Teleflex Earnings 2020-06-28

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

tfx-20200628

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 28, 2020


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number 1-5353

TELEFLEX INCORPORATED

(Exact name of registrant as specified in its charter)


Delaware						23-1147939
(State or other jurisdiction of incorporation or organization)						(I.R.S. employer identification no.)

550 E. Swedesford Rd., Suite 400 Wayne, PA 19087

(Address of principal executive offices and zip code)

(610) 225-6800

(Registrant’s telephone number, including area code)

(None)

(Former Name, Former Address and Former Fiscal Year,

If Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $1.00 per share

TFX

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The registrant had 46,516,030 shares of common stock, par value $1.00 per share, outstanding as of July 28, 2020.

TELEFLEX INCORPORATED

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JUNE 28, 2020

TABLE OF CONTENTS

Page

PART I — FINANCIAL INFORMATION

Item 1:

Financial Statements (Unaudited):

Condensed Consolidated Statements of Income

Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Cash Flows

Condensed Consolidated Statements of Changes in Equity

Notes to Condensed Consolidated Financial Statements

Item 2:

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3:

Quantitative and Qualitative Disclosures About Market Risk

Item 4:

Controls and Procedures

PART II — OTHER INFORMATION

Item 1:

Legal Proceedings

Item 1A:

Risk Factors

Item 2:

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3:

Defaults Upon Senior Securities

Item 4:

Mine Safety Disclosures

Item 5:

Other Information

Item 6:

Exhibits

SIGNATURES

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended						Six Months Ended
	June 28, 2020		June 30, 2019		June 28, 2020		June 30, 2019
	(Dollars and shares in thousands, except per share)
Net revenues	$	567,034	$	652,507	$	1,197,676	$	1,266,091
Cost of goods sold	288,662		300,269		585,680		589,883
Gross profit	278,372		352,238		611,996		676,208
Selling, general and administrative expenses	191,193		215,500		338,989		422,421
Research and development expenses	29,364		27,595		56,760		54,745
Restructuring and impairment charges	19,005		1,685		20,351		19,080
Gain on sale of assets	—		—		—		(2,739)
Income from continuing operations before interest and taxes	38,810		107,458		195,896		182,701
Interest expense	15,682		20,758		31,121		43,450
Interest income	(163)		(472)		(742)		(811)

Income from continuing operations before taxes	23,291		87,172		165,517		140,062
Taxes on income from continuing operations	11,848		3,844		22,922		14,816
Income from continuing operations	11,443		83,328		142,595		125,246
Operating income (loss) from discontinued operations	22		61		18		(1,282)
Tax benefit (expense) on operating loss from discontinued operations	9		14		7		(308)
Income (loss) from discontinued operations	13		47		11		(974)
Net income	$	11,456	$	83,375	$	142,606	$	124,272
Earnings per share:
Basic:
Income from continuing operations	$	0.25	$	1.80	$	3.07	$	2.72
Income (loss) from discontinued operations	—		0.01		—		(0.02)
Net income	$	0.25	$	1.81	$	3.07	$	2.70
Diluted:
Income from continuing operations	$	0.24	$	1.77	$	3.02	$	2.67
Loss from discontinued operations	—		—		—		(0.03)
Net income	$	0.24	$	1.77	$	3.02	$	2.64
Weighted average common shares outstanding
Basic	46,442		46,172		46,412		46,111
Diluted	47,242		47,036		47,237		46,989

The accompanying notes are an integral part of the condensed consolidated financial statements.

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended						Six Months Ended
	June 28, 2020		June 30, 2019		June 28, 2020		June 30, 2019
	(Dollars in thousands)
Net income	$	11,456	$	83,375	$	142,606	$	124,272
Other comprehensive income (loss), net of tax:
Foreign currency translation, net of tax of $$2,295, $(298), $(5,286), and $(1,759) for the three and six months periods, respectively	17,654		12,568		(545)		12,332
Pension and other postretirement benefit plans adjustment, net of tax of $(404), $(446), $(926), and $(836) for the three and six months periods, respectively	1,345		1,459		3,034		2,688
Derivatives qualifying as hedges, net of tax of $64, $83, $436, and $82 for the three and six months periods, respectively	(1,095)		755		(4,912)		158
Other comprehensive income (loss), net of tax:	17,904		14,782		(2,423)		15,178
Comprehensive income	$	29,360	$	98,157	$	140,183	$	139,450

The accompanying notes are an integral part of the condensed consolidated financial statements.

