Q3 2023 Teleflex Inc Earnings Call

Speaker 1: Please stand by. Good morning, ladies and gentlemen, and welcome to the Teleflex third quarter 2023 earnings conference call. At this time, all participants have been placed in a listen-only mode. At the end of the company's prepared remarks, we will conduct a question and answer session. Please note that this conference call is being recorded and will be available on the company's website for replay shortly.

Please standby good morning, ladies and gentlemen, and welcome to the Teleflex third quarter 2023 earnings conference call. At this time, all participants have been placed in a listen only mode. At the end of the company's prepared remarks, we will conduct a question and answer session.

Please note that this conference call is being recorded and will be available on the company's website for replay shortly.

Speaker 1: And now I will turn the call over to Mr. Lawrence Kersh, Vice President of Investor Relations and Strategy Development. Please go ahead.

And now I will turn the call over to Mr. Lawrence Kirsch, Vice President of Investor Relations and strategy development. Please go ahead.

Speaker 2: Good morning, everyone, and welcome to the Teleflexion Corporated, third quarter 2023 Eurings Conference.

Good morning, everyone and welcome to the Teleflex incorporated third quarter 2023 earnings Conference call.

Speaker 2: The press release and slides to accompany this call are available on our website at teleplex.com.

Press release and slides to accompany this call are available on our website.

At Teleflex.

Please note that webcast viewers have the ability to advance the presentation slides.

Speaker 2: Please note that webcast viewers have the ability to advance the presentation slides on their own.

Speaker 2: Simply follow along with the presentation as we proceed through the call.

Simply fall along with the presentation.

During the call.

Speaker 2: As a reminder, a replay will be available on our website. Those wishing to access the replay can refer to our press release from this morning for detail.

As a reminder, a replay will be available on our website those wishing to access the replay can refer to our press release from this morning for details.

Participating on today's call are Liam Kelly, Chairman, President and Chief Executive Officer, and Thomas Powell, Executive Vice President and Chief Financial Officer.

Speaker 2: Participating on today's call are Liam Kelly, Chairman, President, and Chief Executive Officer, and Thomas Powell, Executive Vice President, and Chief Finance.

Speaker 2: Liam and Tom will provide prepared remarks and then we will open the call to QA.

Liam and Tom will provide prepared remarks, and then we will open the call to Q&A.

Speaker 2: Before we begin, I'd like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in the slides posted to the investor relations section of the tall flex web.

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.

Outlined in the slides posted to the Investor Relations section of the Teleflex website.

Speaker 2: We wish to caution you that such statements are in fact forward-looking in nature and are subject to risks and uncertainties, and actual events or results may differ materially.

We wish to caution you that such statements are in fact forward looking in nature.

And are subject to risks and uncertainties and actual events or results may differ materially.

Speaker 2: 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 10K, which can be accessed on our website. Now, I'll turn the call over.

The factors that could cause actual results or events to differ materially include but are not limited to factors referenced in our press release today as well as our filings with the SEC, including our Form 10-K, which can be accessed on our website.

Now I'll turn the call over to Liam for his remarks.

Thank you Larry and good morning, everyone. It is a pleasure to speak with you today.

Speaker 3: Thank you, Larry. And good morning, everyone. It is a pleasure to speak with you today.

Speaker 3: On this morning's call, we will discuss the third quarter results, our acquisition of Palletlight Sciences, and our financial guidance for 2023. Turning.

On this mornings call, we will discuss the third quarter results, our acquisition of <unk> life Sciences, and our financial guidance for 2023.

Turning to the third quarter.

<unk> revenues were $746 $4 million a year over year increase of eight 7%.

Speaker 3: Teleflex revenues were $746.4 million. A year over year increase of 8.7%

Speaker 3: and an increase of 7.4% on a constant currency base.

And an increase of seven 4% on a constant currency basis.

Speaker 3: Third quarter adjusted Ernie Spurshare with $3.64.

Third quarter adjusted earnings per share was $3 64.

Speaker 3: an 11.3% increase year over year.

And 11, 3% increase year over year.

Speaker 3: During the third quarter, we experienced stable-to-improving macro and healthcare utilization trends.

During the third quarter, we experienced stable to improving macro and health care utilization trends.

Speaker 3: In the acute care setting, which is our primary market, utilization during the third quarter returned towards normal seasonality.

In the acute care setting, which is our primary market utilization during the third quarter return towards normal seasonality.

Speaker 3: From a macro perspective, we witness a stable to improving environment for material inflation and supply chain in the third-water unesequential base.

From a macro perspective, we witnessed a stable to improving environment for material inflation and supply chain in the third quarter on a sequential basis.

Speaker 3: These dynamics are generally tracking to our expectations for the year.

These dynamics are generally tracking to our expectations for the year.

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

Speaker 3: Now, let's turn to a deeper dive into our third quarter revenue results.

I will begin with a review of our geographic segment revenues for the third quarter.

Speaker 3: I will begin with the review of our Geographic Segment Revenues for the Third Corps.

Speaker 3: All growth rates that I refer to are on a constant currency basis unless otherwise noted.

All growth rates that I referred to on a constant currency basis, unless otherwise noted.

Speaker 3: America's revenues are 428.2 million dollars, which represents 5.5% growth year-over-year.

America's revenues were $428 2 million.

Which represents five 5% growth year over year.

Speaker 3: In particular, we saw strong performance in our surgical and interventional business.

In particular, we saw strong performance in our surgical and interventional businesses.

Speaker 3: EMEA revenues of $142.7 million increased 4% year over year.

EMEA revenues of $142 $7 million increased 4% year over year.

Speaker 3: During the quarter, intervention led the growth, while we saw balance performances across our other business.

During the quarter interventional led the growth, while we saw balanced performance across our other businesses.

Now turning to Asia revenues were $93 $2 million, increasing 17, 1% year over year during the third quarter, we saw stable demand across the majority of the region.

Speaker 3: Now turning to Asia, revenues were 93.2 million dollars, increasing 17.1% year-over-year. During the third quarter, we saw stable demand across the majority of the reach.

Revenues in China increased in excess of 20% year over year and reflected solid underlying demand.

Speaker 3: Revenue in China increased in excess of 20% year over year and reflected solid underlying demand.

Given our specific portfolio of products, we have not seen any impact on our business in China as a result of government initiated anti corruption measures.

Speaker 3: Given our specific portfolio products, we have not seen any impact on our business in China as a result of government-initiated anti-corruption measures.

Speaker 3: That's now moved to a discussion of our third quarter revenues by global product

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

Commentary on global product category growth for the third quarter was also be on a constant currency basis.

Speaker 3: Commentary and global product category growth for the third quarter would also be on a constant currency basis.

Starting with vascular access.

Speaker 3: Revenue increased 0.3% to $169.9 million.

Revenue increased <unk>, 3% to $169 9 million.

Speaker 3: As expected, the quarter was negatively impacted by the previously announced endurance catheter recall.

As expected the quarter was negatively impacted by the previously announced insurance catheter recall.

Speaker 3: Initial launch activities for our next generation Arrow, VPS, Rhythm, DLX Navigation Device, and the new Arrow pick preloaded with the NaviCurve Stylus, continue to generate a positive customer response and system place.

Initial launch activities for our next generation Arrow Vps rhythm <unk> navigation device.

And the new Arrow preloaded with the Navy card stylist continue to generate a positive customer response and system placements.

Speaker 3: And we drove double digit growth in our underlying PIC business.

And we drove double digit growth in our underlying <unk> business.

Moving to intervention of Axis revs.

Speaker 3: Revenue was $134.1 million, up 22.4% year-to-date.

Revenue was $134 1 million.

Up 22, 4% year over year.

Speaker 3: In the border, we continue to drive our complex PCI and emerging structural heart portfolio.

In the quarter, we continued to drive our complex PCI and emerging structure at Hyatt portfolios.

Speaker 3: balloon pumps, access enclosure, uncontrolled and manned were meaningful contributors to growth in the world.

Balloon pumps access and closure uncontrolled and manta were meaningful contributors to growth in the quarter.

Speaker 3: Turning to anesthesia. Revenue declined 1.3% year over year, $97.6 million.

Turning to anesthesia.

Revenue declined one 3% year over year to $97 6 million.

Speaker 3: I'd expect this to previously announced a T-Tube recall negatively impacted year over year growth.

As expected the previously announced <unk>, you recall negatively impacted year over year growth.

In our surgical business revenue was $112 8 million.

Speaker 3: In our surgical business, revenue was $112.8 million. Up 20.6% year-over-year.

Up 26% year over year.

Speaker 3: Among our larger franchises, flagation, staplers, and instruments were notable drivers of growth.

Among our larger franchises ligation staplers and instruments were notable drivers of growth.

Speaker 3: For 2023, we now expect Standard Barriathrix Titan's table of revenues in the team.

For 2023, we now expect standard bariatrics tightened stapler revenues in the teens.

For intervention urology revenue was $73 $6 million.

Speaker 3: For interventional urology, revenue was $73.6 million.

Speaker 3: representing a decrease of 6.8% year over year.

Representing a decrease of six 8% year over year.

In the U S. The office remains the biggest challenge for your lift.

Speaker 3: In the US, the office remains the biggest challenge for your list.

Speaker 3: We are continuing our efforts to stabilize this side of service.

We are continuing our efforts to stabilize this site of service.

In the international markets, we remain focused on driving your lift revenue in Japan, while in China. Our initial launch activities I've tracked to plan.

Speaker 3: In the international markets, we remain focused on driving Euro lift revenue in Japan, while in China, our initial launch activities have tracks to plan.

Speaker 3: OEM had another solid quarter with revenues increasing 14% year over year, $2.3 million.

OEM had another solid quarter with revenues, increasing 14% year over year to $82 3 million.

The strength in the quarter was broad based across our portfolio, including micro catheters.

Speaker 3: Strength in the chord was broad based across our portfolio, including microcaps.

Third quarter other revenue increased five 3% to $76 $1 million year over year.

Speaker 3: Third quarter other revenue increased 5.3% to 76.1 million dollars year over year. As it relates to the other revenues, we have been informed by medeline that they are now in a position to exist. The MSA earlier in 2023 than previously anticipated.

As it relates to the other revenues we have been informed by Medline that they are now in a position to exit the MSA early or in 2023 than previously anticipated.

