Q2 2025 Teleflex Inc Earnings Call

Lawrence Keusch: Please stand by. Good morning, ladies and gentlemen, welcome to the Teleflex second quarter 2025 earnings conference call. At this time, all participants have been placed in a listen-only mode. At the end of the company's prepared remarks, we will conduct a question-and-answer session. Please note that this conference call is being recorded and will be available on the company's website for replay shortly. I will turn the call over to Mr. Lawrence Keusch, Vice President of Investor Relations and Strategy Development.

Please stand by. Good morning, ladies and gentlemen, and welcome to the telephone second quarter 2025 earnings conference call. At this time, all participants have been placed in a listen-only mode.

At the end of the company's prepared remarks, we will conduct a question-and-answer session.

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

And now, I will turn the call over to Mr. Lawrence kersch, vice president of investor relations and strategy development.

Lawrence Keusch: Good morning, everyone, and welcome to the Teleflex Incorporated second quarter 2025 earnings conference call. The press release and slides to accompany this call are available on our website at teleflex.com. As a reminder, a replay will be available on our website. Those wishing to access the replay can refer to our press release from this morning for details. Participating on today's call are Liam Kelly, Chairman, President, and Chief Executive Officer, and John Deren, Executive Vice President and Chief Financial Officer. Liam and John will provide prepared remarks, and then we will open the call to Q&A. Before we begin, I would like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in the slides posted to the Investor Relations section of the Teleflex website.

The press release and slides to accompany this call are available on our website at teleflex.com.

As a reminder, a replay will be available on our website.

Those wishing to access the replay can refer to our press release from this morning for details.

Participating on today's call are Liam Kelly chairman, president and chief executive officer and John Darren Executive, Vice President and Chief Financial Officer. Liam and John will provide prepared remarks and then we will open the call to Q&A.

Lawrence Keusch: We wish to caution you that such statements are, in fact, forward-looking in nature and are subject to risks and uncertainties, and actual events or results may differ materially. The factors that could cause actual results or events to differ materially include, but are not limited to, factors referenced in our press release today, as well as our filings with the SEC, including our Form 10-K, which can be accessed on our website. Now, I will turn the call over to Liam for his remarks.

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 tlex website.

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

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

Liam Kelly: Thank you, Larry, and good morning, everyone. On this morning's call, we will discuss the second quarter results, provide a strategic update, review commercial highlights, and conclude with our updated financial guidance for 2025. Of note, year-over-year constant currency revenue growth is adjusted for the impact of the Italian measure, which was recorded in the second quarter of 2024. Our second quarter results demonstrate our continued progress as we work to drive operational excellence and enhance value creation across our business. Second quarter revenues were $780.9 million, an increase of 4.2% year-over-year on a GAAP basis and up 1% on an adjusted constant currency basis. This result exceeded the high end of our previous $769 million to $777 million guidance. Second quarter adjusted earnings per share were $3.73, a 9.1% increase year-over-year. Now, let's turn to a deeper dive into our second quarter revenue results.

To William for his remarks.

Thank you, Larry, and good morning, everyone.

On this morning's call, we will discuss the second quarter results. Provide a strategic update review commercial highlights and conclude with our updated Financial guidance for 2025.

Of note, year-over-year constant currency Revenue. Growth is adjusted for the impact of the Italian measure, which was recorded in the second quarter of 2024.

Our second quarter results, demonstrate our continued progress. As we work to drive operational excellence and enhance value creation across our business.

Second quarter revenues were 780.9 million.

An increase of 4.2% year-over-year and a gap basis and up 1% on an adjusted constant currency basis.

This result exceeded the high-end of our, previous 769 million to 777 million guidance.

Second quarter adjusted earnings per share were 3 dollars. 73 cents. A 9.1% increase year-over-year.

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

Liam Kelly: I will begin with a review of our geographic segment revenues for the second quarter. All growth rates that are referred to are on an adjusted constant currency basis unless otherwise noted. Americas revenues were $525.7 million, a 2% increase year-over-year and in line with expectations. Revenue growth in the quarter was driven by strength in intra-aortic balloon pumps and was partially offset by OEM declines and continued challenges in Europe. EMEA revenues of $166.2 million decreased 2.1% year-over-year and were a bit softer than expected. During the quarter, we saw strength in our interventional business, which was offset by our anesthesia business, including a tough year-over-year comp in military orders. Turning to Asia, revenues were $89 million, a 1.2% increase year-over-year and in line with our expectations.

I will begin with the review of our Geographic segments revenues for the second quarter.

All growth rates that are referred to are on an adjusted constant currency basis, unless otherwise noted

America's revenues were $525.7 million, a 2% increase year-over-year and in line with expectations.

Revenue growth in the quarter was driven by strength in intra-articular obsessed by OEM declines and continued challenges in Euro Lyft.

EMA revenues have 166.2% year-over-year and were a bit softer than expected.

During the quarter, we saw strength in our Interventional business, which was offset by our anesthesia business, including a tough year-over-year comp in military orders.

Liam Kelly: Revenue growth was driven by strength in Southeast Asia, India, and Japan, which were partially offset by the previously announced volume-based procurement dynamics affecting our China business. As expected, we saw sequential revenue improvement in China during the second quarter and expect continued improvement through the remainder of 2025. Now, let's move to a discussion of our second quarter revenues by global product category. Commentary on global product category growth for the second quarter will also be on a year-over-year adjusted constant currency basis. Starting with vascular access, revenue increased 1.4% year-over-year to $185.5 million. The quarter was led by year-over-year growth in PICs, which increased at a double-digit rate and a solid performance in EZ-IO. Looking forward, we expect acceleration in growth in the second half of the year. Moving to interventional, revenue was $170 million, an increase of 19.3% year-over-year.

Turning to Asia revenues were 89 million, a 1.2% increase year-over-year and in line with our expectations Revenue growth was driven by strength in Southeast Asia, India and Japan.

Which were partially offset by the previously announced volume based procurement Dynamics. Affecting our China business.

As expected, we saw sequential Revenue Improvement in China, during the second quarter and expect continued Improvement through the remainder of 2025.

Now, let's move to a discussion of our second quarter revenues by global product category.

Commentary on global product category growth for the second quarter will also be on a year-over-year, adjusted constant currency basis.

Starting with vascular access Revenue increase, 1.4% year-over-year to 185.5 million.

The quarter was led by year-over-year growth in picks, which increased at a double-digit rate, along with a solid performance in Ezio.

Looking forward. We expect acceleration and growth in the second half of the year.

Liam Kelly: The strong performance for the quarter was led by growth drivers such as intra-aortic balloon pumps and catheters, uncontrolled complex catheters, and right heart catheters. Turning to anesthesia, revenues decreased 7.6% year-over-year to $96.4 million. Among our largest product categories, hemostatic products and LMA single-use masks delivered growth in the quarter but were primarily offset by a tough comp in military orders and pressure on airway products. In our surgical business, revenue was $114 million, an increase of 1.4% year-over-year. Underlying trends in our core surgical franchise continue to be solid, partially offset by the expected impact of volume-based procurement in China. Our North America surgical business, which is not impacted by volume-based procurement, grew mid-single digits in the quarter. For interventional urology, revenue was $76.4 million, representing a decrease of 8.3% year-over-year. While we saw strong double-digit growth for Barrigel, we continue to experience pressure on UroLift.

Moving to Interventional Revenue was 170 million, an increase of 19.3% year-over-year.

the strong performance for the quarter was led by growth drivers, such as intra-articular,

Turning to Anesthesia revenues, decrease 7.6% year-over-year to 96.4 million among our largest product categories. He must static products and LMA single-use masks delivered growth in the quarter, but were primarily offset by a tough comp in military, orders, and pressure on Airway products.

In our surgical business, revenue was $114 million, an increase of 1.4% year-over-year.

Trends in our core surgical franchise continue to be solid partially offset by the expected impact of volume based procurement in China.

Volume based procurement grew mid single digits in the quarter.

For Interventional, neurology Revenue was 76.4 Million. Representing a decrease of 8.3% year-over-year.

Liam Kelly: In line with our expectations, OEM revenue decreased 12.4% year-over-year to $78.7 million. The second quarter was impacted by the previously disclosed lost customer contract and continued customer inventory management. As expected, we saw sequential revenue improvement during the second quarter and continue to anticipate increased revenue contribution in the second half of 2025 versus the first half of the year. Second quarter other revenues increased 3.5% to $59.9 million year-over-year. The performance was driven by urology care, in particular intermittent catheters. That completes my comments on the second quarter revenue performance. Moving to a strategic update, we are actively taking steps to unlock value within our business. As part of this, we continue to progress the separation of Teleflex that we announced in February.

While we saw strong double digit growth for Barry gel. We continue to experience pressure on Euro Lyft.

