Q3 2022 Teleflex Inc Earnings Call

October 27, 2022

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 Gosh, Vice President of Investor Relations and strategy development.

Good morning, everyone and welcome to the Teleflex incorporated third quarter 2022 earnings Conference call.

Press release and slides to accompany this call are available on our website at Teleflex Dot com.

As a reminder, this call will be available on our website and a replay will also be available.

Please refer to our press release from this morning for details on how to access the replay.

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.

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 our slides 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 rich.

<unk> 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.

During this conference call you will hear management make statements regarding intra quarter business performance management is providing this commentary to provide the investment community with additional insights concerning trends and these disclosures may not occur in subsequent quarters with that said I will now turn the call over to Liam for his remarks.

Thank you Larry and good morning, everyone.

The third quarter Teleflex revenues were $686 8 million a year over year decline of one 9% on a reported basis and an increase of two 4% on a constant currency basis.

Compared to the prior year period.

Revenue under the manufacturing and supply transitioning agreement associated with our prior divestiture of the respiratory assets negatively impacted growth by one 3% in the quarter.

Implying underlying constant currency growth of three 7%.

Adjusted earnings per share declined by six 8% year over year to $3 27.

In reviewing the quarter the majority of our business units executed well.

When excluding your lift and adjusting for the respiratory divestiture the remaining 88% of the business grew at an underlying rate of four 3% in the third quarter.

This solid performance continues to reflect the benefit.

<unk> diversified portfolio that has been purposefully built to target the care of critically ill patients.

We saw improvement in revenues as the third quarter progressed with September strengthening over July and August .

Our OEM business unit drove double digit constant currency year over year revenue growth, while the intervention business unit grew approximately 9%.

Our surgical business turned in another solid performance with mid single digit constant currency growth year over year.

From a geographic perspective, we saw strong results in Asia, which continues to be an important growth driver for teleflex.

Conversely, interventional urology continues to be impacted by patient business to urologists that remained down year over year and staffing shortages with third quarter revenues modestly missing internal objectives.

In the quarter.

Our high growth revenue, which includes year end lift manta hemostatic product easier youll uncontrolled and peaks maintained momentum across the majority of growth drivers for.

For the nine months.

It has declined five 8% year over year, while the remainder of products in the high growth portfolio continued to show healthy gains with 14% growth.

Moving over to durable core revenues, which accounted for more than 60% of revenues in 2021.

In the first nine months of 2022, the durable core has generated four 6% growth compared to the prior year period.

Turning to inflation.

There are elements of stabilization during the quarter with some areas of improvement in particular secret costs declined in line with our internal expectations.

We continue to see elements of elevated supply chain disruption during the third quarter.

Availability of select raw materials and components are not yet back to normal. This dynamic resulted in some greater than anticipated backorder levels during the third quarter, especially in our vascular and interventional businesses.

Looking forward, we expect a portion of those anticipated back artist flushed through by the end of 2022.

Now, let's turn to a deeper dive into our third quarter revenue results.

I will begin with a review of our reportable segment revenues for the third quarter all growth rates that I refer to are on a constant currency basis, unless otherwise noted.

America's revenues were $405 1 million.

Each represents a two 7% decline year over year against a tough comp in the year ago period.

Lower revenue from the manufacturing supply and transition agreement associated with our prior divestiture of the respiratory assets negatively impacted Americas Americas growth by two 1%, implying a flattish underlying performance for the quarter.

Intervention on record at high single digit growth.

Set by declines in vascular and interventional urology.

In addition, we did experienced some supply chain disruption during the third quarter.

EMEA revenues of $128 $4 million increased three 4% year over year, we continue to see procedure volumes improved year over year.

Now turning to Asia.

Revenues were $82 million, increasing a robust 25% year over year.

We saw strength across the region with all geographies posting growth during the third quarter.

China had a very strong performance with growth exceeding 19%.

Let's now move to a discussion of our third quarter revenues by global product category.

Consistent with my prior comments regarding our reportable segment commentary on global product category growth in the third quarter will also be on a constant currency basis and ranked by size of our business units.

Starting with vascular access.

Revenue decreased <unk>, 8% to $167 1 million.

The performance in the quarter in part reflects a tough comp due to the year over year reduction in COVID-19 patients in the intensive care unit in the United States.

As previously noted there was some elevation in back order during the quarter due to raw material shortages.

Of note the vascular business has the greatest exposure to Ty Peck packaging for our kits and trays.

We anticipate the tieback shortages will abate in 2023 as additional supply for the industry comes online.

We remain confident that our category leadership in central venous catheters and mid lines, along with our novel causes Pic portfolio continues to position us for dependable growth.

Moving to intervention revenue was $108 $7 million.

Up eight 9% year over year.

We saw strong performances across our diversified portfolio during the third quarter with balloon pumps and controls manta in complex catheters, all contributing to growth.

We continue to see some elements of supply chain disruption during the quarter.

Turning to anesthesia revenue was $97 6 million up five 8% year over year.

The business had a challenging comparison with 26, 6% growth last year.

Of our larger franchises regional anesthesia hemostatic products and attract new tubes, all contributed double digit growth in the third quarter.

In our surgical business revenue was $93 $1 million, representing another solid performance with six 2% growth year over year.

Among our largest product categories skin stapling led the growth for the quarter, while metal and polymer ligation clips growth et cetera raise it sequentially following COVID-19 related lockdowns in China during the second quarter.

Of note there are no revenues in the third quarter surgical results from the standard Bariatrics acquisition.

For intervention urology revenue was $79 million, representing a flattish performance sequentially and a decrease of four 6% year over year and slightly below our internal expectations.

The overall environment for elective BPH procedures has not yet returned to normal.

Third party data indicates that overall patient visits to urologists were down high single digits year over year in the quarter, which has impacted the funnel for BPH procedures. In addition, staffing shortages remain a constraint.

In a teleflex survey of U S. Based urologists conducted in August of this year, 52% of the 125 respondents reported having experienced staffing issues.

The survey also indicators.

That office based urologists are experiencing significantly more patient cancellations per week than hospital based urologists.

OEM revenues increased 14, 4% year over year to 71 3 million. Despite a tough comparison to last year.

Our order book remains well positioned as customers recognized our broad competencies with competitive capabilities, including fast growth markets for thin wall interventional micro catheters.

To assess smaller vessels and fine wire for sensing and ablation technology.

Okay.

Third quarter other revenue declined nine 9% to $69 $9 million year over year.

The majority of the decline reflects lower manufacturing and supply transition agreement revenues year over year.

We continue to expect all MSA revenues to six at the end of 2023.

That completes my comments on the third quarter revenue performance.

Turning to some commercial and clinical updates.

On September 28, we closed on our acquisition of standard Bariatrics for an upfront cash payment of $170 million with additional consideration of up to $130 million payable upon the achievement of certain commercial milestones.

<unk> Bariatrics has commercialized the Titan SGS stapler, which is an innovative powered stapling technology, specifically designed for sleeve gastrectomy, we estimate that there were 120000 sleeve gastrectomy procedures in 2020, we are very.

Excited about the acquisition of standard Bariatrics for a number of reasons.

First the tightened stapler addresses unmet needs and sleeve gastrectomy by offering surgeons, along with continuous cost and staple line of 'twenty three centimeters.

It is designed to help surgeons achieve more consistent and symmetrical sleeve pouch anatomy.

Setting their patients up for optimized outcomes.

But every patient anatomy is different.

Tightened long staple line enables surgeons to plan in place Staples in one firing minimizing variation sometimes associated with the use of multiple overlapping sharp character stapler firings.

Additionally.

The design May result, in a more secure staple line and fewer chances of leased as evidenced with higher burst pressures.

Second we believe that we can compete effectively and gain stapling share in the sleeve gastrectomy market.

Following our third quarter 2021 U S launch, we expect tightened stapler revenues to be approximately $15 million in 2022.

With the tightened stapler now prior to the Teleflex surgical portfolio, we expect continued momentum going forward.

Tightened stapler products slot into our existing bariatric surgery color point in our surgical business and complements our obligation clip portfolio.

Mini lap percutaneous surgical system, and wacky FX special closure portfolio.

In addition, the inclusion of the standard bariatric sales team doubled our commercial team addressing the sleeve gastrectomy market.

We have the capability to flex higher with existing teleflex reps as demand grows which would more than tripled the standalone salesforce of standard bariatrics.

Finally, we see a pathway through value analysis committees with a carve out due to the differentiation of the stapler, which gives us confidence in our ability to expand our user base over the coming years.

Third the acquisition of the Titan Stapler reflects teleflex a strategy to invest in innovative products and technologies that can meaningfully enhance clinical efficacy patient safety and comfort reduce complications and lower the overall cost of care.

From a financial perspective, the acquisition is immediately accretive to teleflex as long term revenue growth profile and will enhance our growth and operating margin over time.

Moving over to interventional.

We relaunched the Langston dual lumen catheter and expect sales to ramp up in the fourth quarter and into 2023.

In addition.

At the mid September TCT conference, we highlighted the Caroline Scott 1000 consecutive Manta device study.

This study, which was not sponsored by Teleflex represents the largest real world evaluation of the manta device in patients undergoing tabby.

Sepsis committees with a carve out due to the differentiation of the stapler, which gives us confidence in our ability to expand our user base over the coming years.

The study demonstrated low complication rates and a short learning curve, specifically manta device related major vascular complications occurred in four 2% of patients, which was consistent with the safe Manta IDE study and Marvel prospective registry.

Third the acquisition of the tightened stapler reflects teleflex a strategy to invest in innovative products and technologies that can meaningfully enhance clinical efficacy patient safety and comfort reduce complications and lower the overall cost of care.

With respect to our market development objectives for Euro lift we were again pleased with our progress during the quarter.

Training of new physicians continued in the third quarter and we are on track to reach our target for the year.

From a financial perspective, the acquisition is immediately accretive to teleflex as long term revenue growth profile and will enhance our growth and operating margin over time.

With access to surgeons, improving we recently hosted a light BPH summit training session in the United States as we continue to tap into surgeons not yet trained on euro debt.

Moving over to interventional, we relaunched the Langston dual lumen catheter and expect sales to ramp up in the fourth quarter and into 2023.

We are also excited to host an upcoming BPH summit in Japan during the fourth quarter.

In addition.

