Q1 2026 Teleflex Inc Earnings Call

May 7, 2026

Operator 2: Good morning, ladies and gentlemen, welcome to the Teleflex Q1 2026 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. Now I will turn the call over to Mr. Lawrence Keusch, Vice President of Investor Relations and Strategy Development. You may begin.

Operator: Good morning, ladies and gentlemen, welcome to the Teleflex Q1 2026 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. Now I will turn the call over to Mr. Lawrence Keusch, Vice President of Investor Relations and Strategy Development. You may begin.

Speaker #1: 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 Keusch, Vice President of Investor Relations and Strategy Development. You may begin.

Speaker #2: Good morning, everyone, and welcome to the Teleflex Incorporated First Quarter 2026 Earnings Conference Call. The press release and slides to accompany this call are available on our website at teleflex.com.

Lawrence Keusch: Good morning, everyone, and welcome to the Teleflex Incorporated Q1 2026 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 Stuart Randle, Interim President and Chief Executive Officer, and John Deren, Executive Vice President and Chief Financial Officer. Stu and John will provide prepared remarks, and then we will open the call to Q&A. Before we begin, I'd like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in the slides posted to the investor relations section of the Teleflex website.

Lawrence Keusch: Good morning, everyone, and welcome to the Teleflex Incorporated Q1 2026 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 Stuart Randle, Interim President and Chief Executive Officer, and John Deren, Executive Vice President and Chief Financial Officer. Stu and John will provide prepared remarks, and then we will open the call to Q&A. Before we begin, I'd like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in the slides posted to the Investor Relations section of the Teleflex website.

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 details.

Speaker #2: Participating on today's call are Stuart Randall, Interim President and Chief Executive Officer; and John Deren, Executive Vice President and Chief Financial Officer. Stu and John 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 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.

Lawrence Keusch: 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 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 Stu for his remarks.

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 10-K, which can be accessed on our website.

Speaker #2: Now, I'll turn the call over to Stu for his remarks.

Speaker #3: Thank you, Larry, and good morning, everyone. Before I review the First Quarter 2026 results, I will provide an update on our strategic objectives, and our commitment to maximize long-term shareholder value.

Stuart Randle: Thank you, Larry. Good morning, everyone. Before I review the first quarter 2026 results, I will provide an update on our strategic objectives and our commitment to maximize long-term shareholder value. Teleflex has made demonstrable progress optimizing its portfolio and positioning the company for the meaningful opportunities ahead of us. In July 2025, we completed the acquisition of Biotronik's vascular intervention business, expanding our coronary intervention portfolio and establishing a global footprint in the fast-growing peripheral intervention market. In December 2025, we announced agreements to sell the acute care, interventional urology, and OEM businesses as part of our overall transformation plan, creating a more focused medical technologies leader with a higher forward revenue CAGR, greater exposure to core critical care and high acuity hospital markets, and a more focused portfolio across vascular access, interventional, and surgical.

Speaker #3: Teleflex has made demonstrable progress optimizing its portfolio and positioning the company for the meaningful opportunities ahead of us. In July 2025, we completed the acquisition of Biotronix Vascular Intervention Business, expanding our coronary intervention portfolio and establishing a global footprint in the fast-growing peripheral intervention market.

Speaker #3: In December 2025, we announced agreements to sell the acute care interventional urology and OEM businesses, as part of our overall transformation plan, creating a more focused medical technologies leader with a higher forward revenue CAGR, greater exposure to core critical care and high acuity hospital markets, and a more focused portfolio across vascular access, interventional, and surgical.

Speaker #3: These strategic investment shares remain on track to close in the second half of 2026. On OEM, we reached an important milestone in March when the hard Scott Rodina waiting period expired.

Stuart Randle: These strategic divestitures remain on track to close in H2 2026. On OEM, we reached an important milestone in March when the Hart-Scott-Rodino waiting period expired. We are focused on completing the remaining closing conditions with a target of closing in Q3 2026. Separately, in March, Teleflex and the buyer of the acute care and interventional urology businesses each received a second request for additional information from the US Federal Trade Commission. We are cooperating with the FTC and continue to expect that transaction to close in H2 2026. We remain committed to using the proceeds from the divestitures to fund a share repurchase program of up to $1 billion and to reduce debt by $800 million, reflecting our disciplined approach to capital allocation and our focus on enhancing shareholder value and financial flexibility.

Speaker #3: We are focused on completing the remaining closing conditions with a target of closing in the third quarter of 2026. Separately, in March, Teleflex and the buyer of the acute care and interventional urology businesses each received a second request for additional information from the U.S.

Speaker #3: Federal Trade Commission. We are cooperating with the FTC and continue to expect that transaction to close in the second half of 2026. We remain committed to using the proceeds from the divestitures fund to share repurchase program of up to $1 billion and to reduce debt by $800 million.

Speaker #3: Reflecting our disciplined approach to capital allocation, and our focus on enhancing shareholder value and financial flexibility. We now expect to begin opportunistic share repurchases in the open market during the second quarter of this year, ahead of the previously anticipated timing of following the completion of the strategic divestitures.

Stuart Randle: We now expect to begin opportunistic share repurchases in the open market during the Q2 of this year, ahead of the previously anticipated timing of following the completion of the strategic divestitures. This action reflects our confidence in the value of the business, the progress we are making on our transformation plan, and our commitment to disciplined capital allocation and long-term shareholder value creation. Teleflex is also making progress on its strategic priorities, which include driving durable performance and building a clear financial profile through improved margins, lower interest expense, and stronger adjusted earnings per share over time. In the Q1, we met or exceeded our internal expectations for revenues, margins, and adjusted EPS. Pro forma adjusted constant currency growth increased 5.1%, while adjusted operating margin was 18.1%.

Speaker #3: This action reflects our confidence in the value of the business, the progress we are making on our transformation plan, and our commitment to disciplined capital allocation and long-term shareholder value creation.

Speaker #3: Teleflex is also making progress on its strategic priorities which include driving durable performance and building a clear financial profile through improved margins, lower interest expense, and stronger adjusted earnings per share over time.

Speaker #3: In the first quarter, we met or exceeded our internal expectations for revenues, margins, and adjusted EPS. Pro forma adjusted constant currency growth increased 5.1%, while adjusted operating margin was transactions and delivering on our financial objectives for 2026, as well as building further momentum to drive sustainable growth and operating leverage.

Stuart Randle: We've remained focused on closing the sale transactions and delivering on our financial objectives for 2026, as well as building further momentum to drive sustainable growth and operating leverage. As previously announced, we launched a multi-year restructuring plan that is expected to achieve approximately $50 million in annual pre-tax cost savings upon completion in mid-2028. Restructuring activities, which are on track, began in Q1 2026, and savings are expected to accelerate in H2 of the year. In April, Teleflex announced governance changes, including the nomination of Michael J. Tokich, former Senior Vice President and Chief Financial Officer of STERIS, to the board of directors, as well as the intent to establish a new growth and operating committee of the board. These actions reflect our continued focus on strong governance, thoughtful oversight, and long-term performance.

Speaker #3: As previously announced, we launched a multi-year restructuring plan that is expected to achieve approximately $50 million in annual pre-tax cost savings upon completion in mid-2028.

Speaker #3: The restructuring activities, which are on track, began in the first quarter of 2026, and savings are expected to accelerate in the second half of the year.

Speaker #3: In April, Teleflex announced governance changes including the nomination of Michael J. Tokich, former Senior Vice President and Chief Financial Officer of STARIS, to the Board of Directors, as well as the intent to establish a new growth and operating committee of the board.

Speaker #3: These actions reflect our continued focus on strong governance, thoughtful oversight, and long-term performance. Additionally, we announced that Dr. Stephen Klasko and John Heinmiller will conclude their respective terms on the board, and our upcoming annual stockholders meeting.

Stuart Randle: Additionally, we announced that Dr. Stephen Klasko and John Heitmiller will conclude their respective terms on the board at our upcoming annual stockholders' meeting. Dr. Klasko recently accepted a new significant healthcare leadership role, and Mr. Heitmiller is pursuing other professional interests. On behalf of the board, I want to thank Steve and John for their meaningful contributions and dedication to Teleflex over their many years of service, and wish them well in their future endeavors. Effective following the annual meeting, Andrew Krakauer, who currently serves as the chair of the board's comp committee, will succeed Steve as chair of the board. Andy has served as a director of Teleflex since 2018.

Speaker #3: Dr. Klasko recently accepted a new significant healthcare leadership role and Mr. Heinmiller is pursuing other professional interests. On behalf of the board, I want to thank Steve and John for the meaningful contributions and dedication to Teleflex over their many years of service, and wish them well in their future endeavors.