Speaker 3: We now expect the MSA to cease earlier in December rather than December 31st.

We now expect the MSA to seats earlier in December rather than December 31.

Speaker 3: Tom will give an update on the financial impact later in the call. That completes my comments on the third quarter revenue performance.

Tom will give you an update on the financial impact later in the call.

That completes my comments on the third quarter revenue performance.

Turning to some other business updates.

Speaker 3: On October 10th, we announced the close of the acquisition of privately held Pallet Life Sciences for an upfront cash payment of $600 million of closing and up to an additional $50 million upon the achievement of certain commercial months.

On October 10th we announced the close of the acquisition of privately held <unk> life Sciences for an upfront cash payment of $600 million of closing and up to an additional $50 million upon the achievement of certain commercial milestones.

Speaker 3: So let's product portfolio, particularly Virgil, will complement the uralis system, covering the top two diseases within urology care, BPH and prostate cancer. Virgil is a different...

So lets product portfolio, particularly Vera gel will complement the euro lift system covering the top two diseases within urology care BPH and prostate cancer.

<unk> is a differentiated rectal spacer.

Speaker 3: The product is easily sculpted when placed between the prostate and rectum and allows the position to achieve predictable protection of healthy rectal tissue prior to radiation third

Our product is easily sculpted when placed between the prostate and rectum and allows the physician to achieve predictable protection of healthy rectal tissue prior to radiation therapy.

Speaker 3: There is a large and growing global market for rectal space.

There is a large and growing global market for rectal spacers. The American cancer Society estimates that there will be 288000, new cases of prostate cancer in the U S with the incidents growing 3% a year.

Speaker 3: The American Cancer Society estimates that there will be 288,000 new cases of prostate cancer in the U.S. with the incidence growing 3% a year.

Speaker 3: In addition, the increasing use of hyperfractionation radiation therapy is driving demand for rectal spacers to protect healthy tissue.

In addition, the increasing use of hyper fractionation radiation therapy is driving demand for erectile spaces protect as deep tissue.

From a strategic perspective. The addition of <unk> portfolio complements our strong presence in the treatment of benign prostate enlargements and helps to expand the clinical landscape of our intervention note urology business.

Speaker 3: From a strategic perspective, the addition of Pellet's portfolio complements our strong presence in the treatment of benign prostate enlargement and helps to expand the clinical landscape of our interventional urology business.

Speaker 3: I've note, urologists perform the majority of rectal space or placements, which will leverage our existing call point.

Of note urologists perform the majority of rectal spacer placements, which will leverage our existing call points.

We have a broad and established urology sales organization.

Speaker 3: which will be augmented by Pales' clinical expertise in the use of rectal spacing, irradiation therapy, and prostate cancer treatment.

Which will be augmented by pellets clinical expertise in the use of Brookfield spacing for radiation therapy in prostate cancer treatment.

Speaker 3: The acquisition will also enable teleflex to engage with other specialists in areas including radiation oncology, female urology, and pediatric urology.

The acquisition will also enable teleflex to engage with other specialists in areas, including radiation oncology female urology and pediatric urology.

Speaker 3: We will implement strong peer-to-peer education, a patient awareness focus, and leverage best practice.

We will implement strong peer to peer education Ah patient awareness focus and leverage best practices.

Speaker 3: We also expect interest in rectal spaces to provide opportunities to cross-cell uralit, although such synergies have not been included in our acquisition model.

We also expect interest in rectal spaces to provide opportunities to cross sell your lift although such synergies have not been included in our acquisition model.

Speaker 3: Finally, Farajel has established brand success, which allows teleplex to effectively invest in and grow within a significant new market.

Finally, Biogen has established brand success, which allows teleflex to effectively invest in and grow within a significant new markets.

Speaker 3: From a financial perspective, we expect the acquisition to be immediately aggressive to revenue growth and adjusted growth margin. And in-hands are adjusted operating margin in the near term.

From a financial perspective, we expect the acquisition to be immediately accretive to revenue growth and adjusted gross margin and enhance our adjusted operating margin in the near term.

Moving to the topic of <unk> drugs, which had been an investor focus over the past couple of quarters.

Speaker 3: Moving to the topic of GLP-1 drugs, which has been an investor focus over the past couple of quarters.

We continue to evaluate clinical data and monitor the usage of <unk> ones to assess potential exposure for teleflex.

Speaker 3: We continue to evaluate clinical data and monitor the usage of GLP ones to assess potential exposure for telephoto.

Speaker 3: We have reviewed the markets that we serve, and at this time, we do not expect GLP ones to have a significant direct impact on teleflexes diversified product or poly.

We have reviewed the markets that we serve and at this time, we do not expect GOP ones to have a significant direct impact on teleflex is diversified product portfolio.

Speaker 3: Although our large exposure is standard barrier aftericks with the Titan stapler, revenues for this product are expected to account for less than 1% of teleflexes overall revenue in 2023.

Although our largest exposure is standard bariatrics with tightened stapler revenues for this product are expected to account for less than 1% of teleflex as overall revenue in 2023.

Over the past two quarters, we have seen an impact on sleeve gastrectomy volumes from the interest in GOP ones.

Speaker 3: We have seen an impact on sleeve gas-rectomy volumes from the interest in GLP1.

Speaker 3: It is important to note that while the select trial showed a 20% reduction in major adverse cardiac events over five years, a recent study from the Cleveland Clinic, which was presented at the American Society for Metabolic and Bariatric Surgery 2023 Annual Scientific Meeting, showed that bariatric surgery has been associated with a 42% lower risk of major adverse cardiac events.

It is important to note that while the select trial showed a 20% reduction in major adverse cardiac events over five years. A recent study from the Cleveland Clinic, which was presented at the American Society for metabolic and Bariatric surgery 2023 annual scientists.

<unk> meeting showed that bariatric surgery has been associated with a 42% lower risk of major adverse cardiac events.

While we continue to expect some softness to bariatric surgery volumes. We believe we will offset this due to our focus on capturing market share.

Speaker 3: While we continue to expect some softness to bariatric surgery volumes, we believe we will offset this due to our focus on capturing market share.

Speaker 3: We remain active in gaining back approvals and training surgeons during the war.

We remain active in gaining back approvals and training surgeons during the quarter.

Speaker 3: We've also done a deep dive into our interventional business to assess the possible impact of GLP1s in the lives of the results from the select study, which showed an absolute reduction in the rate of major adverse cardiac events of 1.6% from approximately 8% to 6.4% over five years.

We've also done a deep dive into our interventional business to assess the possible impact of GOP ones in light of the results from the select study, which showed an absolute reduction in the rate of major adverse cardiac events of one 6% from approximately 8% to six four <unk>.

<unk> over five years.

Speaker 3: When considering the times that events defined in-mace for the study and the follow-up period, the reduction in these events on an annual basis is measured in the tens of basis points. So actually, I read it-

When considering the types of events defined inmates for the study and the follow up period. The reduction in these events on an annual basis is measured in the tens of basis points, so actually a relatively small impact.

Speaker 3: In addition, when considering that GLP1 patients could live longer, it may only serve to delay cardiac events.

In addition, when considering the <unk> patients could live longer it may only serve to delay cardiac events.

Speaker 3: Also, demographics remain a powerful driver with global populations age.

Also demographics remain a powerful driver with global populations AG.

Speaker 3: Accordingly, we do not expect GLP-1s to have a significant impact on our interventional business.

<unk>, we do not expect GOP ones to have a significant impact on our interventional business.

Speaker 3: More broadly, we sell other surgical products to bariatric surgeons, including metal ligations clips and closure devices. But the revenue associated with these products in this surgical specialty is immaterial to tell us.

More broadly we sell other surgical products to bariatric surgeons, including metal ligation clips and closure devices, but the revenue associated with these projects and this surgical specialty is immaterial to teleflex. Indeed, the vast majority of our surgical products are utilized in general cardiac <unk>.

Speaker 3: Indeed, the vast majority of our surgical products are utilized in general, cardiac, urology, and gynecological surgery.

Our allergy and gynecological surgeries.

Speaker 3: and are not expected to be significantly impacted by GLP1 use.

And are not expected to be significantly impacted by G. L. P. One usage.

Speaker 3: Teleflex also sells hemodialysis catheters through our vascular and interventional business units.

Teleflex ultra sales hemodialysis catheters through our vascular and interventional business units.

Speaker 3: In total, haemodialysis catheter sales in North America account for less than 1% of Pellaflex revenues, with the majority utilized for the treatment of acute kidney injuries or AKI, which is not expected to be impacted by GLP1U.

In total hemodialysis catheter sales in North America account for less than 1% of Teleflex revenues with the majority utilized for the treatment of acute kidney injury or 8-K.

Which is not expected to be impacted by <unk> one use.

Speaker 3: It is estimated that AKI develops enough to 67% of patients admitted to the intensive care unit with the vast majority, not associated with chronic kidney disease.

It is estimated that ATI develops in up to 67% of patients admitted to the intensive care unit with the vast majority not associated with chronic kidney disease.

Speaker 3: Common causes of AKI in hospitalized patients include severe infection, low blood pressure, and blockages of the renal tract. And it is...

Common causes of 8-K I in hospitalized patients include severe infection, low blood pressure and blockages of the renal tract.

And it is often reversible.

Speaker 3: Between the businesses mentioned, as well as assumptions for other discrete product categories, total sales for products that have potential direct exposure to increased use of GRP1 drugs is approximately 1% to 2% of teleflex revenue.

Between the business as mentioned as well as assumptions for other discrete product categories.

Total sales for products that have potential direct exposure to increased use of <unk> drugs is approximately 1% to 2% of teleflex revenues.

Speaker 3: That said, the potential impact should be less than that. As the use of GRP1 drugs may reduce some usage, what would be unlikely to completely eliminate the need for our products exposed. Our highly diverse-

That said the potential impacts should be less than that.

The use of <unk> drugs may reduce some usage, but it would be unlikely to completely eliminate the need for our products exposed.

Our highly diversified product portfolio is.

Speaker 3: primarily focused on critical care procedures. And as a result, we estimate that over 98% of telephlex revenues should not be directly impacted as a result of increased usage of GLT-1 growth.

It is primarily focused on critical care procedures and as a result, we estimate that over 98% of teleflex revenues should not be directly impacted as a result of increased usage of <unk> drugs.

