| Consolidated depreciation and amortization | $ | | | | $ | | | (1)Reflects depreciation and amortization included within other allocated expenses per reconciliation of segment operating profit measure.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
Teleflex Incorporated (“we,” “us,” “our" and “Teleflex”) is a global provider of medical technology products focused on enhancing clinical benefits, improving patient and provider safety and reducing total procedural costs. We primarily design, develop, manufacture and supply single-use medical devices used by hospitals and healthcare providers for common diagnostic and therapeutic procedures in critical care and surgical applications. We market and sell our products worldwide through a combination of our direct sales force and distributors. Because our products are used in numerous markets and for a variety of procedures, we are not dependent upon any one end-market or procedure. We are focused on achieving consistent, sustainable and profitable growth by increasing our market share and improving our operating efficiencies.
We evaluate our portfolio of products and businesses on an ongoing basis to ensure alignment with our overall objectives. Based on our evaluation, we may identify opportunities to divest businesses and product lines that do not meet our objectives. In addition, we may seek to optimize utilization of our facilities through restructuring initiatives designed to further improve our cost structure and enhance our competitive position. We also may continue to explore opportunities to expand the size of our business and improve operating margins through a combination of acquisitions and distributor to direct sales conversions, which generally involve our elimination of a distributor from the sales channel, either by acquiring the distributor or terminating the distributor relationship (in some instances, particularly in Asia, the conversions involve our acquisition or termination of a master distributor and the continued sale of our products through sub-distributors or through new distributors). Distributor to direct sales conversions are designed to facilitate improved product pricing and more direct access to the end users of our products within the sales channel.
Acquisition of BIOTRONIK Vascular Intervention business
On February 24, 2025, we executed a definitive agreement to acquire substantially all of the Vascular Intervention business (the “VI Business”) of BIOTRONIK SE & Co. KG. The acquisition will include a broad suite of coronary and peripheral medical devices, such as drug-coated balloons, stents, and balloon catheters, which will complement our interventional product portfolio. Under the terms of the agreement, we will acquire the VI Business for an initial cash payment of €760 million reduced by certain adjustments as provided in the purchase agreement including certain working capital not transferring and other customary adjustments. The acquisition is subject to customary closing conditions, including receipt of certain regulatory approvals, and is expected to be completed in the third quarter of 2025.
Concurrent with the execution of the agreement to acquire the VI Business, we entered into an amendment to our Third Amended and Restated Credit Agreement (the “Credit Agreement”), which, among other things, (a) provides for a delayed draw term loan facility in an aggregate principal amount of $500 million, which will be available to be drawn on the date on which we consummate the VI Business acquisition and (b) permits us to borrow up to $550 million under the revolving facility provided for under the Credit Agreement on a limited condition basis on the date on which the VI Business acquisition is consummated. Borrowings under the delayed draw term loan will bear interest at a rate per annum equal to the applicable margin plus, at our option, either (1) the highest of (i) the “Prime Rate” in the U.S. last quoted by The Wall Street Journal, (ii) 0.50% above the greater of the federal funds rate and the rate comprised of both overnight federal funds and overnight euro transactions denominated in U.S. dollars and (iii) 1.00% above the Term SOFR Rate for a one month interest period, plus an applicable margin ranging from 0.125% to 1.00%, in each case subject to adjustments based on our total net leverage ratio or (2) a Term Secured Overnight Financing Rate (“SOFR”) rate (which includes a credit spread adjustment of 10 basis points). The applicable margin for borrowings under the delayed draw term loan range from 1.125% to 2.00% for SOFR borrowings and from 0.125% to 1.00% for base-rate borrowings, in each case, depending on, at our election, either (x) our public corporate family rating or (y) our consolidated total net leverage ratio, in each case, based on the most recently ended fiscal quarter. The obligations under the delayed draw term loan will be guaranteed and secured on the same basis as the facilities provided for under the Credit Agreement. The delayed draw term loan will not amortize and will mature on the earlier of (x) the date that is two years after the date on which such loans are funded and (y) the maturity date for the revolving facility provided for under the Credit Agreement.
