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Teleflex Reports Fourth Quarter and Full Year 2016 Results; Provides 2017 Guidance

Fourth Quarter Revenues of $513.9 million, up 6.1% Versus Prior Year Period; up 6.9% on Constant Currency Basis

Fourth Quarter GAAP Diluted EPS of $1.29, down 31.4% Versus Prior Year Period

Fourth Quarter Adjusted Diluted EPS of $2.13, up 6.0% Versus Prior Year Period

Full Year 2016 Revenues of $1,868.0 million, up 3.2% Versus Prior Year; up 4.1% on Constant Currency Basis

Full Year 2016 GAAP Diluted EPS of $4.98, up 1.4% Versus Prior Year

Full Year 2016 Adjusted Diluted EPS of $7.34, up 16.0% Versus Prior Year

2017 Guidance Range for GAAP Revenue Growth of 10.0% to 11.5%

2017 Guidance Range for Constant Currency Revenue Growth of 12.5% to 14.0%

2017 Guidance Range for GAAP Diluted EPS of $5.04 to $5.08

2017 Guidance Range for Adjusted Diluted EPS of $8.00 to $8.15, up 9.0% to 11.0%, which reflects our expectation of an approximately 4.1% negative impact from foreign currency exchange rates

WAYNE, Pa.--(BUSINESS WIRE)--Feb. 23, 2017-- Teleflex Incorporated (NYSE: TFX) (the “Company”) today announced financial results for the fourth quarter and year ended December 31, 2016.

Fourth quarter 2016 net revenues were $513.9 million, an increase of 6.1% compared to the prior year period. Excluding the impact of foreign currency exchange rate fluctuations, fourth quarter 2016 net revenues increased 6.9% over the year ago period.

Fourth quarter 2016 GAAP diluted earnings per share from continuing operations decreased 31.4% to $1.29, as compared to $1.88 in the prior year period. The financial results for the quarter reflect non-cash impairment charges, net of tax of $26.1 million related to the Company's Semprus technology, which was somewhat offset by a related reversal of contingent consideration liabilities, net of tax of $8.3 million. As such, the net non-cash, after-tax impact associated with these items was $17.8 million. Fourth quarter 2016 adjusted diluted earnings per share from continuing operations increased 6.0% to $2.13, compared to $2.01 in the prior year period.

Full year 2016 net revenues were $1,868.0 million, an increase of 3.2% compared to the prior year period. Excluding the impact of foreign currency exchange rate fluctuations, full year 2016 net revenues increased 4.1% over the prior year.

Full year 2016 GAAP diluted earnings per share from continuing operations increased 1.4% to $4.98, as compared to $4.91 in the prior year. Full year 2016 adjusted diluted earnings per share from continuing operations increased 16.0% to $7.34, compared to $6.33 in the prior year.

“Teleflex delivered a strong finish to 2016 with revenue growth above our most recently provided guidance,” said Benson Smith, Chairman and Chief Executive Officer. “During the fourth quarter, each of our segments delivered solid performances, resulting in constant currency revenue growth of 6.9% and the attainment of an adjusted operating margin of 25.0%."

Added Mr. Smith, "As we turn to 2017, thanks to stability in our end-markets, a robust product pipeline and the completion of the acquisition of Vascular Solutions ahead of our initial timetable, Teleflex is poised to deliver double-digit constant currency revenue growth and significant adjusted margin and adjusted earnings per share expansion."

FOURTH QUARTER NET REVENUE BY SEGMENT

The following table provides information regarding net revenues in each of the Company's reportable operating segments and all of its other operating segments for the three months ended December 31, 2016 and December 31, 2015 on both a GAAP and constant currency basis. The discussion below the table of the principal factors behind changes in net revenues for the three months ended December 31, 2016 as compared to the prior year period applies to both GAAP revenue and constant currency revenue, although GAAP revenue also was affected by foreign currency exchange rate fluctuations, as indicated in the "Foreign Currency" column of the table.