Speaker 3: We will continue to evaluate clinical data and monitor the usage of GLP1s to assess potential exposure to teleplex moving forward. Moving.

Speaker 3: We are pleased to share that we are in the final stages of completion for the commercial launch of Watson Temporary Facing Guide.

Speaker 3: Watson is a unique bipolar guidewire used specifically for TAVR and BAV procedures, and engineered to help reduce the risk of ventricular perforation while providing confidence in capture during rapid patient care.

Speaker 3: As a dual delivery guide wire and pacing wire, once and will complement our expanding structure and hard portfolio, which already includes the man's and large foreclosure device and the Langston dual loomant for contrast delivery and pressure measurement.

Speaker 3: We are building momentum with a focus on complex PCI and structural heart. Of note, we continue to drive our innovation engine, and we'll be launching a number of new products over the coming year.

Speaker 3: 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, thanks.

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

Thanks, Liam and good morning.

Given the previous discussion of the company's revenue performance.

Speaker 2: Given the previous discussion of the company's revenue performance, I'll begin with margin.

<unk> with margins for.

Speaker 2: For the quarter, adjusted gross margin was 59.4%.

For the order adjusted gross margin was 59, 4%.

Speaker 2: 70 bases pulling increase versus the prior year period.

70 basis point increase versus the prior year period.

The year over year increase was primarily due to favourable price.

Speaker 2: The year-over-year increase was primarily due to favorable price.

Speaker 2: benefits from cost improvement initiatives, and lower logistics and distribution related costs.

Benefits from cost improvement initiatives, and lower logistics and distribution related costs.

Speaker 2: Arslet Offset by continued cost inflation, non-favorable fluctuations in foreign exchange.

Partially offset by continued cost inflation and unfavorable fluctuations in foreign exchange rates.

Speaker 2: Adjusted operating margin was 27.2% in the third border.

Adjusted operating margin was 27.2% in the third quarter.

Speaker 2: 30 basis point, your every year increase was the result of a slow through of gross margin partially offset by increased head count and employee related expenses investments to grow the business and the inclusion of

The 30 basis points year over year increase was the result of the flow through of gross margin.

Partially offset by increased head count an employee related expenses.

Vestments to grow the business.

And the inclusion of standard very Ettrick operating expenses.

Speaker 2: Then it just expense totaled 15.7 million in the third quarter. An increase from 13.2 million in the prior year period.

Net interest expense totaled $15.7 million in the third quarter, an increase from $13.2 million in the prior year period.

Speaker 2: The Eurovere increase in that interest expense reflects higher interest rates versus the prior year, and higher average debt outstanding utilized to fund the acquisition of Pallet. Partly offstead by increased interest in...

Here over your increase in net interest expense reflects higher interest rates versus the prior year and higher average debt outstanding utilize to fund the acquisition.

Partly offset by increased interest income.

Speaker 2: Our adjusted tax rate for the third quarter of 2023 was 8% compared to 9.8% in the prior year period.

Alright, just a tax rate for the third quarter of 2023 was 8%.

Care to 9.8% in the prior year period.

The year over year decrease in are just tax rate is primarily due to a reduction in tax costs, resulting from a U S tax law, requiring capitalization of R&D expenses.

Speaker 2: The year over your decrease in our adjusted tax rate is primarily due to a reduction in tax costs resulting from a US tax law requiring the capitalization of R&D expenses.

Speaker 2: At the bottom line, third quarter adjusted earnings per share was $3.64.

At the bottom line.

Third quarter adjusted earnings per share was $3.64.

Speaker 2: increase of 11.3% versus prior year. During now to select...

Kris of 11.3% versus prior year.

Turning now to select balance sheet and cash flow highlights.

Cash flow from operations for the nine months was $372.4 million.

Speaker 2: Cash flow from operations for the nine months was $372.4 million Compared to $244.4 million in the prior year period

Compared to $244 $4 million in the primary your period.

The $128 million increase was primarily trivial favorable operating results lower tax payments and favorable changes in working capital.

Speaker 2: The $128 million increase with primarily a true goal to favorable operating results, lower tax payments, and favorable changes in working capital.

Speaker 2: The favorable changes in working capital were primarily driven by lower inventory purchases, stemming from the build up and inventory in the prior year due to elevated global supply chain volatility.

The favorable changes in working capital.

Primarily driven by lower inventory purchases stemming from the buildup in inventory in the prior year due to elevated global supply chain volatility.

Moving to the balance sheet.

Speaker 2: Inclusive of the acquisition of Palette Life Sciences, our financial position remains sound and continues to provide us flexibility to execute on our disciplined capital allocation strategy.

Inclusive of the acquisition of I'll add like Sciences.

Our financial position remains sound and continues to provide is flexibility to execute on our disciplined capital allocation strategy.

Speaker 2: At the end of the third quarter, our cash balance was 881.5 million, compared to 292 million as of the end of 2022.

At the end of the third quarter, our cash balance was $881.5 million as compared to $292 million.

At the end of 2022.

Speaker 2: The increase in cash is primarily due to $600 million of cash on the balance sheet to fund the Pallette Life Sciences Acquisition in October 2023.

The increase in cash is primarily due to $600 million of cash on the balance sheet.

To find the <unk> by scientists acquisitions in October of 2023.

Speaker 2: Net leverage at quarter end was approximately 1.4 times.

Net leverage a corner and was approximately one four times.

Speaker 2: which remains well below our 4.5 times 7.

Which remains well below are four five times covenant.

On a pro forma basis third quarter net leverage with Colette was approximately 2.1 times.

Speaker 2: On a pro forma basis, third quarter net leverage with Palette was approximately 2.1 times.

Now turning the financial guidance.

Speaker 2: starting with the acquisition of Palette Life Sciences, which closed on October 10th and ahead of our December 1st assumption.

Starting with the acquisition of <unk> Life Sciences, which closed on October 10th at the head of our December 1st assumption.

For the full year of 2023, we continue to expect collect net revenue to be approximately $56 million on a standalone basis.

Speaker 2: For the full year of 2023, we continue to expect Collette Net Revenue to be approximately $56 million on a standalone basis.

Speaker 2: We now expect the transaction to be approximately 25 cents dilutive to the company's adjusted earnings per share in 2023. First, the dilution of 15.

We now expect the transaction to be approximately 25 cents dilutive to the company's adjusted earnings per share in 2023.

Versus dilution of 15 previously.

The incremental pollution in 2023 is primarily the result of higher interest expense.

Speaker 2: The incremental delusion in 2023 is primarily the result of higher interest expense.

Speaker 2: as well as incremental operating expenses associated with the earlier close of the transaction.

As well as incremental operating expenses associated with the earlier close of the transaction.

Speaker 2: For 2024, there is no change to our expectation for Qualified to achieve year-over-year net revenue growth in the high teens or low 20 percent.

For 2024, there is no change to our expectation for qualified to achieve year over year net revenue growth in the <unk>.

Hi teams or low 20 per cent range.

In addition, we continue to expect the transaction will be 35 cents dilutive to the company's adjusted earnings per share in 2024.

Speaker 2: In addition, we continue to expect the transaction will be 35 spends diluted to the company's adjusted earning per share in 2024.

Speaker 2: Beginning in fiscal year 2025, the transaction is expected to be increasingly accurate to adjust an EPS.

In fiscal year 2025, the transaction is expected to be increasingly creepy, it's two adjusted EPS.

Turning to an update on the manufacturing transition services agreement with Medline associated with our sale certain respiratory assets.

Speaker 2: Turning to an update on the Manufacturing Transition Services Agreement with MedLine associated with our sale, certain respiratory assets.

Speaker 2: We have been notified by midline that they intend to end the MSA earlier in our previous expected end date of December 31, 2023.

Have been notified by Medline.

Tend to envy MSA earlier in our previous expected and date of December 31 2023.

Speaker 2: Our revised 2023 constant currency revenue guidance now reflects a loss of approximately $4 million in sales due to the early termination of the MSA as compared to our prior guidance.

A revised 2000 twenty-three constant currency revenue guidance now reflects a loss of approximately 4 million sales.

Sales <unk>.

<unk> early termination of MSA as compared to our prior guidance.

Moving to our updated outlook for 2023.

We are increasing our 2023 constant currency revenue guidance $6, 4% to $6 6%.

Speaker 2: We are increasing our 2023 constant currency revenue guidance, the 6.4% to 6.6%.

Representing a 90 basis point increase at the low end of the range and a 35 basis point increase at the high end of the range.

Speaker 2: Representing a 90 basis point increased at the low end of the range and a 35 basis point increase at the high end.

Speaker 2: is important to note that the lost revenues from the unanticipated early termination of the MSA in 2023.

It's important to note that the lost revenues from the unanticipated early termination of the MSA in 2023.

Speaker 2: I've found a little less than half the incremental revenue associated with the earlier than anticipated close of the Polette acquisition.

Offset a little less than half the incremental revenue associated with the earlier than anticipated close.

<unk> acquisition.

Speaker 2: applying the majority of the increase in constant currency guidance was driven by this strong operational performance in the third quarter and our positive outlook for the fourth quarter.

Applying the majority of the increase in constant currency guidance was driven by the strong operational performance in the third quarter and.

<unk> are positive outlook for the fourth quarter.

Turning the foreign exchange.

Speaker 2: We now assume approximately 4 million or 15 basis points had went to revenue from foreign exchange in 2023.

We now assume approximately $4 million or 15 basis points headwind revenue from foreign exchange in 2023.

Speaker 2: This compares to our prior guidance, which assumed an approximately $8 million tailwind to Gaffer Avenue grow in 2020.

This compares to our prior guidance, which assumed at approximately $8 million tailwind gaffe revenue growth in 2023.

A revised foreign exchange guidance for 2023 captures the actual rates for the third quarter and.

Speaker 2: Our revised Horn Exchange guidance for 2023 captures the actual rates for the third quarter and now assumes current foreign exchange rates including a euro dollar exchange rate of 105 per the fourth.

And now assumes current foreign exchange rates, including a euro dollar exchange rate of 105 for the fourth quarter.

Speaker 2: Considering the revised foreign exchange outlook, we expect reported revenue growth of 6.25% to 6.45%.

Considering the revised foreign exchange outlook, we expect reported revenue growth of 625%.

645% in 2023 and.

Speaker 2: applying a dollar range of $2,966,000,000 to $2,900,000.

Employing a dollar range of $2 billion 966 million.