Speaker #3: Effective following the annual meeting, Andrew Krakauer, who currently serves as the chair of the board's comp committee, will succeed Steve as chair of the board.

Speaker #3: Andy has served as the director of Teleflex since 2018. He previously served as CEO and board member of Cantell Medical Corporation, from 2009 to 2016.

Stuart Randle: He previously served as CEO and board member of Cantel Medical Corp. from 2009 to 2016, which was an NYSE-listed provider of infection control products and services during his tenure. Taken together, these actions reflect a more focused portfolio, stronger governance, disciplined capital allocation, and a clear path to value creation. We believe they position Teleflex to deliver improved execution and stronger long-term performance. Finally, I want to welcome Jason Weidman as Teleflex's next president and CEO, effective 8 June. Jason is a proven medical technology leader with more than 25 years of industry experience and a strong track record of building and scaling businesses globally. His deep medical technology expertise and proven track record of driving growth, innovation, and operational execution make him well suited to lead Teleflex to its next chapter and help accelerate the opportunities ahead.

Speaker #3: Which was an NYSE listed provider of infection control products and services during his tenure. Taken together, these actions reflect a more focused portfolio, stronger governance, disciplined capital allocation, and a clear path to value creation.

Speaker #3: And we believe they position Teleflex to deliver improved execution and stronger long-term performance. Finally, I want to welcome Jason Weidman as Teleflex's next President and CEO, effective June 8th.

Speaker #3: Jason is a proven medical technology leader with more than 25 years of industry experience and a strong track record of building and scaling businesses globally.

Speaker #3: His deep medical technology expertise, and proven track record of driving growth, innovation, and operational execution make him well suited to lead Teleflex through its next chapter.

Speaker #3: And help accelerate the opportunities ahead. It has been an honor to lead Teleflex as interim president and CEO, and I look forward to continuing to support the company as a member of the board.

Stuart Randle: It has been an honor to lead Teleflex as interim president and CEO. I look forward to continuing to support the company as a member of the board. Now moving to our Q1 continuing operations results and updated financial guidance for 2026. All growth rates that I refer to are on a year-over-year pro forma adjusted constant currency basis, unless otherwise noted. Pro forma adjusted constant currency growth for 2026 excludes the impact of foreign exchange, the Italian payback measure in H2 2025 of $9 million, and the impact of approximately $14 million in continuing operations product revenue that was discontinued at the end of 2025 due to a strategic realignment. It includes revenue generated by the acquired vascular intervention business for the prior full year period.

Speaker #3: Now moving to our first quarter continuing operations results and updated financial guidance for 2026. All growth rates that I referred to on a year-over-year pro forma adjusted constant currency basis when this otherwise noted.

Speaker #3: Pro forma adjusted constant currency growth for 2026 excludes the impact of foreign exchange, the Italian payback measure in the second half of 2025 of $9 million, and the impact of approximately $14 million in continuing operations product revenue that was discontinued at the end of 2025 due to a strategic realignment.

Speaker #3: But it includes revenue generated by the acquired vascular intervention business for the prior full year period. All comments are related to the continuing operations for the first quarter of 2026.

Stuart Randle: All comments are related to the continuing operations for Q1 of 2026. For Q1, Teleflex revenues were $548.3 million, up 32.3% year over year on a GAAP basis, and an increase of 5.1% on a pro forma adjusted constant currency basis. In the quarter, we demonstrated strong execution and, to a lesser extent, also benefited from some timing of orders in our surgical instrument portfolio. Q1 adjusted earnings per share was $1.39, a 3.5% decrease year over year. Early in Q2, we were notified that 2 third-party product suppliers had initiated recalls for certain components included in some of our vascular and interventional kits. We have identified actions to return our products to market and have a remediation program underway.

Speaker #3: For the first quarter, Teleflex revenues were $548.3 million, up 32.3% year-over-year on a gap basis. And an increase of 5.1% on a pro forma adjusted constant currency basis.

Speaker #3: In the quarter, we demonstrated strong execution and to a lesser extent also benefited from some timing of orders in our surgical instrument portfolio. First quarter adjusted earnings per share was $1.39, a 3.5% decrease year-over-year.

Speaker #3: Earlier in the second quarter, we were notified that two third-party product suppliers had initiated recalls for certain components included in some of our vascular and interventional kits.

Speaker #3: We have identified actions to return our products to market, and have a remediation program underway. We have included the necessary estimated cost provision within our first quarter results to remediate our current product stock.

Stuart Randle: We have included the necessary estimated cost provision within our Q1 results to remediate our current product stock. Although the actions for the remediation may result in some elevated back orders at the end of the Q2, we do not currently believe that there will be a significant impact on our full year 2026 revenue guidance as we continue to focus on serving the needs of our customers. Let's turn to a deeper dive into our Q1 revenue performance. I will begin with a review of our revenues by global product category for the Q1. Starting with vascular, revenue increased 4.8% year over year to $236.8 million, was primarily driven by growth in our hemostatic products in our central venous and other access portfolio.

Speaker #3: Although the actions for the remediation may result in some elevated back orders at the end of the second quarter, we do not currently believe that there will be a significant impact on our full year 2026 revenue guidance as we continue to focus on serving the needs of our customers.

Speaker #3: Now let's turn to a deeper dive into our first quarter revenue performance. I will begin with a review of our revenues by global product category for the first quarter.

Speaker #3: Starting with vascular revenue increased 4.8% year-over-year to $236.8 million, with primarily driven by growth in our hemostatic products and our central venous and other access portfolio.

Speaker #3: Moving to interventional, revenue was $204.7 million, an increase of 3%. Performance for the quarter was driven by intraosseous right heart catheters and complex catheters.

Stuart Randle: Moving to interventional, revenue was $204.7 million, an increase of 3%. Performance for the quarter was driven by intraosseous, right heart catheters, and complex catheters. We are continuing our integration of the vascular interventional business, which closed early in Q3 2025. In Q1, the sales forces of the legacy Teleflex interventional and vascular intervention businesses were combined. As expected, we have experienced some disruption from the integration and restructuring activities, we continue to anticipate improving momentum in H2 of the year based on our expanded presence and cross-selling opportunities in the cath lab. As part of our commitment to increasing R&D investment for innovative new technologies, we continue to advance our clinical study for the Freesolve drug-eluting resorbable magnesium scaffold technology.

Speaker #3: We are continuing our integration of the vascular intervention business, which closed early in the third quarter of 2025. In the first quarter, the sales forces of the legacy Teleflex Interventional and Vascular Intervention businesses were combined.

Speaker #3: As expected, we have experienced some disruption from the integration and restructuring activities. But we continue to anticipate improving momentum in the second half of the year based on our expanded presence and cross-selling opportunities in the cath lab.

Speaker #3: As part of our commitment to increasing R&D investment for innovative new technologies, we continue to advance our clinical study for the FreeSolve drug-eluting resorbable magnesium scaffold technology.

Speaker #3: FreeSolve's combination of temporary scaffolding with drug delivery has anticipated to address the current trend in interventional cardiology and endovascular procedures towards leaving nothing behind.

Stuart Randle: Freesolve's combination of temporary scaffolding with drug delivery is anticipated to address the current trend in interventional cardiology and endovascular procedures towards leaving nothing behind. Recruitment for the BIOMAG-II study, which is a European pivotal trial for Freesolve, continues to outpace our assumption for the study, positioning us for a late 2027 data readout. We intend to expand our regulatory pathway for Freesolve in additional geographies, including the initiation of the BIOMAG-III pivotal trial in the US during 2026. In our surgical business, revenue was $106.8 million, an increase of 9.9%, which was primarily driven by strong performance in our ligation clip and some timing of orders in our instrument portfolio. Instrument orders can be lumpy quarter to quarter. We anticipate some moderation of growth in the Q2. That completes my comments on the Q1 revenue performance.

Speaker #3: Recruitment for the Biomag 2 study, which is a European pivotal trial for FreeSolve, continues to outpace our assumption for the study. Positioning us for a late 2027 data readout.

Speaker #3: We intend to expand our regulatory pathway for FreeSolve and additional geographies, including the initiation of the Biomag 3 pivotal trial in the US during 2026.

Speaker #3: In our Surgical business, revenue was $106.8 million, an increase of 9.9%, which was primarily driven by strong performance in our ligation clip and some timing of orders in our instrument portfolio.

Speaker #3: Instrument orders can be lumped in quarter to quarter. We anticipate some moderation of growth in the second quarter. That completes my comments on the first quarter revenue performance.

Speaker #3: Now I'd like to turn the call over to John for more detailed review of our financial results. John.

Stuart Randle: Now I'd like to turn the call over to John for a more detailed review of our financial results. John?