       
Three Months Ended % Increase/ (Decrease)
December 31, 2016     December 31, 2015 Constant Currency     Foreign Currency     Total Change
(Dollars in millions)
Vascular North America $ 95.7     $ 90.3 5.9 % 5.9 %
Surgical North America 48.3 43.1 12.2 % 12.2 %
Anesthesia North America 54.9 50.6 8.5 % 8.5 %
EMEA 135.7 135.2 3.0 % (2.6 )% 0.4 %
Asia 73.0 69.2 5.4 % 5.4 %
OEM 45.3 37.8 20.0 % (0.2 )% 19.8 %
All Other   61.0     58.3   5.5 % (0.8 )% 4.7 %
Total $ 513.9   $ 484.5   6.9 % (0.8 )% 6.1 %
 

Vascular North America fourth quarter 2016 net revenues were $95.7 million, an increase of 5.9% compared to the prior year period on both a GAAP and constant currency basis. The increase in revenue was largely due to higher sales volumes of both existing and new products and price increases.

Surgical North America fourth quarter 2016 net revenues were $48.3 million, an increase of 12.2% compared to the prior year period on both a GAAP and constant currency basis. The increase in revenue was largely due to higher sales volumes of both new and existing products and price increases.

Anesthesia North America fourth quarter 2016 net revenues were $54.9 million, an increase of 8.5% compared to the prior year period on both a GAAP and constant currency basis. The increase in revenue was largely due to higher sales volumes of both existing and new products.

EMEA fourth quarter 2016 net revenues were $135.7 million, an increase of 0.4% compared to the prior year period. Excluding the impact of foreign currency exchange rate fluctuations, fourth quarter 2016 net revenues increased 3.0% compared to the prior year period. The constant currency revenue increase was largely due to higher sales volumes of both existing and new products, somewhat offset by a decline in the average selling prices of certain products.

Asia fourth quarter 2016 net revenues were $73.0 million, an increase of 5.4% compared to the prior year period on both a GAAP and constant currency basis. The increase in revenue was largely due to higher sales volumes of both new and existing products and price increases.

OEM and Development Services (“OEM”) fourth quarter 2016 net revenues were $45.3 million, an increase of 19.8% compared to the prior year period. Excluding the impact of foreign currency exchange rate fluctuations, fourth quarter 2016 net revenues increased 20.0% compared to the prior year period. The constant currency revenue increase was largely due to higher sales volumes of existing products and revenues generated by acquired businesses.

OTHER FINANCIAL HIGHLIGHTS AND KEY PERFORMANCE METRICS

Depreciation expense, amortization of intangible assets and deferred financing charges for 2016 totaled $128.3 million compared to $125.3 million for the prior year.

Cash and cash equivalents at December 31, 2016 were $543.8 million compared to $338.4 million at December 31, 2015.

Net accounts receivable at December 31, 2016 were $272.0 million compared to $262.4 million at December 31, 2015.

Net inventories at December 31, 2016 were $316.2 million compared to $330.3 million at December 31, 2015.

2017 OUTLOOK

On a GAAP basis, revenues in 2017 are expected to increase 10.0% to 11.5% over the prior year, reflecting the anticipated 2.5% unfavorable impact of foreign currency exchange rate fluctuations. On a constant currency basis, the Company estimates that revenues for full year 2017 will increase 12.5% to 14.0%, which includes the impact of Vascular Solutions which is expected to contribute approximately 8.5% to 9.0%.

The Company expects full year 2017 GAAP diluted earnings per share from continuing operations to be between $5.04 and $5.08. The Company expects adjusted diluted earnings per share from continuing operations to be between $8.00 and $8.15 for full year 2017, representing an increase of 9.0% to 11.0% over 2016, reflecting our expectation of an approximately 4.1% negative impact from foreign currency exchange rate fluctuations.