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 28, 2020		December 31, 2019
	(Dollars in thousands)
ASSETS
Current assets
Cash and cash equivalents	$	553,535	$	301,083
Accounts receivable, net	374,886		418,673
Inventories	514,755		476,557
Prepaid expenses and other current assets	94,381		97,943
Prepaid taxes	7,060		12,076

Total current assets	1,544,617		1,306,332
Property, plant and equipment, net	432,401		430,719
Operating lease assets	101,982		113,160
Goodwill	2,343,561		2,245,305
Intangible assets, net	2,260,863		2,156,285
Deferred tax assets	5,589		5,572
Other assets	76,117		52,447
Total assets	$	6,765,130	$	6,309,820
LIABILITIES AND EQUITY
Current liabilities
Current borrowings	$	83,000	$	50,000
Accounts payable	107,140		102,916
Accrued expenses	103,557		100,466
Current portion of contingent consideration	25,243		148,090
Payroll and benefit-related liabilities	80,602		115,981
Accrued interest	6,887		5,514
Income taxes payable	18,340		6,692
Other current liabilities	31,846		33,396

Total current liabilities	456,615		563,055
Long-term borrowings	2,328,791		1,858,943
Deferred tax liabilities	488,968		439,558
Pension and postretirement benefit liabilities	60,866		82,719
Noncurrent liability for uncertain tax positions	12,381		10,294
Noncurrent contingent consideration	24,036		71,818
Noncurrent operating lease liabilities	91,917		101,372
Other liabilities	204,154		202,741
Total liabilities	3,667,728		3,330,500
Commitments and contingencies
Total shareholders' equity	3,097,402		2,979,320
Total liabilities and shareholders' equity	$	6,765,130	$	6,309,820

The accompanying notes are an integral part of the condensed consolidated financial statements.

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended
	June 28, 2020		June 30, 2019
	(Dollars in thousands)
Cash flows from operating activities of continuing operations:
Net income	$	142,606	$	124,272
Adjustments to reconcile net income to net cash provided by operating activities:
(Income) loss from discontinued operations	(11)		974
Depreciation expense	34,461		31,966
Intangible asset amortization expense	78,638		75,285
Deferred financing costs and debt discount amortization expense	1,984		2,249
Gain on sale of assets	—		(2,739)
Fair value step up of acquired inventory sold	1,707		—
Changes in contingent consideration	(29,951)		25,456
Impairment of long-lived assets	—		6,911
Stock-based compensation	8,482		12,700
Deferred income taxes, net	1,055		(5,495)
Payments for contingent consideration	(79,771)		(26,092)
Interest benefit on swaps designated as net investment hedges	(9,805)		(8,799)
Other	(18,981)		4,272
Changes in assets and liabilities, net of effects of acquisitions and disposals:
Accounts receivable	45,843		(19,747)
Inventories	(34,875)		(33,970)
Prepaid expenses and other assets	11,819		(6,381)
Accounts payable, accrued expenses and other liabilities	(26,449)		(6,231)
Income taxes receivable and payable, net	7,257		(17,347)
Net cash provided by operating activities from continuing operations	134,009		157,284
Cash flows from investing activities of continuing operations:
Expenditures for property, plant and equipment	(39,052)		(56,107)
Proceeds from sale of assets	400		1,178
Payments for businesses and intangibles acquired, net of cash acquired	(265,895)		(1,025)
Net interest proceeds on swaps designated as net investment hedges	9,986		8,330
Net cash used in investing activities from continuing operations	(294,561)		(47,624)
Cash flows from financing activities of continuing operations:
Proceeds from new borrowings	1,010,000		25,000
Reduction in borrowings	(500,000)		(52,500)
Debt extinguishment, issuance and amendment fees	(7,727)		(4,703)
Net proceeds from share based compensation plans and the related tax impacts	2,668		7,829
Payments for contingent consideration	(60,947)		(111,928)
Dividends paid	(31,558)		(31,347)
Net cash provided by (used in) financing activities from continuing operations	412,436		(167,649)
Cash flows from discontinued operations:
Net cash (used in) provided by operating activities	(317)		2,799
Net cash (used in) provided by discontinued operations	(317)		2,799
Effect of exchange rate changes on cash and cash equivalents	885		1,925
Net increase (decrease) in cash and cash equivalents	252,452		(53,265)
Cash and cash equivalents at the beginning of the period	301,083		357,161
Cash and cash equivalents at the end of the period	$	553,535	$	303,896

The accompanying notes are an integral part of the condensed consolidated financial statements.

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)


	Common Stock					Additional Paid In Capital		Retained Earnings		Accumulated Other Comprehensive Loss	Treasury Stock						Total
	Shares	Dollars											Shares			Dollars
	(Dollars and shares in thousands, except per share)
Balance at December 31, 2019	47,536	$	47,536	$	616,980	$	2,824,916	$	(344,392)	1,182	$	(165,720)		$	2,979,320
Cumulative effect adjustment resulting from the adoption of new accounting standards						(791)								(791)
Net income						131,150								131,150
Cash dividends ($0.34 per share)						(15,767)								(15,767)
Other comprehensive loss								(20,327)						(20,327)
Shares issued under compensation plans	24	24		(3,074)						(37)	1,748			(1,302)
Deferred compensation				383						(5)	358			741
Balance at March 29, 2020	47,560	47,560		614,289		2,939,508		(364,719)		1,140	(163,614)			3,073,024
Net income						11,456								11,456
Cash dividends ($0.34 per share)						(15,791)								(15,791)
Other comprehensive income								17,904						17,904
Shares issued under compensation plans	35	35		10,516						(3)	175			10,726
Deferred compensation				—						(1)	83			83
Balance at June 28, 2020	47,595	$	47,595	$	624,805	$	2,935,173	$	(346,815)	1,136	$	(163,356)		$	3,097,402