At the mid September TCT conference, we highlighted the Carlin Scott 1000 consecutive mounted device study.

We continue to receive excellent feedback from surgeons regarding your lift too.

While you're lift advanced tissue controls for use in obstructive median lobes saw increased momentum in the third quarter.

This study, which was not sponsored by Teleflex represents the largest real world evaluation of the manta device in patients undergoing tabby.

New data published in the peer reviewed journal of Endo Urology revealed that in a controlled clinical trial of the <unk> system for obstructive median lobes.

<unk> experienced better symptom improvement within the first three months of treatment compared to those treated with placebo and TARP and other controlled studies.

With respect to our market development objectives for Euro lift we were again pleased with our progress during the quarter.

Encouragingly.

Those patients did not endure high grade serious adverse events.

Training of new physicians continued in the third quarter and we are on track to reach our target for the year.

The data further revealed that symptoms and euro flow outcomes were largely consistent for obstructive median lobe patients treated in both controls in real world settings.

With access to surgeons, improving we recently hosted ally BPH summit training session in the United States as we continue to tap into surgeons not yet trained on euro debt.

We believe that the launch of the euro lift to an advanced tissue control.

Will enable us to further engage with surgeons and drive utilization deeper into our labeled indications.

We are also excited to host an upcoming BPH summit in Japan during the fourth quarter.

Based on our progress at the end of the third quarter, we remain on track to convert the vast majority of our U S customers to your list two by the end of 2022.

We continue to receive excellent feedback from surgeons regarding your lift too.

While you're lifting advanced tissue controls for use in obstructive median lobes saw increased momentum in the third quarter.

Now turning to an update.

New data published in the peer reviewed journal of Endo Urology revealed that in a controlled clinical trial of the euro lift system for obstructive median lobes men experienced better symptom improvement within the first three months of treatment compared to those treated with placebo.

On our international expansion strategy for your lift.

We are in the early stages of a multiyear multi geography international market expansion, which is expected to be a meaningful driver of growth in the coming years.

The launch of your lift in Japan, which began on April 1st continues to gain momentum and is tracking to our plan.

And turf in other controlled studies.

Encouragingly.

Cases are continuing to ramp up and we are very encouraged with the results thus far.

Those patients did not endure high grade serious adverse events.

The data further abuse that symptoms and euro flow outcomes were largely consistent for obstructive median lobe patients treated in both controls in real world settings.

Looking forward, we are excited to implement our virtual reality capabilities to enhance our physician training and sales force interactivity.

Given our results to date, we expect to be well positioned to increased traction in 2023, as we expand our reach into key regions within the country.

We believe that the launch of the euro lift to an advanced tissue control with.

<unk> will enable us to further engage with surgeons and drive utilization deeper into our labeled indications.

Shifting to other international geographies.

Based on our progress at the end of the third quarter, we remain on track to convert the vast majority of our U S customers to your list two by the end of 2022.

We remain on track with our expected your lift commercial milestones.

In China, we will commence our initial launch activities in the fourth quarter with a focus on key cities and engagement with Urological society to build acceptance.

Now turning to an update.

On our international expansion strategy for your lift.

In addition, we still expect updated reimbursement in France and launches in select regions in Italy, and Spain during the fourth quarter.

We are in the early stages of a multiyear multi geography international market expansion, which is expected to be a meaningful driver of growth in the coming years.

Finally investors familiar with Teleflex will recall that in July of 2020, we inform the investment community that the department of Justice had opened an investigation under the civil false claims act with respect to one of our subsidiaries near tracked Inc. I am glad to share that in August of 2012.

The launch of your lift in Japan, which began on April 1st continues to gain momentum and is tracking to our plan.

Cases are continuing to ramp up and we are very encouraged with the results thus far.

Looking forward, we are excited to implement our virtual reality capabilities to enhance our physician training and sales force interactivity.

To the U S Department of Justice advised us that it had closed the investigation. We are pleased that this investigation behind us and look forward to continuing our focus on the patients we serve across the world every day.

Given our results to date, we expect to be well positioned to increased traction in 2023, as we expand our reach into key regions within the country.

That completes my prepared remarks, now I would like to turn the call over to Tom for a more detailed review of our third quarter financial results Tom.

Shifting to other international geographies.

We remain on track with our expected your lift commercial milestones.

Thanks, Liam and good morning.

Given the previous discussion of the company's revenue performance I'll begin with margins.

In China, we will commence our initial launch activities in the fourth quarter with a focus on key cities and engagement with Euro logical society to build acceptance.

For the quarter adjusted gross margin totaled 58, 7%.

An 80 basis point decrease versus the prior year period.

In addition, we still expect updated reimbursement in France and launches in select regions in Italy, and Spain during the fourth quarter.

The year over year decrease was driven by the expected incremental inflation.

Partially offset by favorable pricing.

Finally investors familiar with Teleflex will recall that in July of 2020, we inform the investment community that the department of Justice has opened an investigation under the civil false claims act with respect to one of our subsidiaries near tracked Inc. I'm glad to share that in August of 2012.

As expected we have seen an improvement in sea freight, although raw material and component availability have yet to normalize.

Of note our pricing strategy continued to maintain his traction during the third quarter.

Adjusted operating margin was 26, 9% in the third quarter.

To the U S Department of Justice advised us that it had closed the investigation. We are pleased to have this investigation behind us and look forward to continuing our focus on the patients we serve across the world every day.

160 basis point year over year decline was the result of the lower gross margin.

Deleveraged across our expense base from lower revenue year over year.

Inflation in our expense base, such as wages and planned investment in the business for our growth drivers.

That completes my prepared remarks, now I would like to turn the call over to Tom for a more detailed review of our third quarter financial results Tom.

We offset by disciplined expense management of non revenue generating expense.

Net interest expense totaled $13 2 million in the third quarter, an increase from $11 8 million in the prior year period.

Thanks, Liam and good morning.

Given the previous discussion of the company's revenue performance I'll begin with margins.

For the quarter adjusted gross margin totaled 58, 7%.

One 4 million year over year increase in net interest expense reflects higher interest rates versus the prior year, partially offset by a reduction in average debt outstanding.

An 80 basis point decrease versus the prior year period.

The year over year decrease was driven by the expected incremental inflation, partially offset by favorable pricing.

Our adjusted tax rate for the third quarter of 2022 was nine 8% compared to 11, 3% in the prior year period.

As expected we have seen an improvement in sea freight, although raw material and component availability have yet to normalize.

The year over year decrease in our adjusted tax rate is primarily due to further enhancements and tax efficiencies of our global structure parks.

Of note our pricing strategy continued to maintain its traction through the third quarter.

Adjusted operating margin was 26, 9% in the third quarter.

Partially offset by tax expense arising from the new provision of the U S tax law, requiring the capitalization of certain R&D expenses.

160 basis point year over year decline was the result of the lower gross margin.

At the bottom line third quarter adjusted earnings per share was $3 27.

Deleveraged across our expense base from lower revenue year over year.

A decrease of six 8% versus prior year.

Inflation in our expense base, such as wages and planned investment in the business for our growth drivers.

Turning to select balance sheet and cash flow highlights.

We offset by disciplined expense management of non revenue generating expense.

Cash flow from operations for the nine months was $244 4 million compared to $455 million in the prior year period.

Net interest expense totaled $13 2 million in the third quarter, an increase from $11 8 million in the prior year period.

The decrease was primarily due to lower operating results.

Higher tax payments.

$1 4 million year over year increase in net interest expense reflects higher interest rates versus the prior year, partially offset by a reduction in average debt outstanding.

Our payroll and benefit related payments and unfavorable changes in working capital driven by an increase in inventory purchases to maintain high customer service levels during a period of elevated global supply chain volatility.

Yes.

Our adjusted tax rate for the third quarter of 2022 was nine 8% compared to 11, 3% in the prior year period.

Moving to the balance sheet.

Our financial position remains healthy at the end of the third quarter, our cash balance was $397 3 million as compared to $445 1 million as of year end 2021.

The year over year decrease in our adjusted tax rate is primarily due to further enhancements and tax efficiencies of our global structure.

Partially offset by tax expense arising from the new provision of the U S tax law, requiring the capitalization of certain R&D expenses.

Reduction in cash on hand is due to $144 million of payments on our senior credit facility.

At the end of the third quarter, our floating rate debt accounted for 42% of the total debt outstanding and net leverage at quarter end was approximately one seven times.

At the bottom line third quarter adjusted earnings per share was $3 27.

A decrease of six 8% versus prior year.

On a pro forma basis, including standard Bariatrics net leverage is one nine times, which remains well below our four five times covenant.

Turning to select balance sheet and cash flow highlights.

Cash flow from operations for the nine months was $244 4 million compared to $455 million in the prior year period.

Now turning to our 2022 guidance update.

The decrease was primarily due to lower operating results.

We are maintaining our 2020 to constant currency revenue growth guidance of $3, two 5% to 425%.

Higher tax payments.

Our payroll and benefit related payments.

Favorable changes in working capital driven by an increase in inventory purchases to maintain high customer service levels during a period of elevated global supply chain volatility.

When excluding the impact of the respiratory divestiture and normalizing for the one less shipping day, the underlying growth projections for the business remains over 5% year over year.

When considering the midpoint of our 2020 to constant currency revenue growth guidance.

Moving to the balance sheet.

Our financial position remains healthy at the end of the third quarter. Our cash balance was 397 3 million as compared to $445 1 million as of year end 2021.

Turning now to foreign exchange.

The dollar has further strengthened across a broad number of currencies as compared to our prior guidance.

We now expect that the impact of foreign exchange will be a headwind to revenue of approximately 4% in 2022 versus.

Reduction in cash on hand is due to $144 million of payments on our senior credit facility.

Versus three 7% expected previously.

At the end of the third quarter, our floating rate debt accounted for 42% of the total debt outstanding and net leverage at quarter end was approximately one seven times.

This equates to an approximately $110 million reported revenue headwind year over year as compared to approximately $100 million in the prior guidance.

On a pro forma basis, including standard Bariatrics net leverage is one nine times, which remains well below our four five times covenant.

Considering the revised outlook for foreign exchange, we are reducing our reported revenue growth to negative 75% to.

Two positive two 5% in 2022, implying a dollar range up to seven to eight 9 billion to $2 $8 7 billion.