Speaker #1: Thanks, Stu, and good morning. All results that I speak to will be on a continuing operations basis for 2026. Due to the reclassification of discontinued operations, historic continuing operations reflects the impact of stranded costs in all periods presented.

John Deren: Thanks, Stu, and good morning. All results that I speak to will be on a continuing operations basis for 2026. Due to the reclassification to discontinued operations, historic continuing operations reflects the impact of stranded costs in all periods presented. Given Stu's previous discussion of revenue, I'll begin with margins. For Q1 2026, adjusted gross margin was 61.4%. The 470 basis point decrease year over year was primarily due to the adverse impact of tariffs, quality remediation charges primarily associated with the third-party supplier disruption, as Stu mentioned earlier, higher logistics and distribution costs, and the addition of the vascular intervention acquisition, which has a slightly lower gross margin than the corporate average. Q1 2026 adjusted operating margin was 18.1%.

Speaker #1: Given Stu's previous discussion of revenue, I'll begin with margins. For the first quarter of 2026, adjusted gross margin was 61.4%. The $470 basis point decrease year-over-year was primarily due to the adverse impact of tariffs, quality remediation charges primarily associated with the third-party supplier disruption as Stu mentioned earlier, higher logistics and distribution costs, and the addition of the vascular intervention acquisition, which has a slightly lower gross margin than the corporate average.

Speaker #1: First quarter 2026 adjusted operating margin was 18.1%. The $510 basis point decrease reflected the year-over-year gross margin pressure, higher operating expenses associated with the acquisition of the vascular intervention business, as well as increased R&D investment partially offset by the positive impact of foreign exchange rates.

John Deren: The 510 basis point decrease reflected the year-over-year gross margin pressure, higher operating expenses associated with the acquisition of the vascular intervention business, as well as increased R&D investment, partially offset by the positive impact of foreign exchange rates. Adjusted net interest expense totaled $24 million for Q1, as compared to $17 million in the prior year period. The year-over-year increase is primarily due to the borrowings used to finance the vascular intervention acquisition. Our adjusted tax rate for Q1 of 2026 is 18.3% as compared to 16.4% in the prior year. The year-over-year increase is primarily due to higher tax expense associated with stock-based compensation. At the bottom line, Q1 adjusted earnings per share was $1.39, representing a 3.5% decrease year over year.

Speaker #1: Adjusted net interest expense totaled $24 million for the first quarter as compared to $17 million in the prior year period. The year-over-year increase is primarily due to the borrowings used to finance the vascular intervention acquisition.

Speaker #1: Our adjusted tax rate for the first quarter of 2026 is 18.3% as compared to 16.4% in the increase is primarily due to higher tax expense associated with stock-based compensation.

Speaker #1: At the bottom line, first quarter adjusted earnings per share was $1.39, representing a 3.5% decrease year-over-year. The year-over-year decrease is primarily due to tariffs, higher interest expense, partially offset by higher revenue and adjusted operating income, including the impact of the vascular intervention acquisition and higher R&D spending and a lower share count.

John Deren: The year-over-year decrease is primarily due to tariffs, higher interest expense, partially offset by higher revenue and adjusted operating income, including the impact of the vascular intervention acquisition and higher R&D spending and a lower share count. At the end of Q1, our cash equivalents and restricted cash equivalents balance was $329.6 million, as compared to $402.7 million as of year-end 2025. Net leverage at the quarter end was approximately 2.5 times. Now turning to our financial guidance. As we have previously indicated, 2026 results include a number of transient factors related to our strategic divestitures that will impact our near-term results, which we expect to mitigate with the close of both transactions.

Speaker #1: At the end of the first quarter, our cash equivalents and restricted cash equivalents balance was $329.6 million, as compared to $402.7 million as of year-end 2025.

Speaker #1: Net leverage at the quarter end was approximately 2.5 times. Now turning to our financial guidance. As we have previously indicated, 2026 results include a number of transient factors related to our strategic divestitures that will impact our near-term results, which we expect to mitigate with the close of both transactions.

Speaker #1: Therefore, we anticipate 2027 will be a more reflective of the underlying business going forward, ultimately building a clearer financial profile with significant improvements in margins, interest expense, and adjusted earnings per share.

John Deren: We anticipate 2027 will be a more reflective of the underlying business going forward, ultimately building a clearer financial profile with significant improvements in margins, interest expense, and adjusted earnings per share. With that context, I will review the items that will impact our 2026 results. First, our 2026 guidance reflects the fully burdened cost structure for RemainCo, inclusive of approximately $90 million of stranded costs, but does not include any positive impacts from the TSA or MSAs. Secondly, the exact timing of the closing of the strategic divestitures will pace our ability to deploy capital in 2026. As a reminder, we expect to receive net proceeds of approximately $1.8 billion after tax from the divestitures.

Speaker #1: With that context, I will review the items that will impact our 2026 results. First, our 2026 guidance reflects the fully burdened cost structure for remainco, inclusive of approximately $90 million of stranded costs.

Speaker #1: But does not include any positive impacts from the TSA or MSAs. Secondly, the exact timing of the closing of the strategic divestitures will pace our ability to deploy capital in 2026.

Speaker #1: As a reminder, we expect to receive net proceeds of approximately $1.8 billion after tax from the divestitures. We remain committed to returning significant capital to shareholders through our previously announced $1 billion share repurchase authorization, and our intention to repay $800 million in debt with the remaining proceeds from the strategic divestitures.

John Deren: We remain committed to returning significant capital to shareholders through our previously announced $1 billion share repurchase authorization and our intention to repay $800 million in debt with the remaining proceeds from the strategic divestitures. As previously disclosed, we expect to begin opportunistic share repurchases under the existing $1 billion authorization in the open market during Q2. Any such repurchases will be subject to prevailing market conditions and the company's operating cash flow needs. As we look forward to 2027 and beyond, we anticipate these capital deployment actions, in combination with the impacts of the TSA and MSA arrangements and our efforts to further mitigate stranded costs and right-size the organization, will result in a significant increase in both our operating income and margins as well as our adjusted EPS. Moving to an update on our 2026 guidance.

Speaker #1: As previously disclosed, we expect to begin opportunistic share repurchases under the existing $1 billion authorization in the open market during the second quarter. Any set repurchases will be subject to prevailing market conditions and the company's operating cash flow needs.

Speaker #1: As we look forward to 2027 and beyond, we anticipate these capital deployment actions in combination with the impacts of the TSA and MSA arrangements and our efforts to further mitigate stranded costs and right-size the organization, will result in a significant increase in both our operating income and margins, as well as our adjusted EPS.

Speaker #1: Moving to an update on our 2026 guidance. Please note that our 2026 guidance is provided on a continuing operations basis, excludes the acute care interventional urology and OEM businesses.

John Deren: Please note that our 2026 guidance is provided on a continuing operations basis, excludes the acute care, interventional urology, and OEM businesses. We continue to expect pro forma adjusted constant currency revenue growth for 2026 to be in the range of 4.5% to 5.5%. Turning to adjusted earnings per share, we continue to expect a range of $6.25 to $6.55 in 2026. Our guidance does not include the anticipated positive impact from our announced plans to repurchase $1 billion of our common stock and repayment of debt, which will be primarily funded with the proceeds from the strategic divestitures. We anticipate these actions will result in a meaningfully lower share count and significantly reduced interest expense in 2027 and beyond.

Speaker #1: We continue to expect pro forma adjusted constant currency revenue growth for 2026 to be in the range of 4.5% to 5.5%. Turning to adjusted earnings per share, we continue to expect a range of $6.25 to $6.55 in 2026.

Speaker #1: Our guidance does not include the anticipated positive impact from our announced plans to repurchase $1 billion of our common stock and repayment of debt, which will be primarily funded with the proceeds from the strategic divestitures.

Speaker #1: We anticipate these actions will result in a meaningfully lower share count and significantly reduced interest expense in 2027 and beyond. Although we have not included the benefits of these actions in our 2026 adjusted EPS guidance, we continue to anticipate closing the strategic divestitures in the second half of 2026 with the OEM transaction expected to close in the third quarter.

John Deren: Although we have not included the benefits of these actions in our 2026 adjusted EPS guidance, we continue to anticipate closing the strategic divestitures in H2 2026, with the OEM transaction expected to close in Q3. Taken together, we expect these factors will contribute to significantly higher adjusted EPS beginning in 2027. For modeling purposes, you should consider the following. The impact of foreign exchange for 2026 is still expected to be approximately $14 million. We continue to expect our 2026 adjusted operating margin to be approximately 19%, which reflects the full impact of approximately $90 million in stranded costs associated with the separation activities and no offsetting benefit from the TSA and MSA arrangements during 2026.