In line with our expectations, OEM revenue decreased 12.4% year-over-year to $78.7 million.

The second quarter was impacted by the previously disclosed last customer contract and continued customer inventory management.

As expected, we start sequential Revenue Improvement during the second quarter and continue to anticipate increased Revenue contribution in the second half of 2025 versus the first half of the year.

Second quarter, other revenues increased 3.5% to 59.9 million year-over-year. The performance was driven by Urology Care in particular, intermittent, catheters,

That completes my comments on the second quarter Revenue performance.

Moving to a strategic update.

Liam Kelly: Once separated, each business will be best positioned for the future, with more focused strategic direction, simplified operating models, streamlined manufacturing footprints, and individually tailored capital allocation strategies aligned with their respective growth philosophy and objectives. At the same time, we are also pursuing in parallel a potential sale of NewCo. As we discussed on our first quarter earnings call, we have received a significant number of inbound expressions of interest in acquiring NewCo. Since then, and in line with our commitment to maximize value for our shareholders, our board and management have been actively evaluating a potential sale of NewCo. By way of a progress update, we have had preliminary meetings with many potential buyers. We continue to be impressed by the quantity and quality of interested parties. We will provide updates to the investment community on our progress as we move along these parallel paths as appropriate.

We are actively taking steps to unlock value within our business. As part of this, we continue to progress the separation of tyflex that we announced in February.

Once separated, each business will be best positioned for the future with more focused strategic direction, simplified operating models, streamlined manufacturing footprints, and individually tailored capital allocation strategies aligned with their respective growth philosophies and objectives.

At the same time, we are also pursuing in parallel a potential sale of new code.

As we discussed on our first quarter, earnings call. We have received a significant number of inbound, expressions of interest, in acquiring new code.

since then, and in line with our commitment to maximize value for our shareholders,

our board and management have been actively evaluating a potential sale of new code.

By way of a progress update, we have had preliminary meetings with many potential buyers. We continue to be impressed by the quantity and quality of interested parties.

Liam Kelly: Importantly, our guiding principles continue to focus on maximizing shareholder value through this process. Should a sale be consummated, we currently intend to utilize proceeds to balance paydown of debt and return capital to shareholders. We will continue to act in the best interest of our company and shareholders as we move through this process. Turning to our capital allocation strategy, on June 30th, which marked the start of our third quarter, we were pleased to complete the acquisition of substantially all of the vascular intervention business of Biotronic for a net initial upfront cash payment of €704 million euros. The Teleflex interventional portfolio has long been a cornerstone of growth and innovation within our company.

We will provide updates to the investment community on our progress as we move along. These parallel, paths, as appropriate importantly, our guiding principles continue to focus on maximizing shareholder value through this process.

Should a sale be consummated. We currently intend to utilize proceeds to balance pay down of debt and return Capital to shareholders.

We will continue to act in the best interests of our company and shareholders as we move through this process.

Turning to our capital allocation strategy.

On June 30th which marked the start of our third quarter. We were pleased to complete the acquisition of substantially, all of the bachelor intervention business of biotronik for a net initial upfront, cash payment of 704 million euros.

Liam Kelly: With the opportunity to drive sustainable revenue growth and improve margins, the vascular intervention acquisition is a key part of our value creation strategy that will enable us to further build upon this strong foundation. We expect our combined interventional business to generate $800 million plus dollars in annual revenues. The acquired product portfolio includes a broad suite of vascular intervention devices such as drug-coated balloons, drug-eluting stents, covered stents, balloon and self-expanding bare metal stents, and balloon catheters. We believe this acquisition will enhance our global presence in the cap lab, expand our suite of innovative technologies, and improve patient care. The acquisition of the vascular intervention business will also provide Teleflex with the opportunity to invest in and expand the clinical trial program for FreeSolve, a serotonin-eluting resorbable metallic scaffold technology.

The tflex Interventional portfolio has long been a Cornerstone of growth and Innovation within our company.

With the opportunity to drive sustainable Revenue, growth and improve margins. That vascular intervention acquisition is a key. Part of our value creation strategy that will enable us to further build upon the strong Foundation.

We expect our combined Interventional business to generate 800 million plus dollars in annual revenues.

The acquired product portfolio includes a broad Suite of vascular intervention devices, such as drug code of balloons, drug, eluding stance, cover stance, balloon and self-expanding bare metal stance and balloon. Catheters

We believe this acquisition will enhance our global presence in the cat lab, expand our suite of innovative technologies, and improve patient care.

The acquisition of the vascular intervention business will also provide Teleflex with the opportunity to invest in and expand the clinical trial program for free solve a sorus. Alluding resorbable metallic scaffold technology

Liam Kelly: FreeSolve's combination of temporary scaffolding with drug delivery is anticipated to address the current trend in interventional cardiology and endovascular procedures towards leaving behind less permanent hardware. We also see FreeSolve's potential to address the limitations of previous polymeric resorbable scaffolds, achieving more rapid absorption, thinner struts, and metallic mechanical performance. FreeSolve received its CE mark in February of 2024 and is indicated for treatment of de novo coronary artery lesions. The European pivotal Biomag 2 study is currently ahead of schedule with more than 800 patients enrolled out of the 2,000 patients total. We plan to initiate the Biomag 3 U.S. pivotal study in the coming months. The U.S. study design is complete, and in partnership with the Scientific Steering Committee, we are initiating recruitment of leading interventional cardiology programs and investigators from across the United States.

Permanent Hardware.

We also see free sales potential to address the limitations of previous polymeric, resolvable scaffolds

Achieving more rapid absorption.

Thinner struts.

And metallic mechanical performance.

Freestyle received at CE Mark in February of 2024 and is indicated for treatment of denovo, coronary artery lesions.

The European pivotal biomag. 2 study is currently ahead of schedule with more than 800 patients. Enrolled out of the 2,000, patient, totals,

We plan to initiate the Biomax 3 US pivotal study in the coming months.

The U.S. study design is complete and in partnership with the scientific steering committee.

We are initiating recruitment of leading Interventional Cardiology programs and investigators from across the United States.

Liam Kelly: As noted on our July 1st press release announcing the closing of the acquisition, we expect the acquired product to generate revenues of €177 million or $204 million in the second half of 2025. Specifically, we expect acquisition revenue of €86 million and €91 million in the third and fourth quarters, respectively. Beginning in 2026, we expect sales of the acquired products to deliver annual constant currency revenue growth of 6% or better. Also noted in our July 1st announcement, excluding non-recurring purchase accounting items and other acquisition and integration-related costs, we expect the transaction to be approximately $0.10 accretive to our adjusted earnings per share in the first year of ownership and to be increasingly accretive thereafter. Turning to some commercial and clinical updates. Starting with our vascular business, we recently announced findings from a new multinational study reporting the efficacy of Arrow chlorhexidine-impregnated CVTs among ICU patients.

As noted in our July 1st press release announcing the closing of the acquisition, we expect the acquired products to generate revenues of €177 million, or €204 million in the second half of 2025.

Specifically, we expect acquisition revenue of €86 million and €91 million in the third and fourth quarters, respectively.

Beginning in 2026, we expect sales of the acquired products to deliver annual constant currency revenue growth of 6% or better.

Also, noted in our July 1st announcement, excluding non-recurring purchase, accounting, items, and other acquisition and integration related costs.

We expect the transaction to be approximately 10 cents, a creative to our adjusted area per share in the first year of ownership and to be increasingly accretive thereafter.

Turning to some commercial and clinical updates.

Starting with our vascular business.

Liam Kelly: The study's analysis demonstrated a statistically significant reduction in collapses of 70.5% in patients receiving the impregnated antimicrobial catheters. Even though this cohort of patients had longer average lengths of ICU stay and device utilization ratios, indicating frequent and extended use, infections still remained significantly lower. This underscores the potential benefit of the antimicrobial technology, even in high-risk patients. Additionally, the use of chlorhexidine-impregnated CVCs was associated with a lower incidence of infection-causing pathogens, including gram-negative and gram-positive bacteria and fungi. Moving to our surgical business, we continue to expand our foundation of clinical data that supports the use of the Titan SGS stapler as safe and effective for patients undergoing laparoscopic sleeve gastrectomy. In May, we announced the publication of a retrospective study comprising 257 patients from 2016 and 2023 who underwent sleeve gastrectomy.

We recently announced findings from a new multinational study reporting, efficacy of Arrow. Chlorohexidine impregnated, cbc's among ICU patients.

the studies analysis, demonstrated a statistically significant reduction in clabsis of 70.5% in patients, receiving the impregnated antimicrobial, catheters

Even though this cohort of patients had longer average, length of ICU, stay and device utilization, ratios indicating frequent and extended use infections still remain significantly lower.

this underscores the potential benefit of the antimicrobial technology, even in high-risk patients,

Additionally, the use of chlorohexidine impregnated. Cbc's was associated with the lower incidence of infection causing pathogens, including gram, negative, and ground positive, bacteria, and fungi.