Now turning to our 2022 guidance update.

We are maintaining our 2022 constant currency revenue growth guidance of $3, two 5% to 425%.

Moving to additional comments regarding the revenue outlook for 2022.

When excluding the impact of the respiratory divestiture and normalizing for the one less shipping day, the underlying growth projection for the business remains over 5% year over year.

We expect incremental revenue from standard bariatrics to be in the range of $4 million to $5 million in the fourth quarter.

For your lift we are now assuming that 2022 revenue will be roughly $320 million versus the prior guidance of $335 million.

When considering the midpoint of our 2020 to constant currency revenue growth guidance.

Turning now to foreign exchange.

Our prior guidance had assumed an improving environment for your lift during the second half of 2022.

The dollar has further strengthened across a broad number of currencies as compared to our prior guidance.

We now expect that the impact of foreign exchange will be a headwind to revenue of approximately 4% in 2022 versus.

Sequential revenue increase in the third quarter and a further sequential increase in the fourth quarter.

Given the persistence of procedure environment headwinds, our revised guidance assumes no underlying improvement in the current environment for the remainder of the year.

Versus three 7% expected previously.

This equates to an approximately $110 million reported revenue headwind year over year as compared to approximately $100 million in the prior guidance.

Turning to the middle of the income statement.

We expect gross margin for 2022 to be 58, and three quarters percent to <unk> 59, and one quarter percent versus 59% to <unk> 59, and one 5% previously.

Considering the revised outlook for foreign exchange, we are reducing our reported revenue growth to negative 75% to.

Two positive two 5% in 2022, implying $1 range up to 789 billion to $2 $8 7 billion.

The slightly lower outlook for gross margin reflects the impact from unfavorable mix.

Our gross margin guidance range continues to reflect the impact of incremental inflationary pressure, which represents a year over year headwind of approximately 100 basis points.

Moving to additional comments regarding the revenue outlook for 2022.

We expect incremental revenue from standard bariatrics to be in the range of $4 million to $5 million in the fourth quarter.

Importantly, we remain confident in our ability to achieve at least 50 basis points in price for the year, which helps partially offset the inflationary pressures that we are experiencing in our cost of goods line. This year.

For your lift we are now assuming that 2022 revenue will be roughly $320 million versus the prior guidance of $335 million.

As a matter of course, we will continue to assess our global pricing and we will continue to make adjustments as opportunities arise.

Our prior guidance had assumed an improving environment for your lift during the second half of 2022.

Relative to operating margin, we now expect operating margin to fall within a range of 26, 5% to 27% versus 26% and three quarters percent to 27% in one quarter percent previously.

Sequential revenue increase in the third quarter and a further sequential increase in the fourth quarter.

Given the persistence of procedure environment headwinds, our revised guidance assumes no underlying improvement in the current environment for the remainder of the year.

Our guidance reflects the impact of the gross margin and incremental operating expense from standard bariatrics, which was not contemplated in prior guidance.

Turning to the middle of the income statement.

We expect gross margin for 2022 to be 58, and three quarters percent to <unk> 59, and one quarter percent versus 59% to <unk> 59, and one 5% previously.

Partially offset by the better than expected operating expense in the third quarter.

Turning to items below the line.

We continue to expect an adjusted tax rate in the 11% to 11, 5% range for 2022.

The slightly lower outlook for gross margin reflects the impact from unfavorable mix.

Our gross margin guidance range continues to reflect the impact of incremental inflationary pressure, which represents a year over year headwind of approximately 100 basis points.

We now expect net interest expense to approximate $54 million for 2022 as compared to $51 million previously.

The majority of the increase in our net interest expense outlook reflects debt associated with the acquisition of standard bariatrics.

Moving to earnings we are reducing our adjusted earnings per share guidance for 2022% to $12 80 to.

As a matter of course, we will continue to assess our global pricing and we will continue to make adjustments as opportunities arise.

To $13 20.

Compared to $13 to $13 40.

Yes.

Relative to operating margin, we now expect operating margin to fall within a range of 26, 5% to 27% versus 26% and three quarters percent to 27% in one quarter percent previously.

Previously.

The reduction in guidance reflects the earnings performance in Q3.

All set by dilution from the standard Bariatrics acquisition.

The revised impact from foreign exchange and the margin impact from mix.

Our guidance reflects the impact of the gross margin and incremental operating expense from standard bariatrics, which was not contemplated in prior guidance Harsha.

Under the revised guidance adjusted earnings per share of $12 80.

To $13 20.

Amounts to a 4% year over year decline at the low end and a 1% decline at the high end.

Partially offset by the better than expected operating expense in the third quarter.

Turning to items below the line.

Normalizing for incremental inflation foreign exchange, the respiratory divestiture and dilution from the standard Bariatrics acquisition implies underlying adjusted earnings per share growth at.

We continue to expect an adjusted tax rate in the 11% to 11, 5% range for 2022.

We now expect net interest expense to approximate $54 million for 2022 as compared to $51 million previously.

At the midpoint of guidance in the high single digit range year over year in 2022.

The majority of the increase in our net interest expense outlook reflects debt associated with the acquisition of standard bariatrics.

And reflects the benefits of our diverse growth drivers and ability to grow earnings in a period of significant macro challenges.

Yes.

That concludes my prepared remarks, I would now like to turn it back to Liam for closing commentary.

Moving to earnings we are reducing our adjusted earnings per share guidance for 2022% to $12 80 to.

Thanks, Tom in closing I will highlight our three key takeaways from the third quarter and our 2022 outlook.

To $13 20.

Compared to $13 to $13 40.

Previously.

First our third quarter results reflect the diversification of the teleflex portfolio through the combination of our growth drivers and stability of durable core revenues.

The reduction in guidance reflects the earnings performance in Q3.

All set by dilution from the standard Bariatrics acquisition.

The revised impact from foreign exchange and the margin impact from mix.

Importantly, we will continue to focus on investment in our future growth drivers, while managing overall cost for the business.

Under the revised guidance adjusted earnings per share of $12 80.

To $13 20.

In the quarter, we augmented our growth drivers with the acquisition of the standard Bariatrics tightened Sds powered stapler we.

Amounts to a 4% year over year decline at the low end and a 1% decline at the high end.

We expect revenue growth and margin accretion over time, as we effectively integrate standard bariatrics into the teleflex surgical business and expand the reach of this innovative stapling technology.

Normalizing for incremental inflation foreign exchange, the respiratory divestiture and dilution from the standard Bariatrics acquisition implies underlying adjusted earnings per share growth.

At the midpoint of guidance in the high single digit range year over year in 2022.

Accordingly, we expect the standard bariatrics acquisition to enhance our long term constant currency growth.

And reflects the benefits of our diverse growth drivers and ability to grow earnings in a period of significant macro challenges.

Third we continue to execute against our long term growth strategy, we will continue to incrementally invest in our high growth portfolio and drive dependable expansion in our durable core portfolio.

That concludes my prepared remarks, I would now like to turn it back to Liam for closing commentary.

Thanks, Tom in closing I will highlight our three key takeaways from the third quarter and our 2022 outlook.

We have levers in place to drive further expansion in our margins.

And our balance sheet is in a solid position with pro forma leverage of one nine times, providing ample financial flexibility for our capital allocation priorities, including M&A.

First our third quarter results reflect the diversification of the teleflex portfolio through the combination of our growth drivers and stability of durable core revenues and.

That concludes my prepared remarks, now I would like to turn the call back to the operator for Q&A.

Importantly, we will continue to focus on investment in our future growth drivers, while managing overall cost for the business.

Okay.

Thank you.

If you'd like to ask a question.

In the quarter, we augmented our growth drivers with the acquisition of the standard Bariatrics tightened Sds powered stapler we.

One on your telephone keypad.

Speaker phone.

Sure Jimmy.

To allow your signal to reach our equipment.

We do ask that you limit yourself to one question and one follow up.

If you would like to ask additional questions. We invite you to ask yourself into the queue by pressing star one.

Accordingly, we expect the standard bariatrics acquisition to enhance our long term constant currency growth.

Third we continue to execute against our long term growth strategy, we will continue to incrementally invest in our high growth portfolio and drive dependable expansion in our durable core portfolio.

Our first question comes from.

CBF Farlow with Morgan Stanley .

Your line is open.

Hey, good morning, and thank you for taking my questions.

We have levers in place to drive further expansion in our margins.

Jim I wanted to start on your commentary on your list and really just the site of care you talked about in terms of where youre seeing patient flow alright.

And our balance sheet is in a solid position with pro forma leverage of one nine times, providing ample financial flexibility for our capital allocation priorities, including M&A.

Office is wasted and pacing can you just talk about how that's trended versus pre Covid times and then also just.

That concludes my prepared remarks, now I would like to turn the call back to the operator for Q&A.

The role of DTC, you talked about certain between how you're thinking about DTC going forward.

Okay.

Hey, Syria. Thank you for the question with regard to pre Covid patient flow and post Covid patient flows. So we know that in Q2 patient flow was down approximately 12%. It was down high single digits in Q3.

Thank you.

If you'd like to ask a question.

One on your telephone keypad.

Thank you Brian .

So can you kind of to allow your signal to reach our equipment.

And we know that in 2020.

We do ask that you limit yourself to one question and one follow up.

One page.

Patient visits were also below.

If you would like to ask additional questions. We invite you to add yourself into the queue again by pressing star one.

Pre COVID-19 levels. So you add those together and we're seeing a significant drop in patient flow pre COVID-19. The other impact is obviously staffing shortages now and the rest of our business.

Our first question comes from.

Also within.

CBF Farlow with Morgan Stanley .

The euro and the portfolio included in that.

Okay.

Did see a modest improvement in staffing levels and the hospital sites of service. So that was somewhat encouraging during the during the quarter and if that continues that that will continue to be encouraging.

Your line is open.

Good morning, and thank you for taking my questions.

Jim I wanted to start on your commentary on your list and really just the site of care that you talked about in terms of where you're seeing patient flow alright.

With regard to our DTC.

We believe that the DTC continues to.

Office is first at MP thing can you just talk about how that's trended versus pre Covid times and then also just.

To add value. We are ahead of our targets with regard to patients that were transferring to urologists at TV actually dominates the way men first learn about your lift.

The role of DTC, you talked about 13 between how you're thinking about DTC going forward.

