TFX Teleflex Inc

Second Quarter Revenues Increase 11.4% to $468.1 million; up 10.1% on Constant Currency Basis

Second Quarter GAAP Diluted EPS of $1.04, up 5.1% over the prior year; Adjusted Diluted EPS of $1.51 up 18.9%

2014 Guidance Range for Constant Currency Revenue Growth of 7% to 9% Reaffirmed

2014 Guidance Range for Adjusted Diluted EPS Increased from $5.35 to $5.55 to $5.45 to $5.60

Teleflex Incorporated (NYSE: TFX) (the “Company”) today announced financial results for the second quarter ended June 29, 2014.

Second quarter 2014 net revenues were $468.1 million, an increase of 11.4% over the prior year period. Excluding the impact of foreign currency fluctuations, second quarter 2014 net revenues increased 10.1% over the prior year period.

Second quarter 2014 GAAP diluted earnings per share from continuing operations were $1.04, as compared to $0.99 in the prior year period, an increase of 5.1%. Second quarter 2014 adjusted diluted earnings per share from continuing operations were $1.51, as compared to $1.27 in the prior year period, an increase of 18.9%.

“Despite the impact of one less selling day in the second quarter of 2014 as compared to the prior year period, Teleflex delivered double-digit constant currency revenue and adjusted earnings per share growth,” said Benson Smith, Chairman, President and Chief Executive Officer. “Our second quarter performance was aided by the contribution from the acquisitions of Vidacare and Mayo Healthcare, an improvement in the average selling price of products, the introduction of new products to the market and a slight improvement in the sales of existing products resulting from a modest improvement in end-market utilization.”

Added Mr. Smith, “Based on the Company’s performance during the first six months of 2014, and our outlook for the remainder of the year, we are reaffirming our full year constant currency revenue growth guidance range of 7% to 9%, and increasing our full year adjusted diluted earnings per share guidance range from $5.35 to $5.55 to $5.45 to $5.60.”

SECOND QUARTER NET REVENUE BY SEGMENT

Vascular North America second quarter 2014 net revenues were $64.2 million, an increase of 13.1% compared to the prior year period. Excluding the impact of foreign currency fluctuations, second quarter 2014 net revenues increased 13.5% compared to the prior year period. The increase in constant currency revenue was largely due to Vidacare product sales, the introduction of new products to the market and price increases. This was somewhat offset by lower sales volume of existing products.

Anesthesia/Respiratory North America second quarter 2014 net revenues were $55.0 million, a decrease of 5.9% compared to the prior year period. Excluding the impact of foreign currency fluctuations, second quarter 2014 net revenues decreased 5.7% compared to the prior year period. The decrease in constant currency revenue was largely due to lower sales volume of existing products. This was somewhat offset by the introduction of new products to the market and price increases.

Surgical North America second quarter 2014 net revenues were $38.0 million, an increase of 0.6% compared to the prior year period. Excluding the impact of foreign currency fluctuations, second quarter 2014 net revenues increased 1.3% compared to the prior year period. The increase in constant currency revenue was largely due to price increases and the introduction of new products to the market. This was somewhat offset by lower sales volume of existing products.

EMEA second quarter 2014 net revenues were $154.7 million, an increase of 12.2% compared to the prior year period. Excluding the impact of foreign currency fluctuations, second quarter 2014 net revenues increased 7.3% compared to the prior year period. The increase in constant currency revenue was largely due to Vidacare product sales, higher sales volume of existing products, price increases and the introduction of new products to the market.

Asia second quarter 2014 net revenues were $62.5 million, an increase of 24.1% compared to the prior year period. Excluding the impact of foreign currency fluctuations, second quarter 2014 net revenues increased 25.2% compared to the prior year period. The increase in constant currency revenue was largely due to the acquisitions of Mayo Healthcare and Vidacare, price increases, the introduction of new products to the market and higher sales volume of existing products.

OEM and Development Services (“OEM”) second quarter 2014 net revenues were $36.6 million, an increase of 14.0% compared to the prior year period. Excluding the impact of foreign currency fluctuations, second quarter 2014 net revenues increased 13.1% compared to the prior year period. The increase in constant currency revenue was largely due to higher sales volume of existing products and the introduction of new products to the market. This was somewhat offset by lower average selling prices.