Moving to our surgical business.

We continue to expand our foundation of clinical data that supports the use of the Titan, SGS stapler, as safe and effective for patients undergoing, laparoscopically gastrectomy.

Liam Kelly: The study showed that one year post-procedure, compared to traditional surgical staplers, fewer patients in the Titan SGS stapler cohort reported having GERD, and fewer patients in the Titan SGS stapler cohort developed de novo GERD, both of which were statistically significant. Additionally, more patients in the Titan SGS stapler cohort who had GERD prior to the procedure saw resolution of this condition compared to patients in the traditional surgical stapler cohort. Notably, the improvements in GERD outcomes linked to the Titan SGS stapler were achieved without a significant difference in weight loss at one year between the two cohorts. This study also showed that the Titan SGS stapler enabled a shorter average hospital length of stay compared with traditional surgical staplers.

in may we announced the publication of a retrospective study comprising of 257 patients from 2016 and 2023 who underwent sleep gastrotomy

The study showed that 1 year, post procedure, compared to traditional, surgical staplers fewer patients in the Titan. SGS stapler cohort reported having gird and fewer patients in the Titan. SGS stapler cohort developed the novo gird, both of which were statistically significant

Additionally, more patients in the Titan. SGS stapler cohort, who had guard prior to the procedure, so resolution of this condition compared to patients in the traditional surgical stapler cohort.

Notably, the improvements incurred outcomes, linked to the Titan, SGS stapler or achieved, without a significant difference in weight loss at 1 year between the 2 cohorts.

This study also showed that the Titan SGS stapler enabled a shorter average hospital length of stay compared with traditional surgical staples.

Liam Kelly: As the only stapler to provide a 23-centimeter staple line, the industry's longest continuous staple cut line, the Titan SGS stapler is designed to provide an ideal tubular surgical sleeve anatomy that is a consistent shape, free of kinks, twists, or spirals, improving the potential to resolve GERD and nausea. We will continue to focus on supporting the Titan SGS stapler with expanded clinical data. On the reimbursement front, the Centers for Medicare and Medicaid Services released its 2026 proposed rules for reimbursement of UroLift and Barrigel in the physician office and ASC hospital outpatient care settings. Overall, the proposed rules for 2026, if enacted largely as outlined, would be a positive for the reimbursement environment. That completes my prepared remarks. Now, I would like to turn the call over to John for a more detailed review of our Q2 financial results. John.

A 23 cm staple line.

The industry's longest continuous staple cut line.

The Titan SGS stapler is designed to provide an ideal tubular, surgical sleeve Anatomy.

That is a consistent shape.

Free of kinks, twists, or spirals.

Improving the potential to resolve dirt and nausea.

We will continue to focus on supporting the Titan, SGS stapler with expanded clinical data.

On the reimbursement, front.

The Centers for Medicare and Medicaid Services released its 2026 proposed rules for reimbursement of urolith and Barrigel in the outpatient office and ASC hospital care settings.

Overall.

The proposed rules for 2026, if enacted largely as outlined, would be a positive for the reimbursement environment.

John Deren: Thanks, Liam, and good morning. Given the previous discussion of the company's revenue performance, I will begin with margins. For the quarter, adjusted gross margin was 59.7%. The 110 basis point decrease year-over-year, which was in line with our expectations, was primarily due to continued cost inflation from macroeconomic factors, specifically with respect to labor and raw materials, an increase in logistics and distribution costs, and unfavorable product mix, partially offset by fluctuations in foreign currency exchange rates. Adjusted operating margin was 26.9% in the second quarter. The 20 basis point year-over-year increase was better than expected as we offset year-over-year gross margin pressure with prudent operating expense control and a positive benefit from foreign exchange rates. Adjusted net interest expense totaled $19.9 million in the second quarter, a slight increase from the $19.4 million in the prior period.

That completes my prepared remarks. Now, I would like to turn the call over to John for a more detailed review of our second quarter Financial results. John

Thanks, Liam. And good morning. Given the previous discussion of the company's Revenue performance. I'll begin with margins for the quarter adjusted. Gross margin was 59.7% the 110 basis, point decrease year-over-year which was in line with our expectations was primarily due to continued, cost inflation from macroeconomic factors specifically, with respect to labor and raw materials and increase in logistics and distribution costs and unfavorable product mix, partially offset by fluctuations in foreign currency exchange rates,

Adjusted operating margin was 26.9%. In the second quarter, the 20 basis point year-over-year increase was better than expected as we all set year-over-year growth margin pressure with prudent operating expense control and a positive benefit from foreign exchange rates.

John Deren: The year-over-year increase is primarily due to a higher average debt outstanding, partially offset by lower interest rates on floating rate debt. Our adjusted tax rate for the second quarter of 2025 was 13.1% compared to 12.3% in the prior year period. The year-over-year increase is primarily due to additional costs arising from the enactment of Pillar Two tax reform. At the bottom line, second quarter adjusted earnings per share was $3.73. The 9.1% increase year-over-year is primarily due to higher adjusted operating income, a lower share count, and a positive benefit of foreign exchange. Turning now to select balance sheet and cash flow highlights. Cash flow from operations for the six months was $81.2 million compared to $204.5 million in the comparable prior period. The $123.3 million decrease was primarily attributable to unfavorable changes in working capital, including payments for recently enacted tariffs.

Adjusted interest expense totaled $19.9 million in the second quarter. A slight increase from the $19.4 million is primarily due to a higher average debt outstanding, partially offset by lower interest rates on floating rate debt.

Our adjusted tax rate for the second quarter of 2025 was 13.1%, compared to 12.3% in the prior year. The year-over-year increase is primarily due to additional costs arising from the enactment of Pillar Two tax reform.

At the bottom line, second quarter adjusted earnings per share was $3.73. The 9.1% increase year-over-year is primarily due to higher adjusted operating income, a lower share count, and a positive benefit of foreign exchange.

Turning now to select the balance sheet and cash flow, highlights cash flow from operations. For the 6 months was 81.2 Million compared to 204.5 million in the comparable prior period.

John Deren: The year-over-year change also includes payments related to the proposed separation, payments related to due diligence and transition planning costs associated with the vascular intervention acquisition, as well as outflows related to cloud computing arrangement expenditures as part of our ongoing development of our new ERP solution. Moving to the balance sheet. At the end of the second quarter, our cash, cash equivalents, and restricted cash equivalents balance was $283.9 million compared to $327.7 million as of year-end 2024. Net leverage at quarter end was approximately 1.8 times and 2.6 times pro forma for the vascular intervention acquisition. Turning to our updated financial guidance for 2025. After giving effect to the June 30th closing of the acquisition of the vascular intervention business, we now expect total constant currency growth for 2025 to be in the range of 7.7% to 8.7% versus our prior guidance of 1% to 2%.

The 123.3% was primarily attributable to unfavorable changes in working capital including payments for recently enacted tariffs. The year-over-year change also includes payments related to the proposed separation payments related to due diligence and transition planning costs associated with the vascular intervention acquisition, as well as outflows related to cloud computing, Arrangement expenditures as part of our ongoing development of our new Erp solution.

Moving to the balance sheet at the end of the second quarter, our cash, cash equivalents and restricted cash. Equivalents balance was 283.9 Million compared to 327.7 million. As of year, end 2024, net, leverage at quarter, end was approximately 1.8 times and 2.6 times proforma for the vascular intervention acquisition.

Turning to our updated Financial guidance for 2025.

John Deren: The constant currency revenue for 2025 growth reflects assumptions that are unchanged from our previous outlook, plus an estimated $204 million in revenue contribution associated with the vascular intervention acquisition in the second half of the year. We now expect a positive impact from foreign exchange of $26 million, representing an approximately 85 basis point tailwind to GAAP revenue growth in 2025. This compares to our prior guidance of approximately $5 million or 17 basis point headwind for 2025. The updated foreign exchange guidance assumes approximately a $1.15 average euro exchange rate for the second half of 2025. For 2025, we now expect GAAP revenue growth to be in the range of 9% to 10% versus our prior guidance of 1.3% to 2.3%, implying a dollar range of $3.322 billion to $3.352 billion.

After giving effect to the June 30th closing of the acquisition of the vascular intervention business, we now expect total constant currency growth for 2025 to be in the range of 7.7% to 8.7%, versus our prior guidance of 1% to 2%. The constant currency revenue for 2025 gross reflects assumptions that are unchanged from our previous outlook, plus an estimated $204 million in revenue contribution associated with the vascular intervention acquisition in the second half of the year.

Great for the second half of 2025.