So it is definitely a medium we want to we want to continue.

And our brand awareness for Euro lift continues to rise. So it is now at 19% well ahead of TARP in that regard and TARP is seen as the gold standard when it comes to brand awareness and that's why I'm comparing it to TARP.

And we know that in 2020.

One page.

Patient visits were also below.

Pre COVID-19 levels. So you add those together and we're seeing a significant drop in patient flow pre COVID-19. The other impact is obviously staffing shortages now and the rest of our business.

So we're very encouraged by the results that we have from DTC and it is our expectation to continue that we do believe that the market will eventually recover we do believe the patient flow will improve we do believe that staffing levels will improve and when that does happen, we're well positioned to take advantage of it.

Also within.

The euro portfolio included in that.

Did see a modest improvement in staffing levels and the hospital sites of service. So that was somewhat encouraging during the during the quarter and if that continues that will continue to be encouraging.

Great. Thank you and if I could follow up just your comments on Japan as well as the initial launch there can you talk to either contribution what you've seen to date outlook for <unk> and then I do think beyond 'twenty two just your confidence, especially just given the current macro environment with the 15% growth that you laid out.

With regard to our DTC.

We believe that the DTC continues to.

To add value. We are ahead of our targets with regard to patients that were transferring to urologists.

At the analyst day earlier this year and thank you for taking my questions.

No absolutely. So we're encouraged by what's happening in Japan.

TV actually dominates the way men first learn about your lift.

As you know I was there in Q2 and met with a number of urologists. The adoption continues to be very solid within the geography.

So it is definitely a medium we want to we want to continue.

And our brand awareness for Euro lift continues to rise. So it is now at 19% well ahead of TARP.

And obviously this quarter, we will do our first euro lift cases in China, which is again a good opportunity for us.

Regarding TARP is seen as the gold standard when it comes to brand awareness and that's why I'm comparing it to TARP.

Obviously with.

In regards to the MRP, we do need to see the market recover.

And I presume, you're asking specifically to your lift I think that the.

The <unk> was a CAGR of 15% per euro lift over the over the three year horizon and our ERP doesn't actually begin for another two and a bit months it.

It was using 2020 as the jump off and then beginning in 2020.

Great. Thank you and if I could follow up just your comments on Japan as well as the initial launch there can you talk to either contribution what youre seeing today outlook for <unk> and then I do think beyond 'twenty two just your confidence, especially just given the current macro environment with the 15% growth that you laid out at.

'twenty two is a jump off and then 2023 as the first year now as I've said already we do need to see the end markets recovering we do need to see that patient flows begin to come back and we do need to see staffing levels improve and we are prepared when that does happen. Our sales force is fully staffed the DTC.

The analyst day earlier this year.

For taking my questions.

<unk> has continued the clinical data is compelling the market is still massive theres still 12 million men in the United States.

No absolutely. So we're encouraged by what's happening in Japan.

As you know I was there in Q2 and met with a number of urologists. The adoption continues to be very solid within the geography.

That suffer with BPH and our patient survey that we did does tell us that we are getting a heightened levels of cancellations from patients.

And obviously this quarter, we will do our first euro lift cases in China, which is again a good opportunity for us.

<unk> for BPH procedures.

And as the environment continues to improve we would expect that to improve also.

Obviously with.

In regards to the MRP, we do need to see the market recover.

And I presume, you're asking specifically to your lift I think that the.

Thank you our next.

Christian comes from Jayson Bedford with Raymond James Your line is open.

The <unk> was a CAGR of 15% per year lift over the over the three year horizon and our ERP doesn't actually begin for another two and a bit months it.

Good morning, maybe for.

Tom one of the group.

It was using 2020 as the jump off and then beginning in 2020.

In this environment revenue has slowed a little bit in the business wondering if this has impacted your thoughts on the pace of margin expansion, specifically thinking about your RFP goes.

Well I will say that as revenue slows you do lose leverage in the P&L and for US to continue to drive margin expansion, we want to see that topline moving I think as Liam just touched on the ORP doesn't start for another couple of months and our expectation.

<unk> has continued the clinical data is compelling the market is still massive theres still 12 million men in the United States.

That suffer with BPH and our patient survey that we did does tell us that we are getting a heightened levels of cancellations from patients.

Just to continue to get the top line.

We will have to look and see how inflation impacts us, but that certainly has been a drag as well, but if you think about the business. The key tenants of margin expansion remain with restructuring programs are still in place.

<unk> for BPH procedures.

And as the environment continues to improve we would expect that to improve also.

We do have good growth in a high growth portfolio, which as you know as <unk>.

Higher than average margin.

As Lee mentioned.

Thank you. Our next question comes from Jason Bedford with Raymond James Your line is open.

Getting your lives back and growing in North America at a solid pace, what will certainly help us assure that margin achievement over the longer term horizon and Jason I would just add you are correct that the revenue has slowed but if you normalize for the days and the respiratory divestiture and you take the midpoint of our guidance for the remainder of the year It will tell.

Good morning, maybe for.

Tom one of the group.

In this environment revenue has slowed a little bit in the business wondering if this has impacted your thoughts on the pace of margin expansion, specifically thinking about your RFP goes.

You that our underlying growth is actually in excess of 5% and thats, even with the decline in the current environment with the euro lift revenue, obviously, an improvement in that will help us.

We have got really good pricing discipline as you know and we feel that we will do well in excess of about 50 basis points that we laid out and we also have the restructuring programs, which through the ERP will deliver another $28 million.

Just to continue to grow the topline.

Benefit dropping through the gross margin line through the operating margin so lots of moving pieces and we're in an inflationary environment and we will.

Potentially lose some leverage this year, but with an improving environment, we'll see what will happen over the ERP.

We do have good growth in a high growth portfolio, which as you know as he has got a higher than average margin.

Timeframe.

Okay, and just as a quick follow up.

As Lee mentioned.

You mentioned, an elevated backlog during the quarter is there a dollar amount that you could attribute to this dynamic.

Getting your lives back and growing in North America at a solid peso will certainly help us assure that margin achievement over the longer term horizon and Jason I would just add you are correct that the revenue has slowed but if you normalize for the days and the respiratory divestiture and you take the midpoint of our guidance for the remainder of the year. It will tell you.

So I don't want to get into too many specifics of a dollar amount, but it is obviously clearly in the millions of dollars and it was really impacting the vascular access business and the intervention of access business. Those were the two that are most impacted we have.

That our underlying growth is actually in excess of 5%.

Third party providers in both of those business one being tie back in the other being a third party.

And thats, even with the decline in the current environment with the Euro lift revenue, obviously an improvement in that.

Extrusion company this causing some difficulties at this moment in time, we would expect that to normalize in the fourth quarter and it's part of the reason, we're able to maintain our constant currency guidance that and the addition of standard bariatrics.

<unk> will help us and we have got really good pricing discipline as you know and we feel that we will do well in excess of about 50 basis points that we laid out and we also have the restructuring programs, which through the ERP will deliver another $28 million.

Yeah.

Thank you we now have seven.

Jennifer dropping through to the gross margin line through the operating margin so lots of moving pieces and we're in an inflationary environment and we will.

From RBC. Please go ahead when you're ready.

Alright. Thank you so much can you hear me okay.

<unk> lose some leverage this year, but with an improving environment, we'll see what will happen over the AARP.

We can hear you.

Okay great.

So I would say.

Just wondering if you can shed any specific data points that might suggest.

Frame.

Okay, and just as a quick follow up.

Patients what is their time.

You mentioned, an elevated backlog during the quarter is there a dollar amount that you could attribute to this dynamic.

Once the environment stabilizes.

Given the pace of cancellations.

What makes you confident and then your Q4 guidance now implies $86 million versus 101 million by the prior guidance.

So I don't want to get into too many specifics of a dollar amount, but obviously clearly in the millions of dollars and it was really impacting the vascular access business and the interventional access business. Those were the two that are most impacted we have.

What gives me the confidence that you can.

18% CAGR in 'twenty, three and beyond and then can you just remind us of your confidence in the 6% to 7%.

Third party providers in both of those business one being tie back in the other being a third party.

It does slow in 2023 and beyond I know you made the acquisition of surgical bariatrics.

Extrusion company, that's causing some difficulties at this moment in time, we would expect that to normalize in the fourth quarter and it's part of the reason, we're able to maintain our constant currency guidance that Andy edition to standard bariatrics.

60 basis points, so that should help offset.

What that headwind, but if you can just talk about the 67% and how you're thinking about M&A.

As you think about the portfolio overall.

For taking the question.

Yeah.

Okay, Thanks, sugar and Theres a lot of in that to unpack. So let me begin as I said earlier DLR Pea begins in two and a bit months.

Thank you we now have seven.

From RBC. Please go ahead when you're ready.

Alright. Thank you so much can you hear me okay.

I think I feel confident in the 6% to 7% we outlined and the addition of standard Bariatrics helps my confidence on that 6% to 7% CAGR over that period of time I think that again.

We can hear you.

Okay great.

So I was just wondering if you can shed any specific data points that might suggest that patients with a good time.

Once the environment stabilizes.

Reminding people that 15% for Europe is also a CAGR.

Given the pace of cancellations for years. So what makes you confident and then your Q4 guidance now implies maybe $6 million versus 101 million by the prior guidance.

And we probably have an easier comparable in the first year of that.

The three year plan that should help us to improve that why do I feel confident in the patients will return.

What gives me the confidence that you can achieve the 15% CAGR in 'twenty three and beyond and then can you just remind us of your confidence in the 6% to 7%.

Because there's a lot of them there is 12 million patients out there. The dollar target market is the $1 5 million men that have BPH took the pill and no longer take it.

Yes.

In 2023 and beyond I know you made the acquisition of surgical bariatrics that.

And I'm also encouraged by what I see going on in the hospital environment, where staffing levels are starting to improve.

60 basis points, so that should help offset some of that headwind, but if you can just talk about the 67% and how you're thinking about M&A.

So some what we've learned from our patient study is some patients are having difficulty making appointments to actually get into see the urologists.

I could think about the portfolio overall.

Taking the question.

If that staffing improvement in the hospital moves to the office and the ASC that should also assist in getting that too.

Okay, Thanks, sugar and Theres a lot in that to unpack. So let me begin as I said earlier DLR Pea begins in two two and a bit months.