Speaker #1: Taken together, we expect these factors will contribute to a significantly higher adjusted EPS beginning in 2027. Additionally, for modeling purposes, you should consider the following.

Speaker #1: The impact of foreign exchange for 2026 is still expected to be approximately $14 million. We continue to expect our 2026 adjusted operating margin to be approximately 19%, which reflects the full impact of approximately $90 million in stranded costs associated with the separation activities and no offsetting benefit from the TSA and MSA arrangements during 2026.

Speaker #1: In addition, I would also note that our 2026 operating margin is inclusive of R&D investment of approximately 8% of sales. Of note, when taking into account the positive impacts of the TSA and MSA arrangements, in terms of reducing the operating expense profile for continued operations, we estimate that our underlying steady-state adjusted operating margin will be approximately 23%, which is 400 bips above our fully burdened adjusted operating margin guidance for 2026.

John Deren: In addition, I would also note that our 2026 operating margin is inclusive of R&D investment of approximately 8% of sales. Of note, when taking into account the positive impacts of the TSA and MSA arrangements in terms of reducing the operating expense profile for continued operations, we estimate that our underlying steady-state adjusted operating margin will be approximately 23%, which is 400 basis points above our fully burdened adjusted operating margin guidance for 2026. Looking forward, we see opportunities over the next several years to improve adjusted operating margin through operating leverage from revenue growth and other cost savings initiatives above our steady-state operating margin profile of approximately 23%. Moving to assumptions below the line. Net interest expense is expected to approximately $105 million for full year 2026.

Speaker #1: Looking forward, we see opportunities over the next several years to improve adjusted operating margin through operating leverage from revenue growth and other cost savings initiatives above our steady-state operating margin profile of approximately 23%.

Speaker #1: Moving to assumptions below the line. Net interest expense is expected to approximately 105 million for a full year 2026. Our estimate reflects the refinancing of a $500 million in 4 and 5/8 senior notes, which are due in November 2027, and does not assume any debt paydown associated with the after-tax proceeds from the strategic divestitures.

John Deren: Our estimate reflects the refinancing of our $500 million in four and five eight senior notes, which are due in November 2027, and does not assume any debt paydown associated with the after-tax proceeds from the strategic divestitures. We continue to expect our tax rate to be approximately 13.5% in 2026. That concludes my prepared remarks. I would now like to turn it back to Stu for closing commentary.

Speaker #1: Finally, we continue to expect our tax rate to be approximately 13.5% in 2026. That concludes my prepared remarks. I would now like to turn it back to Stu for closing commentary.

Speaker #2: Thanks, John. In closing, I will highlight our three key takeaways from the first quarter of 2026. First, Teleflex is in the midst of a transformation that optimizes our portfolio and creates a more focused medical technologies leader and positions our company for meaningful value creation opportunities going forward.

Stuart Randle: Thanks, John. In closing, I will highlight our 3 key takeaways from the Q1 of 2026. First, Teleflex is in the midst of a transformation that optimizes our portfolio, creates a more focused medical technologies leader, and positions our company for meaningful value creation opportunities going forward. We continue to make progress on the pillars of our strategic plan, which are expected to catalyze a strong financial profile beginning in 2027. Second, we are pleased with the performance in the Q1 with pro forma adjusted constant currency revenue growth of 5.1% year-over-year, tracking towards our 2026 pro forma constant currency growth guidance of 4.5% to 5.5%.

Speaker #2: We continue to make progress on the pillars of our strategic plan, which are expected to catalyze a strong financial profile beginning in 2027. Second, we are pleased with the performance in the first quarter with pro forma adjusted constant currency revenue growth of 5.1% year over year, tracking towards our 2026 pro forma constant currency growth guidance of 4.5 to 5.5%.

Speaker #2: In addition, the first quarter performance is aligned with our mid-single-digit growth profile aspirations and represents a strong reflection of the durable growth potential of our go-forward business.

Stuart Randle: In addition, the Q1 performance is aligned with our mid-single-digit growth profile aspirations and represents a strong reflection of the durable growth potential of our go-forward business. Third, we continue to expect our two strategic divestitures to close in the H2 2026. We remain committed to return significant capital to shareholders through our $1 billion share repurchase program, while also reducing debt to enhance our financial flexibility and support future growth and value creation. We also remain focused on opportunities to offset the stranded costs from the separation, initially through the recognition of Transition Service and Manufacturing Service fees of at least $90 million on an annualized basis, and longer term through cost optimization. We have already initiated restructuring to drive approximately $50 million in after-tax savings. We're actively assessing additional cost reduction programs.

Speaker #2: Third, we continue to expect our two strategic divestitures to close in the second half of 2026. We remain committed to return significant capital to shareholders for a $1 billion share repurchase program, while also reducing debt to enhance our financial flexibility and support future growth and value creation.

Speaker #2: We also remain focused on opportunities to offset the stranded costs from the separation initially through the recognition of transition service and manufacturing service fees of at least $90 million on an.

Speaker #2: Annualized basis. And longer term, through cost optimization. We have already initiated restructuring to drive approximately $50 million in after-tax savings and are actively assessing additional cost reduction programs.

Stuart Randle: With a more streamlined portfolio and clear strategic priorities, we will be well positioned to drive durable performance and long-term value for shareholders. We expect our financial performance to improve through 2026 and more fully capture the benefits of our efforts in 2027 and beyond, with meaningful increases in adjusted earnings per share. That concludes my prepared remarks. Now I'd like to turn the call back to the operator for Q&A.

Speaker #2: With the more streamlined portfolio and clear strategic priorities, we will be well positioned to drive durable performance and long-term value for shareholders. We expect our financial performance to improve through 2026 and more fully capture the benefits of our efforts in 2027 and beyond, with meaningful increases in adjusted earnings per share.

Speaker #2: That concludes my prepared remarks. Now I'd like to turn the call back to the operator for Q&A.

Operator 2: Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you're using a speakerphone, 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. Your first question comes from the line of Mike Matson with Needham & Company. Please go ahead.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you're using a speakerphone, 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. Your first question comes from the line of Mike Matson with Needham & Company. Please go ahead.

Speaker #3: Thank you. If you would like to ask a question, please press the star one on your telephone keypad. If you're using a speakerphone, make sure your mute function is turned off to allow your signal to reach our equipment.

Speaker #3: 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.

Speaker #3: Your first question comes from the line of Mike Matson with Needham and Company. Please go ahead.

Mike Matson: Yeah, thanks. I wanted to ask one about the Q2 revenue growth expectations. I know you're not giving guidance, but there were a few things in the prepared remarks that seemed to indicate growth could be a bit slower than kind of the annual growth, including this recall issue, the instrument order timing, and then the interventional sales integration. I don't know what you're willing or able to tell us on that, but are you comfortable with the consensus estimate of around $567 million?

Speaker #4: Yeah, thanks. So I wanted to ask one about the second quarter revenue growth expectations. I know you're not giving guidance, but there were a few things in the prepared remarks that seemed to indicate growth could be a bit slower than kind of the annual growth, including this recall issue, the instrument order timing, and then the interventional sales integration.

Speaker #4: So I don't know what your willing or able to tell us on that, but are you comfortable with the consensus estimate of around 567 million?

John Deren: Mike, to your first point, we're not guiding quarterly revenue. Your observations around those things. You know, we did say we would see accelerated growth in H2 2026. We still believe that, we'll expect accelerated growth, you can start doing the math through the P&L. We do have these two recalls that could relate to some back orders, it's a really a bump in the road for us. For one of them, we already have product flowing for the larger one, the other one is really small, to be honest.

Speaker #5: So Mike, yeah, to your first point, we're not guiding quarterly revenue. But yeah, your observations around those things are we did say we would see accelerated growth in the second half of 2026.

Speaker #5: We still believe that, so we'll expect accelerated growth. So you can start doing the math through the P&L. Yeah, we do have these two recalls that could relate to some backorders, but it's a really bump in the road for us.

Speaker #5: For one of them, we're already half product flowing for the larger one, and the other one is really small, to be honest. So I think that while they're always some level of risk and there's going to be puts and takes, I think those are not going to be problematic for us for the full year.

John Deren: I think that, while there's always some level of risk, and there's gonna be puts and takes, I think those are not gonna be problematic for us for the full year. We did see some instrument order timing for surgical. You know, we'll continue to see how that plays out throughout the year. You know, it's hard to tell you exactly that that's gonna be a Q2 adjustment. That could come in Q3, but it's possible it'd be Q2 as well. Again, we're not guiding Q2 revenues, that's all I can tell you on that.