$2.971 billion.

Turning the margins, we are raising 2000 twenty-three gross margin guidance by 25 basis points at the low and high end of the range to 59.25% to.

Speaker 2: Turning to margins, we are raising 2023 gross margin guidance by 25 basis points at the low and high end of the range to 59.25% to 59.75%.

To $59 75 per cent.

Speaker 2: Given the earlier than expected close of the pallet acquisition, and he associated incremental

Giving me earlier than expected close of the <unk> acquisition any associated incremental operating expenses.

Speaker 2: We now anticipate operating margin in the range of 26.25% to 26.5% for 2020.

Now anticipate operating margin in the range of 26.25%.

To $26, 5% for 2023.

Speaker 2: Below the line, we now expect net interest expense to approximate $76 million in 2023.

The line, we now expect net interest expense to approximate $76 million in 2023.

Speaker 2: The flight decrease in 2023 guidance reflects higher net interest expense associated with the earlier than anticipated close of the Polat acquisition offset by out performance in the third quarter and debt paydown in the fourth.

The slight decrease in 2000 twenty-three guidance reflects higher net interest expense associated with the earlier than anticipated close of the <unk> acquisition.

Offset by outperformance in the third quarter and debt pay down in the fourth quarter.

Speaker 2: Our tax rate is now expected to be approximately 10% for 2023.

Our tax rate is now expected to be approximately 10% for 2023.

We are narrowing or 2023 guidance for adjusted earnings per share to arrange a $13.30.

Speaker 2: We are narrowing our 2023 guidance for adjusted earnings for share to a range of $13.30 to $13.50.

To $13.50.

Speaker 2: or adjusted EPS-Aulu as been updated to reflect favorable operating performance, including better than expected results.

Are adjusted EPS outlook has been updated to reflect.

Favorable operating performance.

Including better than expected results in the third border.

Speaker 2: partly offset by an incremental $0.10 of dilution from the acquisition of pledge due to the early close.

Offset by an incremental 10 sense of dilution from the acquisition of <unk>.

Due to the early close.

Speaker 2: and approximately five cents from changes in foreign exchange rates versus the prior guidance, and the earlier than expected termination of the MSA.

And approximately five cents from changes in foreign exchange rates versus the prior guidance.

And the earlier than expected termination of the MSA.

Speaker 2: Although we do not provide quarterly guidance for your modeling purposes, we expect reported revenues for the fourth quarter to be in a range of $755 million to $771 million.

Although we do not provide quarterly guidance for your modeling purposes, We expect reported revenues for the fourth quarter to be in a range of $765 million to $771 million.

Speaker 2: which includes the impacts of high-flash summon days representing approximately 53 million.

Which includes the impacts of Firefly selling days, representing approximately $53 million.

Speaker 2: Harsley Offset by Port Exchange benefit of 3.6 million year over year.

Partially offset by foreign exchange benefit of $3.6 million year over year.

Speaker 2: The next clue is by prepared remarks. I would like to now turn it back to Liam for closing comments.

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

Speaker 3: Thank you, Tom. In closing, I will highlight our three key takeaways from the third quarter of 2022.

Thank you Tom.

Clothing, I will highlight are three key takeaways from the third quarter of 2023.

Speaker 3: First, are diversified portfolio and global footprint drove durable growth in the third quarter.

<unk> are diversified portfolio and global footprint drove durable growth in the third quarter.

Our execution remained strong we are launching new products and our margins remain healthy.

Speaker 3: Our execution remains strong. We are launching new products and our margins remain healthy.

Second the strong third quarter performance, a stable to improving macroenvironment keeps us well positioned to deliver on our updated financial guidance for 2023.

Speaker 3: Second, the strong third quarter performance and stable to improving macro environment keeps us well positioned to deliver on our updated financial guidance for 2020.

Speaker 3: As we look to close out the year, we are positioned for better than 6% constant currency growth under our Revive 2023 guide.

As we look to close out the year, we are positioned for better than 6% constant currency growth under our revised 2000 twenty-three guidance.

Speaker 3: Third, we will continue to focus on our strategy to drive durable growth.

Third we will continue to focus on our strategy to drive durable growth.

Speaker 3: We will invest in organic growth opportunities and drive innovation.

We will invest in organic growth opportunities and drive innovation.

Speaker 3: Spanner margins and execute on our disciplined capital allocation strategy to enhance long-term value creation.

Expand our margins and execute on our disciplined capital allocation strategy to enhance longterm.

Longterm value creation.

We are excited about the close of the <unk> acquisition, we believe that the acquisition will be a meaningful contributor to our growth in the coming years.

Speaker 3: We are excited about the close of the Pellet acquisition. We believe that the acquisition will be a meaningful contributor to our growth in the coming years, be immediately accretive to adjusted gross margin, and will enhance our adjusted operating margin in the near term.

Immediately accretive drew adjusted gross margin.

Hands are adjusted operating margin in the near term.

Speaker 3: That concludes my prepared remarks. Now I would like to turn the call back to the operator for Q&A.

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

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Speaker 1: We do ask that you please limit yourself to one question and one follow up. If you would like to ask additional questions, we invite you to add yourself to the queue again by pressing star.

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Speaker 1: And your first question comes from the line of Patrick Wood with Morgan Stanley . Your line is open.

And your first question comes from the line Patrick with with Magenta Stanley. Your line is open.

Speaker 4: Amazing. Thank you so much for taking the question.

Amazing. Thank you so much for taking the the question.

Speaker 4: I guess on the interventional side of things, I'm curious, you know, and maybe to some degree on surgical. A, did you guys see any sort of a stocking benefit in the quarter, because it's very strong numbers? And B, was there any kind of benefit or are you seeing any kind of benefits? One of your peers obviously has a bit of a recall going on, on their side of the business on the balloon market. So I'm just curious if you had any business doing a little bit better there.

Guess on the international side of things I'm curious.

To some degree on search call Uhm, a did you guys see any sort of a stocking benefit and the code is very strong numbers and be was there any kind of benefit are you seeing any kind of benefits. One of your peers, obviously has a bit of a recall going on on that side of the business on the balloon balloon market. So I'm just curious if you if you hadn't.

Business doing a little bit about that thanks.

Perfect. Thank you very much for the question I had just taken a step back I just wanted to start by saying.

Speaker 3: Patrick, thank you very much for the question. Just taking a step back, I just want to start by saying that we're really pleased with this quarter's result, including surgical and intervention, which outperformed. We feel as a company, we deliver all aspects of our income statement in quarter three. Our updated guidance is bullish, and it reflects the three quarters to date performance and our confidence in the strong finish of the year.

We're really pleased with this quarter's results, including surgical intervention, which outperformed we feel as a company we delivered all aspects of our income statement in quarter three.

Date of guidance is is bullish and it reflects the threequarters today's performance and our confidence in a strong finish of the year.

Speaker 3: Many of our keep for franchise including the ones you mentioned are performing well. Healthcare utilization is back to pre-pandemic levels and I think that the purposeful acute care focus of our company is really paying dividends. Inflation and supply chain is stable to improving and as we go through each quarter we're more confident in our ability to deliver.

Many of our Keith franchise, including the ones you mentioned are performing well health care utilization is back to pre pandemic levels and I think that the purposeful acute care focus of our company is really paying dividends inflation a supply chain is stable to improving and as we go through each quarter were more confident in our ability to deliver what are the only.

Speaker 3: One of the only areas I'd say that we have not seen improvement is probably in the Eurology Office Site of Service, which still remains a challenge. But with all that at the backdrop, we really feel confident in our updated revenue guidance of 6.4 to 6.6% in our ability to achieve it.

[noise] areas I'd say that we have not seen improvement is properly and the urology office site of service, which still remains a challenge, but with all of that as a backdrop, we really feel confident in our updated revenue guidance of 6.4% to 6.6% in our ability to achieve it.

Speaker 3: Specifically to your questions on interventional access and surgical, no, this was underlying growth driven by these businesses. We had outperformance in interventional in some of our key product portfolios, including balloon pumps.

<unk> to your questions on intervention access and surge go no. This was underlying growth driven by these businesses wait outperformance an intervention in our some of our key product portfolios, including balloon pumps.

Speaker 3: and in surgical also ligation, stapling, and also the instrument portfolio did very well. Regarding stocking, no, third quarter, traditionally a de-stocking month for distributors, and that's what would have happened in this quarter, as we would have expected.

And in surgical also <unk>.

Ligation Stapling and also the instrument portfolio did very well.

To stocking no third quarters traditionally of Destocking month for distributors and that's what would have happened in this quarter as we would have expected and regarding the company that has had a recall they are now they have come back to the market.

Speaker 3: and regarding the company that has had a recall, they have come back to the market in fits and starts and it's a duopoly. So normally hospitals will focus on

And start and it's <unk>, so normally hospitals will focus on.

Speaker 3: one company that I use our pump or their pump and I think we may have seen some marginal benefit but that really wasn't really what drove the upside and totality for the interventional business. It was multifaceted across a broad range of the portfolio.

One company steroid use our pump or their pump and I I think we may have seen some marginal benefit but that really wasn't out really what drove the upside in totality for the intervention of the business. It was multifaceted across a broad range of of the portfolio.

To prepare and thanks for the thoughtful G. L. P. One commentary that was really helpful. Alright.

Speaker 4: super clear and thanks as well to the store full GRP1 commentary those really helpful.

Hi, Patrick.

Your next question comes from the line at Jason Bedford with Raymond James Your line is open.

Speaker 1: Your next question comes from the line of Jason Bedford with Raven James. Your line is open.

Good morning.

Speaker 5: Good morning. I hate to start with a boring financial question, but maybe for Tom. What was the revenue and ETS impact of the recalls both in vascular access and anesthesia? Is there an impact on the fourth quarter?

To start with a financial question, but maybe for Tom.

The revenue any T as in part of the recalls Brooklyn Bachelor access in anesthesia and is there an impact on the fourth quarter.

So are you to umber revenue Uhm Jason.

Speaker 5: Well, both. I think you mentioned there was a revenue impact in the third quarter. I'm just wondering if there's a way to quantify that. And then was there an EPS impact to the recalls as well? And I'm just wondering if that'll recur in the fall.

<unk> <unk> was there perfect. Thank you mentioned there was a revenue impact in the third quarter I'm. Just wondering if there's a way to quantify that and then was there and a P. S impact of the recalls as well and I'm just wondering if federal recur in the fourth quarter.