       

FORECASTED 2017 CONSTANT CURRENCY REVENUE GROWTH RECONCILIATION

 
Low     High
 
Forecasted 2017 GAAP revenue growth 10.0 % 11.5 %
 
Estimated impact of foreign currency exchange rate fluctuations   2.5 %       2.5 %
 
Forecasted 2017 constant currency revenue growth   12.5 %       14.0 %
 
 

FORECASTED 2017 ADJUSTED EARNINGS PER SHARE RECONCILIATION

 
Low     High
 
Diluted earnings per share attributable to common shareholders $ 5.04 $ 5.08
 
Restructuring, impairment charges and special items, net of tax $ 1.35 $ 1.40
 
Intangible amortization expense, net of tax $ 1.60 $ 1.65
 
Amortization of debt discount on convertible notes, net of tax $ 0.01       $ 0.02  
 
Adjusted diluted earnings per share $ 8.00       $ 8.15  
 

CONFERENCE CALL WEBCAST AND ADDITIONAL INFORMATION

As previously announced, Teleflex will comment on its financial results on a conference call to be held today at 8:00 a.m. (ET). The call will be available live and archived on the company’s website at www.teleflex.com and the accompanying presentation will be posted prior to the call. An audio replay will be available until March 28, 2017 at 11:59pm (ET), by calling 855-859-2056 (U.S./Canada) or 404-537-3406 (International), Passcode: 65576607.

ADDITIONAL NOTES

References in this release to the impact of foreign currency exchange rate fluctuations on adjusted diluted earnings per share include both the impact of translating foreign currencies into U.S. dollars and the impact of foreign currency exchange rate fluctuations on foreign currency denominated transactions.

In the discussion of segment results, "new products" refers to products we have sold for 36 months or less, and "existing products" refers to products we have sold for more than 36 months.

Certain financial information is presented on a rounded basis, which may cause minor differences.

Segment results and commentary exclude the impact of discontinued operations.

NOTES ON NON-GAAP FINANCIAL MEASURES

This press release includes certain non-GAAP financial measures, which include:

Adjusted diluted earnings per share. This measure excludes, depending on the period presented (i) restructuring and other impairment charges; (ii) certain losses and other charges, including, for 2016, charges primarily related to facility consolidation and acquisition costs, net of reversals related to contingent consideration liabilities and the gain on sale of assets and, for 2015, charges related to facility consolidations, net of reversals related to contingent consideration liabilities, the medical device excise tax and a litigation verdict against the Company with respect to a non-operating joint venture; (iii) amortization of the debt discount on the Company’s convertible notes; (iv) intangible amortization expense; (v) loss on extinguishment of debt; and (vi) tax benefits resulting primarily from (1) the expiration of applicable statutes of limitations for prior year returns and/or the resolution of audits or filing of amended returns with respect to prior tax years, and (2) tax law changes affecting the Company's deferred tax liability. In addition, the calculation of diluted shares within adjusted earnings per share gives effect to the anti-dilutive impact of the Company’s convertible note hedge agreements, which reduce the potential economic dilution that otherwise would occur upon conversion of the Company’s senior subordinated convertible notes (under GAAP, the anti-dilutive impact of the convertible note hedge agreements is not reflected in diluted shares).

Constant currency revenue growth. This measure excludes the impact of translating the results of international subsidiaries at different currency exchange rates from period to period.

Management believes these measures are useful to investors because they eliminate items that do not reflect Teleflex’s day-to-day operations and, as a result, they facilitate comparisons of financial results exclusive of items that can fluctuate in a manner that may not reflect the performance of our business. In addition, management believes that the calculation of non-GAAP diluted shares is useful to investors because it provides insight into the offsetting economic effect of the convertible note hedge against conversions of the convertible notes. Management uses these financial measures for internal managerial purposes, when publicly providing guidance on possible future results, and to assist in our evaluation of period-to-period comparisons. These financial measures are presented in addition to results presented in accordance with generally accepted accounting principles (“GAAP”) and should not be relied upon as a substitute for GAAP financial measures. Tables reconciling historical adjusted diluted earnings per share to historical GAAP earnings per share are set forth below. Tables reconciling constant currency net revenues to GAAP net revenues and reconciling forecasted non-GAAP measures to the most directly comparable forecasted GAAP measures are set forth above.