To come back.

You are correct in your math it would imply for Q4 and 86 million dollar number for four euro lift and what is considered in that.

I think I feel confident in the 6% to 7% we outlined and the addition of standard Bariatrics helps my confidence on the 6% to 7% CAGR.

Is just the normal seasonality that one sees because of the deductible impact that happens every year going from Q3 to Q4, and obviously the input from the international markets.

Over that period of time, I think that again reminding people that the 15% for Euro is also a CAGR.

And we probably have an easier comparable in the first year of that.

As we expand over there so there isn't in our $86 million and implied continued recovery if that happens that will help but it's not implied in our guidance we have given us today.

<unk>.

Our three year plan that should help us to improve that why do I feel confident that patients will return.

Because there's a lot of them there is 12 million patients out there. The dollar target market is the $1 5 million men that have BPH took the pill and no longer take it.

Thank you.

Your next question comes from the line of Matt Taylor.

And I'm also encouraged by what I see going on in the hospital environment, where staffing levels are starting to improve.

Cooler with Jefferies.

You May proceed with your question.

So some of what we've learned from our patient study is some patients are having difficulty making appointments to actually get into see the urologists.

Hi, Good morning, guys can you hear me okay.

We can hear you Matt good morning.

Great.

Okay I had a couple of questions I'll keep my questions.

If that staffing improvement into hospital moves to the office and the ASC that should also assist in getting that.

Jack.

So.

I wanted to I wanted to ask you about how you're going.

We're going to be well in excess of the 50 basis points.

To come back.

You are correct in your math it would imply for Q4 and 86 million dollar number for euro lift and what is considered in that.

Can you give us any sense for how much better you're tracking and then also can you can you keep this trick up next year is that something that you view as durable or is it more more onetime.

Just the normal seasonality that one sees because of the deductible impact that happens every year going from Q3 to Q4, and obviously the input from the international markets.

So I think that Teleflex has always been a company that can carve out pricing even in a non pricing environment, where none of our peer companies, we're getting pricing over the last number of years, we were always able to carve out 10 or 20 basis points.

As we expand over there so there isn't in our $86 million and implied continued recovery if that happens that will help but it's not implied in our guidance we have given us today.

I think that we will do in excess of 50 basis points. This year were tracking ahead of that matter for the first three quarters.

And I do think that we will be able to repeat that again.

Next year at least.

We are living in an inflationary environment, we are being impacted by it our customers are getting impacted by it we're trying to work that very fine line wherever we're being partners with our customers.

Thank you.

Your next question comes from the line of.

It's Jefferies.

You May proceed with your question.

At the same time, recognizing that we are seeing inflation.

Hi, Good morning, guys can you hear me okay.

We can hear you Matt good morning.

<unk> for US is costing US 100 basis points in gross margin. This year as a result of what's being passed on to us from our customers and therefore, there must be a recognition that we must pass some of that onto our customers.

Hey man.

Okay I had a couple of questions I'll keep my questions.

Jack.

So.

I wanted to I wanted to ask you about I think you said, you're going to be well in excess of the 50 basis points.

And.

In a thoughtful way.

Can you give us any sense for how much better you're tracking and then also can you can you keep this trick up next year is that something that you view as durable or is it more more onetime.

In a way that maintains that business relationship with the customer.

Okay Gotcha Gotcha.

And then I wanted to check the math I went back on the disclosures about the high growth portfolio Euro lab.

So I think that Teleflex has always been a company then carve out pricing even in a non pricing environment, where none of our peer companies, we're getting pricing over the last number of years, we were always able to carve out 10 or 20 basis points.

I think it looks like you did like low double digits in Q1.

20% in Q2, and then it looks like low double digits in Q3 is that correct and then.

I think that we will do in excess of 50 basis points. This year were tracking ahead of that matter for the first three quarters.

The 14% year to date, what do you expect.

<unk> portfolio going forward and are the fluctuation quarter by quarter just.

And I do think that we will be able to repeat that again.

Or is there something else going on there.

Next year at least.

No the quarter by quarter isn't comps quarter by quarter honestly, Matt has some backorder clearance.

As we've had a few issues with <unk> and some of our businesses it flushes through in one quarter and Thats what really.

But at the same time, recognizing that we are seeing inflation.

If you go back to the transcript of Q2, we outlined that we had cleared through some back order. So it's not particularly comps it's really the timing of some of these back orders clearing as we overcome some of the supply chain constraints.

Inflation for US discussing is 100 basis points in gross margin this year as a result.

What's being passed on to us from our customers and therefore, there must be a recognition that we must pass some of that onto our customers.

You are correct in your math.

And in a thoughtful way.

We do expect that it is running at just over 14% X your lift for the first three quarters and obviously, we anticipated staying in that in that region for the remainder of the year. So our high growth ex euro lift is performing well in line with expectations.

In a way that maintains that business relationship with the customer.

Okay Gotcha Gotcha.

And then I wanted to check the math I went back on the disclosures about the high growth portfolio Euro lab.

And once Europe recovers that entire high growth buckets should should improve and obviously.

I think it looks like you did like low double digits in Q1.

Excess of 20% in Q2.

The individuals working their models standard bariatrics would be included in the high growth portfolio moving forward.

Then it looks like low double digits.

Q3 is that correct and then.

The 14% year to date, what do you expect for the high growth portfolio going forward.

We now have a question on the line from Mike.

<unk> Wolfe research.

The fluctuation quarter by quarter just.

Please go ahead when you're ready.

Or is there something else going on there.

Good morning, Thank you for taking the questions I have one on your lift and then one on standard Bariatrics on your left just <unk>.

No the quarter by quarter isn't comps quarter by quarter honestly, Matt is some backorder clearance.

<unk>.

We've had a few issues with <unk> and some of our business as it flushes through in one quarter and Thats what really.

This was asked differently, but.

What is the lift embedded from the O U S.

Efforts ramping into.

In the <unk>.

Can you frame kind of the $7 million sequential step up.

Much of that do you view as kind of the core U S business versus some of the O U S stuff starting to contribute more meaningfully.

Yes, so on that one.

Normally what you see in seasonality within the U S is a pickup in that call. It 7% to 10% just based on the deductible phenomenon that goes that goes with that.

And once Europe recovers that entire high growth buckets should should improve and obviously.

Obviously O U S. In particular, Japan has been ramping steadily and and as we advised investors. Its a third of the size of the U S and we expected it to ramp at a third of the size of the U S. In the first year.

<unk> individuals working their models standard bariatrics would be included in the high growth portfolio moving forward.

The U S business has.

We now have a question on the line from Michael Foods.

Had done.

$55 million.

And then 15, and then 50 and so on so forth. So if you take a third of that would be a good metric for Japan.

Please go ahead.

Please go ahead when you're ready.

Good morning, Thank you for taking the questions I have one on your lift and then went on standard bariatrics on your lift just <unk> and I know this was asked differently but.

And we continued and.

The contribution in all transparency in China is very modest within the fourth quarter. So I wouldn't advise building much and for that we will do cases.

What is the lift embedded from the O U S.

It's difficult to get people in and out of the country, but we are encouraged to ramp within in 2023 in China will be more of a 2023 ramp than a 2022 impact.

Efforts ramping.

And the <unk> can.

Can you frame kind of the $7 million sequential step up how much of that do you view as kind of the core U S business versus some of the O U S stuff starting to contribute more meaningfully.

Helpful and then on standard Bariatrics <unk>.

<unk> $15 million for the.

Product this year in its first full year, you're guiding I believe 30% to 35 next year a very.

Yes, so on that one.

Normally what you see in seasonality within the U S is a pickup in that call. It 7% to 10% just based on the deductible phenomenon that goes that goes with that.

Healthy ramp, it's a sizable market and you've structured in a sizeable earn out so I'm curious, what's what's the dream of the sellers here, how you know how much kind of upside is.

Implied if they achieve their earn out.

What does that mean for <unk>.

For.

The revenue run rate and.

Over what time horizon is that framed up.

Yes, Mike I think the way I would frame that is that a teleflex pays out the full $130 million no one will be happier than Liam Kelly because that will mean that the business will have done better than than I would've anticipated.

<unk> done.

$55 million.

And then 15, and then 50 and so on so forth. So if you take a third of that that would be a good metric for Japan.

We continued and the.

I think that when we look at this business.

Abuse.

Transparency in China is very modest within the fourth quarter. So I wouldn't advise building much and for that we will do cases.

It's a unique technology and.

Look at this and a lot of these technologies that gained share they tend to be evolution, rather than revolution, and this really fits into that category its right into the sleeve gastrectomy market that the surgeons to conduct everyday.

It's difficult to get people in and out of the country, but we are encouraged to ramp within in 2023 in China would be more of a 2023 ramp than a 2022 impact.

Helpful and then on standard <unk> 15.

It speeds up the procedure you get less leaks higher burst pressure when you completed and all in all it's being adopted pretty rapidly out there.

<unk> $15 million for the.

Product this year in its first full year, you're guiding I believe 30% to 35 next year a very.

Healthy ramp, it's a sizable market and you've structured in a sizeable earn out so I'm curious, what's what's the dream of the sellers here, how how much kind of upside is.

<unk>.

A number of the high volume users that have already adopted the technology in high volume user for us would be some others do intense leaves a month.

And we're I'm very very encouraged by by the way, it's moving forward but.

Implied in it.

To your question, if we pay out 130 million teleflex will be delayed.

Their earn out you know what does that mean for <unk>.

For.

The revenue run rate and.

Thank you.

Over what time horizon is that framed up.

Great. Thank you.

America Merrill Lynch. Please go ahead your line is open.

Yes, Mike I think the way I would frame that is that a teleflex pays out the full $130 million no one will be happier than Liam Kelly because that will mean that the business would have done better than than I would've anticipated.

Good morning, guys. Thanks for taking the questions.

Just a couple on your list.

And I appreciate all the comments that you made there.

I think that when we look at this business.

But wanted to ask specifically on <unk>. So I believe you said Doc visits are down.

It's a unique technology and.

Down 12% year over year.

Look at this and a lot of these technologies that gain share they tend to be evolution, rather than revolution, and this really fits into that category its right into the sleeve gastrectomy market that the surgeons to conduct everyday.

In Q2, and now Theyre down high single digits.

Q3.

