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TELEFLEX INC (TFX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $795.4M (+2.8% y/y, +3.2% adjusted constant currency), with adjusted EPS up 15% y/y to $3.89; GAAP EPS was $(2.95) driven by a $240M non‑cash goodwill impairment in Interventional Urology .
  • Strong Interventional (+18.2% y/y) and Surgical (+11.3% y/y) offset Interventional Urology softness (−8.7% y/y) and a weaker Vascular CVC environment; adjusted operating margin expanded to 27.6% (+130 bps y/y) .
  • Strategic catalysts: agreement to acquire BIOTRONIK’s Vascular Intervention business (~€760M) and intent to separate into RemainCo (Vascular Access/Interventional/Surgical) and NewCo (Urology/Acute Care/OEM) by mid‑2026 .
  • 2025 guidance initiated: GAAP revenue growth −0.35% to +0.65%; adjusted constant currency growth +1.0% to +2.0%; adjusted EPS $13.95–$14.35; company also launching a $300M accelerated share repurchase effective Feb 28, 2025 .
  • Management flagged ~$100M 2025 headwinds (UroLift reimbursement, OEM customer vertical integration/inventory, China volume‑based procurement), tempering near‑term top line while emphasizing margin discipline and portfolio moves as stock catalysts .

What Went Well and What Went Wrong

What Went Well

  • Interventional and Surgical delivered strong Q4 growth: Interventional +18.2% y/y and Surgical +11.3% y/y; “strong performances from Interventional and Surgical helped offset softness in Interventional Urology revenues” .
  • Palette/Barrigel outperformed: “Palette Life Sciences revenues exceeded $75 million…above the $73–$75 million guidance,” supporting Interventional Urology franchise mix .
  • Margin execution: adjusted operating margin rose to 27.6% (+130 bps y/y) and adjusted gross margin was 60.1% (flat y/y), reflecting cost control and mix benefits .

What Went Wrong

  • Interventional Urology headwinds: IU revenue declined 8.7% y/y in Q4; management revised UroLift forecasts, recorded a $240M goodwill impairment, and expects “prolonged period of subdued revenue growth” due to pricing pressure in office site of service and volume challenges .
  • OEM softness and inventory management: OEM grew only +3.5% y/y in Q4; earlier quarters saw a large customer in‑sourcing and broader inventory tightening that management expects to carry into 2025 .
  • Vascular CVC impact: “lower year‑over‑year hospitalizations due to flu and COVID‑19 impacting our CVC business negatively in our Vascular business unit,” contributing to revenue below internal expectations by ~$10.2M in Q4 .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$773.9 $764.4 $795.4
GAAP EPS ($)$0.66 $2.36 $(2.95)
Adjusted EPS ($)$3.38 $3.49 $3.89
Gross Margin (%)55.7% 56.3% 55.3%
Adjusted Gross Margin (%)60.1% 60.8% 60.1%
Operating Margin (%)10.7% 19.5% (13.9)%
Adjusted Operating Margin (%)26.3% 27.3% 27.6%

Segment revenue (geography) – Q4 comparison:

SegmentQ4 2023 Revenue ($M)Q4 2024 Revenue ($M)Reported GrowthAdjusted CC Growth
Americas$533.2 $540.8 1.4% 1.7%
EMEA$152.4 $161.0 5.7% 6.0%
Asia$88.3 $93.6 5.9% 7.5%
Consolidated$773.9 $795.4 2.8% 3.2%

Global product category – Q4 comparison:

CategoryQ4 2023 Revenue ($M)Q4 2024 Revenue ($M)Reported GrowthAdjusted CC Growth
Vascular Access$186.7 $189.3 1.4% 1.8%
Interventional$135.6 $160.4 18.2% 18.7%
Anesthesia$98.2 $95.3 (2.9)% (2.4)%
Surgical$109.6 $121.9 11.3% 12.3%
Interventional Urology$93.0 $84.9 (8.7)% (8.6)%
OEM$82.6 $85.4 3.5% 3.6%
Other$68.2 $58.2 (14.7)% (14.3)%

KPIs and balance sheet/cash

KPIQ4 2024Notes
Cash & Equivalents ($M)$290.2 End of period
Inventories ($M)$600.1 End of period
Net Accounts Receivable ($M)$459.5 End of period
Cash from Ops (FY, $M)$638.3 2024 CF from ops
Net leverage~1.5x As disclosed on call
ASR announced$300M (effective 2/28/25) Completes $500M program
Goodwill impairment (IU)$240M Non‑cash

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP Revenue GrowthFY 2025N/A(0.35)% to 0.65% Initiated
Adjusted Constant Currency Revenue GrowthFY 2025N/A1.00% to 2.00% Initiated
GAAP EPSFY 2025N/A$8.85 to $9.25 Initiated
Adjusted EPSFY 2025N/A$13.95 to $14.35 Initiated
Adjusted Gross MarginFY 2025N/A60.25% to 61.00% Initiated
Adjusted Operating MarginFY 2025N/A26.60% to 27.00% Initiated
Accelerated Share Repurchase2025N/A$300M to commence 2/28/25 Announced
DividendQ1 2025N/A$0.34/share (payable 3/17/25) Declared