John Deren: The outlook for 2025 includes the previous assumptions, plus updated foreign exchange rates and the contribution from the vascular intervention acquisition. The year-over-year growth rate reflects the $13.8 million impact from the Italian measure in the second quarter of 2024. On the topic of tariffs, the situation remains highly dynamic and may change further over the coming months. There remains significant uncertainty on the positioning, timing, and magnitude of the administration's tariff policy, as well as the impact of any retaliatory actions from other countries. Consistent with the methodology discussed at the time of our first quarter earnings call, our outlook is based on tariffs currently enacted, including country-specific reciprocal tariff rates, as well as the status of certain tariff exemptions, primarily in Mexico, related to the current USMCA rules and regulations. The outlook does not contemplate future tariffs that are not yet enacted.

For 2025, we now expect GAAP revenue growth to be in the range of 9% to 10% versus our prior guidance of 1.3% to 2.3%, implying a dollar range of $3.322 billion to $3.352 billion. The outlook for 2025 includes the previous assumptions, plus updated foreign exchange rates and the contribution from the vascular intervention acquisition year-over-year. The growth rate reflects the $13.8 million impact from the Italian measure in the second quarter of 2024.

On the topic of tariffs, the situation remains highly dynamic and may change further over the coming months. There remains significant uncertainty on the positioning, timing, and magnitude of the administration's tariff policy, as well as the impact of any retaliatory actions from other countries.

John Deren: Any future changes could change the anticipated impact on our adjusted EPS in 2025. We now estimate the impact from tariffs of approximately $29 million in 2025, or $0.55 a share, versus a previous outlook of $55 million, or $1.05 a share. The reduction in expected tariff impact for 2025 is driven by changes in tariff rates, primarily associated with China, as well as the early benefit of expanding mitigation efforts with the additional opportunities to come as we progress through the second half of 2025. We continue to actively explore strategies to mitigate our exposure to tariffs in 2025, including optimizing our supply chain, increasing our mix of USMCA compliant products, which provides tariff waivers for products assembled in Mexico and Canada using U.S. components, and continued and diligent control of our spending.

Consistent with the methodology discussed at the time of our first quarter earnings call. Our Outlook is based on terrorists, currently enacted including countries specific reciprocal, tariff rates, as well, as the status of certain tariff exemptions primarily in Mexico related to the current usmca rules and regulations. The Outlook does not contemplate future tariffs that are not yet enacted. Any future changes could change the anticipated impact on our adjusted EPS in 2025.

John Deren: Since our last earnings report, we have made progress increasing our percentage of USMCA compliant products entering the U.S. from our manufacturing facilities in Mexico. We will also begin to implement increased customer pricing as contracts come up for renewal. Additionally, for modeling purposes, you should consider the following. We are increasing 2025 adjusted gross margin guidance to be in the range of 58.75% to 59.5%, which represents an increase of 50 basis points at the low and high end of the range. The increase in our 2025 gross margin guidance expectation is primarily driven by lower than expected tariffs, partially offset by an adverse impact from foreign exchange. We expect adjusted operating margin to be in the range of 24.5% to 25%, which reflects a 10 basis point reduction at the low end of the range versus our prior guidance.

We now estimate the impact from tariffs of approximately 29 million in 2025 or 55 cents a share versus a previous Outlook of 55 million or a dollar or 5 cents a share the reduction in expected tariff impact for 2025 is driven by changes in tariff, rates primarily associated with China, as well as the early benefit of expanding mitigation efforts with the additional opportunities to come as we progress through the second half of 2025. We continue to actively explore strategies to mitigate our exposure to tariffs in 2025, including optimizing, our supply chain, increasing our mix of usmca compliant products, which provides tariff waivers for product assembled in Mexico, and Canada, using us components and continued, and diligent control of our spending. Since our last earnings report, we have made progress, increasing our percentage of usmca compliant products entering the us from our manufacturing facilities in Mexico.

We will also begin to implement increased customer pricing as contracts come up for renewal.

Additionally, for modeling purposes. You should consider the following.

John Deren: Our updated guidance reflects the benefit of lower than expected tariffs offset by incremental expenses associated with the acquisition of the vascular intervention business and an adverse impact from foreign exchange. Moving to items below the line, net interest expense is now expected to be approximately $95 million for 2025 as compared to $75 million previously. The incremental net interest expense is primarily due to the financing associated with the acquisition of the vascular intervention business. We have refined our tax assumption for 2025 and now expect our tax rate to be 13.25% versus our previous expectation of 13.5%. Turning to adjusted earnings per share, we are raising the low and high end of our 2025 guidance by $0.70, of which $0.50 is associated with a lower than expected tariff impact.

We are increasing 2025 adjusted gross margin guidance to be in the range of 58.75% to 59.5%, which represents an increase of 50 basis points at the low and high end of the range. The increase in our 2025 gross margin guidance expectation is primarily driven by lower than expected tariffs, partially offset by an adverse impact from foreign exchange. We expect adjusted operating margin to be in the range of 24.5% to 25%, which reflects a 10 basis point reduction at the low end of the range versus our prior guidance. Our updated guidance reflects the benefit of lower than expected tariffs offset by incremental expenses associated with the acquisition of the vascular intervention business, and an adverse impact from foreign exchange.

Moving to items below the line. Ned interest expense is now expected to be approximately 95 million for 2025 as compared to 75 million previously. The incremental net interest expense, is primarily due to the financing associated with the acquisition of the vascular intervention business.

We have refined our tax assumption for 2025 and now expect our tax rate to be 13.25% versus our previous expectation of 13.5%.

John Deren: Although the acquisition of the vascular intervention business is expected to be slightly dilutive in 2025, we expect to offset any negative impact to adjusted EPS through operational performance. As such, we now expect 2025 adjusted earnings per share to be in the range of $13.90 to $14.30. For the third quarter, adjusted constant currency growth is expected to be in the range of 15% to 16.5%, excluding a foreign exchange benefit of approximately $8 million. As a reminder, the third quarter revenue outlook includes $99 million in revenue associated with the vascular intervention acquisition. That concludes my prepared remarks, and I would now like to turn the call back over to Liam for closing commentary.

Turning to adjusted earnings per share. We are Wing the low and high end of our 2025 guidance by 70 cents of which 50 cents is associated with a lower than expected tariff impact. Although the acquisition of the vascular intervention of business is expected to be slightly diluted in 2025. We expect to offset any negative impact, adjusted, EPS through operational performance as such. We now expect 2025 adjusted earnings per share to be in the range of 13.90 to 14.30.

For the third quarter, adjusted constant currency growth is expected to be in the range of 15% to 16.5% excluding a foreign exchange benefit of approximately 8 million dollars as a reminder. The third quarter Revenue Outlook includes 99 million in Revenue associated with the vascular intervention acquisition.

Liam Kelly: Thanks, John. In closing, I will highlight our three key takeaways from the second quarter of 2025. First, we continued to make significant progress in executing our strategy, delivering second quarter revenues above the high end of our range of guidance. In addition, we are pleased with our adjusted operating margin and adjusted earnings per share. Second, we successfully completed the acquisition of the vascular intervention business and have begun our integration activities. It is our intention to host a virtual investor event in the fall dedicated to the vascular intervention business, with a focus on the strategic rationale, the comprehensive coronary and peripheral product portfolio, and clinical trial pathway for the FreeSolve by resorbable scaffold. Last, we remain laser-focused on controlling what we can across our business as we continue to advance our strategic objectives.

That concludes my prepared remarks and I would now like to turn the call back over to Liam for closing commentary.

Thanks John.

In closing.

3 key takeaways from the second quarter of 2025.

First.

We continue to make significant progress in executing our strategy, delivering second-quarter revenues about the high end of our range of guidance. In addition, we are pleased with our adjusted operating margin and adjusted earnings per share.

Second, we successfully completed the acquisition of the bachelor intervention business and have begun our integration activities.

It is Our intention to host a virtual investor event in the fall, dedicated to the vascular intervention business with a focus on the Strategic rationale, the comprehensive coronary and peripheral product portfolio and clinical trial pathway for the freestyle by Zorb scaffold.

Liam Kelly: Our focus is on enhancing operational execution, returning the business to growth, and strengthening our diverse product portfolio to better deliver for our customers. We continue to progress the separation of Teleflex, supported by our guiding principles, which are focused on maximizing shareholder value through this process. That concludes my prepared remarks. Now, I would like to turn the call back to the operator for Q&A.

Last, we remain laser focused on controlling, what we can across our business as we continue to advance our strategic objectives.

Our focus is on enhancing operational, execution returning, the business to growth and strengthening our diverse product portfolio to better deliver for our customers. We continue to progress, the separation of tflex supported by our guiding principles, which are focused on maximizing shareholder value through this process.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We ask that you 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 one. Our first question will come from Matthew O'Brien of Jefferies. Your line is open.

