Teleflex Incorporated

Good morning, ladies and gentlemen, and welcome to the Teleflex first quarter 2024 earnings conference call. At this time, all participants have been placed in a listen-only mode. At the end of the company's prepared remarks, we will conduct a question and answer session. Please note that this conference call is being recorded and will be available on the company's website for replay shortly. And now I will turn the call over to Mr. Lawrence Kirsch, Vice President of Investor Relations and Strategy Development.

Good morning, everyone, and welcome to the Teleflex Incorporated first quarter 2024 earnings conference call. The press release and slides to accompany this call are available on our website at teleflex.com. As a reminder, a replay will be available on our website. Those wishing to access the replay can refer to our press release from this morning for details. Participating on today's call are Liam Kelly, Chairman, President, and Chief Executive Officer, and Thomas Powell, Executive Vice President and Chief Financial Officer. Liam and Tom will provide prepared remarks, and then we will open the call to Q&A. Before we begin, I'd like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in the slides posted to the investor relations section of the Teleflex website. We wish to caution you that such statements are, in fact, forward-looking in nature and are subject to risks and uncertainties, and actual events or results may differ materially. The factors that could cause actual results or events to differ materially include, but are not limited to, factors referenced in our press release today, as well as our filings with the SEC, including our Form 10-K, which can be accessed on our website. Now, I'll turn the call over to Liam for his remarks.