Speaker 3: Yeah, so if you added both of the recalls together, you would be looking in the quarter of a revenue impact of in and around that five-ish million, Jason, would be what it would be. If I think of the gross margin of both of the products impacted.

Yeah. So if you add in both of the recalls together you would be looking in the quarter revenue impact of inner around at five ish million, Jason what would be what it would be if I think of the gross margin of both of the products impacted.

Speaker 2: You're probably looking at just modestly below company average dropping through something around there So just less than 60% gross margin dropping through so you could figure out the EPS impact on that I would I would say you agree Tom. I would agree with the revenue impact and then with the cost of the recall We're largely accrued in a second quarter of the year. That's fair

You're probably looking at just modestly below company average dropping through some something around there. So just less than 60% gross margin dropping through so that you could figure out the EPS impact on that I would I would say you would <unk> I would agree with the revenue impact and then with the cost of the recall were largely accrued in the second quarter of the year.

Fair Oak very minimal impact in the third quarter.

Speaker 5: Okay. And then just more on your left. I know it's only been a month, but Liam, are you seeing any cross-selling opportunities here between Palette and your left?

Okay, Uhm and then just more.

From your left I know, it's only been a month, but are you seeing any cross selling opportunities here between <unk> and you're left.

Speaker 3: So we're just in the very early stages of the integration and pulling the two companies together. There are a number of the sales team that are very welcome back to Telaflex.

So uhm <unk>.

We're just in the very early stages of of the integration.

And pulling the two companies together there are a number of the sales team that are very welcome back to Teleflex, that's actually joined palette. So they they're they already know the your lift product we have had a a plethora of inquiries from our existing your list.

Speaker 3: That actually joined palette so they they already know the uraliff product

Speaker 3: We have had a plethora of inquiries from our existing Eurolift phase.

Speaker 3: asking us to trial the the Palette barragelle product which is very very encouraging and it's too early Jason yet to see any impact of the cross-selling the other way from the barragelle sales organization into the uraliv side of the house

<unk> asking us to trial, they <unk> <unk> product, which is very very encouraging and it's too early Jason yet to see any impact of the cross selling the other way from the very gel sales organization and into the your left side of the house and again as we said in our prepared remarks, we haven't built that into our module Jason.

Speaker 3: And again, as we said in our prepared remarks, we haven't built that into our model, Jason. Do we think that we will expect some? Yes, potentially there will be a halo effect.

Do we think that we will expect some potentially there will be a halo effect when you're able to go into some urologist that in the past may not have considered your lift as an option, but as you know 97% of of Jurado, just that do BPH also do prostate cancer.

Speaker 3: when you're able to go into some urologists that in the past may not have considered Urolift as an option. But as you know, 97% of urologists

Speaker 3: that do BPH also do prostate cancer. And our...

And all of our base of urologist, the Jews Urolift on a 20% of them are so at use the Berry Judd products. So a lot of white space for us to grow into an early indications with the inbounds from our base is very encouraging.

Speaker 3: base of urologists that use uralift only 20% of them are so use the barigel product. So a lot of white space for us to grow into an early indications with the in-bounds from our base is very encouraged.

Speaker 1: Your next question comes from the line of Shagun Singh with RBC, your line is open.

Alright next question comes from the line is taken anything with I B C. Your line is open.

Alright. Thank you so much for taking my question I'm, just trying to understand the underlying grilled trade better here for <unk> for you know I think your excess excess sizable 50 basis points of the <unk> heartburn, which could be about 610 basis point you know <unk>.

Speaker 6: Thank you so much for taking the question. I'm just trying to understand the underlying growth rate better here. For Q4, I think your XFX applies about 50 basis points of decline. I believe there's a selling day headwind, which could be about 610 basis point. Palette is about 130 just based on a math. MSA may be 50 basis points headwind, which gets us to 4.8% underlying versus 7.4% in Q3. So firstly, is that math correct? It does imply deceleration from Q3 to Q4 on an underlying basis. It's back to your growth. Just wondering what is driving that? Is there some conservatism and then what it implies for?

It is based on a map ever say, maybe 50 basis points headwind, which gets us to 4.8% underlined what's the 7.4% in Q3. So firstly you know is is that map correct. It does imply this elevation funky looking for unearned along with.

<unk>, it's back to your account you know just wondering uhm what is driving that does that sound conservatism and then what it implied for 2024, and you know <unk> Oh six per cent sorry for that for all those numbers.

Speaker 6: 2024 and, you know, LRP growth of low 6%. Sorry for the for.

Speaker 3: No, that's okay, Shagun, and thank you again for the question. So I'll go through a few pieces of it. So our update, if data guidance is 6.4, 6.6%. If you look at that on a constant currency basis, that's 0.4 to 1.2%. Then if you take into account the billing days that as you would have heard in Tom's remarks, it's $53 million or around 7%. That is an underlying growth of 7.4 to 8.1%. Then as you also heard...

That's okay sugar and and thank you again for the questions. So I'll go through a few a few pieces of it so our our update data guidance is $6 $406 six per cent. If you look at that on a constant currency basis that 0.4212%. Then if you take into account the billing days that as as you would.

Tom's remarks of $53 million or around 7% that is an underlying grow with a 7.428, 0.1% then.

Dan as you also heard from Tom.

Speaker 3: We've added in the, the, the palette that closed earlier, but also the MSA that leaves earlier. So the MSA is approximately $4 million.

We've added in the <unk> closed earlier, but also the MSA that leaves earlier, so the msas approximately $4 million.

Speaker 3: and that is slightly shy of half of what we bring in.

And that is slightly shy of half of what we bring in from the <unk> acquisition.

Speaker 3: from the Pallet acquisition. So that's how I would look at it. So I would say that it's not at all decelerating. If you take into days the account, the days, the lower end of our guidance into the Q4 would employ 7.4 to 7.4, and the upper end would obviously show some acceleration.

That that's how I would look at it so I would say that it's not at all decelerating if you're taking today's the account the the day.

The days at the lower end of our of our guidance into the queue for would employ at 7.474 and the upper end would obviously show some acceleration and I think as I said in my opening that is truly should go on a reflection of our performance through three quarters, and our and our enthusiasm of what we see.

Speaker 3: And I think, as I said in my opening, that is truly, Shagun, a reflection of our performance through three quarters.

Speaker 3: And our enthusiasm of what we see in front of us for the fourth quarter, I think we've executed.

See in front of us for the fourth quarter, I think we've executed pretty well through three quarters. This is the third quarter in a row had been in a position to call up revenue and I think we have a a a a a significant step up from the beginning of the year and I'd just like to throw out one more number at the beginning of the year the low end of.

Speaker 3: Pretty well, through three quarters. This is the third quarter in a row. We've been in a position to call up or revenue. And I think we have a significant step up from the beginning of the year. And I just like to throw out one more number. At the beginning of the year, the low end of our guidance range was 4.75%.

Guidance range was $4 75 per cent.

Speaker 3: As we go now into the fourth quarter, the low end of our guidance range is 6.4% to significant uptick.

As we go now into the fourth quarter, the low end of our guidance range of 6.4% a significant uptick.

Speaker 6: That's really helpful, and then just as a follow-up on the margin side, you know, you guys are absorbing about 25 cents of Pellet dilution in 23. You've raised your EPS guidance, you know, so what is driving this underlying improvement? And, you know, any color on 24, I think, in census looking for 50 basis points of margin expansion, and, you know, how should we think about 24 in the context of your LRP? Thank you for taking the question.

Wow, that's really helpful. And then just you know the follow up.

<unk> you know you guys are absorbing about 25 and 20.

23 G. P. S guidance you know so so what is driving this underlying improvement and do you know any color on 24, I think I'm looking for 50 basis point margin expansion and you know how should we think about 24 in the context of your anarchy. Thank you for taking my questions.

Speaker 2: Well, on the margin, what's driving it is largely we're seeing, you know, favorable results in pricing, mix, and some manufacturing-related variances in the third quarter.

Well on the on the margin what's driving it is largely we're seeing you know favorable results in pricing mix and some manufacturing related variances.

In the third quarter.

Speaker 2: As expected, inflation improved in the third quarter, both sequentially and year over year. Foreign exchange was a bit of a headwind in the quarter, relatively. If you go back in time, it was actually a benefit earlier in the years.

As expected inflation improved in the third quarter, both sequentially and year over year.

Foreign exchange was a bit of a headwind in the quarter relevant and candidly. If you go back in time it was actually a benefit earlier in the year is shifted to.

Speaker 2: headwind of sorts. So those are some of the drivers that we saw in the in the third quarter and you know we see continued improvement and stabilization in the macro environment if you will with regards to inflation and logistics costs and timing that we expect to play through into the fourth quarters.

Headwind of sorts. So those are some of the drivers that we saw in the in the third quarter and we see continued improvement and stabilization in the macro environment. If you will with regards to inflation and logistics costs and timing that we expect to play through into the fourth quarter as well.

Speaker 2: And then as it relates to margins for next year, we're still working through our annual planning process and really aren't in a position today to be providing guidance for.

And then S as it relates to margins for.

For next year.

We're still working through our annual planning process and really aren't in a position today to be providing guidance for for next year at this point.

Speaker 1: Your next question comes from the line of Richard Newitor with Truist Securities. Your line is open.

Your next question comes from the line of Richard <unk> with Choosed Securities. Your line is open.

Speaker 7: Hi, this is Ling on Forge. So first question, I recalled last quarter, you kind of pinned on longer VIC committee approval for item. Just wondering if it's improving there or like any color you can provide on a trend there. Thanks.

Hi, This is a link for a great. So first question.

I can't quote you kind of pink <unk>.

Approval for Titan.

Is it's improving their or like any color you can provide on a 10 day. Thanks.

Speaker 3: Yeah, absolutely. So regarding Titan, first of all, just looking at surgical in general, it had a really, really strong quarter growing 20.6%.

Yeah, absolutely so regarding tight and first of all just looking at surgical in general.

And <unk> really really strong quarter growing 26%.

And.

Speaker 3: With regards to Titan specifically, you will recall that from Q1 to Q2, we doubled the number of surgeons that we were proctoring in Q2 compared to Q1. I can tell you that in Q3, we maintained that level of proctoring. And that is a good indication that you're getting through the value analysis committees.