 

RECONCILIATION OF CONSOLIDATED STATEMENT OF INCOME ITEMS

Dollars in millions, except per share amounts

 
 
Quarter Ended - December 31, 2016
   

Cost of goods

sold

   

Selling, general

and

administrative

expenses

   

Research and

development

expenses

   

Restructuring

and other

impairment

charges

   

(Gain) loss on

sale of business

and assets

   

Interest

expense, net

    Income taxes    

Net income

(loss)

attributable to

common

shareholders

from

continuing

operations

   

Diluted

earnings per

share available

to common

shareholders

   

Shares used

in calculation

of GAAP

and adjusted

earnings per

share

GAAP Basis $240.9 $144.2 $15.7 $46.4 ($0.2 ) $16.2 ($10.1 ) $60.9 $1.29 47,112
Adjustments
Restructuring and other impairment charges (A) 46.4 16.5 29.8 $0.63
Losses and other charges, net (B) 3.7 (4.4 ) 0.0 (0.2 ) 3.4 3.4 (1.0 ) ($0.01 )
Amortization of debt discount on convertible notes 1.1 0.4 0.7 $0.02
Intangible amortization expense 15.9 0.1 4.0 12.0 $0.26
Tax adjustment (C) 4.9 (4.9 ) ($0.10 )
Shares due to Teleflex under note hedge (D) $0.06 (1,343 )
Adjusted basis $237.2 $132.7 $15.6 $11.7 $19.3 $97.5 $2.13 45,769
 
 
Quarter Ended - December 31, 2015

Cost of goods

sold

Selling, general

and

administrative

expenses

Research and

development

expenses

Restructuring

and other

impairment

charges

(Gain) loss on

sale of business

and assets

Interest

expense, net

Income taxes

Net income

(loss)

attributable to

common

shareholders

from

continuing

operations

Diluted

earnings per

share available

to common

shareholders

Shares used

in calculation

of GAAP

and adjusted

earnings per

share

GAAP Basis $224.2 $148.2 $13.2 $2.1 $13.6 ($7.6 ) $90.6 $1.88 48,323
Adjustments
Restructuring and other impairment charges (A) 2.1 0.8 1.3 $0.03
Losses and other charges, net (B) 1.9 (3.1 ) 0.3 (1.5 ) ($0.03 )
Amortization of debt discount on convertible notes 3.4 1.2 2.1 $0.04
Intangible amortization expense 17.1 4.6 12.5 $0.26
Tax adjustment (C) 14.9 (14.9 ) ($0.31 )
Shares due to Teleflex under note hedge (D) $0.14 (3,440 )
Adjusted basis $222.3 $134.2 $13.2 $10.2 $14.2 $90.2 $2.01 44,883
 

(A) In 2016, "other impairment charges" included (1) a pre-tax, non-cash $41.0 million impairment charge and $14.9 million reduction in related deferred tax liabilities in connection with the Company's Semprus technology; and (2) $2.4 million in pre-tax, non-cash impairment charges related to two properties, one of which was classified as an asset held for sale and $0.7 million reduction in related deferred tax liabilities. In 2015, there were no "other impairment charges."

(B) In 2016, losses and other charges, net related primarily to reversals related to contingent consideration liabilities, including $8.3 million related to the Company's Semprus technology, somewhat offset by acquisition and facility consolidation costs. In 2015, losses and other charges, net related primarily to facility consolidations and reflect reversals of previously recorded charges related to contingent consideration liabilities and the medical device excise tax.

(C) The tax adjustment represents a net benefit resulting primarily from (1) the expiration of applicable statutes of limitations for prior year returns and/or the resolution of audits or filing of amended returns with respect to prior tax years, and (2) tax law changes affecting our deferred tax liability.