Speaker #5: Yeah, and we did see some instrument order timing for surgical. We'll continue to see how that plays out throughout the year. So it's hard to tell you exactly that that's going to be a Q2 adjustment that could come in Q3, but it's possible it'd be Q2 as well.

Speaker #5: But again, we're not guiding Q2 revenues, but that's all I could tell you on that.

Mike Matson: Yeah. Okay, I understand. Just on the interventional sales integration that kind of kicked off in Q1, how much of that is the disruption being caused by headcount reduction versus just reshuffling of territories? Is it a combination of both of those things?

Speaker #2: Yeah, okay, understand. And then just on the interventional sales integration that kind of kicked off in the first quarter, how much of that is being caused by the disruption being caused by headcount reduction versus just reshuffling of territories?

Speaker #2: Or is it accommodation of both of those things?

John Deren: Do you wanna handle this?

Speaker #5: So there's a do you want to go ahead?

John Deren: Do you wanna handle this?

Stuart Randle: No, this is Stu. I'll take it. It's primarily your latter point on the restructuring of territories. As we integrated, the two sales forces, you know, there's territory realignment, that's the primary cause of that disruption.

Speaker #4: Yeah, Stu, I'll take it. It's primarily your latter point on the restructuring of territories. So as we integrated the two Salesforces, there's territory realignment, and that's the primary cause of that disruption.

Operator 3: The next question comes from the line of Jason Bedford with Raymond James. Please go ahead.

Operator: The next question comes from the line of Jason Bedford with Raymond James. Please go ahead.

Speaker #3: And the next question comes from the line of Jason Bedford with Raymond James. Please go ahead.

Jason Bedford: Good morning. Maybe just a somewhat unoriginal question, you beat consensus estimates by about $0.17 in Q1. No change to the annual guidance. I appreciate there's a lot of factors going into guidance setting, is the EPS guidance factoring in any new cost you're seeing in the business?

Jayson Bedford: Good morning. Maybe just a somewhat unoriginal question, you beat consensus estimates by about $0.17 in Q1. No change to the annual guidance. I appreciate there's a lot of factors going into guidance setting, is the EPS guidance factoring in any new cost you're seeing in the business?

Speaker #2: Good morning. Maybe just a somewhat unoriginal question, but you beat consensus estimates by about 17 cents in the first quarter. No change to the annual guidance.

Speaker #2: I appreciate there's a lot of factors going into guidance setting, but is the EPS guidance factoring in any new cost? You're seeing in the business?

John Deren: No, I mean, Jason, it is early in the year. You know, again, lots of puts and takes throughout the quarters. Really happy about the performance in Q1. We've decided we will maintain our guidance for the full year right now. We'll have better information as we go through Q2, we'll be able to update as appropriate then.

Speaker #5: No, I mean, Jason, it is early in the year. Again, lots of puts and takes throughout the quarters. We're really happy about the performance in Q1.

Speaker #5: And so we've decided we're going to we will maintain our guidance for the full year right now. We'll have better information as we go through the second quarter, and we'll be able to update as appropriate then.

Jason Bedford: Okay. Maybe just on the top line, growth across the three segments was fairly balanced. surgical's obviously the outlier. I am guessing comps were a factor. And obviously there was a few puts and takes here on the surgical side. Within the 4.5% to 5.5% growth guidance, can you just give us an idea of which segments lag, which segments drive the growth, and then maybe touch on some of the segment drivers here?

Jayson Bedford: Okay. Maybe just on the top line, growth across the three segments was fairly balanced. surgical's obviously the outlier. I am guessing comps were a factor. And obviously there was a few puts and takes here on the surgical side. Within the 4.5% to 5.5% growth guidance, can you just give us an idea of which segments lag, which segments drive the growth, and then maybe touch on some of the segment drivers here?

Speaker #2: Okay. Maybe just on the top line, growth across the three segments was fairly balanced. Surgical is obviously the outlier. I'm guessing comps were a factor.

Speaker #2: And obviously, there was a few puts and takes here on the surgical side. But within the four and a half to five and a half percent growth guidance, can you just give us an idea of which segments lag, which segments drive the growth, and then maybe touch on some of the segment drivers here?

John Deren: Look, I mean, I think we're happy with all of the segments. You know, vascular CVCs and hemostatics have did really well. Surgical, it's really around our Hem-o-lok and the instrument orders, as we noted. Interventional's doing really well with complex catheters, the DCBs as well. I think we're really happy with what we're seeing across the portfolio. Again, we don't guide by product portfolio, I'm not gonna get too into that. You know, we do see in the long term, interventional will be the larger grower. I won't, you know, signal that yet for 2026, I think that is our expectation. We're putting a lot behind the interventional product space.

Speaker #5: Yeah, so look, I mean, I think we're happy with all of the segments. Vascular, CVCs, and the hemostatics that did really well. Surgical, it's really around our hemolocks and the instrument orders as we noted.

Speaker #5: Interventional is doing really well with complex catheters. Drug the DCBs as well. So I think we're really happy with what we're seeing across the portfolio.

Speaker #5: Again, we don't guide by product portfolio, so I'm not going to get too into that. We do see, in the long term, interventional will be the larger grower.

Speaker #5: I won't signal that yet for 2026, but I think that that is our expectation. We're putting a lot behind the interventional product space. We're spending most of our R&D dollars there, and we think there's the opportunity for the most innovation there as well.

John Deren: We're spending most of our R&D dollars there. We think there's the opportunity for the most innovation there as well.

Operator 3: The next question comes from the line of Matthew Taylor with Jefferies. Please go ahead.

Operator: The next question comes from the line of Matthew Taylor with Jefferies. Please go ahead.

Speaker #3: And the next question comes from the line of Matthew Taylor with Jeffrey's. Please go ahead.

Matthew Taylor: Hi, good morning. Maybe in terms of what you're expecting from costs for the year, can you help us maybe frame the impact of any cost inflation across manufacturing and freight? Maybe help us understand, like, there's any margin headwind you're seeing today or something you expect in guidance for the year.

Speaker #6: Hi, good morning. Maybe in terms of what you're expecting from costs for the year, can you help us maybe frame the input, like the impact of any cost inflation across manufacturing and freight?

Speaker #6: Maybe help us understand if there's any margin headwind you're seeing today or something you expect in guidance for the year?

John Deren: You know, nothing significant, honestly. We obviously have seen an increase in L&D costs as the Iran conflict moves on. You know, we had a lot of contract locked in place when it started, so, you know, it kept our L&D costs down in the, you know, the beginning of the year. We have started to see that inflation as we got to the end of the quarter, and we think we have a lot of opportunities to offset it. We've actively have a number of continuing improvement process programs in place to offset that. Right now, we think the risks that we see are within the guidance range we have given on operating margins.

Speaker #5: So nothing significant, honestly. We obviously have seen an increase in L&D costs as the Iran conflict moves on. We had a lot of contract locked in place when it started.

Speaker #5: So it kept our L&D costs down in the beginning of the year. We have started to see that inflation as we got to the end of the quarter.

Speaker #5: And we think we have a lot of opportunities to offset it. So we've actively have a number of continuing improvement process programs in place to offset that.

Speaker #5: So right now, we think the risks that we see are within the guidance range we've given on operating margins.

Matthew Taylor: That's helpful. Thank you.

Speaker #6: That's helpful. Thank you.

Operator 3: The next question comes from the line of Ravi Misra with Truist Securities. Please go ahead.

Operator: The next question comes from the line of Ravi Misra with Truist Securities. Please go ahead.

Speaker #3: And the next question comes from the line of Ravi Misra with Truly Securities. Please go

Ravi Misra: Hi, good morning. Thanks for taking the question. I'll just ask my question and follow up up front. First, can you provide a little bit more detail on kind of what the role of the new board committee that you announced was, the growth and operations, and kind of how that's gonna be constructed in terms of who's on it? Second, just with Freesolve, sounds like, you know, you commented to faster than expected enrollment in Europe. On BIOMAG-III in 2026, you know, can you maybe level set expectations in terms of what you see based on those learnings on how long that will take to fill and maybe when we can get a readout there if everything goes well? Thanks.

Speaker #6: Hi, good morning. Thanks for taking the question. So I'll just ask my question and follow-up up front. First, can you provide a little bit more detail on kind of what the role of the new board committee that you announced was, the growth and operations, and kind of how that's going to be constructed?

Speaker #6: In terms of who's on it. And then second, just with Freezall, sounds like you commented too faster than expected enrollment in Europe. On biomag 3 in 2026, can you maybe level set expectations in terms of what you see based on those learnings on how long that will take to fill and maybe when we could get a readout there, if everything goes well?