In addition to amending our Credit Agreement, we also entered into foreign exchange derivative contracts with an aggregate notional value of €700 million to economically hedge against the foreign currency exposure associated with the cash consideration needed to complete the VI Business acquisition.
We anticipate using the new delayed draw term loan along with revolving credit borrowings under the Credit Agreement and cash on hand to finance the VI Business acquisition. For additional information regarding the acquisition of the VI Business, refer to Note 4 within the condensed consolidated financial statements included in this report.
Recently Announced Strategic Actions
On February 27, 2025, we announced our intention to create a new, independently traded public company comprising Urology (consisting of our Interventional Urology and Urology product categories), Acute Care (consisting of our Respiratory product category, the majority of our Anesthesia product category and certain products within our Interventional Access and Surgical product categories) and our OEM businesses. Our Vascular Access product category, most of our products within our Interventional Access and Surgical product categories and the VI Business that we expect to acquire will remain with Teleflex. We intend to target the completion of the transaction in the middle of 2026 via a distribution of newly issued shares of the new company to shareholders that is tax-free for U.S. tax purposes. There can be no guarantees that the proposed separation will be completed on the terms and within the timeframe we announced, or at all.
Impairment considerations
We test the recoverability of long-lived assets whenever events or circumstances indicate the carrying value of an asset may not be recoverable. As of March 30, 2025, we identified indicators of a potential impairment related to the long-lived assets associated with our Titan SGS asset group, which primarily consists of intangible assets. The indicators of a potential impairment primarily arose from lower than expected sales of our Titan SGS product line and anticipated continuing reduced demand for bariatric surgery procedures in future periods driven by the growing adoption of GLP-1 products. We performed a recoverability test, utilizing an updated long-term forecast reflecting higher uncertainty of revenue growth in future periods compared to previous estimates. We concluded that the undiscounted cash flows of the Titan SGS product line exceeded the carrying value of the related assets by approximately 10% and no impairment was recognized. If actual future revenues are lower than forecasted, it may result in future impairment charges, which could be material. The carrying value of the intangible assets as of March 30, 2025 was $130.0 million.
Tariffs
Our global operations are subject to risks associated with international trade policies, and we continue to closely monitor developments in trade relations and policy, including proposed and enacted tariffs. While tariffs have not had a significant impact on our costs during the first quarter of 2025, the tariffs announced in April 2025 could have a material impact on our business. Due to recently enacted U.S. tariffs and accompanying retaliatory measures, we may experience a material negative impact on our gross margins and cash flows in future periods. This impact would be primarily driven by higher import costs linked to our operations in China, as well as to products manufactured in Mexico that are not currently compliant with the United States-Mexico-Canada Agreement (USMCA). We are currently evaluating options to mitigate our exposure through supply chain optimization strategies, including modifications to chain of custody protocols and increasing the proportion of products compliant with the USMCA in our portfolio, in addition to customer pricing. The ultimate impact of changes to tariffs and trade policies on our results from operations and cash flows will depend on several factors, including the timing, scale, scope, and nature of any tariffs or policies that are implemented, and any associated retaliatory measures.
Results of Operations
As used in this discussion, "new products" are products for which commercial sales have commenced within the past 36 months, and “existing products” are products for which commercial sales commenced more than 36 months ago. Discussion of results of operations items that reference the effect of one or more acquired and/or divested businesses or assets (except as noted below with respect to acquired distributors) generally reflects the impact of the acquisitions and/or divestitures within the first 12 months following the date of the acquisition and/or divestiture. In addition to increases and decreases in the per unit selling prices of our products to our customers, our discussion of the impact of product price increases and decreases also reflects the impact on the pricing of our products resulting from the elimination of the distributor, either through acquisition or termination of the distributor, from the sales channel. All of the dollar amounts in the tables are presented in millions unless otherwise noted.