Thank you, Larry, and good morning, everyone. On this morning's call, we will discuss the first quarter results, review some commercial highlights, and provide an update on our financial guidance for 2024. We had a solid start to 2024 as momentum seen through last year continued into the first quarter. For the quarter, Teleflex revenues were $737.8 million, up 3.8% year-over-year on both a GAAP and constant currency basis. First quarter adjusted earnings per share was $3.21, a 3.9% increase year-over-year. During the quarter, utilization for our products trended positively, and tracked to our expectations. While we do not expect a revenue benefit from pent-up demand due to the broad exposure of the Teleflex portfolio to critical care procedures, we are seeing utilization back to pre-pandemic levels. Turning to raw material inflation. We saw positive trends during the first quarter, with year-over-year disinflation tracking towards our expectations for the year. Nonetheless, we continue to expect total inflation to be somewhat higher in 2024 as compared to 2023, in part due to inventory capitalized in 2023 impacting the income statement this year. I would also like to provide an update on our logistics and distribution infrastructure. Our freight expenses continue to show positive trends. Despite the conflict in the Middle East, we continue to maintain customer service levels by successfully diverting shipments to alternative shipping lanes. In addition, I would note that we do not utilize the Port of Baltimore to ship Teleflex products to or from our North American distribution center. Now, let's turn to a deeper dive into our first quarter revenue results. I will begin with a review of our geographic segment revenues for the first quarter. All growth rates that are referred to are on a constant currency basis unless otherwise noticed. America's revenues were $406.3 million, a 1.5% decrease year over year. Investors familiar with Teleflex will be aware that prior year MSA revenues were booked in the Americas. EMEA revenues of $159.6 million increased 9.7% year over year. Growth was seen across the majority of our product families, including solid double-digit growth contributions from interventional and interventional urology. The region also benefited from the ongoing recovery of ET tubes following the recall last year. Now turning to Asia. Revenues were $84.2 million. an 11.2% increase year-over-year. Revenue growth was broad-based across the region with double-digit increases in China, India, and Southeast Asia. Let's now move to a discussion on our first quarter revenues by global product category. Commentary on global product category growth for the first quarter will also be on a year-over-year constant currency basis. starting with vascular access. Revenue increased 2% year over year to $181.4 million. The quarter was led by underlying growth in PICS, central access, and EZIO, partly offset by the impact of the previously announced endurance catheter recall. We will anniversary the endurance recall during the second quarter, and we continue to see opportunities for share gains in the peripheral access market. Moving to interventional. Revenue was $134.7 million, an increase of 15.4% year over year. We demonstrated growth across our geographic segments as our portfolio of growth drivers continues to perform well. During the quarter, growth was led by balloon pumps, manta, and complex catheters. turning to anesthesia. Revenue increased 3.2% year-over-year to $96.4 million. Growth was balanced across the portfolio. Of note, we continue to recover from the ET tube recall initiated during the second quarter of 2023 and will fully anniversary the revenue comparisons at the end of next quarter. In our surgical business, revenue was $105.5 million, an increase of 7.1% year over year against a tough comparison. Our underlying trends in our core surgical franchise continue to be solid. Among our largest franchises, growth was led by chest drainage instrumentation and our ligation portfolio. For interventional urology, revenue was $79.7 million, representing an increase of 6.1% year over year. Growth was driven by Barragel revenue following the October 2023 acquisition of Palette Life Sciences. And as anticipated, Urolift growth was impacted by continued challenges in the office side of service and Salesforce training activities for Barragel during the quarter. Our full year 2024 interventional urology total revenue guidance continues to assume approximately 7.5% growth, which continues to incorporate Palette revenues in the range of $66 and $68 million for 2024. OEM had another solid quarter, with revenues increasing 13.6% year over year to $87.7 million. Our three largest product categories recorded double-digit growth in the quarter. including continued strength in microcatheters. In addition, we saw some modest benefit from order timing shifting from the second quarter into the first quarter. First quarter other revenue declined 27.1% to $52.4 million year over year. The decline in revenue on a year over year basis is primarily due to the planned December 2023 exit of the MSA by Medlife. That completes my comments on the first quarter revenue performance. Turning to some commercial and clinical updates. Starting with an update on Palette Life Sciences, our most recent acquisition. We have now owned Palette Life Sciences for just over six months, and I am pleased to report that the integration process is meeting our targeted milestones. Cross-functional product sales training continued to progress throughout the first quarter, and the first phase of training for our dual bag reps will be completed at the end of the second quarter. During the quarter, we were active training and proctoring the legacy Eurolift sales force on the use of Barragell, and we remain on track to fully complete the integration of the sales force by the end of 2024. moving to a couple of product updates. In our interventional access business, we initiated a limited market release of the Watson Temporary Paging Guidewire. Watson will complement our expanding structural hard portfolio, which already includes the Manta Large Foreclosure Device and the Langston Dual Lumen for contrast delivery and pressure measurement. In our surgical business, we are pleased to share that the Titan SGS stapler is now available with Gore seam guard by absorbable staple line reinforcement material. This complimentary pairing supports bariatric surgeons by addressing clinical preferences in the sleeve gastrectomy market. As we look further into 2024, we will continue to advance our new product introductions with a number of launches across our business units. In our interventional access business, there is no change to our expectation for an FDA marketing clearance and a limited market release of the Ringer catheter in the second half of 2024. Ringer incorporates a unique balloon design that allows blood to flow through a vessel while the balloon is inflated. We expect to initially launch with a PTCA indication, but will evaluate opportunities for label expansion following the completion of our vessel perforation trial. Finally, I will provide a regulatory update. In February, we voluntarily initiated a recall of our quick-flash radial artery and radial artery arterial line catheterization kits after receiving reports of increased resistance in the guide wire handle and chamber during use. The financial impact from this recall was de minimis. In cooperation with the FDA, Teleflex also recently initiated a voluntary field advisory notice for Arrow fiber optics and Ultraflex intra-optic balloon catheter kits due to reports indicating an infrequent condition, which, when not identified and corrected promptly could result in serious health consequences, including a reduction or loss of the hemodynamic support normally provided by intraortic balloon pump therapy. The FDA has not yet designated a recall classification, but under the field advisory notice, customers may continue to use the products in scope per additional instructions, warnings, and cautions. We expect the financial impact from the voluntary field action to be immaterial. That completes my prepared remarks. Now I'd like to turn the call over to Tom for a more detailed review of our first quarter financial results. Tom?