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Cath lab scale & M&AQ3: pursuing cath lab assets; buyback capacity Agreed to acquire BIOTRONIK VI; portfolio spans DCB/DES/covered stents; expected €91M Q4’25 revenue; ~6%+ growth from 2026 Accelerating
Separation (RemainCo/NewCo)Not discussed in Q2/Q3 PRs Intent to separate by mid‑2026 into focused entities with distinct growth/margin profiles New strategic pivot
Interventional Urology (UroLift)Q3: office site reimbursement pressure $240M goodwill impairment; prolonged subdued growth expected; IU −8.7% y/y in Q4 Deteriorating
OEM dynamicsQ3: customer in‑sourcing; inventory management; impact ~$14M FY’24 Inventory tightening to continue in 2025; headwind bucket called out Near‑term headwind
IABP pumps opportunityQ3: >$10M Q4 orders; extends into 1H25 Continues to be a U.S. opportunity; capital first, consumables trail Ongoing
Regional trendsQ3: EMEA growth; Asia doctor strike impact EMEA +6.0% adj CC; APAC headwinds from China VBP in 2025 Mixed
Regulatory/legalItalian payback non‑GAAP adjustment; EU MDR costs Continued MDR registration costs and Italian reserve impact (excluded in adjusted) Continuing
Tariffs/macro—Monitoring potential Mexico/EU tariffs; contingency actions; capitalization impact explained Watchlist
R&D execution—Freesolve RMS CE‑mark, BIOMAG-II enrolling; Titan SGS clinical outcomes; Barrigel post‑prostatectomy study Progressing

Management Commentary

  • “In the fourth quarter, we delivered strong double‑digit adjusted earnings per share growth…strong performances from Interventional and Surgical helped offset softness in Interventional Urology revenues.” – Liam Kelly, CEO .
  • “Palette Life Sciences revenues exceeded $75 million…above the $73–$75 million guidance.” – Liam Kelly .
  • On BIOTRONIK VI acquisition: “expected to be approximately $0.10 accretive to adjusted EPS in the first year…beginning in 2026…constant currency revenue growth of 6% or better.” – Company release .
  • On separation: “Separation expected to position RemainCo to deliver 6%+ constant currency revenue growth…accretive to adjusted gross margin…drive double‑digit EPS growth in the first full year post separation.” – Company release .

Q&A Highlights

  • Rationale/timing of separation: management cited portfolio optimization, clean operational carve‑out, and differing growth/profit profiles; openness to alternative structures if value accretive .
  • Sales force/geography synergies with BIOTRONIK: Teleflex strong in Americas; BIOTRONIK stronger in EMEA; combined bag improves cath lab access .
  • Freesolve RMS confidence: metallic resorbable scaffold differs from prior polymer BRS; BIOMAG-I data and CE mark underpin optionality; U.S. path would require pivotal trial .
  • 2025 guide headwinds (~$100M): UroLift reimbursement (largest), OEM in‑sourcing/inventory, APAC China volume‑based procurement .
  • Tariffs exposure/mitigation: outlined Mexico exposure scenarios and actions (inventory north of border), noted capitalization into inventory if tariffs hit .
  • OEM in‑sourcing details: specific component historically less complex; customer absorption drove move; normalization expected beyond 2025 .

Estimates Context

  • Wall Street consensus estimates from S&P Global were unavailable during this review due to data access limits; therefore, beat/miss vs consensus cannot be quantified here. The company noted Q4 adjusted constant currency revenues were ~$10.2M below its internal expectations, with ~half attributable to Interventional Urology and the remainder to Vascular CVC dynamics .
  • If you’d like, we can refresh S&P Global estimates later to update beat/miss markers (EPS, revenue, margin consensus).

Key Takeaways for Investors

  • Q4 execution was solid on adjusted metrics: revenue $795.4M (+3.2% adjusted CC) and adjusted EPS $3.89 (+15.1% y/y), with adjusted operating margin at 27.6% .
  • Interventional and Surgical strength (+18.2% and +11.3% y/y) underscores the hospital‑focused RemainCo thesis post separation .
  • Interventional Urology remains under pressure; a $240M goodwill impairment and 2025 UroLift reimbursement headwinds argue for cautious near‑term expectations in NewCo .
  • Strategic catalysts: BIOTRONIK VI acquisition (expected €91M Q4’25 revenue; 6%+ growth from 2026; ~$0.10 adjusted EPS accretion in first year) and mid‑2026 separation plan can re‑rate growth/margin profiles .
  • 2025 outlook is conservative: GAAP growth −0.35% to +0.65%; adjusted CC +1% to +2%; adjusted EPS $13.95–$14.35, reflecting ~$100M macro/product headwinds .
  • Capital returns/support: $300M accelerated share repurchase (completing $500M authorization) and $0.34 Q1 dividend provide near‑term support while funding M&A and R&D .
  • Trading setup: near‑term headline risk from UroLift/OEM/China VBP vs medium‑term multiple expansion potential from separation and Interventional scale‑up; watch gross/operating margin execution vs guidance (adj GM 60.25–61.00%, adj OM 26.60–27.00%) .
Notes:
- All figures are as reported by Teleflex; “adjusted” figures exclude specified non‑GAAP items (Italian payback, MDR, restructuring, ERP, pension termination, intangible amortization, etc.) per company reconciliations **[96943_0000096943-25-000025_ex991to2-27x20258xkreq4202.htm:4]** **[96943_0000096943-25-000025_ex991to2-27x20258xkreq4202.htm:8]** **[96943_0000096943-25-000025_ex991to2-27x20258xkreq4202.htm:10]**.
- Consensus estimates from S&P Global were unavailable at time of analysis; beat/miss vs Street not shown.