(D) Adjusted diluted shares are calculated by giving effect to the anti-dilutive impact of the Company’s convertible note hedge agreements, which reduce the potential economic dilution that otherwise would occur upon conversion of the Company's convertible notes. Under GAAP, the anti-dilutive impact of the convertible note hedge agreements is not reflected in diluted shares.

     

Reconciliation of Adjusted Operating Profit and Margin

Dollars in millions

Quarter Ended - December 31, 2016

 
 
Teleflex income from continuing operations before interest and taxes $67.0
 
Teleflex income from continuing operations before interest and taxes margin 13.0%
 
Restructuring and other impairment charges $46.4
Losses and other charges, net ($0.9)
Intangible amortization expense $16.0
 
Adjusted Teleflex income from continuing operations before interest and taxes $128.5
 
Adjusted Teleflex income from continuing operations before interest and taxes margin 25.0%
 
Teleflex revenue as-reported $513.9
 
 

RECONCILIATION OF CONSOLIDATED STATEMENT OF INCOME ITEMS

Dollars in millions, except per share amounts

 
 
Year Ended - December 31, 2016
   

Cost of

goods sold

   

Selling, general

and

administrative

expenses

   

Research and

development

expenses

   

Restructuring

and other

impairment

charges

   

(Gain) loss

on sale of

business and

assets

   

Interest

expense,

net

   

Loss on

extinguishment of

debt, net

    Income taxes    

Net income (loss)

attributable to

common

shareholders

from continuing

operations

   

Diluted earnings

per share

available to

common

shareholders

   

Shares used in

calculation of

GAAP and

adjusted

earnings per

share

GAAP Basis $871.8 $563.3 $58.6 $59.2 ($4.4 ) $54.5 $19.3 $8.1 $237.2 $4.98 47,646
Adjustments
Restructuring and other impairment charges (A) 59.2 19.9 39.3 $0.83
Losses and other charges, net (B) 14.6 (1.8 ) 0.1 (4.4 ) 3.4 7.0 4.9 $0.11
Amortization of debt discount on convertible notes 7.2 2.6 4.5 $0.10
Intangible amortization expense 63.1 0.4 16.1 47.4 $0.99
Loss on extinguishment of debt, net 19.3 7.0 12.2 $0.26
Tax adjustment (C) 10.7 (10.7 ) ($0.23 )
Shares due to Teleflex under note hedge (D) $0.31 (2,025 )
Adjusted basis $857.3 $502.0 $58.1 $43.9 $71.5 $334.8 $7.34 45,621
 
 
Year Ended - December 31, 2015

Cost of

goods sold

Selling, general

and

administrative

expenses

Research and

development

expenses

Restructuring

and other

impairment

charges

(Gain) loss

on sale of

business and

assets

Interest

expense,

net

Loss on

extinguishment of

debt, net

Income taxes

Net income (loss)

attributable to

common

shareholders

from continuing

operations

Diluted earnings

per share

available to

common

shareholders

Shares used in

calculation of

GAAP and

adjusted

earnings per

share

GAAP Basis $865.3 $569.0 $52.1 $7.8 ($0.4 ) $60.8 $10.5 $7.8 $236.0 $4.91 48,058
Adjustments
Restructuring and other impairment charges (A) 7.8 2.9 4.9 $0.10
Losses and other charges, net (B) 9.4 (6.1 ) (0.4 ) 2.5 0.4 $0.01
Amortization of debt discount on convertible notes 13.2 4.8 8.4 $0.17
Intangible amortization expense 62.4 16.6 45.8 $0.95
Loss on extinguishment of debt, net 10.5 3.8 6.6 $0.14
Tax adjustment (C) 19.0 (19.0 ) ($0.39 )
Shares due to Teleflex under note hedge (D) $0.44 (3,350 )
Adjusted basis $855.8 $512.7 $52.1 $47.6 $57.4 $283.2 $6.33 44,708
 

(A) In 2016, "other impairment charges" included (1) a pre-tax, non-cash $41.0 million impairment charge and $14.9 million reduction in related deferred tax liabilities in connection with the Company's Semprus technology; and (2) $2.4 million in pre-tax, non-cash impairment charges related to two properties, one of which was classified as an asset held for sale and $0.7 million reduction in related deferred tax liabilities. In 2015, there were no "other impairment charges."