Certain financial information is presented on a rounded basis, which may cause minor differences.
Net revenues
| | | | | | | | | | | |
|
| March 30, 2025 | | March 31, 2024 |
| Net revenues | $ | 700.7 | | | $ | 737.8 | |
| | | |
Net revenues for the three months ended March 30, 2025 decreased $37.1 million, or 5.0%, compared to the prior year period, primarily due to a $43.6 million decrease in sales volumes of existing products, primarily driven by declines in sales related to our OEM product category and UroLift product line, as well as unfavorable fluctuations in foreign currency exchange rates. The reductions in net revenues were partially offset by an increase in sales of new products.
Gross profit
| | | | | | | | | | | |
| | Three Months Ended |
| | March 30, 2025 | | March 31, 2024 |
| Gross profit | $ | 389.4 | | | $ | 416.1 | |
| Percentage of sales | 55.6 | % | | 56.4 | % |
Gross margin for the three months ended March 30, 2025 decreased 80 basis points, or 1.4%, compared to the prior year period, primarily due to continued cost inflation from macro-economic factors, specifically with respect to labor and raw materials and unfavorable product mix, partially offset by a decrease in costs for quality remediation and excess and obsolete inventory charges.
Selling, general and administrative
| | | | | | | | | | | |
| | Three Months Ended |
| | March 30, 2025 | | March 31, 2024 |
| Selling, general and administrative | $ | 222.7 | | | $ | 242.8 | |
| Percentage of sales | 31.8 | % | | 32.9 | % |
Selling, general and administrative expenses for the three months ended March 30, 2025 decreased $20.1 million compared to the prior year period was primarily attributable to favorable fluctuations in foreign currency exchange rates, largely stemming from non-designated foreign currency forward contracts designed to hedge against the cash consideration for the VI Business. The decrease in selling, general and administrative expenses was partially offset by costs related to our expected acquisition of the VI Business and higher IT related costs primarily driven by our ongoing development of a new ERP solution.
Research and development
| | | | | | | | | | | | | | | |
| | Three Months Ended |
| | March 30, 2025 | | March 31, 2024 | | | | |
| Research and development | $ | 36.4 | | | $ | 37.3 | | | | | |
| Percentage of sales | 5.2 | % | | 5.1 | % | | | | |
The decrease in research and development expenses for the three months ended March 30, 2025 compared to the prior year period was primarily attributable to lower European Union Medical Device Regulation related costs partially offset by higher project spend within certain product categories.
Pension Settlement Charge
For the three months ended March 31, 2024, we recognized a settlement charge of $138.1 million related to our plan to terminate the Teleflex Incorporated Retirement Income Plan resulting from our purchase of a group annuity contract to provide participants, beneficiaries, and alternate payees the full value of their benefit under the plan.
Restructuring charges, separation costs and impairment charges
| | | | | | | | | | | |
| | Three Months Ended |
| | March 30, 2025 | | March 31, 2024 |
| Restructuring charges, separation costs and impairment charges | $ | 4.8 | | | $ | 2.7 | |
Restructuring charges, separation costs and impairment charges for the three months ended March 30, 2025 primarily consisted of consulting and professional advisory services associated with our strategic action plan to create a new, independently traded public company and termination benefits related to our ongoing Footprint Realignment plans.
Ongoing restructuring plans
We have ongoing restructuring programs that include the consolidation of our manufacturing operations (referred to as our 2024 and 2023 Footprint realignment plans) and the 2024 Restructuring plan. The following table provides a summary of the key estimates related to the completion of these programs:
| | | | | | | | | | | | | | | | | |
| 2024 Restructuring plan | | 2024 Footprint Realignment plan | | 2023 Footprint Realignment plan |
|
| Aggregate pre-tax restructuring and restructuring related charges estimated | $9 million to $11 million | | $37 million to $46 million | | $11 million to $15 million |
Estimated annual pre-tax savings | $9 million to $11 million | | $12 million to $14 million | | $2 million to $4 million |
For additional information regarding our restructuring plans, refer to Note 5 within the condensed consolidated financial statements included in this report.
