Teleflex Incorporated Q2 FY2025 earnings call

Strategic Update

• Progressing separation of Teleflex announced in February; pursuing potential sale of NewCo with significant inbound interest in acquiring NewCo.
• Completed acquisition of BIOTRONIK's Vascular Intervention business for EUR 704 million, expected to enhance global presence, expand technology suite, and improve patient care; expected to be ~$0.10 accretive to adjusted EPS in first year.

Commercial and Clinical Updates

• Vascular: New study showed Arrow chlorhexidine-impregnated CVCs reduced CLABSIs by 70.5% in ICU patients.
• Surgical: Clinical data supports Titan SGS stapler for laparoscopic sleeve gastrectomy, showing improvements in GERD outcomes and shorter hospital stays.

Geographic Segments

• Americas: Revenues $525.7 million, +2% Y/Y on adjusted constant currency basis. Driven by intra-aortic balloon pumps, offset by OEM declines and UroLift challenges.
• EMEA: Revenues $166.2 million, -2.1% Y/Y. Strength in Interventional offset by Anesthesia, including tough comp in military orders.
• Asia: Revenues $89 million, +1.2% Y/Y. Strength in Southeast Asia, India, Japan; China impacted by volume-based procurement but saw sequential improvement.

Product Categories

• Vascular Access: $185.5 million, +1.4% Y/Y. Led by PICCs and EZ-IO, expected acceleration in H2 2025.
• Interventional: $170 million, +19.3% Y/Y. Driven by intra-aortic balloon pumps, OnControl, complex catheters, right heart catheters.
• Anesthesia: $96.4 million, -7.6% Y/Y. Hemostatic products and LMA single-use masks grew, offset by tough comp in military orders.
• Surgical: $114 million, +1.4% Y/Y. Core franchise solid, partially offset by China volume-based procurement; North America mid-single digit growth.
• Interventional Urology: $76.4 million, -8.3% Y/Y. Strong double-digit growth for Barrigel, offset by UroLift pressure.
• OEM: $78.7 million, -12.4% Y/Y. Impacted by lost customer contract and customer inventory management; sequential improvement expected in H2 2025.
• Other Revenues: $59.9 million, +3.5% Y/Y. Driven by Urology Care, particularly intermittent catheters.

2025 Guidance

• Total constant currency growth: 7.7%-8.7% (previously 1%-2%), reflecting BIOTRONIK acquisition's ~$204M revenue contribution in H2 2025.
• GAAP revenue growth: 9%-10% (previously 1.3%-2.3%), implying revenue range $3.322B-$3.352B.
• Adjusted EPS: $13.90-$14.30, up from prior guidance. Adjusted gross margin: 58.75%-59.5%, adjusted operating margin: 24.5%-25%.
• Third quarter adjusted constant currency growth: 15%-16.5% (excluding ~$8M foreign exchange benefit).

Risks

• Tariffs: Dynamic situation with uncertainty on positioning, timing, and magnitude; impact estimated at ~$29M in 2025 vs prior ~$55M.
• Foreign exchange fluctuations: Adverse impact on gross margin partially offset by lower tariffs.
• Impact of GLP-1s: Declines in bariatric surgery volumes, though Titan SGS stapler remains a growth driver with clinical evidence.

Question and Answer

Q: Provide more context on the bridge of the guidance between tariffs, FX and business outperformance? And help understand BIOTRONIK's outlook.

A: BIOTRONIK Vascular Interventions business expected mid-single digit organic growth in H2 2025, 6%+ constant currency growth from 2026. Operational performance in Q2 contributes ~$0.20 to EPS, tariffs ~$0.50, FX and tax largely offset.

Q: Rough breakout between RemainCo and NewCo growth?

A: RemainCo expected upper 5s growth in 2025, mid-single digit excluding China volume-based procurement impact in Q2.

Q: Durability of Interventional growth?

A: Interventional business expected high single to low double digit growth for full 2025, driven by balloon pumps, OnControl, and complex catheters.

Q: Progress on NewCo sale/spin, timing?

A: Focus on maximizing shareholder value; preliminary meetings with potential buyers, progress made on due diligence; spin expected mid-2026, sale timeline dependent on maximizing value with no specific timing provided yet.

Q: Impact of CMS proposed rule on Urology segment?

A: Proposed rule positive; Barrigel gets ~40% uplift in office service, UroLift ~10% uplift in all sites of service; expected to help Urology business recover.