Stuart Randle: Sure. This is Stu. I'll take the growth and operating committee. We've got a board meeting next week where we will put together the outline for that committee as well as the members. I think it's fair to say it will focus more specifically or in a little more detail on the operations of the company and specifically how we put our growth plans in place and how we monitor the execution of those plans.

Speaker #6: Thanks.

Speaker #4: Sure. This is Stu. I'll take the growth and operating committee. We've got a board meeting next week where we will put together the outline for that committee as well as the members.

Speaker #4: I think it's fair to say it will focus more specifically and a little more detail on the operations of the company and specifically how we put our growth plans in place and how we monitor the execution of those plans.

Lawrence Keusch: Ravi, it's Larry, just on the BIOMAG trials. Yes, we on BIOMAG-II in Europe have been enrolling patients ahead of our expected schedule. We will, you know, we are, you know, approaching the end of that enrollment period. We'll obviously let everyone know when we get that wrapped up.

Speaker #6: Okay. And then Ravi, it's Larry, just on the biomag trials. Yes, we on biomag 2 in Europe, have been a role enrolling patients ahead of our expected schedule.

Speaker #6: And we will we are approaching the end of that enrollment period. We'll obviously let everyone know when we get that wrapped up. It is a 12-month follow-up from the last patient in.

Lawrence Keusch: It is a 12-month follow-up from the last patient in, so that should give you some feel as to when we will see the conclusion of that study. Obviously there will be the analysis of the data, and we still expect that data to read out in 2027, you know, in the latter portion of the year. Relative to the US, as we have indicated, BIOMAG-III will initiate in 2026. It is a study protocol that is very similar to BIOMAG-II, so you should think about it in similar numbers of patients. You know, we'll see how enrollment goes. You know, different geographies can be different. I would anticipate that, you know, we'll see that data reading out probably sometime in, you know, something like 2030.

Speaker #6: So that should give you some feel as to when we will see the conclusion of that study and then obviously there will be the analysis of the data and we still expect that data to read out in 2027 in the latter portion of the year.

Speaker #6: Relative to the US, as we have indicated, biomag 3 will initiate in 2026. It is a study protocol that is very similar to biomag 2.

Speaker #6: So you should think about it in similar numbers of patients. We'll see how enrollment goes. Different geographies can be different. But I would anticipate that we'll see that data reading out probably sometime in something like 2030.

Operator 3: The next question comes from the line of Anthony Petrone with Mizuho Group. Please go ahead. Anthony, you might be on mute. We'll take our next question coming from the line of Shagun Singh with RBC Capital Markets. Please go ahead.

Operator: The next question comes from the line of Anthony Petrone with Mizuho Group. Please go ahead. Anthony, you might be on mute. We'll take our next question coming from the line of Shagun Singh with RBC Capital Markets. Please go ahead.

Speaker #3: And the next question comes from the line of Anthony Petrone with the Zulu Group. Please go ahead. Anthony, you might be on mute. We'll take our next question coming from the line of Shogun Singh with RBC Capital Markets.

Speaker #3: Please go ahead.

Shagun Singh: Great. Thank you so much. I believe Jason is starting June 8. Just ahead of his arrival, can you just talk about, you know, why he was the best fit for the company? Once he does take on the role, you know, when can we expect to hear about the company's strategic vision? Is there a plan for Investor Day? Then I have a quick follow-up.

Speaker #7: Great. Thank you so much. So I believe Jason is starting June 8th. Just ahead of his arrival, can you just talk about why he was the best fit for the company?

Speaker #7: And once he does take on the role, when can we expect to hear about the company's strategic vision? And is there a plan for an investor day?

Speaker #7: And then I have a quick follow-up.

Stuart Randle: Sure. Thanks for the question. We're super excited to have Jason start. As we've noted, he's going to start on the eighth. Prior to that, he's got some obligations with Medtronic, but he's clearly going to be actively involved with the company prior to officially starting. You know, why did we pick him? Really, there were kind of three or four things. First, alignment with our culture and our values, those being really focused on ethics, integrity, and accountability. Secondly, we wanted someone who's a proven growth leader. Jason clearly demonstrated that growth when he managed the stent portfolio at Medtronic. Thirdly, we wanted someone who could manage through significant complexity. As you know, we're integrating Biotronik and working on the sales of our businesses.

Speaker #4: Sure. Thanks for the question. So we're super excited to have Jason start as we've noted. He's going to start on the 8th. Prior to that, he's got some obligations with Medtronic, but he's clearly going to be actively involved with the company prior to officially starting.

Speaker #4: Why did we pick him? Really, there were kind of three or four things. First, alignment with our culture and our values. Those being really focused on ethics, integrity, and accountability.

Speaker #4: Secondly, we wanted someone who's a proven growth leader. Jason clearly demonstrated that growth when he managed the Stanton portfolio at Medtronic. Thirdly, we wanted someone who could manage through significant complexity as you know, we're integrating biotronic and working on the sales of our businesses.

Stuart Randle: Clearly someone who's worked in Medtronic, which, as you know, is a giant, highly complex matrix organization. He's had a super successful career there, so he's now obviously seen and managed through that complexity. Lastly, global perspective. He's operated, you know, with a very broad product portfolio throughout his career on a global basis. Those are kind of the key reasons we brought him here. I talk to him almost every day. He's excited to get started, and we're looking forward to having him. Relative to an Investor Day, we don't have anything planned at the moment. We will certainly keep you informed of that after Jason gets on board and gets, you know, gets coupled with the organization. It's something we've spoken about, and we will plan for some time in the future.

Speaker #4: And clearly, someone who has worked in Medtronic, which as you know, is a giant highly complex and matrix organization, he's had a super successful career there.

Speaker #4: So he's obviously seen and managed through that complexity. And lastly, global perspective. He's operated, with a very broad product portfolio throughout his career on a global basis.

Speaker #4: So those are kind of the key reasons we brought him here. I talked to him almost every day. He's excited to get started, and we're looking forward to having him.

Speaker #4: Relative to an Investor Day, we don't have anything planned at the moment. We will certainly keep you informed of that after Jason gets on board and gets comfortable with the organization.

Speaker #4: It's something we've spoken about, and we will plan for sometime in the future.

Shagun Singh: Great. Thank you. Just as a follow-up, you know, I think last quarter you provided some directional outlook into 2027, and I was just wondering if you could touch on that. You know, on sales, you know, the midpoint of the 5% growth, is that a good base case to use, you know, going forward? You know, on operating margins, I think ex-stranded costs you had indicated mid-20s, and you also indicated on your comments today that this year there's about a 400 basis point on the board and operating margin. Any directional outlook would be helpful. Thank you.

Speaker #7: Great. Thank you. And then just as a follow-up, I think last quarter you provided some directional outlook into 2027. And I was just wondering if you could touch on that.

Speaker #7: On sales, the midpoint of this 5% growth, is that a good base case to use going forward? And then on operating margins, I think X-stranded cost you had indicated mid-20s, and you also indicated on your comments today that this year there's about a 400 basis point on the board and operating margin.

Speaker #7: So any directional outlook would be helpful. Thank you.

Lawrence Keusch: Yes, Shagun. We did not, provide, you know, any guidance on 2027. I think what we did provide, though, to your point around a normalized operating margin was more in that 23% level once, you know, we account for the stranded costs. We think we have a lot of opportunity to go above that as we continue to grow and we get some more leverage out of the P&L going forward. I think that's the only thing we really guided to for 2027. Obviously, you know, we've given you the components to think about in terms of buyback and interest expense and the benefits we'll be seeing in 2027. For your own models.

Speaker #4: Yeah. Sure. We did not provide any guidance on 2027. I think what we did provide, though, to your point around a normalized operating margin was more in that 23% level once we account for the stranded costs and we think we have a lot of opportunity to go above that as we continue to grow and we get some more leverage out of the P&L going forward.

Speaker #4: But I think that's the only thing we really guided to in for 2027. Obviously, we've given you the components to think about with in terms of buyback and interest expense and the benefits we'll be seeing in 2027.

Speaker #4: So for your own models, but yeah, as far as top line goes, we're not prepared to start guiding top line until we get a little more into 2026.

Lawrence Keusch: Yeah, as far as top line goes, we're not prepared to start guiding top line until we get a little more into 2026.

Operator 3: The next question comes from the line of Matthew O'Brien with Piper Sandler. Please go ahead.

Operator: The next question comes from the line of Matthew O'Brien with Piper Sandler. Please go ahead.

Speaker #3: And the next question comes from the line of Matthew O'Brien with Piper Sandler. Please go ahead.

