Teleflex Incorporated

Please stand by. Good morning, ladies and gentlemen, and welcome to the Teleflex year-end 2025 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. Lawrence?

Good morning, everyone, and welcome to the Teleflex Incorporated year-end 2025 earnings conference call. The press release and slides to accompany this call are available on our website at teleflex.com. In addition, we have provided supplemental non-GAAP income statement information for 2025 continuing operations in the appendix of our slide deck, which can be found on our investor relations website. 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 Stuart Randall, interim president and chief executive officer, and John Darin, executive vice president and chief financial officer. Stu and John 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 FCC, including our Form 10-K, which can be accessed on our website. Now, I will turn the call over to Stu for his remarks.

Thank you, Larry, and good morning, everyone. In January, I stepped into the role of interim CEO. As a reminder, the board made its decision to transition the chief executive officer position following the announced sale of our acute care, interventional urology, and OEM businesses, and as Teleflex enters its next phase as a more focused, higher growth organization. We remain grateful for Liam Kelly's impactful leadership and the significant contributions he made during his tenure. The Board is actively conducting a CEO search with the support of Spencer Stewart, a leading executive search firm, who is evaluating external candidates. While we are moving with urgency, we are taking a disciplined and thorough approach to ensure we identify the right leader with the experience and capabilities to guide Teleflex in the future. At the same time, it is critical that we maintain momentum across our strategic priorities during this transition period. My way of background, I have had the privilege of serving on Teleflex's board since 2009, and I bring more than three decades of experience in the medical device and healthcare industry. As interim CEO, my immediate focus is on execution, advancing the closing of our two strategic divestitures, consistently delivering on our financial commitments, and ensuring continuity across the organization. I am working closely with our leadership team to keep the business moving forward aligned with our strategic objectives. With that context, let me expand on the key elements of our strategy. In December of last year, we signed definitive agreements to sell the acute care, interventional urology, and OEM businesses to two separate buyers. The strategic divestitures will result in total cash proceeds of $2.03 billion, with net after-tax proceeds of approximately $1.8 billion. As an update, we are working through the regulatory and other conditions to closing and continue to expect the sales to close in the second half of 2026. To be clear, our value creation strategy is unchanged, and we intend to use these net proceeds to return significant capital to shareholders through our previously announced share repurchase authorization of up to $1 billion, while also reducing debt to enhance our financial flexibility and support future growth and value creation. These planned actions signal our commitment to discipline capital allocation and shareholder returns. We will continue to evaluate additional opportunities to return capital to shareholders as appropriate, consistent with our focus on long-term value creation. The creation of Teleflex Remainco, which represents our continuing operations, results in a more focused and optimized portfolio centered on highly complementary businesses. Vascular, which now includes the emergency medicine portfolio, interventional, which no longer includes the intra-aortic balloon pump portfolio, and surgical. We are positioning Teleflex as a medical technologies leader with increased flexibility to invest in innovation and compete in these priority markets. Specifically, product innovation will be a strategic priority for investment going forward, and we expect R&D expense for RemainCo to represent approximately 8% of sales compared to approximately 5% of revenue that Teleflex spent historically. A couple of comments regarding our 2026 adjusted EPS guidance. For 2026, our adjusted EPS guidance is in the range of $6.25 to $6.55. However, it is important to note that there are a number of assumptions included in this guidance that will have significant impacts on our EPS as we move through 2026 and into 2027. First, this guidance range includes the full year negative impact of stranded costs related to our strategic divestitures, which we estimate to be $90 million. Stranded costs are necessary to support both continuing and discontinued operations for a transitionary period of time. Second, this guidance range does not include the positive impact of the transition services and manufacturing services agreements that will come into effect upon the closing of the strategic divestitures. On an annualized basis, we expect the TS and MS agreements to fully offset the aforementioned standard costs. Furthermore, we are taking action on reducing expenses when the TS and MS agreements roll off in the future and have announced an initial restructuring plan to mitigate approximately $50 million of costs to right-size the organization post-investitures. Finally, our 2026 adjusted EPS guidance does not include the anticipated positive impact from our announced plans to repurchase $1 billion of our common stock and repayment of debt with remaining proceeds from the strategic divestitures. both of which we intend to execute following the closings of the transactions. We anticipate these actions will result in a meaningfully lower share count and significantly reduced interest expense. Although we have not included the benefits of these actions on our 2026 adjusted EPS guidance, we continue to anticipate closing of the strategic divestitures in the second half of 2026. Taken together, we expect these factors will contribute to significantly higher adjusted EPS in 2027 and beyond. Now, moving to the agenda for the remainder of this morning's call. First, we will discuss our continuing operations results, then conclude with our financial guidance for 2026. Before I begin, please note that we have reclassified the assets associated with our pending strategic divestitures of acute care, interventional urology, and OEM businesses as discontinued operations to reflect the strategy to separate the company, provide a clearer view of the ongoing performance of RemainCo, and in accordance with accounting guidance requirements. Given that Teleflux is entering a new phase with a streamlined portfolio focused on the acute care setting, I will limit my comments to the continuing operations for the second half of 2025, inclusive of the acquisition of Biotronics' vascular intervention business. All growth rates that I refer to are on a year-over-year pro forma adjusted constant currency basis, unless otherwise noted. Pro forma adjusted constant currency growth excludes the $14 million impact to foreign exchange, the Italian payback measure in 2025 of $9 million, and the impact of approximately $14 million in RemainCo product revenue that was discontinued at the end of 2025 due to a strategic realignment, but includes revenue generated by the acquired FASQ intervention business for the prior year period. Now, let's move to the second half of 2025 continuing operations revenue by global product category. Commentary on global product category growth from continuing operations for the second half of 2025 will also be on a year-over-year pro forma adjusted constant currency basis unless otherwise noted. Starting with vascular, revenue increased 2.4% year-over-year to $472.7 million. It was primarily driven by growth in our central access, hemostatic, and atomization products offset by a tough comparison from the prior year period in part due to military surge orders that did not repeat in 2025. Moving to interventional, revenue was $427.5 million, an increase of 8.1%. The strong performance for the second half was driven by a broad interventional portfolio. For the second half of 2025, reported vascular intervention revenues were $202 million. In our surgical business, revenue was $219.3 million, an increase of 3.2%. reflecting impact of volume-based procurement in China. Underlying trends in our core surgical franchise continue to be solid with strong double-digit growth from the majority of our franchises. This completes my comments on the second half revenue performance. Now, I would like to turn the call over to John for a more detailed review of our financial results.