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

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad, if you're using a speaker-phone, please make sure your mute function is turned off to allow your signal to reach our equipment.

We ask that you 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 1.

And our first question will come from Matt. Taylor of Jeffrey's your line is open.

Matthew O'brien: Hi. Thanks for taking the question. I really had two. I wanted to see if you could provide more context on the bridge of the guidance between tariffs, FX, and business outperformance. Congratulations on closing Biotronic. I was just hoping you could help us understand, just in rough terms, the outlook for that business and its growth organically.

Hi, thanks for taking the question. So

I I really had uh, to I want to, I wanted to see if you could provide um, more contacts on on the bridge of the guidance between tariffs FX and business outperformance.

Liam Kelly: Okay. I will cover. Thank you, Matt. I will cover the Teleflex vascular interventions business, and I will ask John to cover the Teleflex and splitting it into operational and tariffs. First of all, on the Teleflex business, the expectation for the organic growth of the Teleflex business in the second half of the year is mid-single digits during that time. That is the full growth on that $204 million in the back half of the year or the €177 million, Matt. Nothing has changed to our outlook for the business starting in 2026. We still expect the Teleflex vascular interventions business to grow 6% or better. John, do you just want to cover the mix of the EPS?

Um, and then congrats on closing by electronic. I was just hoping you could help us understand, uh, just in rough terms, the outlook for that business and its growth organically.

Okay, I I'll cover thank you, Matt. Um, uh, I'll cover the the, um, biotronik, vascular, interventions business and our last John, to cover, uh, the beach. Uh, uh, uh, I'm spending it into operational and tariffs. Um, so, first of all on the biotronik business, uh, the expectation for the organic growth of the

By atronic business in the second half, uh, of the year.

John Deren: Yeah. I think you've seen, we had a pretty nice operational performance in Q2. We will carry some of that into the back half of the year, roughly $0.20, and that covers also any dilution we would see on Biotronic. Tariffs, roughly 50%, I am sorry, $0.50 for the year. And then foreign exchange is negative, tax and shares positive. They largely offset each other.

Liam Kelly: I'll just add, Matt, that of the $0.50, a good chunk of it, $0.45, $0.47 is coming from China. We've also made some improvements on USMCA. So we've also done some operational work behind the scenes to improve our tariff position as a company.

Uh, is mid single digits, uh, during that time. Uh, that is the, the, the full, uh, growth on that 204 million in the back half of the year or the 177 million euros Mass. Uh, nothing has changed to our outlook for the business starting in 2026. Uh, we still expect the, the biotronik, vascular interventions business to grow, 6% are better, and John huge fun to cover the, the mix of, uh, the, the EPS, I think. Um, and you've seen, you know, we we had a pretty nice operational performance in Q2 will carry some of that into the back here for the year, uh, roughly roughly 20 cents and that covers also. Um, any dilution we'd see on biotronik, um, tariffs roughly 50%, uh I'm sorry 50% for the year and then, uh, foreign exchange is negative tax and shares positive. They, they largely offset each other. I'll just add Matt that up the 50 cents. Uh, you know, a good chunk of it, you know, a 4547 cents is coming from the China. And we've also made some

Improvements on usmca. So, we've also done some operational work behind the scenes to improve our tariff position, uh, as a company.

Operator: Our next question comes from Jayson Bedford of Raymond James. Your line is open.

Our next question comes from Jason Bedford of Raymond James. Your line is open.

Matthew O'brien: Good morning, and thanks for all the details here. You know, you threw out a lot of numbers, so I do not want to be greedy with this question, but do you have a rough breakout between the growth of RemainCo and NewCo? I am not sure if we have enough information to fully calculate that.

Uh, good morning and uh, thanks for all the details here.

Liam Kelly: In the quarter, I can give you a breakout of RemainCo. Nothing has changed to our outlook for RemainCo and a growth perspective for the year. We still expect it to be in the upper 5s, and it was in the mid-single-digit range, excluding the impact of volume-based procurement in the second quarter, Jayson.

You know, you threw out a lot of numbers so I don't want to be greedy with this question. But do you have a rough breakout uh between the growth of romao? And and new Co I'm not sure if we have enough information to fully calculate that.

Matthew O'brien: Okay. That's helpful. You touched on it, but interventional was quite strong. Can you maybe speak to the durability of this type of growth?

Um in the quarter. Um I I do I can give you a break out of our main Co, nothing has changed to our our, our our outlook for for remain coal, uh, and a growth perspective for the year, we expect the still expected to be in the upper fives, uh, and it was in the mid single digit range, uh, excluding the impact of volume based procurement in the second quarter, Jason

Liam Kelly: So interventional did have a good, strong quarter. Obviously, balloon pumps had really strong double-digit growth and were in line with our expectations. The upside in interventional actually was delivered by QuikClot and complex catheters. We continue to expect the interventional business to grow high single, low double digits for the full year of 2025.

That's helpful. And there's, um, you touched on it, but Interventional was quite strong. Can you maybe speak to the durability of this type of growth?

So, in Interventional, did have a good strong quarterly. Uh, balloon pumps had really strong double digit growth and were in line with our expectations. The upside in Interventional actually was delivered by uncontrolled and complex catheters and we continue to expect the Interventional business to grow High single low, double digits for the full year uh, of of 2025

Operator: Our next question comes from the line of Anthony Petrone with Mizuho Americas. Your line is open.

Anthony Petrone: Thanks, and congrats on the progress here on bringing Barrigel in and moving toward a transaction with NewCo. Maybe on NewCo specifically, sale versus spin, speaking to a number of strategics. Maybe, Liam Kelly, just a little bit on timing, you know, obviously considering all angles here, but anything on timing that you can provide on the decision-making process for NewCo, that would be helpful. Then maybe, you know, on the Barrigel addition, quarterly cadence of that business, maybe walk us a little bit through the seasonality, would expect maybe Q3 is a little bit more modest than Q4, and your thoughts out of the gate on revenue synergy specifically with that business with the existing Teleflex Incorporated portfolio. Thank you.

Our next question comes from the line of Anthony. Petrone with mizuho Americas, your line is open.

Uh, thanks and congrats on the progress here on on bringing biotronik in and moving toward uh,

Uh uh transaction with new Co, maybe on on new Coast specifically.

Uh, sale versus spin speaking to a number of strategic.

Maybe Liam just a little bit on on timing, you know, uh obviously considering all angles here but anything on timing that you can provide on on the decision-making process for new code that would be helpful.

And then maybe um, you know, on the uh biotronik Edition uh quarterly Cadence of that business. Maybe walk us a little bit through the seasonality would expect. Maybe 3 Q is a little bit more modest than 4 q.

Liam Kelly: All right, Anthony, thank you for the questions. Let me start off with the sale versus spin and the timing. Nothing has changed in our outlook for the timing of the spin. If we proceed with a spin, that would be mid-2026. It is difficult for me to give you specifics on the timing of a sale, but I will tell you, as we continue to evaluate all options, Anthony, our focus is really on maximizing shareholder value. As I said in my prepared remarks, we have made significant progress. We could not get to the point we are today without conducting numerous preliminary buyer meetings as part of the sale process, without having made progress and getting some key deliverables.

Uh, and and your thoughts out of the gate on Revenue synergies, specifically with that business with the existing tele Teleflex portfolio. Thank you.

Liam Kelly: So one of those would be, for example, finalizing quality of earnings and future outlook, which is needed for both sale or spin, getting a data room ready, identifying key internal leadership talent to lead the management presentations, and obviously, qualifying and quantifying the transition support, as well as having numerous NDAs signed ahead of those preliminary meetings, which should speed up now the second phase of the process as we go into due diligence. I remain really encouraged and impressed by the quantity and quality of the interested parties. That continues to be the case. We do plan to continue due diligence, Anthony, as we go through the third quarter. In the event that we are successful with a sale, we will obviously update the investment community as we go.

All right, Anthony, thank you for the questions. Um, let me start off with um, the the sale versus Spin and the timing nothing has changed in our outlook for the timing of the spin. Uh, if we proceed with a spin, that would be mid 2026 difficult for me to give you specifics on the timing of of a sale. But I will tell you as we continue to evaluate all options and Anthony our focus is really on maximizing shareholder value. Um, and as I said, in my prepared remarks, we've made significant progress, you know, we couldn't get to the point we are today without uh, to conduct numerous preliminary buyer meetings as part of the sale process without having made progress and getting some key deliverables. So 1 of those would be for example. Finalizing quality of earnings and future outlook, which is needed for both sales or spin. Um, getting your data room ready, uh, identifying key internal leadership talent to lead the management presentations. Uh, and obviously, uh,

Liam Kelly: Your second question was really around Biotronic and the cadence. You are absolutely correct, and it is reflected in our guidance, as you can see. In Q3, we have $99 million built in for Biotronic, and in Q4, we have $105 million built in for Biotronic to give you the total of $204 million. So there is the normal cadence that you would expect from any interventional business. With regard to the synergies, as I said a little bit earlier, Biotronic is going to grow in that mid-single-digit range, and we still expect it to grow in that 6% or better beginning in 2026. A part of that is the bringing together of the two portfolios. There are two aspects of that, Anthony. One is access to the cath lab.