With regards to tightened specifically you will recall that from Q1 Q2, we doubled the number of surgeons that were Proctor ring and Q2 compared to Q1 I can tell you that in Q3, we maintain that level of Procter and and that is a good indication of that you're getting through the value analysis Committee.

Speaker 3: because you cannot proctor the surgeon until you've gotten through the value analysis committee. It's taking longer than we anticipated originally, but now we're into a reasonable cadence of getting through these value analysis committees, and it is our belief that while the titan will be...

Because you cannot proctor the surgeon that you've gotten through the value analysis Committee, it's taking.

Taking longer than we anticipated originally but now we're into a reasonable cadence of getting through these value analysis committees and it is our belief that while the Titans will be impacted in the market will be impacted by G. L. T ones as we said in our prepared remarks that the technology is compelling and we believe that there is a pathway to can.

Speaker 3: impacted and the market will be impacted by GLP ones as we said in our prepared remarks. The technology is compelling and we believe that there is a pathway to continue to take share. The product is performing very, very well. There are a number of clinical studies in process that will demonstrate the time efficiency of the Titan Stapler compared to other technologies. And we do believe that it will be a growth driver for telophilics over a multi-year period given the ability that we have to save time for the surgeon to do a better procedure to have better patient outcomes.

Tenure to take share the product is performing very very well and there are a number of clinical studies and process that will demonstrate the time efficiency of the Titans stabler compared to other technologies and we do believe that it will be a growth driver for teleflex over a multiyear period, given the the ability that we <unk>.

Have to save time for the surgeon to do a better perceive procedure that better patient outcomes and ultimately we think thats what will matter at the end of the day and this will be a growth driver property [noise].

Speaker 3: And ultimately we think that's what will matter at the end of the day and this will be a grow driver. Probably it will be overall market won't be as big as we initially thought because the GLP won't. That's just the fact of life.

Overall, mark it won't be as big as we initially thought because of G. O P. Once that's just a fact of life, but our our objective here is to take share within the American space and there are still lots of room for us to grow into antiques sure.

Speaker 3: But our our objective here is to take share within the market space. And there's still lots of room for us to grow into and take share.

Great Oh, that's very helpful. Thank you Uhm also oh.

Speaker 7: Great. That's very helpful. Thank you. Also on OEM, it's appeared to be a strong. So, do you have confidence in this trend going into 10.4?

Okay.

So.

Do you have confidence in.

<unk> <unk>.

Thank you.

Speaker 3: Yeah, so our guidance is based on what we see through Q3, what we've seen in the first month of Q4 candidly. And of all of our businesses, the business that we have the best line of sight, is our OEM business, just because the nature of it orders our book in advance and therefore gives us greater visibility into what's happening within that business.

Yeah. So our our our guidance would is is based on what we see through Q3, what we've seen in the first month of shoe for candidly and all of our businesses. The business that we have the best line of sight.

R O M business, just because of the nature of it the orders are booked in advance and therefore gives us.

Greater visibility into what's happening within that business I I will tell you that the micro catheter patch of of OEM has continued to perform very very well for the whole year and and also within the third quarter and we feel confident that the the business will continue to be a.

Speaker 3: I will tell you that the microcatheter part of OEM has continued to perform very, very well for the whole year and also within the third quarter. And we feel confident that the OEM business will continue to be a double-digit grower for the foreseeable future, just given the backdrop of some of the technologies that we have that are unique to Teleflex.

Double digit growth in it for the foreseeable future just given the backdrop of some of the technologies that we have that are unique to teleflex and some of the the product.

Speaker 3: and some of the product development work that we're doing in our innovation centers around the world with key customers.

Product development work that we're doing in our innovation centres around the world with key customers.

Thank you.

Speaker 1: Your next question comes from the line of Matt Taylor of Jeffries. Your line is open.

Your next question comes from the line of Taylor of Geoffrey's. Your line is okay.

Speaker 8: Good morning, this is my star cone on for Matt today. Thanks for taking the questions.

Good morning. This is my <unk>, thanks for taking the question.

And my.

Speaker 8: Hello, so just a follow up on standard bariatric and thanks for all your commentary on the GOP1 impacts. Do you think you can give a little more color on the reduction you're seeing in sleeves, guest recdomy, volumes, any quantification would be helpful and then just given that, what kind of share gain?

So just to follow up on on standard Bariatrics and thanks for all your commentary on the D. L. P. One impact do you think you can give a little more color on you know the the reduction you're seeing and fleas gastrectomy volumes you know any quantification would be helpful. And then you know just given that what kind of share.

<unk> do you expect you'd need to at least you know offset the reduction versus your prior expectations for the volume.

Speaker 8: do you expect you need to at least, you know, offset the reduction versus your prior expectations for the volume?

Speaker 3: so it's it was a three hundred million dollar market roughly a mic and so who knows what the impact of glp ones will ultimately be that's got to be the starting point

So it it was at 300 million dollar market roughly Mike So who knows what the impact of G. L. P ones will ultimately be that's gotta be the starting point I I have a view that it's obviously going to reduce sleeves in the near term.

Speaker 3: I have a view that it's obviously going to reduce sleeves in the near term and it'll depend if that is an air pocket depending on the outcomes, the longer term outcomes of GLP ones, how people bear with the side effects of GLP ones, and don't ever underestimate the cost. There's a significant

And it'll depend if that is an air pocket, depending on the outcomes the longer term outcomes of G. L. P. One is how people bear with the side effects of G. L. P. One and don't ever underestimate the cost there is a significant cost to these farm of options compared to a surgical option and I know everybody's.

Speaker 3: to these pharma options compared to a surgical option. And I know everybody's all heated up about the 20% reduction of major events.

Al.

He ended up about the 20% reduction.

Major events.

Speaker 3: in that select study. Just to put that into context, as we said in our prepared remarks, that's going from 8% to 1.6%. So it's a percent of a percent, which is a dangerous way to measure something, as every analyst on this call will know. The true reduction is around 1.6% in absolute terms.

Select study just to put that into context, as we said in our prepared remarks, that's going from.

8% to 1.6% so it's a percent of a percent, which is a dangerous way to measure something as as every analyst on this call will know the true reduction is around 1.6% in absolute terms.

Speaker 3: And as I said in my preferred remarks, the study that would come out of the Cleveland Clinic showed a 40% reduction in the same event.

And as I said my prepared remarks, the study that came out of the Cleveland clinic showed a 40% reduction in the same events from gastric sleeves. So I think conditions will start to take a step back and look at this on balance, but we are seeing is a reduction in the customers we've converted.

Speaker 3: from gastric sleeves. So I think clinicians will start to take a step back and look at this on balance.

Speaker 3: What we are seeing is a reduction in the customers that we've converted for the number of procedures that they are doing for sure. But as I said, it was a $300 million market. What is a $200 million market now? Plenty of opportunity, Mike, for us to grow into because if you talk to most surgeons.

The number of procedures that they are doing for sure but as I said. It said it was a 300 million dollar Mark and what are the 200 million dollar market now plenty of opportunity Mike for us to grow into because if you talk to most surgeons. The they will tell you that this is this is the morbidly obese population, we're talking about the <unk>.

Speaker 3: they will tell you that this is the morbidly obese population we're talking about that get a gastric sleeve and I believe firmly that gastric sleeves and if you talk about the atric surgeons gastric sleeves will exist in the future and so therefore to grow into that let's call it a $200 million market is still significant opportunity for teleflux.

A gastric sleeve and I believe firmly that gastric sleeves, and if you talk to Barry Afric surgeons gastric sleeves will exist in the future and so therefore to grow into that let's call. It a 200 million dollar market is still significant opportunity for teleflex.

Speaker 8: Great. Thanks, Liam. And yeah, we're on board with you in that kind of 10 to 20 BIPs per year impact. And just my second question is just on the ASP pricing that you're taking, is it possible to quantify, you know, the level of price you're taking and how sustainable that is or your thoughts about your ability to take price in 2024 and beyond?

Great Thankfully imager were on board with you and that kind of 10 to 25th per year.

And this is my second question is just on the AFP pricing that you're taking is it possible to quantify the level of price, you're taking and how sustainable that is or what are your thoughts about your ability to take pride in 2024 and beyond.

So yeah. That's a good question I think we're two years through the cycle now and most of our tenders and contracts go on a three year cycle. So uhm through this year, we have laid out a plan to do 50 basis points I can tell you we're doing better than that were a good bit north of that 50 basis points similar to what we did last year. So that's Ah.

Speaker 3: Through this year, we had laid out our plan to do 50 basis points. I can tell you we're doing better than that.

Speaker 3: a good bit north of that 50 basis points, similar to what we did last year so that's a good story for us. And I think next year we'll be well in a position to do another 50 basis points.

Good story for Us and I think next year will be well in a position to do another 50 basis points at least a positive pricing in the environment. After that Mike I think it'll trail off a little bit because we will have been through the cycle. The three year cycle of your normal tenders and we'll assess that then in 2025.

Speaker 3: at least a positive pricing in the environment. After that, Mike, I think it'll trail off a little bit because we'll have been through the cycle, the three-year cycle of your normal tenders assess that then in 2025.

Speaker 1: your next question comes from the line of Larry Beagle-Sin with Wells Fargo. Your line is

Your next question comes from.

<unk>.

<unk> Your line is open.

Speaker 9: Hey, good morning. This is Vick and Polaria. Thanks for taking the questions to me. The one on 2024, I just wanted to ask about the sustainability of the 10% tax rate given the recent changes in the tax laws. And my follow up question is, you know, on your M&A strategy, you recently closed the Pallet deal. I'm just curious as to how much capacity you have left to do additional deals. And how the higher interest rate environment is impacting your M&A strategy. Thank you.

Hey, Good morning. This is banking primary thanks for taking the questions to me. The 124 I just wanted to ask about the sustainability of the 10% tax rate given the the recent changes in the tax laws and my follow up question is you know on your M&A strategy recently called the police.

I'm just curious as to how much capacity you have left to do additional deal and how the higher interest rate environment is impacting your M&A strategy. Thank you.

Speaker 3: So I'll cover the M&A first, and then I'll ask Tom to cover the tax question that you had, Vic. So on the M&A, as we said in our prepared remarks, pro forma, we're at 2.1 times levered. So we have lots of firepower. Depending on what EBITDA the asset would bring, you know, that would put you...