    Three Months Ended % Increase/ (Decrease) June 29, 2014   June 30, 2013

ConstantCurrency

 

ForeignCurrency

 

TotalChange

(Dollars in millions) Vascular North America $ 64.2 $ 56.8 13.5% (0.4% ) 13.1% Anesthesia/Respiratory North America 55.0 58.5 (5.7% ) (0.2% ) (5.9% ) Surgical North America 38.0 37.8 1.3% (0.7% ) 0.6% EMEA 154.7 137.8 7.3% 4.9% 12.2% Asia 62.5 50.4 25.2% (1.1% ) 24.1% OEM 36.6 32.1 13.1% 0.9% 14.0% All Other   57.1   46.7 23.0% (0.7% ) 22.3% Total $ 468.1 $ 420.1 10.1% 1.3% 11.4%  

OTHER FINANCIAL HIGHLIGHTS AND KEY PERFORMANCE METRICS

Depreciation expense and amortization of intangible assets and deferred financing costs for first six months of 2014 were $63.8 million compared to $52.0 million for the prior year period.

Cash and cash equivalents at June 29, 2014 were $237.4 million compared to $432.0 million at December 31, 2013. The decline in cash and cash equivalents is primarily due to a $235 million repayment of a portion of the outstanding principal amount of borrowings under the revolving credit facility.

Net accounts receivable at June 29, 2014 were $301.7 million compared to $295.3 million at December 31, 2013.

Net inventories at June 29, 2014 were $356.5 million compared to $333.6 million at December 31, 2013.

Net debt obligations at June 29, 2014 were $867.3 million compared to $902.7 million at December 31, 2013.

“During the first six months of 2014, Teleflex significantly improved cash flow from operations, reaching $120.2 million,” said Thomas Powell, Executive Vice President and Chief Financial Officer. “In addition, during the second quarter we took steps to refine our capital structure and repay debt. As a result, we will be better positioned to take advantage of future strategic opportunities.”

2014 OUTLOOK

The Company reaffirmed its full year 2014 constant currency revenue growth guidance range of 7% and 9%, and increased its full year 2014 adjusted diluted earnings per share guidance from a range of $5.35 to $5.55 to a range of $5.45 to $5.60.

       

FORECASTED 2014 CONSTANT CURRENCY REVENUE GROWTH RECONCILIATION

  Low   High   Forecasted 2014 GAAP revenue growth 7.0 % 9.0 %   Estimated impact of foreign currency fluctuations   —       —     Forecasted 2014 constant currency revenue growth   7.0 %     9.0 %        

FORECASTED 2014 ADJUSTED EARNINGS PER SHARE RECONCILIATION

  Low   High   Forecasted 2014 diluted earnings per share attributable to common shareholders $3.50 $3.60   Restructuring, impairment charges and special items, net of tax $0.85 $0.90   Intangible amortization expense, net of tax $0.93 $0.93   Amortization of debt discount on convertible notes, net of tax   $0.17     $0.17   Forecasted 2014 adjusted diluted earnings per share   $5.45     $5.60  

CONFERENCE CALL WEBCAST AND ADDITIONAL INFORMATION

As previously announced, Teleflex will comment on its financial results on a conference call to be held today at 8:00 a.m. (ET). The call will be available live and archived on the company’s website at www.teleflex.com and the accompanying presentation will be posted prior to the call. An audio replay will be available until August 6, 2014 at 11:59 p.m. (ET), by calling 888-286-8010 (U.S./Canada) or 617-801-6888 (International), Passcode: 18970797.

ADDITIONAL NOTES

Constant currency revenue and growth exclude the impact of translating the results of international subsidiaries at different currency exchange rates from period to period.

Certain financial information is presented on a rounded basis, which may cause minor differences.

Segment results and commentary exclude the impact of discontinued operations, items included in restructuring and impairment charges, and losses and other charges set forth in the condensed consolidated statements of income and in the Reconciliation of Consolidated Statement of Income Items set forth below.