	Common Stock					Additional Paid In Capital		Retained Earnings		Accumulated Other Comprehensive Loss	Treasury Stock						Total
	Shares	Dollars											Shares			Dollars
	(Dollars and shares in thousands, except per share)
Balance at December 31, 2018	47,248	$	47,248	$	574,761	$	2,427,599	$	(341,085)	1,232	$	(168,545)		$	2,539,978
Cumulative effect adjustment resulting from the adoption of new accounting standards						(1,321)								(1,321)
Net income						40,897								40,897
Cash dividends ($0.34 per share)

Price	342.74	EPS	9
Shares	47	P/E	36
MCap	16,169	P/FCF	56
Net Debt	1,758	EBIT	391
TEV	17,928	TEV/EBIT	46
TTM 2019-09-29, in MM, except price, ratios

10-Q	2020-06-28	Filed 2020-07-30
10-Q	2020-03-29	Filed 2020-04-30
10-K	2019-12-31	Filed 2020-02-21
10-Q	2019-09-29	Filed 2019-10-31
10-Q	2019-06-30	Filed 2019-08-01
10-Q	2019-03-31	Filed 2019-05-02
10-K	2018-12-31	Filed 2019-02-21
10-Q	2018-09-30	Filed 2018-11-01
10-Q	2018-07-01	Filed 2018-08-02
10-Q	2018-04-01	Filed 2018-05-03
10-K	2017-12-31	Filed 2018-02-22
10-Q	2017-10-01	Filed 2017-11-02
10-Q	2017-07-02	Filed 2017-08-03
10-Q	2017-04-02	Filed 2017-05-04
10-K	2016-12-31	Filed 2017-02-23
10-Q	2016-09-25	Filed 2016-10-27
10-Q	2016-06-26	Filed 2016-07-28
10-Q	2016-03-27	Filed 2016-04-28
10-K	2015-12-31	Filed 2016-02-25
10-Q	2015-09-27	Filed 2015-10-29
10-Q	2015-06-28	Filed 2015-07-30
10-Q	2015-03-29	Filed 2015-04-30
10-K	2014-12-31	Filed 2015-02-20
10-Q	2014-09-28	Filed 2014-10-29
10-Q	2014-06-29	Filed 2014-07-30
10-Q	2014-03-30	Filed 2014-04-30
10-K	2013-12-31	Filed 2014-02-24
10-Q	2013-09-29	Filed 2013-10-30
10-Q	2013-06-30	Filed 2013-07-31
10-Q	2013-03-31	Filed 2013-04-30
10-K	2012-12-31	Filed 2013-02-22
10-Q	2012-09-30	Filed 2012-10-31
10-Q	2012-07-01	Filed 2012-07-31
10-Q	2012-04-01	Filed 2012-05-01
10-K	2011-12-31	Filed 2012-02-24
10-Q	2011-09-25	Filed 2011-10-25
10-Q	2011-06-26	Filed 2011-07-27
10-Q	2011-03-27	Filed 2011-04-26
10-Q	2010-09-26	Filed 2010-10-27
10-Q	2010-06-27	Filed 2010-07-23
10-Q	2010-03-28	Filed 2010-04-28
10-K	2009-12-31	Filed 2010-02-25

8-K	2020-07-30	Earnings, Regulation FD, Exhibits
8-K	2020-05-27
8-K	2020-05-21
8-K	2020-05-21
8-K	2020-05-01
8-K	2020-04-30
8-K	2020-02-20
8-K	2019-11-15
8-K	2019-10-31
8-K	2019-08-06
8-K	2019-08-01
8-K	2019-05-03
8-K	2019-05-02
8-K	2019-04-05
8-K	2019-02-26
8-K	2019-02-21
8-K	2019-02-18
8-K	2018-12-10
8-K	2018-11-01
8-K	2018-10-04
8-K	2018-07-31
8-K	2018-06-22
8-K	2018-05-31
8-K	2018-05-21
8-K	2018-05-11
8-K	2018-05-04
8-K	2018-05-03
8-K	2018-03-13
8-K	2018-02-22
8-K	2018-02-19

EX-31.1	tfx-2020628xex3111.htm
EX-31.2	tfx-2020628xex312.htm
EX-32.1	tfx-2020628xex321.htm
EX-32.2	tfx-2020628xex322.htm

TFX 10Q Quarterly Report

Teleflex Earnings 2020-06-28