That qualifying and quantifying the transition support as well as having numerous ndas signed ahead of those preliminary meetings which should speed up. Now the second phase of the process as we go into due diligence. I I remain really encouraged and impressed by the quantity and quality of the interested parties. Uh, that continues to be the case. Uh, we do plan to continue due diligence Anthony as we go through the third quarter and the event that we are successful. Uh, with a sale, uh, we will obviously update the investment Community as as we go. Um, your second question was really around biotronik and the Cadence, uh, you're you're absolutely correct. Uh, and it's reflected in our guidance, as you can see.

Liam Kelly: Because the Biotronic BI organization in North America is smaller than Teleflex's, gaining access to the cath lab is quite difficult for them. But now you combine the two entities. Therefore, access is going to be a lot easier. So that really will help in bringing some of these portfolios together. There are some natural synergies with the portfolio. I am just going to give you two examples. The biggest part of our portfolio in that cath lab is our complex catheters. What do complex catheters do? They give you access to the tortuous coronary arteries. Why are you getting access? Because you want to put in a bare metal stent or a drug-eluting stent. Bringing those two together will definitely help the combination. The second is in regard to perforations.

In Q3 uh we have 99 million built in for for biotronik. And in Q4 we have 105 million dollars built in for biotronik to give you uh the total of 204 million. So there is the normal Cadence that you would expect from any Interventional business uh with regard to the synergies. As I said a little bit earlier by atronic is going to grow in that mid single digit range and we still expect it to grow in that 6% or better beginning in 2026. A part of that is the bringing together of the 2 portions. There's 2 aspects of that. Anthony 1 is access to the cat lab because the biotronik V organization in North America is pretty is is is, is is smaller than tyflex

Just gaining access to the cath. Lab is quite difficult for them, but now you combine the 2 entities uh therefore access is going to be a lot easier. So that really will help in bringing some of these portfolios together and then there are some natural synergies with the with the portfolio. I'm just going to give you 2 example examples. The biggest part of our um portfolio in that catlab is our complex catheters uh, so

Liam Kelly: When one has a perforation and accidents happen in any procedure, the first thing you need to do, there are two combo products in this area that Teleflex has. Now, with the combination of the Biotronic BI business, we will be the dominant player in this area. The Ringer catheter would be used initially in order to continue doing the procedure, and then the PK papyrus would be used to close up the perforation. We would be able to block out this niche of a market globally for Teleflex with the combination of these products. They are just two quick examples, Anthony, on how this portfolio will work incredibly well together. We are really looking forward to having an investor day to outline this, to share our excitement with Wall Street as to why this is a great fit for Teleflex.

Share our excitement with Wall Street, as to why this is a great fit for tell Flex.

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

Our next question.

With RBC.

Shagun Singh: Great. Thank you so much. I guess a couple of clarification questions. Just on Q2 EPS beat, can you maybe help us identify how much was tariffs versus business outperformance, phasing for EPS or margins in Q3 versus Q4? Then, Liam Kelly, on the underlying business, I just want to make sure that I understand. I think you indicated that the adjusted constant currency revenue guidance on an underlying basis, excluding the acquisition, is unchanged. I do not know if you can further elaborate on how you are thinking about each of your businesses. Are there areas of upside versus downside relative to expectations internally to highlight? That would be helpful. Thank you so much.

Your line is open.

Liam Kelly: Absolutely, Shagun. I will cover the last part of the question, and then I will ask John to cover the first two components of it. With regard to our outlook, if we take a step back, first of all, we are really happy with Q2. I think we delivered well in Q2. We hit some really key metrics. We delivered on our expectations for revenue. We exceeded op margin and EPS, and I think we executed well, and the team executed well in the quarter. To answer your question, and you are absolutely correct, Shagun, on our 2025 outlook, there is no change to our underlying revenue guidance in that regard. The only change is we have added the Biotronic vascular interventions business of $204 million in the second half, $99 million in Q3, and $105 million in Q4. Our updated revenue guidance is 7.7% to 8.7%.

Uh, great, thank you so much. Um, I guess a couple of clarification questions so just on Q2 EPS beat, can you maybe? Uh, uh, you know, help us identify how much was tariff versus business outperformance? Uh, you know, phasing for EPS or margins in in Q3 versus Q4 and then Liam on the underlying business, I just want to make sure that I understand. So, I think you indicated that the adjusted constant currency Revenue, guidance on an underlying basis, excluding the acquisition is unchanged. So, uh, I don't know if you can further elaborate on. Uh, you know, how you're thinking about each of your businesses, you know, are there areas of upside versus downside relative to expectations internally, uh, to highlight, uh, that would be helpful. Thank you so much.

Absolutely, you should go and so I'll cover the last part of the question. And then I'll ask John to cover the the first 2 components of it, uh, with regard to our, our Outlook, you know, if we take a step back, first of all, we're really happy with Q2, I think we delivered well in Q2, uh, we hit some really key metrics, uh, we delivered on our expectations for Revenue. We exceeded our margin and EPs, and I think, uh, we, we, we, we executed well, and the team executed. Well, uh, in in the quarter, uh, to answer your question, uh, and you are absolutely correct. You should go on, on, on our 2025.

Liam Kelly: And obviously, we have increased our gross margin guidance by 50 basis points, and we have increased our EPS by $0.70. Now, I will ask John just to again reiterate the breakup of that $0.70 and answer the other part of your question.

John Deren: Yeah. So again, the $0.70, about $0.50 of it relates to tariffs, Shagun. As Liam Kelly pointed out earlier, some of that is improvements we have made from a USMCA compliance standpoint and exemption standpoint. Obviously, the adjustments in China and elsewhere made a large difference. Again, there is no tariff impact in Q2. The tariff impacts start in the second half of the year. Then, I apologize, you are looking for the impacts from a gross margin perspective as well. Sorry, you wanted?

Outlook. There is no change to our underlying Revenue guidance. Uh, in that regard, the only change is we've added the biotronik. Vascular interventions business of 204 million in the second half 99 million in Q3 and 105 million updates, uh, are in Q4. Uh, our updated Revenue. Uh, guidance is 7.7 to 8.7% and obviously, we've increased our, our gross margin guidance, uh, by 50 basis points and and we've increased our EPS by 770 cents. Uh, now, I'll ask John just to again, reiterate the breakup of that 70 cents and answer the other part of your question. Yeah. So so again the the um, the 70 cents about about 50 cents of it relates to tariffs soon. And and as William pointed out earlier, um, some of that is improvements. We've made from the usmca compliance standpoint and exemption standpoint, but, you know, obviously the adjustments in China and and elsewhere need a large difference. So again, there's no tariff impact in Q2.

Shagun Singh: Just phasing on margins in the back half.

2, at the Tariff impact, start in the second half of the year. Um, and then and I I apologize that you're looking for the impacts from a gross margin perspective as well. So we wanted

Liam Kelly: Q3 and Q4.

uh, just freezing on margins in the back of

John Deren: Q3 and Q4. So the tariff impacts are largely similar in Q3, Q4. I think we are down a little bit in Q3 versus Q4 from a beat perspective. You know, we will see a little bit of uplift in Q4, but I do not have the, I do not have the, we do not provide a detailed breakup between Q3 and Q4 margin.

Q3 and Q4 L Q3 and Q4. Um uh so the Tariff impacts uh largely similar in Q. 23 Q4, I think we're down a little bit in Q3 versus Q4 from, uh, um, uh, a b perspective. Uh, you know, we'll see a little bit of uplifting Q4, but I don't. Well, I'll have the, I don't have the, I don't have, we don't, we're not providing a detailed breakout between Q3 and Q4 margin.

Operator: Our next question comes from Richard Newitter with Truist Securities. Your line is open.

All right. Next question comes from Richard newer with truist. Your line is open.

Matthew O'brien: Hi. Thanks for taking the questions. I just wanted to go to the urology segment for a minute and back to the CMS proposals. I am just curious if you can talk a little bit about how you see that potentially impacting the business, if at all, and if there is any kind of side of care kind of positive impact. I know there has been a migration out of the office for UroLift. Is that something that you think will change practice at the margin and help that business recover a little bit?