Interest expense
| | | | | | | | | | | |
| | Three Months Ended |
| | March 30, 2025 | | March 31, 2024 |
| Interest expense | $ | 18.5 | | | $ | 22.7 | |
| Average interest rate on debt | 4.2 | % | | 4.7 | % |
| | | |
The decrease in interest expense for the three months ended March 30, 2025 compared to the prior year period was primarily due to a lower average interest rate resulting from decreases in interest rates associated with our variable interest rate debt instruments.
Taxes on income from continuing operations
| | | | | | | | | | | |
| | Three Months Ended |
| | March 30, 2025 | | March 31, 2024 |
Effective income tax rate (1) | 12.7 | % | | 161.0 | % |
(1) The effective income tax rate for the three months ended March 30, 2025 represents an income tax expense and the effective income tax rate for the three months ended March 31, 2024 represents an income tax benefit.
The effective income tax rates for both periods reflect a tax benefit from research and development tax credits. Additionally, the effective income tax rate for the three months ended March 30, 2025 reflects a non-taxable favorable adjustment incurred in relation to foreign currency exchange rates, largely stemming from non-designated foreign currency forward contracts designed to hedge against the cash consideration for the VI Business acquisition. The effective income tax rate for the three months ended March 31, 2024 reflects a tax benefit associated with a pension charge recognized in connection with the termination of the TRIP defined benefit plan.
Segment Financial Information
| | | | | | | | | | | | | | | | | | | |
| Segment net revenues | | | | | | | |
| | Three Months Ended |
| | March 30, 2025 | | March 31, 2024 | | % Increase/(Decrease) | | |
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|
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| Americas | $ | 475.7 | | | $ | 494.0 | | | (3.7) | | | |
| EMEA | 151.2 | | | 159.6 | | | (5.3) | | | |
| Asia | 73.8 | | | 84.2 | | | (12.4) | | | |
|
|
| Segment net revenues | $ | 700.7 | | | $ | 737.8 | | | (5.0) | | | |
|
| Segment operating profit | | | | | | | |
| | Three Months Ended |
| | March 30, 2025 | | March 31, 2024 | | % Increase/(Decrease) | | |
|
|
|
| Americas | $ | 157.8 | | | $ | 160.7 | | | (1.8) | | | |
| EMEA | 33.3 | | | 35.6 | | | (6.7) | | | |
| Asia | 18.9 | | | 26.1 | | | (27.4) | | | |
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|
Segment operating profit (1) | $ | 210.0 | | | $ | 222.4 | | | (5.6) | | | |
(1)See Note 14 to our condensed consolidated financial statements included in this report for a reconciliation of segment operating profit to our condensed consolidated income from continuing operations before interest and taxes.
Comparison of the three months ended March 30, 2025 and March 31, 2024
Americas
Americas net revenues for the three months ended March 30, 2025 decreased $18.3 million, or 3.7%, compared to the prior year period, which was primarily attributable to a $29.6 million decrease in sales volumes of existing products, primarily driven by declines in sales related to our OEM product category and UroLift product line. The decrease in net revenue was partially offset by an increase in sales of new products and, to a lesser extent, price increases.
Americas operating profit for the three months ended March 30, 2025 decreased $2.9 million, or 1.8%, compared to the prior year period, which was primarily attributable to a decrease in gross profit resulting from lower sales and unfavorable product mix, partially offset by price increases. The decrease in operating profit was partially offset by a reduction in sales and marketing expenses.