But sales where you guys were.

I'll just flat sequentially.

Wanted to reconcile that dynamic and I know you mentioned that.

It speeds up the procedure you get less leaks higher burst pressure when you completed and all in all it's being adopted pretty rapidly out there we.

Staffing was getting better in the hospitals, but.

Stepping improve in the office setting from Q3 to Q2, we did get worse and then is there a timing factor from.

<unk>.

A number of the high volume users that have already adopted the technology in high volume user for us would be some others do intense leaves a month I'm very encouraged by by the way, it's moving forward but.

Procedure that may be kind of embedded in in.

Those numbers as we look at them sequentially from Q2 and Q3.

Yes, I'll answer the last bit of it first Greg yes. It is definitely a lag so it takes somewhere in the region of six to eight weeks for a patient to work through the funnel and have a procedure do they've got to come in see the urologists they've got to do their IBSA score they've gotta do assist to scope and then they've got to get slated for a procedure.

To your question, if we pay out 130 million teleflex will be delighted.

Thank you.

Great. Thank you Bank of America Merrill Lynch. Please go ahead your line is open.

Good morning, guys. Thanks for taking the questions.

We we did our survey of urologists.

A couple on euro lift.

August and we know that in general 53% of them are suffering with staffing shortages, but if you look at the urologist in the office site of service.

And I appreciate all the comments that you made Liam.

But wanted to ask.

Typically on so I believe you said Doc visits are down.

Down 12% year over year.

Their staffing shortages are more acute 61% of that category.

In Q2, and now they're down high single digits.

Just said that they were suffering with with staffing shortages.

Q3.

But sales where you guys were.

So I think that the my I did see an improvement in the hospital side of service.

Just flat sequentially.

Wanted to reconcile that dynamic and I know you mentioned that.

From a staffing level the office was as it was in <unk>.

Staffing was getting better in the hospitals, but.

In Q2, no significant improvement I will say, Craig, though as the hospital site of service does improve that frees up capacity for the office and ASC to approve so I would anticipate there will be a lag in the improvement.

Stepping improve in the office setting from Q3 to Q2 or did it get worse.

Is there a timing factor from the procedure that may be kind of embedded in in.

It.

Those numbers as we look at them sequentially from Q2 and Q3.

Flowing down to the other two sites of service because the hospitals also.

Yes, I'll answer the last bit of it first Greg yes. It is definitely a lag so it takes somewhere in the region of six to eight weeks for a patient to <unk>.

For contract Labor Arden paying as much as they were a couple of quarters ago. So all of these dynamics will actually help free up some labor into the other sites of service, but there definitely will be a lag.

Work through the funnel and have a procedure do they've got a commence either urologists they've got to do the IPSA score they've got to do assistant scope and then they've got to get slated for a procedure.

Said earlier when that does happen teleflex is well positioned to take advantage of it.

We we did our survey of Urologists in August and we know that in general 53% of them are suffering with staffing shortages, but if you look at the urologist in the office site of service.

Okay. Thanks for that color Liam and then.

Apologize for forgetting granular here, but you guys mentioned the overall business in September was stronger than July and August . So wanted to ask maybe specifically on Europe . I know June was a tough month for euro lift, but any color on the monthly trends within the quarter four.

Their staffing shortages are more acute 61% of that category of urologist said that they were suffering with with staffing shortages.

So I think that the my I did see an improvement in the hospital side of service.

Or your lip sales.

From a staffing level the office was as it was.

Yes, sure. So as expected August was impacted by the vacation season, and we knew that was going to happen, but we did see an uptick in the day rate in September as also was expected.

In Q2, no significant improvement I will say, Craig, though as the hospital side. The service does improve that frees up capacity for the office and ASC to approve so I would anticipate there will be a lag in the improvement.

So.

And as I said, we saw improvement in staffing levels. So we're encouraged by the uptick in September coming out of the holiday season in our day rates.

Slowing down to the other two sites of service because the hospitals also.

And that's what is the basis for our guidance for Q4.

Our contract labor Arden paying as much as they were a couple of quarters ago. So all of these dynamics will actually help free up some labor into the other sites of service, but there definitely will be a lag and as I said earlier when that does happen teleflex is well positioned to take advantage of it.

Okay. Thanks for taking the questions guys.

Sure.

We now have Matthew O'brien with Piper Sandler.

Please go ahead. Thank you.

Hey, Good morning. This is Phil on for Matt. Thanks for my Thanks for taking my question can you guys hear me all right.

Okay. Thanks for that color Liam and then upon.

Apologize for forgetting granular here, but you guys mentioned the overall business.

We can hear you Phil Thank you.

Right.

Touch on Europe again, I mean, do you expect the strength of trainings to continue through fourth quarter and into 2023 here.

Number was stronger than July and August so wanted to ask maybe specifically on Urolith I know June was a tough month for euro lift, but any color on the monthly trends within the quarter or your lip sales.

And then additionally, I understand that the timeline of visit recovery a bit up in the air but do you expect more of a step function in terms of visits once they do return or will it be a slower ramp.

Yes, sure. So as expected August was impacted by the vacation season, and we knew that was going to happen, but we did see an uptick in the day rate in September as also was expected.

Patients return a little bit more slowly.

So with regard to the training the training was in Q3 was right in line with our expectations. So we're ramping too.

So.

And as I said, we saw improvement in staffing levels. So we're encouraged by the uptick in September coming out of the holiday season in our day rates.

The traditional.

400 ish docs that we would train in any given year. So we're on we're on track for that and that for US is encouraging because it lets us know that docs are still interested in the procedure. They want to take the procedure. We're moving from the early adopter to the fast follower and that that is quite encouraging with regard to visits.

And that's what is the basis for our guidance for Q4.

Okay. Thanks for taking the questions guys.

Sure.

We now have Matthew O'brien with Piper Sandler.

The first.

Milestone for me.

Please go ahead, when you're ready Matthew.

Phil is to get to a flat visit year over year.

Hey, Good morning. This is Phil on for Matt. Thanks, So much. Thanks for taking my question can you guys hear me all right.

We've gone through this year with minus 15 minus 12.

We can hear you Phil Thank you.

Is high single digits. So we have to get the flat first before we get the normal cadence of increase and even if even when were flat.

Alright.

Touch on Euro left again, I mean, do you expect the strength of trainings to continue through fourth quarter and into 2023 here.

Year over year that is still below 2019 pre COVID-19. So there is a ways to go in the patient visits and you are correct once patient flow starts to come back there should be a lag thereafter, and then you should see momentum begin to build once the patients are back visiting their urologist.

And then additionally, I understand that the timeline of visit recovery is a bit up in the air but do you expect more of a step function in terms of visits once they do return or will it be a slower ramp.

Patients return a little bit more slowly.

So with regard to the training the training was in Q3 was right in line with our expectations. So we're ramping too.

Great great. Thanks for that color.

Just shifting gears congratulations on the standard Bariatrics acquisition I was wondering if you would need any additional pieces to surround that asset or if you believe that.

The traditional.

400 ish docs that we were trained in any given year. So we're on we're on track for that and that for US is encouraging because it lets us know that docs are still interested in the procedure. They want to take the procedure. We're moving from the early adopter to the fast follower and that that is quite encouraging.

It can exist.

Current state and I guess, just broadly more broadly on M&A what are your thoughts given the pullback in valuations and you're on your own leverage ratios.

With regards to visits.

The first.

Yes, so our standard Bariatrics first obviously is a great acquisition for US we already have a significant coal point in with the bariatric surgeon.

Millstone for me.

Phil is to get to a flat visit year over year.

We've gone through this year with minus 15 minus 12 minus high single digits. So we have to get the flat first before we get the normal cadence of increase and even if even one were flat.

We set our mini lap our percutaneous surgical.

System.

We sell the work FX closure and we set our call litigation products. So we already have that all points around it.

At year over year that is still below 2019 pre COVID-19. So there is a ways to go in the patient visits and you are correct once patient flow starts to come back there should be a lag thereafter, and then you should see momentum begin to build once the patients are back visiting their urologists.

And this is an opportunity for us to double our sales force in that call point add the standard bariatrics and double the number of salespeople that are selling the Titan SGS as well regarding M&A.

Pro forma we're at one nine times Levered, so we're in pretty good shape.

We are active out there in the marketplace looking for assets.

Great great. Thanks for that color and then I guess just shifting gears congratulations on the standard Bariatrics acquisition I was wondering if you would need any additional pieces the surround that asset or if you believe that.

The team internally ran some analysis on the standard Bariatrics acquisition, because I'm taking from your question should you do a share buyback given where your stock is that and actually if you are short term holder of teleflex stock buyback in the first year might be preferable, but if youre a long term holder for sure over the 23456 year horizon.

It can exist.

Current state and I guess, just broadly more broadly on M&A what are your thoughts given the pullback in valuations and youre on your own leverage ratios.

It's a significantly better return on teleflex using their balance sheet to do M&A, rather than do a stock buyback, even with our stock price where it is today. So we've run that analysis, we feel confident we can give shareholders a better return by continuing to bring in attractive M&A and to the company continued to expand.

Yes, so our standard Bariatrics first obviously is a great acquisition for US we already have a significant coal point in with the bariatric surgeon.

We set our mini lap our percutaneous surgical.

System we.

Sell the work FX closure, and we set our core litigation products. So we already have that all points around it.

Teleflex is reach into into new underlying procedures and that would be our mantra going forward and that's what we're going to execute towards.

And this is an opportunity for us to double our sales force in that call point.

The standard bariatrics and double the number of salespeople that are selling the Titan SGS as well regarding M&A.

Thank you.

Your next question comes from Lauren <unk> of Wells Fargo. Please go ahead, when you're ready.

So format, we're at one nine times Levered, so we're in pretty good shape.

Okay.

Hey, Good morning. This is big in corollary to predict for the questions just a couple from us.

We are active out there in the marketplace looking for assets.

Can you provide us with the framework for 2023, not asking for specific guidance, but any sort of items you are aware of now like FX or inflation.

The team internally ran some analysis on the standard Bariatrics acquisition, because I'm taking from your question should you do a share buyback given where your stock is at and actually if you are a short term holder of teleflex stock buyback in the first year might be preferable, but if youre a long term holder for sure over the 23456 year hurt.

On the P&L that you can share your preliminary preliminary thoughts on.