(B) In 2016, losses and other charges, net related primarily to facility consolidation and acquisition costs, net of reversals related to contingent consideration liabilities, including $8.3 million related to the Company's Semprus technology, and the gain on sale of assets. In 2015, losses and other charges, net related primarily to facility consolidation costs and reflects reversals of previously recorded charges related to contingent consideration liabilities, the medical device excise tax and a litigation verdict against the Company with respect to a non-operating joint venture.

(C) The tax adjustment represents a net benefit resulting primarily from (1) the expiration of applicable statutes of limitations for prior year returns and/or the resolution of audits or filing of amended returns with respect to prior tax years, and (2) tax law changes affecting our deferred tax liability.

(D) Adjusted diluted shares are calculated by giving effect to the anti-dilutive impact of the Company’s convertible note hedge agreements, which reduce the potential economic dilution that otherwise would occur upon conversion of the Company's convertible notes. Under GAAP, the anti-dilutive impact of the convertible note hedge agreements is not reflected in diluted shares.

ABOUT TELEFLEX INCORPORATED

Teleflex is a global provider of medical technologies designed to improve the health and quality of people’s lives. We apply purpose driven innovation - a relentless pursuit of identifying unmet clinical needs - to benefit patients and healthcare providers. Our portfolio is diverse, with solutions in the fields of vascular and interventional access, surgical, anesthesia, cardiac care, urology, emergency medicine and respiratory care. Teleflex employees worldwide are united in the understanding that what we do every day makes a difference. For more information, please visit teleflex.com.

Teleflex is the home of Arrow®, Deknatel®, Hudson RCI®, LMA®, Pilling®, Rusch® and Weck® - trusted brands united by a common sense of purpose.

CAUTION CONCERNING FORWARD-LOOKING INFORMATION

This press release contains forward-looking statements, including, but not limited to, forecasted 2017 GAAP and constant currency revenue growth and GAAP and adjusted diluted earnings per share. Actual results could differ materially from those in the forward-looking statements due to, among other things, conditions in the end markets we serve, customer reaction to new products and programs, our ability to achieve sales growth, price increases or cost reductions; changes in the reimbursement practices of third party payors; our ability to realize efficiencies and to execute on our strategic initiatives; changes in material costs and surcharges; market acceptance and unanticipated difficulties in connection with the introduction of new products and product line extensions; product recalls; unanticipated difficulties in connection with the consolidation of manufacturing and administrative functions, including as a result of difficulties with various employees, labor representatives or regulators; the loss of skilled employees in connection with such initiatives; unanticipated difficulties, expenditures and delays in complying with government regulations applicable to our businesses; the impact of government healthcare reform legislation, including possible repeal, modification or replacement of the Patient Protection and Affordable Care Act; our ability to meet our debt obligations; changes in general and international economic conditions, including fluctuations in foreign currency exchange rates and the impact of the United Kingdom's vote to leave the European Union; and other factors described or incorporated in our filings with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K.