EMEA
EMEA net revenues for the three months ended March 30, 2025 decreased $8.4 million, or 5.3%, compared to the prior year period, which was primarily attributable to a $7.8 million decrease in sales volumes of existing products and $4.2 million of unfavorable fluctuations in foreign currency exchange rates, partially offset by price increases.
EMEA operating profit for the three months ended March 30, 2025 decreased $2.3 million, or 6.7%, compared to the prior year period, which was primarily attributable to an increase in sales expenses and unfavorable fluctuations in foreign currency exchange rates, partially offset by lower research and development expenses related to the European Union Medical Device Regulation.
Asia
Asia net revenues for the three months ended March 30, 2025 decreased $10.4 million, or 12.4%, compared to the prior year period, which was primarily attributable to a $6.1 million decrease in sales volumes of existing products, unfavorable fluctuations in foreign currency exchange rates and price decreases stemming from the implementation of volume-based procurement programs in China.
Asia operating profit for the three months ended March 30, 2025 decreased $7.2 million, or 27.4%, compared to the prior year period, which was primarily attributable to a decrease in gross profit resulting from lower sales and price decreases in addition to unfavorable fluctuations in foreign currency exchange rates.
Liquidity and Capital Resources
We believe our cash flow from operations, available cash and cash equivalents and borrowings under our revolving credit facility will enable us to fund our operating requirements, including those arising from newly implemented tariffs, capital expenditures, debt obligations and separation costs for the next 12 months and the foreseeable future. We have net cash provided by United States based operating activities as well as non-United States sources of cash available to help fund our debt service requirements in the United States. We manage our worldwide cash requirements by monitoring the funds available among our subsidiaries and determining the extent to which we can access those funds on a cost effective basis.
In conjunction with our upcoming acquisition of the VI Business discussed in the above overview, we entered into foreign exchange derivative contracts with an aggregate notional value of €700 million to economically hedge against the foreign currency exposure associated with the cash consideration needed to complete the acquisition.
On July 30, 2024, the Board of Directors authorized a share repurchase program for up to $500 million of our common stock. On February 28, 2025, we entered into an accelerated share repurchase agreement for $300 million of our common stock, representing the remainder of the share repurchase program approved by the Board of Directors in 2024. Under this agreement, 1,725,253 shares of common stock, representing 80% of the $300 million aggregate, were delivered and included in treasury stock during the three months ended March 30, 2025. The initial shares received were calculated based on a price per share of $139.11, which was the closing share price of our common stock on February 27, 2025. Final settlement under the agreement occurred on April 9, 2025, at which time we received 493,150 additional shares of common stock. The total shares received were calculated based on a price per share of $135.23, which was based on volume-weighted average prices of our common stock during the accelerated share repurchase period less a discount.
Cash Flows
Net cash provided by operating activities from continuing operations was $73.3 million for the three months ended March 30, 2025 as compared to $112.8 million for the three months ended March 31, 2024. The $39.5 million decrease was primarily attributable to unfavorable operating results and unfavorable changes in working capital, which were primarily driven by inventory purchases and outflows related to cloud computing arrangement expenditures as part of our ongoing development of a new ERP solution.
Net cash used in investing activities from continuing operations was $28.8 million for the three months ended March 30, 2025, and primarily consisted of $30.0 million in capital expenditures and $5.0 million of purchases in equity investments, partially offset by $6.3 million in insurance settlement proceeds.
Net cash used in financing activities from continuing operations was $59.5 million for the three months ended March 30, 2025, and primarily consisted of $300.0 million in repurchases of our common stock under the accelerated share repurchase agreement, a $250.9 million increase in net borrowings under our Senior Credit Facility and $15.2 million in dividend payments.
Borrowings
The indentures governing our 4.625% Senior Notes due 2027 (the “2027 Notes”) and 4.25% Senior Notes due 2028 (the "2028 Notes") contain covenants that, among other things and subject to certain exceptions, limit or restrict our ability, and the ability of our subsidiaries, to create liens; consolidate, merge or dispose of certain assets; and enter into sale leaseback transactions. As of March 30, 2025, we were in compliance with these requirements.