Hi. Um, thanks for taking the questions. Uh, just wanted to to go to the Urology segments per minute and and back to the, um,

Liam Kelly: Hey, Rich. Thanks for the question. Look, the updated CMS proposed rule, I just want to point it, is a proposed rule. If it comes into effect, as it has been outlined, will definitely be positive. I will start with Barrigel. Barrigel, in the office side of service, got an uplift of approximately 40%. In the ASC, it got a 9% uplift as well as a 9% in the hospital. With regard to UroLift in the office, it is approximately a 10% uplift. It is 9% to 10% actually in all sites of service for UroLift across the board. What that means from the office, Rich, just to give you a little bit of detail, is that it will almost net of any rebates that we would have put in place.

The CMS, uh, proposals. I'm just curious, uh, if if, if you can talk a little bit about how you see that potentially impacting um, the business if at all and and if there's any kind of sight of care uh kind of positive impact, you know I know there's been a migration out of the office for urolith is that is that something that you think will change practice at the margin and and help that business recover a little bit?

Liam Kelly: If you just take the base reimbursement change, it would more than double the doctor's fee, if you want to call it that, net of the cost of the product in the office side of service. So we see it as a positive development. It is very encouraging. We also would like it to become the, not be a proposed rule, but be an actual rule, and we will wait to see that. I think, to the credit of CMS, this is really a strong focus on moving procedures from a more expensive location to a less expensive location as in the doctor's office. We would strongly encourage them to continue that focus.

Matthew O'brien: Thank you. Just one more. Intra-aortic balloon pumps, it looks like that was the drive of most of the interventional outperformance. Can you maybe update us there on your thoughts on the kind of the jump ball opportunity in the wake of a competitor issue and any updated views of what that could be even looking out over the next 12 months? Thanks.

If you want to call it, that net of the cost of the product in the office site of service. So we see it as a positive development. Uh, it's very encouraging. And we also would like it to become the, the not be a proposed rule, but be an actual Rule, and we'll wait to see that. Um, and and I think to the credit of CMS, this is, this is really a strong focus on moving procedures from a, a more expensive location to a, a less expensive location as in the doctor's office and uh, we would strongly encourage them to continue that Focus.

Liam Kelly: Yeah, Rich. Actually, the beats in interventional from our internal plan was not intra-aortic balloon pumps. The beats actually came from uncontrolled and complex catheters. So we were very encouraged by the overall performance of that business. Now, did balloons perform well? Yes, they performed well and very much in line with our expectation. In particular, the focus here is in North America. Just like we had in Q1, we had very strong double-digit growth in balloon pumps in Q2. The outlook, we expect, as I said earlier, we continue to expect the interventional-based business, excluding the Biotronic vascular interventions business, to grow high single, low double digits for the year. Obviously, you come up on, specifically to balloon pumps, you come up on a tougher comp in Q4.

Thank you and then just 1 more and you know, in balloon pumps. Uh it looks like there was you know that that was the drive of most of the Interventional outperformance. Can you maybe update us there on on your thoughts on the kind of the the jump all opportunity in the wake of uh competitor issue uh and and kind of any updated uh views of of what that could be, uh, even looking looking out of the next 12 months. Thanks.

Yeah, Rich, um, actually the the B is an Interventional from our internal plan was not intro to balloon pumps. The beat actually came from on control and complex catheter. So we were very encouraged by the overall performance of that business. Now did balloons perform? Well yes they performed well and very much in line with our expectation. Uh and in particular the focus here is in North America and just like we had in q1 uh we had very strong double digit growth in in balloon pumps in Q2.

Liam Kelly: So I would expect the growth from balloon pumps themselves to moderate when we get into Q4 because that was the beginning of the issue with the competitor. All in all, we couldn't be more pleased with the performance of our interventional business. It couldn't be timed better because now we have the addition of the Biotronic BI business into a business that's performing exceptionally well. We are going through a separation at the same time. So all the stars seem to be aligning for that process.

Um, the Outlook, you know, we, we expect we, as I said earlier, we continue to expect the Interventional base business. Excluding the the biotronik vascular interventions business to grow a high single low, double digits for the year. Obviously, you come up on specifically to balloon pumps, you come up on a tougher comp in Q4. So I would expect the growth from balloon pumps themselves to to moderate. And we get into Q4 because that was the beginning of the issue, uh with the competitor. But all in all we couldn't be more pleased with the performance of our Interventional business. And it couldn't be timed better because now we have the the addition of the biotronik V business into a business that's performing exceptionally well and and and we're going through a separation at the same time. So all the stars seem to be aligning for that process.

Operator: Our next question comes from Matthew O'Brien with Piper Sandler. Your line is open.

Our next question comes from Matthew O'Brien with Piper, Sandler. Your line is open.

Shagun Singh: Hi. This is Samantha. I am from Mizuho Group. Thank you so much for taking our question. I guess we are wondering if you can provide any more details on the progress for the separation or sale. If you were 50/50 sale versus spin at the time of the announcement, are you leaning one way or the other now?

Liam Kelly: We did not actually give any leaning at the time of the announcement. When we announced, we only announced a spin. As we went through the process, we got significant inbound interest. As I said a little bit earlier, we are encouraged by the amount of inbound interest that we have received. I can tell the investment community our focus remains on unlocking shareholder value. I can also tell you that we have been working incredibly hard. We are not sitting in our hands. I guess the most significant update we gave on the call was we have had many preliminary management meetings with interested parties.

Hi. This is Samantha on for math. This morning. Thank you so much for taking our question. Um, I guess we're wondering, if you can provide any more details on the um, I guess progress for the separation or sale, you know, if you were 5050, uh, silver spin at the time of the announcement, you know, where are you leading 1, way, or the other now,

Liam Kelly: We have done, as I said a little bit earlier, a lot of work regarding the financial outlook of both businesses, identifying some of the key internal leadership that will lead the management presentations, many NDAs signed, which should accelerate the due diligence because that in itself can normally take two weeks to get that done. Front-loading these management meetings was actually strategically a good move because it gets us moving in the right direction. We will do whatever unlocks the most shareholder value. That is our north star and our guiding principle. Whether it is a sale or a spin, we have very complex models working with independent.

So we we, we didn't actually give any leaning at the time of the announcement. Actually, when we announced, we only announced a, a spin. And as we went through the process, we got significant inbound interest. And as I said, a little bit earlier, we are encouraged, uh, by the amount of inbound interest that that we have received. I can tell the investment Community, our Focus remains on unlocking shareholder value. I can also tell you that we have been working incredibly hard. Uh, we are not sitting in our hands and I guess the most significant update we gave on the call, was we have had many preliminary management meetings uh, with interested parties. And we've done, as I said a little bit earlier, we've done a lot of work. Uh, in regarding uh, the financial Outlook of both businesses. Uh, identifying some of the key internal leadership that will lead the management presentations, uh, many NDA signed, which should accelerate, uh, the due diligence because that in itself can normally take

Liam Kelly: third parties to help us work through this. We know what our tax basis is. We have a really good understanding as to what the spin would generate to shareholders. Now it's just a question of going through the process of the parallel path and get to an outcome that would be in the best interests of our shareholders.

2 weeks to get that done. So front loading, these management meetings was actually a strategically a good move, because it gets us moving in the right direction. Uh, we will do whatever unlocks the most shareholder value. That is our Northstar in our guiding principle and whether it's a sale or a spin, uh, we have very complex models, working with independent, third parties, to help us work through this. We know what our tax bases is. Uh, we have a really good understanding as to what the spin would generate.

To shareholders. So now it's just a question of going through the process of of the the the parallel path and get to an outcome, uh, that would be in the best interest of our shareholders.

Lawrence Keusch: Perfect. Thank you. If I could sneak in one more on the proposed rule specifically from CMS and Urology. I think you said that UroLift is up 9% to 10% in the office. I know that it was expected that UroLift would get back to growth next year with these reimbursement changes. I just want to confirm that that is still the thinking.

Liam Kelly: Samantha, getting a 10% proposed rule uplift is definitely going to help that hypothesis as we head into 2026. As I said a little bit earlier, where we have had a lot of pressure, as everybody knows, in the office side of service, that 10% lift would result in a nice uptick for the doctor. We will work through this, and we will work with our customer base diligently to position for improvements into 2026. Samantha, you are absolutely right. This is incredibly encouraging. It is a proposed rule. I am hopeful that it will become the rule in the beginning of the new year. If so, it will definitely be more of a help and not a hindrance to UroLift in all sites of service.

That that's that's still the thinking.

Well, Samantha getting a 10% proposed rule. Uplift is definitely going to help that hypothesis as we head into 2026. As I said a little bit earlier and the where we've had a lot of pressure is everybody knows in the office side of service uh that that 10% lift would result in a nice uptick uh, from from the, the, the, the uptick for the doctor. Um, we we will work through this and we will work with our customer base, uh, diligently to position for improvements into 2026, but Samantha, you're right, this is incredibly encouraging, it's a proposed rule. I'm hopeful that it'll become the rule uh, in in the beginning of the new year and if so, uh, it will, it will definitely be more of. It will definitely be a help and not a hindrance to urolift in all sites of service.