 

TELEFLEX INCORPORATED

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

 
 
    Three Months Ended December 31,     Twelve Months Ended December 31,
2016     2015 2016     2015
(Dollars and shares in thousands, except per share)
Net revenues $ 513,933 $ 484,501 $ 1,868,027 $ 1,809,690
Cost of goods sold   240,881     224,185     871,827     865,287  
Gross profit 273,052 260,316 996,200 944,403
Selling, general and administrative expenses 144,180 148,217 563,308 568,982
Research and development expenses 15,687 13,221 58,579 52,119
Restructuring and other impairment charges 46,351 2,131 59,227 7,819
Gain on sale of assets   (194 )       (4,367 )   (408 )
Income from continuing operations before interest, loss on extinguishment of debt and taxes 67,028 96,747 319,453 315,891
Interest expense 16,362 13,638 54,941 61,323
Interest income (150 ) (79 ) (474 ) (532 )
Loss on extinguishment of debt           19,261     10,454  
Income from continuing operations before taxes 50,816 83,188 245,725 244,646
Taxes on income from continuing operations   (10,060 )   (7,577 )   8,074     7,838  
Income from continuing operations   60,876     90,765     237,651     236,808  
Operating loss from discontinued operations (806 ) (298 ) (922 ) (1,730 )
Tax benefit on loss from discontinued operations   (993 )   (10,815 )   (1,112 )   (10,635 )
Income (loss) on discontinued operations   187     10,517     190     8,905  
Net income 61,063 101,282 237,841 245,713
Less: Income from continuing operations attributable to noncontrolling interest 158 464 850
Net income attributable to common shareholders $ 61,063   $ 101,124   $ 237,377   $ 244,863  
Earnings per share available to common shareholders:
Basic:
Income from continuing operations $ 1.38 $ 2.18 $ 5.47 $ 5.68
Income (loss) on discontinued operations   0.01     0.25     0.01     0.21  
Net income $ 1.39   $ 2.43   $ 5.48   $ 5.89  
Diluted:
Income from continuing operations $ 1.29 $ 1.88 $ 4.98 $ 4.91
Income (loss) on discontinued operations   0.01     0.21         0.19  
Net income $ 1.30   $ 2.09   $ 4.98   $ 5.10  
Dividends per share $ 0.34 $ 0.34 $ 1.36 $ 1.36
Weighted average common shares outstanding:
Basic 44,058 41,606 43,325 41,558
Diluted 47,112 48,323 47,646 48,058
Amounts attributable to common shareholders:
Income from continuing operations, net of tax $ 60,876 $ 90,607 $ 237,187 $ 235,958
Income (loss) from discontinued operations, net of tax   187     10,517     190     8,905  
Net income $ 61,063   $ 101,124   $ 237,377   $ 244,863  
 
 

TELEFLEX INCORPORATED

CONSOLIDATED BALANCE SHEETS

(unaudited)

 
 
    December 31,
2016     2015

(Dollars, except per share

amounts, and shares in thousands)

ASSETS
Current assets
Cash and cash equivalents $ 543,789 $ 338,366
Accounts receivable, net 271,993 262,416
Inventories, net 316,171 330,275
Prepaid expenses and other current assets 40,382 34,915
Prepaid taxes 8,179 30,895
Assets held for sale   2,879     6,972  
Total current assets 1,183,393 1,003,839
Property, plant and equipment, net 302,899 316,123
Goodwill 1,276,720 1,295,852
Intangibles assets, net 1,091,663 1,199,975
Deferred tax assets 1,712 2,341
Other assets   34,826     53,644  
Total assets $ 3,891,213   $ 3,871,774  
LIABILITIES AND EQUITY
Current liabilities
Current borrowings $ 183,071 $ 417,350
Accounts payable 69,400 66,305
Accrued expenses 65,149 64,017
Current portion of contingent consideration 587 7,291
Payroll and benefit-related liabilities 82,679 84,658
Accrued interest 10,450 7,480
Income taxes payable 7,908 8,059
Other current liabilities   8,402     8,960  
Total current liabilities 427,646 664,120
Long-term borrowings 850,252 641,850
Deferred tax liabilities 271,377 315,983
Pension and postretirement benefit liabilities 133,062 149,441
Noncurrent liability for uncertain tax positions 17,520 40,400
Other liabilities   52,015     48,887  
Total liabilities 1,751,872 1,860,681
Commitments and contingencies
Convertible notes - redeemable equity component (Note 19)   1,824      
Mezzanine equity 1,824
Common shareholders’ equity
Common shares, $1 par value Issued: 2016 — 45,814 shares; 2015 — 43,517 shares 45,814 43,517
Additional paid-in capital 506,800 440,127
Retained earnings 2,194,593 2,016,176
Accumulated other comprehensive loss   (438,717 )   (371,124 )
2,308,490 2,128,696
Less: Treasury stock, at cost   170,973     119,424  
Total common shareholders’ equity   2,137,517     2,009,272  
Noncontrolling interest       1,821  
Total equity   2,137,517     2,011,093  
Total liabilities and equity $ 3,891,213   $ 3,871,774  
 