The obligations under our senior credit agreement (the "Credit Agreement"), the 2027 Notes and 2028 Notes are guaranteed (subject to certain exceptions) by substantially all of our material domestic subsidiaries, and the obligations under the Credit Agreement are (subject to certain exceptions and limitations) secured by a lien on substantially all of the assets owned by us and each guarantor.
On February 24, 2025, we amended and restated our existing Credit Agreement to facilitate our upcoming acquisition of the VI Business. We anticipate using the new delayed draw term loan along with revolving credit borrowings under the Credit Agreement and cash on hand to finance the VI Business acquisition.
Summarized Financial Information – Obligor Group
The 2027 Notes are issued by Teleflex Incorporated (the “Parent Company”), and payment of the Parent Company's obligations under the Senior Notes is guaranteed, jointly and severally, by an enumerated group of the
Parent Company’s subsidiaries (each, a “Guarantor Subsidiary” and collectively, the “Guarantor Subsidiaries”). The guarantees are full and unconditional, subject to certain customary release provisions. Each Guarantor Subsidiary is directly or indirectly 100% owned by the Parent Company. Summarized financial information for the Parent and Guarantor Subsidiaries (collectively, the “Obligor Group”) as of March 30, 2025 and December 31, 2024 and for the three months ended March 30, 2025 is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | March 30, 2025 |
| | Obligor Group | | Intercompany | | Obligor Group (excluding Intercompany) |
| Net revenue | | $ | 507.2 | | | $ | 72.9 | | | $ | 434.3 | |
| Cost of goods sold | | 315.1 | | | 59.7 | | | 255.4 | |
| Gross profit | | 192.1 | | | 13.2 | | | 178.9 | |
Income (loss) from continuing operations | | 44.1 | | | 48.1 | | | (4.0) | |
Net income (loss) | | 44.0 | | | 48.1 | | | (4.1) | |
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|
| | March 30, 2025 | | December 31, 2024 |
| | Obligor Group | | Intercompany | | Obligor Group
(excluding Intercompany) | | Obligor Group | | Intercompany | | Obligor Group
(excluding Intercompany) |
|
| Total current assets | | $ | 1,049.6 | | | $ | 205.5 | | | $ | 844.1 | | | $ | 1,034.1 | | | $ | 201.2 | | | $ | 832.9 | |
| Total assets | | 2,829.3 | | | 288.2 | | | 2,541.1 | | | 2,815.2 | | | 277.8 | | | 2,537.4 | |
| Total current liabilities | | 1,256.5 | | | 917.0 | | | 339.5 | | | 1,275.4 | | | 953.4 | | | 322.0 | |
| Total liabilities | | 3,644.3 | | | 1,084.3 | | | 2,560.0 | | | 3,450.5 | | | 1,126.6 | | | 2,323.9 | |
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The same accounting policies as described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 are used by the Parent Company and each of its subsidiaries in connection with the summarized financial information presented above. The Intercompany column in the table above represents transactions between and among the Obligor Group and non-guarantor subsidiaries (i.e. those subsidiaries of the Parent Company that have not guaranteed payment of the Senior Notes). Obligor investments in non-guarantor subsidiaries and any related activity are excluded from the financial information presented above.
Critical Accounting Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from the amounts derived from those estimates and assumptions.
In our Annual Report on Form 10-K for the year ended December 31, 2024, we provided disclosure regarding our critical accounting estimates, which are reflective of significant judgments and uncertainties, are important to the presentation of our financial condition and results of operations and could potentially result in materially different results under different assumptions and conditions.
New Accounting Standards
See Note 2 to the condensed consolidated financial statements included in this report for a discussion of recently issued accounting guidance, including estimated effects, if any, of the adoption of the guidance on our financial statements.