And any reason.

I think you'd be at 67% and then I had a follow up thanks.

Ryzen, it's a significantly better return on teleflex using their balance sheet to do M&A, rather than do a stock buyback, even with our stock price where it is today. So we've run that analysis, we feel confident we can give shareholders a better return by continuing to bring in attractive M&A and as the company continued to.

So.

With regard to what we know now.

Going to flow through the P&L for next year, obviously, FX is going to be an impact.

We had set up our our plan this year.

And we brought the in particular, the euro to the data, which is our biggest exposure we brought that to parity in Q2 for the remainder of the year.

Spanned teleflex is reach into into new underlying procedures and that would be our mantra going forward and that's what we're going to execute towards.

And we've updated that and that was one of the reasons for the $10 million call down on euro and other currencies moving.

We realigned that race.

That would give you an average for the year of approximately 105 to the euro and if it stays at parity or below parity, that's going to be an obvious headwind for that for the next year.

Thank you.

Your next question comes from Lauren <unk> of Wells Fargo. Please go ahead, when you're ready.

Okay.

Hey, Good morning. This is Nick in for Larry Thanks for taking my questions just a couple from us.

Are seeing heightened inflation.

But we had built in incremental inflation into our AARP in the future.

Can you provide us with the framework for 2023, not asking for specific guidance, but any sort of items. You are aware of now like FX or inflation running through the P&L that you can share your preliminary preliminary thoughts on.

And the first year in year 2023 question, we'll get to that when we get to February we will give guidance for the first year of DRP when we get to February but as I said, a little earlier Im still very confident on the overall, 6% to 7% and the addition of standard Bariatrics just.

And any reason why you don't think you'd be at 67% and then I had a follow up thanks.

So.

With regard to what we know now.

Gives me more confidence on that 6% to 7% over the AARP horizon.

Going to flow through the P&L for next year, obviously, FX is going to be an impact.

Great. Thanks, and just a follow up can you talk about <unk> penetration in the quarter and how you're thinking about the rest of this year and potentially next year. Thanks, so much.

We had set up our our plan this year.

And we brought the in particular, the euro to the data, which is our biggest exposure we brought that to parity in Q2 for the remainder of the year.

Yes, so with Manta penetration is really into into the type of our procedures were about 75% to 80% of our procedures are done there.

And we've updated that and that was one of the reasons for the $10 million call down on euro and other currencies moving.

We realigned that race.

And that continues to be a focus for us as we head into next year. What we're really excited about we've got a clinical study being done.

That would give you an average for the year of approximately 105 to the euro and if it stays at parity or below parity, that's going to be an obvious headwind for that for the next year.

On top of the Karolinska, one that I spoke about it in the call and the Karolinska one was excellent because it basically shows the adoption curve is really quick for manta and even better the complication rate is right in line with our original study that we did.

Are seeing heightened inflation.

But we had built in incremental inflation into our AARP in the future.

<unk> study so that's really encouraging now we have another trial going on that's going to help with the positioning of manta and the use of ultrasound Doppler to position.

And the first year 2023 question, we'll get to that when we get to February we'll give guidance for the first year DRP when we get to February but as I said, a little earlier I'm still very confident on the overall, 6% to 7% and the addition of standard Bariatrics just.

Product, which should make it even easier for those surgeons to continue to use the product with regard to penetration we see the penetration level, obviously continuing to ramp at the $200 million to $300 million market and we're very early in the adoption curve with you all.

Gives me more confidence on that 6% to 7% over the horizon.

Great. Thanks, and just a follow up can you talk about <unk> penetration in the quarter and how youre thinking about the rest of this year and potentially next year. Thanks, so much.

Yes, so with manta penetration is really into into the type of our procedures.

Thank you.

We now have to be trained.

About 75% to 80% of our procedures are done there.

Your line is now open.

Thanks.

Hope everyone's doing well happy to be back covering the name here. So maybe Liam just a little bit on on Japan, and China and just on the cadence of actually physician training urologists training in those markets.

And that continues to be a focus for us as we head into next year. What we're really excited about we've got a clinical study being done.

Do you expect that to proceed youre doing about 400 a quarter.

In the U S. As it is it going to be the same cadence in those markets.

And maybe.

Early thoughts on 2023, when you think about contribution from Japan, and China in Euro lift and I'll have one follow up thanks.

<unk> study so that's really encouraging now we have another trial going on that's going to help with the positioning of <unk> and the use of ultrasound Doppler to position.

Yes, Anthony welcome back good to have you back on the story, so just to be clear.

Product, which should make it even easier for those surgeons to continue to use the product with regard to penetration we see the penetration level, obviously continuing to ramp it's a $200 million to $300 million market and we're very early in the adoption curve. So we see no reason why that won't continue over a multi year period.

Clear, we'll do a product around 400, a year in the United States rather than the quarter.

In Japan, we're very early in the cycle. So we're really in a few major metropolitan areas, obviously, Tokyo being being one of them.

<unk>.

<unk> added some additional sales reps.

In this quarter.

As we continue to prepare for 2023 and again I feel really confident on the ramp at a third of the size of the U S market. So next year it should be something in the region of a third of about $15 million, what we should expect from from Japan.

Thank you.

We now have.

Right.

Your line is now open.

Thanks.

Japan.

China, We will do our first cases this quarter, obviously, we're starting in the private hospital sector, and again, which will start in the major metropolitan centers, we will start in Shanghai.

Do you expect that to proceed youre doing about 400 a quarter.

Beijing, and Guangzhou, and then we will expand it out beyond that I would like to get the initial training is done in China before we give too much more color on how many docs, we can bring on but we have identified a number of the key opinion leaders in China and that training as I said will take place during Q4 excited.

In the U S is it going to be the same cadence in those markets.

And maybe.

Early thoughts on 2023, when you think about contribution from Japan, and China in Euro lift and I'll have one follow up thanks.

Yes, Anthony welcome back good to have you back on the story, so just to be clear.

Both I think those are the markets that can really move the needle for euro lift they are large enough that.

Clear, we'll do a product around 400, a year in the United States rather than in the quarter.

<unk> got Japan has good reimbursement, we will get reimbursement and put it onto the regional tenders in China.

In Japan, we're very early in the cycle. So we're really in a few major metropolitan areas, obviously, Tokyo being being one of them we have.

Once we build some traction in the in the private markets and that will take us a few years to do that.

Added some additional sales reps.

Great and then the follow up maybe for Tom just when we think about inflation.

In this quarter.

For next year I think previously there was a dollar number that we should be thinking about that.

<unk> will roll into next year. Some companies have given that dollar amount. So just wondering if there is an updated view on how inflation rolls in.

Japan.

China will do our first cases this quarter. Obviously, we are starting in the private hospital sector and again, we'll start in the major metropolitan centers, we will start in Shanghai.

Next year and when we think about the restructuring programs and offsets if you can provide some color on potential offsets. Thanks again.

Sure.

Beijing and Guangzhou.

As you know as we mentioned in our prepared remarks and inflation continues to exist for us as we think about the components of it.

And then we will expand it out beyond that I would like to get the initial training is done in China before we give too much more color on how many docs, we can bring on but we have identified a number of the key opinion leaders in China and that training will as I said will take place. During Q4 excited about both I think those are the markets.

We're actually seeing some improvement in sea freight and we expected that all along this year and so we're seeing the cost of freight going down quarter over quarter.

Materials, however continue to be at elevated rates, we haven't seen that stabilize quite yet or returned to normalized level. So we will continue to expect to.

That can really move the needle for euro lift large enough they've got Japan has good reimbursement, we will get reimbursement and put it onto the regional tenders in China.

To have inflation in our numbers and historically, we've always had a level of inflation I would say that this year it was higher than than typical.

Once we build some traction in the in the private markets and that will take us a few years to do that.

Great and then a follow up maybe for Tom just when we think about.

We will have some rolling into next year as a result of just how we capitalize our inventory and how that rolls off the balance sheet, but <unk>.

Inflation for next year I think previously there was a dollar number that we should be thinking about that.

Right now we're not in a position to give specific guidance for inflationary pressures for next year now with that being said there are.

It will roll into next year. Some companies have given that dollar amount. So just wondering if there is an updated view on how inflation rolls in.

There are a number of offsets we talked about our pricing, which we were very successful this year in.

Next year and when we think about the restructuring programs.

Offsets if you can provide some color on potential offsets. Thanks again.

Getting pricing out there to help offset some of the inflation pressures restructuring programs are that are currently announced will also provide a benefit in next year and as we look after the next couple of years.

Sure.

As we mentioned in our prepared remarks and inflation continues to exist for us as we think about the components of it.

We expect to realize about a half a point.

We're actually seeing some improvement in sea freight and we expected that all along this year and so we're seeing the cost of freight going down quarter over quarter.

And margin expansion from from restructuring just next year with a full point over the next couple of years. So there is a nice benefit from restructuring from pricing.

Materials, however continue to be at elevated rates, we haven't seen that stabilize quite yet or return to normalized level. So we will continue to expect.

Underlying in.

In our business, we still have a nice mix benefit.

That we're seeing come through from our high growth portfolio as mentioned they grow at a faster rate and carry a higher margin. So that's an underlying mix benefit that we.

To have inflation in our numbers and historically, we've always had a level of inflation I would say that this year it was higher than than typical.

Continuing to see and expect to see for the number of years over the MRP and as <unk> continues to recover we will expect to see more and more contribution from that business unit as well on year on the margin line.

We will have some rolling into next year as a result of just how we capitalize our inventory and how that rolls off the balance sheet, but.

So again, we will give specific numbers on it.

Right now we're not in a position to give specific guidance for inflationary pressures for next year now with that being said there are a number of offsets we talked about our pricing, which we were very successful this year in.

Inflation as we get to the <unk>.

As we get to the guidance for 2023.

Thank you.

Our next question comes from.

David just curious please go ahead.

Yeah.

Hi, Thanks for taking the questions maybe.

Maybe just actually Q1 this year.

Sorry to harp on your own.

We expect to realize about a half a point.

A lot of focus there already but I think it's so important for investors.

And margin expansion from from restructuring just next year with a full point over the next couple of years. So there was a nice benefit from restructuring from pricing.

You've mentioned the CAGR granted that's off of potentially lower starting point.

I'm just curious.