So I'll cover the M&A at first and then I'll ask Tom to cover the the tax question that you had big so on the M&A as we said in our prepared remarks pro forma over at 2.1 times Levered.

So we have lots of firepower.

Depending on what EBITDA the acid would bring you know that would put you up.

Speaker 3: up towards the $2 billion mark of firepower available to Teleflex as we sit here today.

Up towards the 2 billion dollar mark of firepower available to teleflex as we sit here today regarding the interest rate environment, you know interest rates were.

Speaker 3: Regarding the industry environment, you know, interest rates were high at the time when we bought pallette. We're still able to get to our internal cost of capital by year five. We still found a really attractive asset.

Hi at the time, when we bought pallet, we're still able to get our internal cost of capital by year. Five we still found a really attractive asset. We still found an asset that is going to continue the transformation of teleflex has gone to augment our top line growth. It's got really attractive margins as we've been through previously and if I could find another pilot in the morning.

Speaker 3: We still found an asset that is going to continue the transformation of telephlexus going dogmen or top line growth It's got really attractive margins as we've been through previously and if I could find another palette in the morning I wouldn't blink twice I would be all in to execute on that as I sit here today We're talking to more than a handful of companies. They arranged for managing from a hundred million dollars potential price to over a billion dollars in potential purchase price

I I wouldn't blink twice I would be all in to execute on that as I sit here today, we're talking to more than a handful of company they range from anything from.

Million dollars potential surprise to over $1 billion in potential purchase price.

Speaker 3: And I think the environment is still pretty attractive to companies like Telaflex who have the balance sheet to execute, obviously, interest rates.

And I think the environment is still pretty attractive to companies like Teleflex, who who has the balance sheet to execute obviously interest rates.

Speaker 2: um... you're you're will remain disciplined we've always remain disciplined through every cycle when the industry is really disciplined when the interest rates are high we're going to be disciplined nothing will change in that regard and i'll ask them to answer and the question on the tax of the mind time so our current twenty twenty three tax rate of approximately ten percent is a very attractive rate you know i would say and work currently in the process of working through

Main disciplined we've always remained disciplined through every cycle when interest rates were low we were disciplined when interest rates are high or we're going to be disciplined nothing will change in that regard.

Tom to answer the question on the tax if you don't mind, Tom sure [noise]. So our current 2020th three tax rate of approximately 10% is a very attractive right I would say and we are currently in the process of working through B, a O P and plans for next year. So we're not in a position to provide specific.

Speaker 2: plans for next year. So we're not in a position to provide, you know, specific guidance for 2024.

Guidance for 2024 at this point I would say that the expectation would be that the tax rate would be modestly higher than where we are in 2023.

Speaker 2: No, I would say that the expectation would be that the tax rate would be modestly higher than where we are in 2023.

Your next question comes from the line.

Stephen Thank your line is open.

Speaker 10: Hey, good morning and thanks for taking the question.

Hey, good morning, and thanks for taking the question.

Speaker 10: For the Pay-Lead acquisition and specifically Barragell, can you just give us some details on what that selling process looks like? And I think you mentioned that a majority of the users of Barragell would be the urologist, but what's the breakout more specifically from radiation oncologists versus urologists?

For the payload acquisition, specifically <unk> could you just give us some details on what that selling process looks like and I think you mentioned that a majority of the users of <unk> would be the the urologist, but what what's the break out more specifically from radiation oncologist first you're all.

<unk>.

Speaker 3: Thanks, George, and good morning. So, we're not ignoring the radiation oncologist, let me assure you of that. We have actually a dedicated team that are exclusively dedicated to the training of the right on.

Thanks charge and good morning, So we're not ignoring the radiation oncologists, let me assure you of that.

We have actually a dirty cases team that are exclusively dedicated to the training of the rat ox as we go through this process. It's around 70 plus percent of the procedures are done by the urologist as compared to the <unk>.

Speaker 3: as we go through this process. It's around 70 plus percent of the procedures are done by the urologist as compared to the radonc.

Speaker 3: But we're addressing both sides of service. I think what's important about Barry Gell is the uniqueness of the product George You know, it's it's it's sculptible

But we're addressing both sides of service I think what's important about Barry Jones, the uniqueness of the product George.

It's it's it's sculptor both.

Speaker 3: which means that you can actually then mold the product around the area you're trying to protect and and the most for a prostate you're trying to protect the anus so you're able to mold it around the prostate to make sure that you're getting protectability

Which means that you can actually then mould the product around the area, you're trying to protect and and and the the most.

Most prostate you're trying to protect the anus, so you're able to mold it around the prostate to make sure that you're getting protect ability.

Speaker 3: There's no injectable time constraints. It's highly visible. It's a one step assembly. It's you don't have to do any hideers to section. If you go into the wrong area, unfortunately, it happens from time to time with some of the products on the market. It's reversible, which is unique to this particular product.

No injectable time constraints is highly visible it's a one step at a assembly. It's you don't have to do any hydrogen dissection.

If you if you go into the wrong area. Unfortunately, it happens from time to time with some of the products on the market. It's reversible which is unique to this particular product and I think all of that makes it a compelling.

Speaker 3: And I think all of that makes it compelling. Yeah, you're right.

Right.

Speaker 3: And as I said earlier, it's only 20% of our current Euro-Lift customers that use Barry Gel. So for us, it's really about expanding the markets and growing the markets rather than taking share. I think this is a unique opportunity for Telaflex, given our footprint in that area.

And as I said earlier, there's only 20% of our current your lift customers that use Barry jail. So for us, it's really about expanding the market.

And growing the market.

Rather than taking share I think this is a unique opportunity for teleflex, given our footprint in that area. The sales process once at a a urologist or a <unk> Ah come sport forward is a little bit of anatomy training and then there are proctor and helped over four or five K S.

Speaker 3: The sales process, once a urologist or a radonc comes forward, there's a little bit of anatomy training and then they're proctored and helped over four or five cases and after that point then they would be deemed to be fully trained and qualified to place the product.

And after that point, then they would be deemed to be to be fully trained and qualified to place the product.

Okay, great that that was really helpful color I appreciate it uhm and then maybe switching gears a little bit maybe one on quick clot. What would you say you ran on penetrating that that market opportunity and have you seen any impact to demand from some of the conflicts going on internationally.

Speaker 10: Okay, great. That was really helpful, color. I appreciate it. And then maybe switching gears a little bit, maybe one on quick quad. What ending would you say you're in on penetrating that, that market opportunity? And have you seen any impact to demand from some of the conflicts going on internationally?

So it's a it's a 600 million dollar Marcus.

Speaker 3: So it's a $600 million market for internal and external split about half of each. We just got a new cardiac indication that expanded the market by about 50 million George. So that takes us up to around $650 million markets. In until the end of the year, frog?er time.

For internal and external split about half of each we just got a new cardiac indication that expanded the market by about 50 million George So that takes us up to around 650 million dollar markets.

Speaker 3: Miltac in general is a key customer of ours. Because of some of the budgetary constraints, it has kind of been under our expectations.

<unk> in general is a is a key customer of ours.

Because of some of the budgetary constraints it has kind of been under our expectations through through the first three quarters of the year I would expect that that might rectify itself now, though unfortunately because of what's going on in different parts of the world. So we wouldn't imagine that that would get back to our original.

Speaker 3: through the first three quarters of the year. I would expect

Speaker 3: that might rectify itself now, but unfortunately because of what's going on in different parts of the world. So we would imagine that that'll get back to our original plan in the fourth quarter. And that's anticipated with our guidance that we just outlined.

Plan in the fourth quarter, and that's anticipated within our guidance that we.

Just outlined.

Oh.

The time.

Alright charge.

Your next question comes from the line of Anthony <unk>.

Speaker 1: your next question comes from the line of Anthony Patron with Mizzouho Group. Your line

Your line is open.

Speaker 11: Thanks for getting us in here, Emil. I'll speak with Barry Gell, and actually ask also about pipeline as well. I know you mentioned at the time of the transaction, 15 cents and 23.

Thanks for getting us and hear me I'll stick with <unk> and actually ask also about pipeline as well.

You mentioned at the time of the transaction 15 cents, an twenty-three and and.

Speaker 11: and $0.35. I guess when we stack it up from a growth and margin perspective, is there anything you can share just on how Barragel is growing? I know they have two other products in there as well, Deflux and Celesta and Pediatric Indications. What is the overall growth profile of the portfolio? And is it margin accretive to the overall corporate average? And then I'll have a couple of follow-up.

And 35 cents I guess, when we stack it up from a a growth and margin perspective is there anything you can share just done on how Barrett yells growing I know they have to have the products in there as well the flux into less in pediatric indications what is the overall growth profile the portfolio.

N as in Martin accretive to the overall corporate average and then I'll have a couple of thoughts.

Speaker 3: Yeah, thanks Anthony. So what we expect in a full year from Palette is 56 million in 2023. The growth profile of it is high teens and low 20s and that's what we would expect in 2024.

Yeah. Thanks, Thanks, Anthony So what were you expecting a full year from from palate is 56 million in 2023, the growth profile of it as high teens and low twenties and that somebody would expect in 2024.

Speaker 3: Regarding your question on the different components of the growth, I think you should focus very heavily on barragell. That's where the majority of the growth is coming from. That's where we bring a lot of the value. And that's where the growth has been, historically, it has been in the barragell product since it came onto the market, just because of all the things I just went through a moment ago. Regarding the growth margins of the product.

Regarding your question on the different components of the growth.

I think you should focus very heavily on Barry Joe that's where the majority of the growth is coming from that's where we bring a lot of the value and that's where the growth has been historically it has been in the very job product since it came onto the market just because of all the things that just went through a moment to go regarding the gross.

Margins of the product.

Speaker 3: As we said previously, it's a crazy phytophylax.

As we said previously it's accretive to teleflex not alone is it a creative side effects, but it's a creative to the high growth portfolio.

Speaker 3: Not alone is it accretive to Teleflex, but it's accretive to the high growth portfolio and not alone is it accretive to the high growth portfolio, it's accretive to the Euro lift margins within the high growth portfolio and as most investors would be familiar with.

Is it a creative the high growth portfolio, it's a creative to the Urolift margins within the high growth portfolio and is most investors won't be familiar with the the gross margins of your lift her in the high seventies are are in the high seventies I should say so.