Forward-Looking Statements
All statements made in this Quarterly Report on Form 10-Q, other than statements of historical fact, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “should,” “guidance,” “potential,” “continue,” “project,” “forecast,” “confident,” “prospects” and similar expressions typically are used to identify forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about our business and the industry and markets in which we operate. These statements are not guarantees of future performance and are subject to risks and uncertainties, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is
expressed or implied by these forward-looking statements due to a number of factors, including changes in business relationships with and purchases by or from major customers or suppliers; delays or cancellations in shipments; demand for and market acceptance of new and existing products; the impact of inflation and disruptions in our global supply chain on us and our suppliers (particularly sole-source suppliers and providers of sterilization services), including fluctuations in the cost and availability of resins and other raw materials, as well as certain components, used in the production or sterilization of our products, transportation constraints and delays, product shortages, energy shortages or increased energy costs, labor shortages in the United States and elsewhere, and increased operating and labor costs; our inability to integrate acquired businesses into our operations, realize planned synergies and operate such businesses profitably in accordance with our expectations; our inability to effectively execute our restructuring programs; our inability to realize anticipated savings resulting from restructuring plans and programs; the impact of enacted healthcare reform legislation and proposals to amend, replace or repeal the legislation; changes in Medicare, Medicaid and third party coverage and reimbursements; the impact of tax legislation and related regulations; competitive market conditions and resulting effects on revenues and pricing; global economic factors, including currency exchange rates, interest rates, trade disputes, the implementation or threatened implementation of tariffs, sovereign debt issues, and international conflicts and hostilities, such as the ongoing conflicts between Russia and Ukraine and in the Middle East; public health epidemics and pandemics, such as COVID-19; difficulties entering new markets; and general economic conditions. For a further discussion of the risks relating to our business, see Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2024. We expressly disclaim any obligation to update these forward-looking statements, except as otherwise explicitly stated by us or as required by law or regulation.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to the information set forth in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2024.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report are functioning effectively to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
(b) Change in Internal Control over Financial Reporting
No change in our internal control over financial reporting occurred during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
We are party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims include actions involving product liability and product warranty, intellectual property, contracts, employment and environmental matters. As of March 30, 2025 and December 31, 2024, we had accrued liabilities of $0.8 million in connection with these matters, representing our best estimate of the cost within the range of estimated possible loss that will be incurred to resolve these matters. Amounts accrued for legal contingencies are often determined based on a complex series of judgments about future events and uncertainties that rely heavily on estimates and assumptions, including as to the timing of related payments. The ability to make such estimates and judgments can be affected by various factors including whether, among other things, damages sought in the proceedings are unsubstantiated or indeterminate; scientific and legal discovery has commenced or is complete; proceedings are in early stages; matters present legal uncertainties; there are significant facts in dispute, or procedural or jurisdictional issues; there is uncertainty or unpredictability regarding the number of potential claims; there is the potential to achieve comprehensive multi-party settlements; there is complexity regarding related cross-claims and counterclaims; and/or there are numerous parties involved. To the extent adverse awards, judgments or verdicts have been rendered against us, we do not record an accrual until a loss is determined to be probable and can be reasonably estimated.
Based on information currently available, advice of counsel, established reserves and other resources, we do not believe that any such actions are likely to be, individually or in the aggregate, material to our business, financial condition, results of operations or cash flows. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to our business, financial condition, results of operations or cash flows.
Item 1A. Risk Factors
See the information set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no significant changes in risk factors for the quarter ended March 30, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table presents the repurchases of our common stock during the three months ended March 30, 2025:
| | | | | | | | | | | | | | | | | | | | | | | |
| Period | Total Number of Shares Purchased | | Average Price Paid Per Share | | Total Number of Shares Purchased as Part of Publicly Announced Program | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program(1) |
January 1, 2025 - February 2, 2025 | — | | — | | — | | $ | 300,000,000 | |
February 3, 2025 - March 2, 2025 (2) | 1,725,253 | | | | 1,725,253 | | — | |
March 3, 2025 - March 30,2025 | — | | — | | — | | — | |
| Total | 1,725,253 | | | | 1,725,253 | | |
(1)On July 30, 2024, our Board of Directors authorized a share repurchase program for up to $500 million of our common stock. As of March 30, 2025, there is no remaining share repurchase capacity under the program.