 

TELEFLEX INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 
 
    Year Ended December 31,
2016     2015
(Dollars in thousands)
Cash flows from operating activities of continuing operations:
Net income $ 237,841 $ 245,713
Adjustments to reconcile net income to net cash provided by operating activities:
(Income) loss from discontinued operations (190 ) (8,905 )
Depreciation expense 54,415 46,013
Amortization expense of intangible assets 63,491 62,380
Amortization expense of deferred financing costs and debt discount 10,440 16,941
Loss on extinguishment of debt 19,261 10,454
Changes in contingent consideration (6,445 ) (4,576 )
Impairment of long-lived assets 2,356
In-process research and development impairment charge 41,000
Stock-based compensation 16,871 14,467
Net gain on sales of businesses and assets (4,367 ) (408 )
Deferred income taxes, net (29,346 ) (54,413 )
Other (13,311 ) (20,775 )
Changes in operating assets and liabilities, net of effects of acquisitions and disposals:
Accounts receivable (11,029 ) 398
Inventories 6,408 (8,371 )
Prepaid expenses and other current assets (3,613 ) (3,027 )
Accounts payable and accrued expenses 15,422 (117 )
Income taxes receivable and payable, net   11,386     7,672  
Net cash provided by operating activities from continuing operations   410,590     303,446  
Cash flows from investing activities of continuing operations:
Expenditures for property, plant and equipment (53,135 ) (61,448 )
Payments for businesses and intangibles acquired, net of cash acquired (14,040 ) (93,808 )
Proceeds from sales of businesses and assets 10,201 408
Investments in affiliates        
Net cash used in investing activities from continuing operations   (56,974 )   (154,848 )
Cash flows from financing activities of continuing operations:
Proceeds from new borrowings 671,700 288,100
Reduction in borrowings (714,565 ) (303,757 )
Debt extinguishment, issuance and amendment fees (8,958 ) (9,017 )
Proceeds from share based compensation plans and the related tax impacts 9,068 4,994
Payments to noncontrolling interest shareholders (464 ) (1,343 )
Payments for acquisition of noncontrolling interest (9,231 )
Payments for contingent consideration (7,282 ) (8,028 )
Dividends   (58,960 )   (56,532 )
Net cash used in financing activities from continuing operations   (118,692 )   (85,583 )
Cash flows from discontinued operations:
Net cash used in operating activities   (2,110 )   (2,636 )
Net cash used in discontinued operations   (2,110 )   (2,636 )
Effect of exchange rate changes on cash and cash equivalents   (27,391 )   (25,249 )
Net increase (decrease) in cash and cash equivalents 205,423 35,130
Cash and cash equivalents at the beginning of the year   338,366     303,236  
Cash and cash equivalents at the end of the year $ 543,789   $ 338,366  
Supplemental cash flow information:
Cash interest paid $ 44,203 $ 45,973
Income taxes paid, net of refunds $ 23,955 $ 56,079
Non cash financing activities of continuing operations:
Settlement and exchange of convertible notes with common or treasury stock $ 35,286 $ 133
Acquisition of treasury stock associated with settlement and exchange of convertible note hedge and warrant agreements $ 86,046 $ 269
 

Source: Teleflex Incorporated

Teleflex Incorporated
Jake Elguicze
Treasurer and Vice President of Investor Relations
610-948-2836



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