Matthew O'Brien: Good morning. Thanks for taking the questions. You know, for starters, just maybe just bigger picture. You know, there was a rumor about, you know, some interest in Teleflex, either strategically or from a private equity perspective, and I'm not sure what you can share, but heard that, you know, seeing two board members not standing for re-election. I'm just wondering if the company was approached about, you know, a transaction, you looked at it as a board said no, it's not something that we're interested in, and hence the hiring of Jason, or if those two pathways or factors are completely independent of each other. I do have a follow-up.

Speaker #8: Good morning. Thanks for taking the questions. For starters, maybe just bigger picture—there was a rumor about some interest in Teleflex, either strategically or from a private equity perspective.

Speaker #8: And I'm not sure what you can share, but I heard that seeing two board members not standing for reelection. So I'm just wondering if the company was approached about a transaction.

Speaker #8: You looked at it as a board said, "No, it's not something that we're interested in." And hence the hiring of Jason or if those two pathways or factors are completely independent of each other.

Speaker #8: And then I do have a follow-up.

Stuart Randle: Yeah, this is Stu. We don't comment on any market rumors and speculation. We made comments regarding these activities in our March 27 press release, so I just refer you to that for our comments.

Speaker #4: Yeah, this is Stu. We don't comment on any market rumors and speculation. We made comments regarding these activities in our March 27th press release.

Speaker #4: So I just refer you to that for our comments.

Matthew O'Brien: Okay, fair enough. Maybe a question for John, and I know timing of repurchases is difficult to fully understand, but it's a big number, you know, $1 billion of repurchases here, but is this something that we think we could be done with by the end of this calendar year, or do you think it'll bleed into 2027? Thanks so much.

Speaker #8: Okay. Fair enough. And then maybe a question for John. And I know timing of repurchases is difficult to fully understand, but is it and it's a big number.

Speaker #8: A billion dollars of repurchases here, but is this something that we think we could be done with by the end of this calendar year, or do you think it'll bleed into '27?

Speaker #8: Thanks so much.

John Deren: First of all, as a reminder, we are going to start doing some open market purchases in Q2, given where the stock price is at. We think there's an opportunity to do that. That's, of course, ahead of the proceeds. No commitment as to how much we're gonna buy back in the Q2, until we're able to close at least the first sale of which we expect to be the OEM transaction. Given the size of the buyback, you know, there is a good chance that purchases will continue into 2027.

Speaker #4: So given the size, first of all, as a reminder, we are going to start doing some open market purchases in Q2 given where the stock price is at.

Speaker #4: We think there's an opportunity to do that. That's, of course, ahead of the proceeds. So no commitment as to how much we're going to buy back in the second quarter.

Speaker #4: Until we're able to close at least the first sale of which we expect to be the OEM transaction. But given the size of the buyback, there is a good chance that that purchases will continue into 2027.

John Deren: If we just think about how the two sales will likely lay out, and if you only thought about the proceeds from the sales, yeah, you'd likely be buying into Q1 2027, just given the volume limits that we would have.

Speaker #4: So if we just think about how the two sales will likely lay out and if you only thought about the proceeds from the sales, yeah, you'd likely be buying into the first quarter of 2027 just given the volume limits that we would have.

Operator 3: The next question comes from the line of Ross Osborn with Wells Fargo. Please go ahead.

Operator: The next question comes from the line of Ross Osborn with Wells Fargo. Please go ahead.

Speaker #3: The next question comes from the line of Ross Osborne with Wells Fargo. Please go ahead.

Ross Osborn: Good morning. Thanks for taking our questions. Starting out, how much of the $90 million in stranded costs has already flowed through during Q1? Is the quarterly cadence linear or back half-weighted?

Speaker #9: Good morning. Thanks for taking our questions. So starting out, how much of the 90 million in stranded costs is already flowed through during the first quarter?

Speaker #9: And is it quarterly cadence, linear, or back half weighted?

John Deren: I apologize. Your second part of your question again, if you could.

Speaker #4: I apologize. Your second part of your question again, if you could.

Ross Osborn: Just in terms of the cadence for the remaining stranded cost, should we expect a linear run rate, or is it back half-weighted?

Speaker #9: Just in terms of the cadence for the remaining stranded cost, should we expect a linear run rate, or is it back half weighted?

John Deren: Kind of think of it a linear run rate. Stranded costs, right, it's, there's not a great science to this. It's a concept, right? It's the overhead cost that we still maintain for all of Teleflex that we'll be able to, you know, we believe we'll be able to fully mitigate once we separate the company. You know, when you get into 2027 or even the back half, you know, back end of this year, once we have the TSAs and MSAs in place, they'll offset the stranded costs entirely. It's really about how these restructuring programs take care of them permanently. You can think about the stranded costs being around for, you know, likely the better part of this year until Q4 once the TSAs and MSAs come into play.

Speaker #4: Kind of think of it as a linear run rate. So stranded costs, right, it's there's not a great science to this. It's a concept, right?

Speaker #4: It's the overhead cost that we still maintain for all of Teleflex that we'll be able to we believe we'll be able to fully mitigate as we once we separate the company.

Speaker #4: When you get into 2027 or even the back end of this year, once we have the TSAs and MSAs in place, they'll offset the stranded costs entirely.

Speaker #4: And then it's really about how these restructuring programs take care of them permanently. So you can think about the stranded costs being around for likely the better part of this year until the fourth quarter once the TSAs and MSAs come into play.

John Deren: You know, they will not be an issue for 2027. We have to continue to work through to make sure they don't become an issue, you know, after 2027, 2028. They, they are in the numbers today, and they are in the comparative numbers, if you will, as we've restated everything for 2025.

Speaker #4: And they will not be an issue for 2027. And then we have to continue to work through to make sure they don't become an issue after 2027, 2028.

Speaker #4: So but they are in the numbers today, and they are in the comparative numbers, if you will, as we've restated everything for 2025.

Ross Osborn: Okay. Confirming the $90 million and how much was hit during Q1?

Speaker #9: Okay. And confirming the 90 million and how much was hit during the first quarter?

John Deren: I'm sorry?

Speaker #4: I'm sorry?

Ross Osborn: Confirming your guidance of $90 million of stranded cost and then how much flowed through during Q1?

Speaker #9: I'm confirming your guidance of 90 million of stranded costs. And then how much flowed through during the first quarter?

John Deren: Well, again, stranded costs are conceptual. They are part of your overhead, your corporate overhead and the like. They're not specific identified cost in that sense, right? Think about them ratably, I guess I would say, right, as you go through the year.

Speaker #4: Well, again, these are stranded costs are conceptual. They are part of your overhead, your corporate overhead and the like. So they're not specific identified costs in that sense, right?

Speaker #4: So think about them radically, I guess I would say, right? As you go through the year.

Operator 3: The next question comes from the line of Michael Polark with Wolfe Research. Please go ahead.

Operator: The next question comes from the line of Michael Polark with Wolfe Research. Please go ahead.

Speaker #3: The next question comes from the line of Michael Pollard with Wolf Research. Please go ahead.

Michael Polark: Hey, good morning. Follow-up on interventional 3% pro forma constant currency growth in the quarter. That is below target of mid-single digits plus. I heard some puts and takes. I just want to understand the quarter specifically being slightly below target growth. Is that the Salesforce integration disruption? Is that the third-party supplier recall, or is there something else you would have us consider?

Speaker #10: Hey. Good morning. Follow-up on interventional 3% pro forma constant currency growth in the quarter. That's below target of mid-single digits plus. I heard some puts and takes.

Speaker #10: I just want to understand the quarter-specifically being slightly below target growth. Is that the Salesforce integration disruption? Is that the third-party supplier recall? Or is there something else you'd have us consider?

John Deren: No, it's, you know. We have already expected the H1 of the year to be slower than the H2 for Interventional, specifically due to There's two. One, we did a major restructuring. We announced the major restructuring at the end of Q4 related to the VI acquisition. That starts taking place, obviously, in Q1. The actions were taking place as well as some of the disruption that Stu has already mentioned. Those really are the items I can talk about. We view them as transient in Q1, you know, going a little into Q2. We expect the H2 of the year to recover nicely after we kind of get through that transition.

Speaker #4: No. So we have expected the first half of the year to be slower than the back half for interventional specifically due to there's two things.

Speaker #4: One, we did a major restructure, and we announced a major restructuring at the end of Q4 related to the VI acquisition. That starts taking place, obviously, in Q1.

Speaker #4: So the actions were taking place, as well as some of the disruption that Stu has already mentioned. So those really are the items I can talk about.

Speaker #4: And so we view them as transient in the Q1. Going in a little into Q2, and then we expect the back half of the year to recover nicely after we kind of get through that transition.

