Teleflex Incorporated (NYSE:TFX) Q4 2022 Earnings Call Transcript

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Mike Sarcone: Good morning. So just two follow-ups on Cecilia’s questions. Just first on the UroLift growth CAGR of 8% to 9% over the next three years. By any chance could you parse out how you’re thinking about US growth versus OUS growth?

Liam Kelly: YeahSo I will tell you that when it comes to the guidance for UroLift during the LRP over the coming years, we are assuming that UroLift will grow 12% to 13%. So, two comments on that. We — the high growth will go 12% 13%. And within that UroLift will grow 8% to 9%. So a couple of comments on that. First is that nothing has changed to our international assumptions. We still are confident in the rollout of the product in Japan. As we said in our prepared remarks, we’ve begun in China. There are other geographies coming on board such as Brazil, Taiwan, India, France, Italy, Spain and ultimately Germany as you go through the LRP cadence. I would also say that 2022 played out a little bit differently than we anticipated in the US with procedural recovery a lot slower than we had anticipated due to patient flow and staffing shortages.

And I think overarching if you look at Teleflex as a company within that high-growth bucket in 2022, it’s 25% of our company growing at 12% to 13% By 2025, it will be one-third of our company still growing at that 12%, 13%. And I think this along with our growth within UroLift will position Teleflex as for attractive long-term durable growth as a company.

Mike Sarcone: Got it. That’s very helpful. And then just one follow-up on the gross margins for 2023. Do you think you could help us think about the quarterly cadence through the year and just how we should flow gross margin through?

Thomas Powell: Yeah. So I’d say there’s some pluses and minuses with how foreign exchange comes in and others. But what you should expect is a relatively stable gross margin for the first three quarters and then expect to see some margin expansion or further expansion in the fourth quarter as a result of a higher volume more attractive mix expectation.

Operator: Our next question comes from Shagun Singh with RBC. Please go ahead. Your line is open.

Shagun Singh: Great. Thank you so much for taking the question. So just on UroLift, the LRP guidance is about 8% to 9%. Is mid single-digit a reasonable ballpark for this year? And I just wanted to get your thoughts on what gives you the confidence that patients will return. Do you have a backlog to tap into? It is encouraging that physicians are continuing to train. And then with respect to my second question on EPS, it’s a pretty wide range. So what gets you to the top versus the bottom end? And what are the biggest swing factors here? Thanks for taking the questions.

Liam Kelly: Okay. Shagun, thank you for the questions. I’ll let Tom answer the EPS range in a moment, but let me begin with UroLift. So obviously, we feel confident on the 8% to 9% for UroLift within our LRP. We do believe it will be improving, as we go through the LRP. And as I said earlier, nothing has changed in our assumptions for the international markets and we continue to anticipate that the international markets will do well. And we do feel good about the global growth for the UroLift franchise based, on all of that and based on the improving environment that we anticipate, as we said in our prepared remarks. And this gives us the confidence in the LRP growth of 8% to 9% CAGR, between now and 2025. With regard to your question regarding patient returns, there’s two elements I think is going to need to be taken into account is, patient returns and staffing shortages.

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