(2)On February 28, 2025, we entered into an accelerated share repurchase program (the "ASR Transaction") with JPMorgan Chase Bank. (the “Counterparty”) to repurchase an aggregate of $300 million (the "Repurchase Price") of our common stock. The ASR Transaction was executed under the $500 million share repurchase program authorized by our Board of Directors on July 30, 2024. Under the terms of the ASR Transaction, on March 3, 2025, we paid the Repurchase Price to the Counterparty in exchange for 1,725,253 shares of our common stock, representing shares with a value of 80% of the total Repurchase Price. The initial shares received, which have been included in treasury stock as of March 30, 2025, were calculated based on a price per share of $139.11, which was the closing share price of our common stock on February 27, 2025. Final settlement under the ASR Transaction occurred on April 9, 2025, at which time we received 493,150 additional shares of common stock. The total shares received were calculated based on a price per share of $135.23, which was based on volume-weighted average prices of our common stock during the accelerated share repurchase period less a discount. See "Management's Discussion and Analysis of Financial Condition — Liquidity and Capital Resources."
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Plans
During the quarter ended March 30, 2025, none of our directors or executive officers , modified or , contracts, instructions or written plans for the sale of purchase of our securities that were intended to satisfy the affirmative defense conditions of Rule 10b5-1.
Departure of Executive Officer
On April 29, 2025, the Company notified Jay White, its Corporate Vice President and President, Global Commercial, that his employment with the company would terminate on July 1, 2025 as a result of the elimination of his position in connection with our previously announced separation of the Company. Upon termination, Mr. White shall be entitled to the benefits, and subject to the obligations, provided for in the Senior Executive Officer Severance Agreement, dated February 25, 2021, between the Company and Mr. White.
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this report:
| | | | | | | | | | | | | | | | | |
| Exhibit No. | | | | Description | |
| | | | | |
| |
| |
| |
| 10.1 | | | | | |
10.2 | | | | | |
10.3 | | | | | |
31.1 | | — | | | |
31.2 | | — | | | |
32.1 | | — | | | |
32.2 | | — | | | |
101.1 | | — | | The following materials from our Quarterly Report on Form 10-Q for the quarter ended March 30, 2025, formatted in inline XBRL (eXtensible Business Reporting Language): (i) Cover Page; (ii) the Condensed Consolidated Statements of Income for the three months ended March 30, 2025 and March 31, 2024; (iii) the Condensed Consolidated Statements of Comprehensive Income for the three months ended March 30, 2025 and March 31, 2024; (iv) the Condensed Consolidated Balance Sheets as of March 30, 2025 and December 31, 2024; (v) the Condensed Consolidated Statements of Cash Flows for the three months ended March 30, 2025 and March 31, 2024; (vi) the Condensed Consolidated Statements of Changes in Equity for the three months ended March 30, 2025 and March 31, 2024; and (vii) Notes to Condensed Consolidated Financial Statements. | |
104.1 | | — | | The cover page of the Company's Quarterly Report on Form 10-Q for the quarter ended March 30, 2025, formatted in inline XBRL (included in Exhibit 101.1). | |
____________________________________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | | | | | | | | | | | | |
| | | TELEFLEX INCORPORATED |
| | | |
| | | By: | | /s/ Liam J. Kelly |
| | | | | Liam J. Kelly President and Chief Executive Officer (Principal Executive Officer) |
| | | | | |
| | | By: | | /s/ John R. Deren |
| | | | | John R. Deren Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
Dated: May 1, 2025
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