Michael Polark: My follow-up on surgical, the upside growth in the quarter timing of orders for instruments, heard that loud and clear. Are you launching new products there? Do you think that's share gain, or is it truly timing? The second piece of that is, does the comment include orders for the bariatric stapler? If it doesn't, I am curious just for an update on how that product is performing given the market challenges.

Speaker #10: My follow-up on surgical that upside growth in the quarter timing of orders for instruments heard that loud and clear. Are you launching new products there?

Speaker #10: Do you think that share gain or is it truly timing? And the second piece of that is, does the comment include orders for the bariatric stapler?

Speaker #10: If it doesn't, I'm curious just for an update on how that product is performing given the market challenges.

John Deren: Yeah, yeah. Surgical did very, very well, and I, you know, I think they'll continue to do well. We did well across the product portfolio. Hem-o-lok did well. The bariatric stapler did well. You know, it's on a much, you know, lower base. You know, the instrument orders have done well throughout the year. That's really the only timing issue in the quarter. Everything else was really strong performance for surgical. We're really pleased with the quarter, and you know, we see some nice opportunities as the year plays out.

Speaker #4: Yeah. Surgical did very, very well. And I think they'll continue to do well. We did well across the product portfolio. Hemlock did well. The bariatric stapler did well.

Speaker #4: It's on a much lower base. The instrument orders have done well throughout the year. That's definitely that's really the only timing issue in the quarter.

Speaker #4: Everything else was really strong performance for the surgical. So we've been we're really pleased with the quarter. And we see some nice opportunities as the year plays out.

Operator 3: The next question comes from the line of Bradley Bowers with Mizuho. Please go ahead.

Operator: The next question comes from the line of Bradley Bowers with Mizuho. Please go ahead.

Speaker #3: The next question comes from the line of Bradley Bowers with Mizuo. Please go ahead.

Bradley Bowers: Great. Thanks for taking our questions. One for Anthony, just maybe a two-parter here. Just wanted to double-click on interventional. You know, obviously, modeling's a little choppy, but it was the only one that was a little bit short of our model, but obviously the ramp is expected. Wanted to share that line of sight on the integration and how you expect that to ramp and exit 2027. You know, admittedly, this is a little nitpicky, but, you know, hear about, you know, a new CEO coming in, you know, experience in complex businesses. The, you know, the recent Teleflex transactions are about making it, you know, you guys more streamlined. Wanted to hear about, you know, puts and takes. Obviously, the skills translate, but just wanted to kind of hear about the mindset and ongoing go forward Teleflex. Thank you.

Speaker #11: Great. Thanks for taking our questions. I'm on for Anthony. Just maybe a two-parter here. Just wanted to double-click on interventional. Obviously, modeling is a little choppy, but it was the only one that was a little bit short of our model.

Speaker #11: But obviously, the ramp is expected. So wanted to share about line of sight on the integration and how you expect that to ramp and exit 2027.

Speaker #11: And then admittedly, this is a little nitpicky, but hear about new CEO coming in, experience in complex businesses. But the recent Teleflex transactions are about making it you guys more streamlined.

Speaker #11: So wanted to hear about puts and takes. Obviously, the skills translate, but just wanted to kind of hear about the mindset and ongoing go forward Teleflex.

Speaker #11: Thank you.

John Deren: Okay. Well, I'll let Stu handle the CEO comment, but I think, at the end of the day, it's consistent with what I've said previously. You know, the H1 of the year, we expected to be, you know, a little lower in growth because of the transition and the restructurings that we talked about. Again, we expect accelerated growth in the H2 of the year. It's the best I can give you. I can't. We're again, we're not guiding by Q, and we're not guiding by business. With that, I'll ask Stu to answer the other question.

Speaker #4: Okay. Well, I'll let Stu handle the CEO comment. But I think at the end of the day, it's consistent with what I've said previously.

Speaker #4: The first half of the year, we expected to be a little lower in growth because of the transition and the restructurings that we talked about.

Speaker #4: And again, we expect accelerated growth in the back half of the year. It's the best I can give you. Again, we're not guiding by quarter.

Speaker #4: And we're not guiding by business. With that, I'll ask Stu to answer the other question.

Stuart Randle: I think, you know, with Jason Weidman coming on board again, we're very excited to have him. You know, I didn't say earlier, we really like the breadth of his experience at Medtronic, you know, both in the cath lab and the peripheral business. He's had experience in stents, drug-coated balloons, coronary catheters, peripheral catheters. We like that product experience and the growth he demonstrated at Medtronic in all of those positions, you know, makes us really comfortable that he's going to be helpful in helping us drive accelerated growth as we go forward.

Speaker #12: Yeah. I think with Jason coming on board again, we're very excited to have him. What I didn't say earlier, we really like the breadth of his experience at Medtronic.

Speaker #12: Both in the cath lab and the peripheral business. So he's had experience in stents, drug-coated balloons, coronary catheters, peripheral catheters. So we like that product experience and the growth he demonstrated at Medtronic.

Speaker #12: And all of those positions makes us really comfortable that he's going to be helpful in helping us drive accelerated growth as we go forward.

Operator 3: The next question comes from the line of Travis Steed with BofA Securities. Steed, go ahead.

Operator: The next question comes from the line of Travis Steed with BofA Securities. Steed, go ahead.

Speaker #3: The next question comes from the line of Travis Steed with Biofa Securities. Please go ahead.

Travis Steed: Hey, everybody. Thanks for the question. Maybe at higher level, just curious how you think about considering kinda all avenues for shareholder value creation and kinda balanced risk-adjusted shareholder returns and, you know, versus going through kinda your longer-term strategic plan. Just would love to kinda hear high-level thoughts on that.

Speaker #13: Hey, everybody. Thanks for the question. Maybe at a higher level, just curious how you think about considering all avenues for shareholder value creation and kind of balanced risk-adjusted shareholder returns, versus going through your longer-term strategic plan.

Speaker #13: Just would love to kind of hear high-level thoughts on that.

Stuart Randle: Yes, Stu, I think, you know, I'll again refer back to our previous public statements, particularly regarding, you know, we have said publicly we'll thoroughly and thoughtfully consider any bona fide acquisition proposal. We're looking at all long-term value creation and how we can best deliver that. The board is open and considering and, you know, has been very thoughtful in that approach.

Speaker #4: Yeah. So Stu, I think I'll again refer back to our previous public statements. Particularly regarding we have said publicly, we'll thoroughly and thoughtfully consider any bona fide acquisition proposal.

Speaker #4: We're looking at all long-term value creation and how we can best deliver that. So the board is open and considering and has been very thoughtful in that approach.

Travis Steed: Great. Thank you. That's fair. Maybe on tariffs, what's assumed on tariffs and the guidance, and if you get refunds, is that upside for the guidance?

Speaker #13: Right. Thank you. That's fair. And maybe on tariffs, what's assumed on tariffs in the guidance? And if you get refunds, is that upside to the guidance?

John Deren: Yeah, refunds would be upside for the guidance. I think we're where most players are right now with what I would call is like a contingent gain model, so waiting for the tariff actually to or get confirmation that we will get the tariffs when we apply for them. There is definitely upside. Right now, we have about $33 million of tariffs in the full year guidance, so there would definitely be some upside for those refunds. Keep in mind, some of the refunds would be for 2025 what we paid. Then, you know, because it gets capitalized and enrolled into 2026, there'd be a clear benefit in 2026 for the first 2 quarters.

Speaker #4: Yeah. Refunds would be upside for the guidance. I think where we're most players are right now with what I would call as a contingent gain model.

Speaker #4: So waiting for the tariff actually to or get confirmation that we will get the tariffs when we apply for them. So there is definitely upside.

Speaker #4: Right now, we have about 33 million dollars of tariffs in the full-year guidance. So there would definitely be some upside for those refunds. Keep in mind some of the refunds would be in 20 for 2025, what we paid.

Speaker #4: And then because it gets capitalized and enrolled into 2026, there'd be a clear benefit in 2026 for the first two quarters.

Operator 3: That concludes our question and answer session. I would like to turn us back to Mr. Lawrence Keusch for closing remarks.

Operator: That concludes our question and answer session. I would like to turn us back to Mr. Lawrence Keusch for closing remarks.

Speaker #3: And that concludes your question-and-answer session. I would like to turn it back to Mr. Lawrence Keusch for closing remarks.

Lawrence Keusch: Thank you, Preela, thank you to everyone that joined us on the call today. This concludes the Teleflex Incorporated Q1 2026 Earnings Conference Call.

Speaker #12: Thank you, Priya. And thank you to everyone that joined us on the call today. This concludes the Teleflex Incorporated first quarter 2026 earnings conference call.

Operator 3: You may now disconnect your lines.

Operator: You may now disconnect your lines.