Speaker 3: The gross margins of your lift were in the high 70s.

Speaker 3: or are in the high 70s, I should say. So from a gross margin perspective, it's a really nice transaction. And that's candidly why it warranted a really nice price, because high growth, high margins is the formula for a higher multiple on an asset.

Gross margin perspective, it's it's it's it's a really nice transaction and that's candidly why it warranted a really nice price because high growth high margins is is the formula for a higher multiple on an asset and then we still expect thirty-five sense of dilution.

Speaker 3: and then we still expect 35 cents of delusion.

Speaker 3: from an EPS perspective for 2024 to the other part of your question.

<unk> perspective for 2024 to the other part of your question.

Okay, and then the fall would be maybe I'll go back to tighten M. G O P. One.

Speaker 11: Okay. And then the follow-up would be, maybe I'll go back to Titan and GOP1.

Speaker 11: Of course, out of the gate here, a lot of folks are talking about headwinds to barri-actrics in the near term.

Of course data out of the gate here a lot of folks were talking about headwinds too bariatrics in the near term.

Speaker 11: But there is chatter from folks in the space that

But there is chatter from folks in the space that.

Speaker 11: You know, when you think of the contraindicated patients that the very upper end of the BMI scale, you know, some of those may be able to come into the fold as they take ozampic omen jarro, et cetera, a GLP1. So do you think as this cycle plays out that you could potentially see a tailwind, although of course it will take some time, where are your views on the potential for GLP1's to actually expand the market and bariatrics? Thanks.

You know when you think of the Contra indicated patience at the very upper ended the BMI scale. You know some of them may be able to come into the fold as they take <unk> et cetera G. L. P. One do you think is this cycle plays out that you could potentially see a tailwind.

Oh of course and will take some time.

What are your views on the potential for G. L. T wants to actually expand the marketing bariatrics. Thanks.

Speaker 3: So my focus, honestly Anthony, is not on the GLP ones expanding the market. I find that hard to see in all honesty. I see GLP ones being used.

So my focus honestly Anthony is not on the G. L. P. One is expanding the market I I find that hard to see in all honesty I C. G. L. P. One is being used as a conduit.

Speaker 3: as a conduit to a gastric sleeve and a lot of surgeons are looking at it in that way and I'm also looking at it.

Two a gastric sleeve and a lot of surgeons are looking at it in that way and I'm also looking at it.

Speaker 3: as its impacts on Titan, as to how long-lasting it will be as an impact, because you have to take the pharma forever, and you have to be able to afford to take the pharma forever. Everything I'm reading is telling me that if the prices stay as where they are for these GLP-1s, that the likelihood of coverage is unlikely. And I've spoken to a number of bariatric surgeons.

As as impacts on Titan.

As to how long lasting it will be as an impact because you have to take the pharma forever and you have to be able to afford to take the pharma forever everything I'm reading is telling me that in <unk>. If the price of stay is where the air for these G. L. P ones that the likelihood of coverage is is is is unlikely.

And I've spoken to.

A number of bariatric surgeons.

Speaker 3: and spoken to the team and spoken to our clinical group and the perspective is that it is going to have a short-term impact on pariatric surgeries. But as I said earlier,

And I've spoken to the team and I've spoken to are clinical group and the perspective is that it is going to have a short term impact on bariatric surgeries, but as I said earlier.

Speaker 12: from a Teleflex perspective, at least for the next.

From a teleflex perspective at least for the next number of years. Our goal is to bring a better technology to the gastric sleeve market, which none of us think is going away it might be a little bit smaller, but it's not going away and they're still ample market for us to grow into as a company. So I still think that.

Speaker 3: number of years our goal is to bring a better technology to the gastric sleeve market which none of us think is going away. It might be a little bit smaller but it's not going away.

Speaker 12: and there's still ample market for us to grow into as a company. So I still think that even though standard has not had the start, we would have wanted it to have, I still think it's going to be longer term and nice growth driver for telephlex and it's going to grow into the markets. And by the time we get to our penetration,

Even though standard has not had the start we would have wanted it to have I still think it's going to be longer term Ah nice growth driver for teleflex, and it's going to it's going to grow into the market and by the time, we get to our penetration point, we'll see what's happening with G. O P wants whether it was an air pocket or not.

Speaker 12: We'll see what's happening with GLP-1s, whether it was an air pocket or not.

Speaker 12: I think more broadly, what I'm more encouraged by is that 98% of teleflexes, 98% plus percent of teleflexes portfolio.

I think more broadly, but I'm more encouraged by is that 98% of teleflex is 98 per cent plus percent of teleflex portfolio has no impact from G. L. P. One so I think.

Speaker 12: has no impact from GLP1. So I think...

Speaker 3: Investors are probably branding everybody as GRT won't impact it right now just because of all the hype about it. But as you break down the different company components and what we know right now, we can see it as 98% close of our company not impact.

Investors are property.

Landing everybody is G O P. One impacted right now just because of all the hype about it but as you breakdown the different company components of what we know right now we can see it as as 98% plus of our company not impact us.

Your next question comes in the line.

Speaker 1: next question comes from the line of Matthew O'Brien with Piper Sandler. Your line is open.

Sandler Your line is open.

Hi, This is Samantha.

Speaker 13: Hi, this is Samantha on for Matt. Quick question from us on the NSA. What do you think? You know, you talked a little bit about financials on the top line, but what about the potential of loss revenue on both top and bottom line?

Quick question Pro Max.

Thank you and talk to him about that at all I need help on that on the top line <unk> right about EM.

That seemed to have lost revenue.

Top and bottom line.

Speaker 12: So probably just to be clear, the MSA and the manufacturing service agreement.

So from the just to be clear the MSA the manufacturing service agreement.

Speaker 3: Yes, that's right. Okay. So, as Tom said in his prepared remarks, the early close will lose about $4 million in revenue.

Yeah, that's right. Okay. So as Tom said these prepared remarks, the early close will we lose about $4 million in revenue.

Speaker 12: From an EPS impact, it's around a penny or thereabouts. Very, very minimal. Very minimal, yeah. So it's around, it's fairly minimal from an EPS perspective this year. And most investors will know that the MSA is now gone completely and there was around $70 million in revenue in a full year and around 25 cents in earnings in a full year. So that'll help individuals with their modeling. So I think the greater impact.

From an EPS impact, it's it's around a penny or there abouts very very minimal mental yeah. So it's around it's fairly minimal.

I'm from an EPS perspective, this year and most investors will know that the MSA is now gone completely under was around $70 million in revenue in a full year at around 25 cents, an earnings and a full year. So that'll help individuals with their modeling.

So I think the greater impact to earnings per share in this year is obviously the early close the plan, which costs around 10 cents and then F X as fast as Tom I think another approximately five censor there about this correct okay.

Speaker 12: to Ayrnings per share in this year is obviously the early close of pallets which cost around 10 cents and then FX has costed this time I think another approximately five cents or that or about that's correct. Okay.

That's perfect. Thank you so much.

Your next question comes from the line of credit.

Speaker 1: Your next question comes from the line of Craig Bijoux with Bank of America Security.

Bank of America Securities. Your line is open.

Speaker 14: Good morning, thanks for taking the questions. I know we're at the end, so I'll keep it to one topic. I wanted to ask on Manta, Liam, I think you mentioned it in your prepare remarks. I don't think we've talked about it in a while. So just wanted to see.

Good morning, Thanks for taking the questions I knew where at the end so I'll keep it to to one topic wanted to ask on Manta I think you mentioned in your prepared remarks, I don't think we've talked about it in in awhile. So just wanted to see.

Speaker 14: You know, some of the strength there was that the recovery in, you know, the procedures that Manta's used in, or you seem better adoption. And then maybe just some comments on how Manta will contribute to your growth as part of your long-term plan or over the next couple of years.

Some strength there was it the recovery and the procedures that <unk> Houston are you seem better adoption and then maybe just some comments on how manta will contribute to to your growth as part of your long term plan or over the next couple of years.

Yeah. So Matt is is is obviously launching in many jurisdictions and geographies.

Speaker 12: Yeah, so Manter is obviously launching in many jurisdictions and geographies.

Speaker 12: Right now we've we saw some nice strength as we've gone through the three quarters in Asia and we believe it'll be a multi-year driver for his Craig It's a unique product It's it's

Right now we we saw some nice strength as we've gone through the three quarters in Asia, and we believe it will be a multiyear driver first Greg as he and it's a unique product.

It's it's I don't think we're gaining honestly from any type of surge or any type of procedure rebound because we're still penetrating the market's still bring you to new customers and the uniqueness of the product is still gives us a significant benefits and it will be a multiyear driver for as Rhapsody.

Speaker 12: I don't think we're gaining, honestly, from any type of procedural rebound.

Speaker 3: because we're still penetrating the market, still bringing it to new customers.

Speaker 12: And the uniqueness of the product, it still gives us a significant benefit and it will be a multiyear driver for us. We're absolutely within the high growth portfolio. If you look at it, you've got some really nice products within there. You've got Manta. You've got the VitaCare portfolio. You've got our PICS. You've got ZMedica. You've got Titan that had a little bump along the road. You've got Urolift that had a bump. Now you've got Barigel and the whole palette and interventional urology within that high growth. So feel really good about Manta. And I suppose you're right.

Within the high growth portfolio, you know if you look at it you've got some really nice products within there you've got a man to you've got divided care a portfolio you've got our peaks you've got Z medic, you've got tightened that had a little bump along the road you've got your left or had a bump but now you have got Barry gel and the whole pallet and <unk>.

Intervention urology within within within that that that that high growth. So feel feel really good about manta and I suppose you're right.

Speaker 3: It doesn't get it as much attention as it used to when it started its journey.

Doesn't get as much attention as it used to when when when did it started its journey.

Thanks.

Speaker 1: That is all the time we have for questions this morning. Our conference call for today is now concluded. Thank you all for your participation. You may now.

That is all the time, we have for questions. This morning or conference call for today is now concluded. Thank you all for your participation you may not disconnect.

Speaker 15: Please wait, the conference will begin shortly.

Please wait the conference will begin shortly [music].

Mmm.

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Yeah.

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Speaker 15: Please wait. The conference will begin shortly. Please stand by. Please stand by. Please stand by. Please stand by. Please stand by. Please stand by. Please stand by. Please stand by.

Yeah.

And.

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