Lawrence Keusch: Once again, if you have a question, it is star one on your telephone keypad. Our next question comes from Michael Polark with Wolfe Research. Your line is open.

Once again, if you have a question, it is star 1 on your telephone keypad. Our next question comes from Michael Polar with Wolf Research. Your line is open.

Liam Kelly: Good morning. Thank you. I will follow up on that thread, but on Barrigel, Liam, the proposed office increase sounded significant. What is the site of service mix for Barrigel today? With a different economic incentive, what do you think it could be?

Good morning, thank you. Um, I'll follow up on that thread. Um, but on behalf of Liam, the the office

The proposed office increased sounded significant. What is the site of service mix for Barrigel today? And, you know, with a different economic incentive, what do you think it could be?

Liam Kelly: We do not break down the site of service, Mike, for Barrigel, but I can tell you that it is spread across all of those three sites of service. I think that the uplift in all sites of service is very encouraging. I think that the office uplift may move some product to that site over time. That in itself is encouraging for us because we have a very strong call point into that site of service. I do think that it is a recognition by CMS how important spacing is when men are going through radiation therapy. I think it is a reflection of the benefits of spacing in that regard.

Um, we don't break down the site of service Mike um for for for bar gels. Uh, but I can tell you that it is spread across all of those 3 sites of service. Um uh and I think that the the the uplift in all sites of service I think is very encouraging. Um I I think that the uh office uplift may move some product to that that site over time uh that in itself is encouraging um for us because we have a very strong call Point into that site of service. Uh and uh I do think that it is a recognition. I think by CMS how important spacing is when men are going through

A a a radiation therapy and and it's, I think it's a reflection of the benefits of spacing in that, in that regard.

Liam Kelly: Helpful. If I can follow up maybe for John. John, I think you mentioned in the tariff mitigation strategy section, you would look to implement increased customer pricing as contracts come up for renewal to attempt to offset some of the tariff-driven pressure. I guess any early feel for how that may go? I mean, I know the industry broadly will probably consider a strategy like this. Hospitals seemingly have been amenable to positive price adjustments over the last couple of years on the heels of the COVID era inflation wave. I am just curious if you think it will be similar in response to tariffs or if you are sensing any early pushback on that front. Thank you for any comments on that one. Thank you.

Helpful. Um, if I can follow up, maybe for John John, I think you mentioned in the um, tariff mitigation strategy section. Um, you know, you would look to implement increased customer pricing as contracts come up for Renewal to to attempt to offset. Um, some of the Tariff driven pressure, I guess any early feel for for how that may go. I mean, I know the industry probably will, will probably consider a strategy like this hospitals.

um,

seemingly have been amenable to to positive price, adjustments over the last couple years on the heels of

the um,

John Deren: Yeah, I mean, it's certainly, you know, kind of in the early stages. We don't expect much impact in 2025. We will be able to guide a little further as we get to our 2026 guidance as to what we think the year looks like. We have a view of where we think we could increase price as appropriate across not just the United States, but elsewhere. There is some, you know, timing that will cause it to take place a little slower than we would have liked. I think in 2026 will be really that larger opportunity. I wouldn't expect significant pushback in what we expect to propose.

Co era inflation. Wave I'm just curious. If you think it'll be similar, uh, in response to tariffs or, or if you're something any any early push back on that front. Um, thank you for any comments on that 1. Thank you. Yeah. I mean it's a certainly, uh, you know, kind of in the, we're on the early stages, you know, we don't expect much impact in 2025 and we'll be able to guide a little further as we, you know, get to our 2026 guidance. As to what we think the year looks like we, we have a view, um, of where we think we could increase price as appropriate across the um, uh, cross. Just not just the United States but elsewhere. Um, and and and, and and there is some, you know, timing that will that will cause it to take place a little slower than we would have liked, but I think in 2026 we'll be really that that larger opportunity. Um, uh, I wouldn't expect significant push back in what we we we expect to propose.

Lawrence Keusch: Our next question comes from Mike Matson with Needham. Your line is open.

Liam Kelly: Yeah, thanks for taking my questions. Now that you've closed the Biotronic deal, I was wondering if you could provide us some insight into the Salesforce integration there. How much overlap is there with the existing interventional Salesforce? How long do you expect the integration effort to take? What's the risk of disruption there?

Our next question comes from Mike Matson with nem. Your line is open.

Yeah, thanks for taking my questions. Um, so just now that you've closed the Byronic deal,

Liam Kelly: Yeah, absolutely, Mike. Thanks for the question. So, if you look at the breakdown of the BI revenue, around 50% of it is in the EMEA, 25% in the Americas, and 25% in APAC. That in itself represents a significant opportunity to drive accelerated revenue growth by leveraging those channels. If you look at our business, it is much stronger in the Americas, good business in Europe, and weaker in Asia Pacific. So, it gives us an opportunity, as I said a little bit earlier, to help in gaining access to the catalog for the products in the Americas. It also helps with the strength of the organization in EMEA to merge that and the product portfolio. We will end up with a larger Salesforce across the board selling all of our products into these markets.

I was wondering if you could provide us some insight into the the Salesforce integration there. Uh, you know, how much overlap is there with the existing, uh, Interventional Salesforce uh, how long do you expect the integration effort to take and what's the the risk of disruption there?

Liam Kelly: We do see an opportunity for revenue synergies being driven by the combination of these two businesses together.

Liam Kelly: Okay, got it. Just one on Titan. What are you seeing more recently with bariatric surgery? Are volumes still declining there? More specifically, what are you seeing with Titan? I know it is probably doing better than overall bariatric volumes, given that it is kind of in a market penetration story.

It gives us an opportunity as I said a little bit earlier to help in gaining access to the catalog for the biotronik products, in the Americas. It also helps uh, with the strength of the biotronik organization, uh, in emea, to merge that and the product portfolio and we will end up with a larger sales, force across the board selling, all of our products into these markets and we do see an opportunity for Revenue, uh, synergies being driven by the combination of these 2 businesses together.

Liam Kelly: Mike, we should expect them to grow double digits this year as we continue to take share. We are seeing declines in bariatric surgery in the marketplace. It is clearly the impact of GLP-1s is having an impact there. That is only impacting the impact of our product on the margins as we continue to penetrate the market. I think that the clinical evidence that we have been generating is really helpful. We are able to show a reduction in GERD. We are also able to show a reduction in hospital stay and equal, if not better, clinical outcomes following the procedure. It is still the only single line staple product in the market, which gets symmetry of outcomes when you are doing gastric sleeves and bariatric surgery. We still remain encouraged by what we are seeing with Titan.

Okay, got it and then just 1 on on Titan. So, um, you know, what are you seeing? Um, more recently with berat surgery, is it still or volume is still declining there and, you know, work specifically, what are you seeing with, with Titan? I mean, is it? I, I know it's probably doing better than overall beri volumes just given that it's kind of an, you know, bark at penetration story. But,

Yeah, Mike, we're still expecting to grow double digits this year, um, as we continue to take share, but we are seeing declines in bariatric surgery, uh, in the marketplace. It it's clearly the impact of glp-1, uh, is having an impact there, uh, but that is, uh, only impacting the, the impact of our product on the margins. Uh, as we continue to penetrate the market, I think that the clinical evidence that we've been generating is really helpful uh, where we're able to show a reduction in gird. We're also able to show a reduction in the hospital.

Liam Kelly: You are correct, there is pressure in that market because of the rollout of GLP-1s.

Hospital stay and and equal. If not better clinical outcomes. Uh, following the procedure, it is still the only only single line staple product in the market, uh, which gets symmetry of of outcomes. Uh, when you're doing barrier a gastric sleeves and bariatric surgery. So still remain encouraged by what we're seeing with Titan, but, you're correct. There is pressure in that market because of the, the, the roll out of glp ones.

Lawrence Keusch: That is all the time we have for questions. I will now turn the call to Lawrence Keusch for closing remarks.

That is all the time we have for questions. I will now turn the call over to Lauren Cures for closing remarks.

Operator: Thank you, Sarah. Thank you to everyone that joined us on the call today. This concludes the Teleflex Incorporated second quarter 2025 earnings conference call.

Lawrence Keusch: Thank you. You may now disconnect your lines.

Uh thank you, uh, Sarah. And thank you to everyone that joined us on the call today. This concludes the Teleflex Incorporated second quarter 2025 earnings conference call.

Matthew O'brien: Please wait. The conference will begin shortly.

Please wait the conference will begin shortly.