Underlying in.

In our business, we still have a nice mix benefit.

Get to that 15%, even if it is off the lower starting point can you give us a sense of what the minimum level of the U S portion of that needs to grow in other words do you need to be back to double digit U S growth over their CAGR.

That we're seeing come through from our high growth portfolio as mentioned they grow at a faster rate and carry a higher margin. So that's an underlying mix benefit that that we.

Continuing to see and expect to see for the number of years over the AARP and as <unk> continues to recover we will expect to see more and more contribution from that business unit as well on year on the margin line.

Order to get there or is there enough.

Rune.

You don't need to rely on that in the international can you get you there and then I have one follow up.

So again, we will give specific numbers on it.

Well rich clearly because international is such a lower base the percentage growth in international is going to be significantly greater than the than the U S. So by biologic. It will tell you that to get to a 15% CAGR that the U S.

Inflation as we get to the <unk>.

As we get to the guidance for 2023.

Thank you.

Our next question comes from.

David just curious please go ahead.

Just by definition is going to be lower than that 15%.

In that regard.

Hi, Thanks for taking the questions.

I still believe that with the number of men that are out there the $12 million in the United States with BPH and the one and a half that have BPH and earn the drug dropout category I still think that growth within the U S is well within our well within our reach as an organization and as I've said, a few times on the call we're well.

Maybe just actually Q on your list here.

Sorry to harp on your let's say I know it.

A lot of focus there already but I think it's so important.

For investors.

You've mentioned the CAGR granted that's off of potentially lower starting point I'm.

I'm, just curious to get to that 15%, even if it is off the lower starting point can you give us a sense as what the minimum level.

<unk>, we got our sales force fully staffed now we've got DTC going we just are back doing a BPH summers that we did a LIBOR that is.

Nice inflection normally for us it gets more interest and we're going to have one in Japan in the fourth quarter and then we'll have a number of them next year again, so things seem to me like getting more towards normal at least in that regard regarding access and.

The U S.

<unk> of that needs to grow in other words do you need to be back to double digit U S growth over their CAGR.

To get there or is there enough.

Room that you don't need to rely on that in the international if you get you there and then I have one follow up.

In terms of your question so the U S for sure doesn't have to grow at 15% for the CAGR to be 15%.

Yeah.

Well rich clearly because international is such a lower base the percentage growth in international is going to be significantly greater than the than the U S. So by biologic Ute will tell you that to get to a 15% CAGR that the U S.

<unk>.

Okay. Yeah, I was more just asking does it have to get back to double digits.

If you can answer that.

Second question for me on <unk> I, just want make sure I understand the staffing issues and the office setting.

Just by definition is going to be lower than that 15% in that regard.

My understanding was doctors tend to schedule their urology procedures.

I still.

One or two operating days, so I'm, just trying to get a sense for.

I believe that with the number of men that are out there the $12 million in the United States with BPH and the one and a half that have BPH and earn the drug dropout category I still think that growth within the U S is well within our well within our reach as an organization and as I've said.

How that might be the mix of.

Where were the earliest volumes coming back is it more youre talking about the higher volume accounts.

Better maybe doing many more euro lift so they just can't get back to their meat.

A few times on the call, we're well positioned we've got our sales force fully staffed now we've got DTC going we just are back doing a BPH summit and we did a live one that's.

Meet the demand levels, because they're doing multiple days per week of operations or.

What exactly am I missing if the if the office setting should be easier from a scheduling and patient management standpoint. Thanks.

Yes, Youre right, Richard it's easier from a schedule and.

And Thats why urologist like to do the procedure there because they are in control of it but what you're missing I think in your analysis Rich's everything that happens before the appointment get scheduled so the patient has to come in has to see the urologists. They have to fill out in IPSA scorecard. They may do some additional diagnostics on them.

<unk>.

In terms of your question so the U S for sure it doesn't have to grow at 15% for the CAGR to be 15%.

Okay. Yeah, I was more just asking does it have to get back to double digits.

The second question too.

In order to determine the bladder health of the patient and then they will definitely do assistant scope all of that requires labor every step along the way requires labor. It's not just about the procedure itself. It's about what happens to the patient flow as they work their way through to get to the endpoint of the procedure.

For me on <unk> I, just want make sure I understand the staffing issues in the office setting.

My understanding was doctors tend to schedule their urology procedures.

One or two operating days, so I'm, just trying to get a sense for.

How that might be the mix.

And thats whats, causing the impact as I said, 61% of office based urologists in our survey clearly identified that staffing charges and I was down south in just about just over a month ago visiting with urologists every one of them mentioned staffing charges every one of them.

Of where where the earliest volumes coming back is it more youre talking about the higher volume accounts.

Meet the demand levels, because they're doing multiple days per week of operations or.

What exactly am I missing if the if the office setting should be easier from a scheduling and patient management standpoint. Thanks.

Okay.

Thank you.

Your next question comes from.

Yes, Youre right, Richard it's easier from a scheduling.

Michael.

And Thats why urologists like to do the procedure there because they are in control of it but what you are missing I think in your analysis Rich's everything that happens before the appointment get scheduled so the patient has to come in has to see the urologists. They have to fill out in IPSA scorecard. They may do some additional diagnostics on them.

With Needham and company your line is open.

Yeah.

Yeah. Thanks, I guess I have two questions I'll just go ahead and get them to book now.

So first with your lift.

With regard to the sales force has there been any changes disruption turnover in that sales force have you.

In order to determine the bladder has the patient and then they will definitely do assistant scope all of that requires labor every step along the way requires labor. It's not just about the procedure itself. It's about what happens to the patient flow as they work their way through to get to the endpoint of the procedure.

Added head count this year.

And then the second question is just on thinner bariatrics.

Is this I mean, I totally understand the opportunity.

Please gastrectomy market and very accurate, but is this sort of a platform technology that would enable you to.

That's what's causing the impact as I said, 61% of office based urologists in our survey clearly identified that staffing charges and I was down south in just about just over a month ago visiting with urologists every one of them mentioned staffing charges every one of them.

Offer like a full range of stapling products over time.

Kind of enter that duopoly market.

Well I think that we already have a series of products within that call point, obviously, it's a fast growing market. It's a market that's going to continue to grow as as we as a society. We continue to eat more of the wrong wrong wrong stuff. So we.

We do see this as an opportunity for us to continue penetration within the bariatric market.

Thank you.

Your next question comes from.

Michael.

There are.

And it comes from your line is open.

Some aligned technologies that may be of interest to us as we go deeper into this.

Yes. Thanks.

It is an area of interest for Teleflex and always has been as I said earlier, we've got our core ligation clips in there we got our facial closure in there and we got our.

Yes, I have two questions I'll just go ahead and give them.

Now.

So first with your lift.

With regard to the sales force has there been any changes disruption turnover in that sales force have you added.

Mini lap that our sales force is in their.

Regarding turnover.

All medical device companies companies, we experienced heightened turnover in 2021.

Head count this year.

And then the second question is just on thinner bariatrics.

Right across the board in Teleflex and in Euro lift.

Is this I mean, I totally understand the opportunity.

Right now we have a very stable sales force in the in the Euro lift area. We have I think right now as I sit here today I think we have about four or five open territories within the business units and we feel really confident that we're well poised to be ready for when the market recovers.

<unk> gastrectomy market and very accurate, but is this sort of a platform technology that would enable you to.

For like a full range of stapling products over time.

Enter that duopoly market.

Well I think that we already have a series of products within that call point, obviously, it's a fast growing market. It's a market that's going to continue to grow as we as a society. We continue to eat more of the wrong wrong wrong stuff. So.

Okay. Thanks, just on the Stapling question I guess, what I'm getting at is would you look at offering staplers that can be used outside of bariatrics like the broader kind of surgical stay pocket I'm sorry, Mike I missed the question, we all we already sell.

We do see this as an opportunity for us to continue penetration within the bariatric market that there are.

Got.

We already sell staples in our in our general surgical portfolio, but theyre skin staplers, and obviously, our hemo lock.

Some aligned technologies that may be of interest to us as we go deeper into this.

Our horizon or both.

It is an area of interest for Teleflex and always has been as I said earlier, we got our core ligation clips in there we got our facial closure in there and we got our <unk>.

Cold and metal ligation clips so.

Don't see ourselves really going up against the big guys to try and take them on in more broad stapling, Mike. It's the reason we went into this one it's because it's so differentiated it speeds up the procedure. It gives a better outcome for the patient and gives a better outcome for the Doc. So this is properly.

Mini lap that our sales force is in there.

Regarding turnover.

All medical device companies companies, we experienced heightened turnover in 2021.

Right across the board in Teleflex and in Euro lift.

Right now we have a very stable sales force.

The reason we went into this area of stapling.

The euro lift area, we have I think right now as I sit here today I think we have about four or five open territories within the business units and we feel really confident that we're well poised to be ready for when the market recovers.

Thank you.

I have no further questions, so I would like to hand.

Alright, guys for some final remarks.

Thank you breaker and thank you to everyone that joined US on the call. Today. This concludes the Teleflex incorporated third quarter 2022 earnings conference call.

Okay. Thanks, just on the pipeline question I guess, what I'm getting at is would you look at offering staplers that can be used outside of bariatrics like the broader kind of surgical stay pocket I'm sorry, Mike I missed the question, we all we already sell.

Okay.

Thank you for joining.

This does conclude today's call.

Got.

We already sell staples in our in our general surgical portfolio, but they are skin staplers, and obviously, our hema lock.

Thank you for joining thank you for your participation you may now disconnect your lines.

Our horizon or both.

Cold and metal ligation clips so.

Don't see ourselves really going up against the big guys to try and take them on a more broad stapling, Mike. It's the reason we went into this one it's because it's so differentiated it speeds up the procedure. It gives a better outcome for the patient and gives a better outcome for the Doc. So this is properly.

The reason we went into this area of stapling.

Thank you.

We have no further questions. So I would like to have.

No request for some final remarks.

Thank you breaker and thank you to everyone that joined US on the call. Today. This concludes the Teleflex incorporated third quarter 2022 earnings conference call.

Thank you for joining.

This does conclude today's call.

Thank you for joining thank you for your participation you may now disconnect your lines.

Yeah.

Yes.

Okay.

Sure.

Q3 2022 Teleflex Inc Earnings Call

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