NOTES ON NON-GAAP FINANCIAL MEASURES

This press release includes certain non-GAAP financial measures, which include:

Adjusted diluted earnings per share. This measure excludes, depending on the period presented (i) the effect of charges associated with our restructuring programs, as well as goodwill and other asset impairment charges; (ii) losses and other charges related to acquisition and integration costs, the reversal of liabilities related to certain contingent consideration arrangements, the establishment of a litigation reserve and a litigation verdict against the Company with respect to a non-operating joint venture; (iii) amortization of the debt discount on the Company’s convertible notes; (iv) intangible amortization expense; and (v) tax benefits resulting from the resolution of, or expiration of the statute of limitations with respect to, prior years’ tax matters. In addition, the calculation of diluted shares within adjusted earnings per share gives effect to the anti-dilutive impact of the Company’s convertible note hedge agreements, which reduce the potential economic dilution that otherwise would occur upon conversion of the Company’s senior subordinated convertible notes (under GAAP, the anti-dilutive impact of the convertible note hedge agreements is not reflected in diluted shares).

Constant currency revenue. This measure excludes the impact of translating the results of international subsidiaries at different currency exchange rates from period to period.

Management believes these measures are useful to investors because they eliminate items that do not reflect Teleflex’s day-to-day operations. In addition, management believes that the calculation of non-GAAP diluted shares is useful to investors because it provides insight into the offsetting economic effect of the convertible note hedge against conversions of the convertible notes. Management uses these financial measures for internal managerial purposes, when publicly providing guidance on possible future results, and to assist in our evaluation of period-to-period comparisons. These financial measures are presented in addition to results presented in accordance with generally accepted accounting principles (“GAAP”) and should not be relied upon as a substitute for GAAP financial measures. Tables reconciling historical non-GAAP measures to the most directly comparable historical GAAP measures are set forth below. Tables reconciling forecasted non-GAAP measures to the most directly comparable forecasted GAAP measures are set forth above.

                RECONCILIATION OF CONSOLIDATED STATEMENT OF INCOME ITEMS Dollars in millions, except per share amounts   Quarter Ended - June 29, 2014   Net income Shares used in (loss) attributable Diluted calculation of Cost Selling, Restructuring to common earnings per GAAP and of general and Research and and other Interest shareholders share available adjusted goods administrative development impairment expense, Income from continuing to common earnings per sold expenses expenses charges net taxes operations shareholders share GAAP Basis $224.0 $146.8 $14.9 $7.6 $15.9 $10.0 $48.4 $1.04 46,392 Adjustments

Restructuring and other impairment charges

— — — 7.6 — 3.5 4.2 $0.09 —

Losses and other charges (A)

0.9 (1.1) 0.1 — — — (0.2) $0.00 —

Amortization of debt discount on convertible notes

— — — — 3.0 1.1 1.9 $0.04 — Intangible amortization expense — 16.1 — — — 4.4 11.7 $0.25 — Tax adjustment (B) — — — — — — — $0.00 —

Shares due to Teleflex under note hedge (C)

— — — — — — — $0.09 (2,714) Adjusted basis $223.1 $131.9 $14.8 — $12.9 $19.0 $65.9 $1.51 43,678   Quarter Ended – June 30, 2013 Net income Shares used in (loss) attributable

Diluted

calculation of Cost Selling, Restructuring to common

earnings per

GAAP and of general and Research and and other Interest shareholders

share available

adjusted goods administrative Development impairment expense, Income from continuing

to common

earnings per sold expenses expenses charges net taxes operations shareholders share GAAP Basis $210.6 $116.3 $16.5 $13.0 $14.3 $6.1 $43.2 $0.99 43,429 Adjustments

Restructuring and other impairment charges

— — — 13.0 — 2.0 11.0 $0.25 — Losses and other charges (A) (0.3) (4.9) — — — 0.8 (6.0) ($0.13) —

Amortization of debt discount on convertible notes

— — — — 2.8 1.0 1.8 $0.04 — Intangible amortization expense — 12.1 — — — 4.2 7.9 $0.18 —

Tax adjustment (B)

— — — — — 4.7 (4.7) ($0.11) —

Shares due to Teleflex under note hedge (C)

— — — — — — — $0.04 (1,514) Adjusted basis $210.9 $109.0 $16.5 — $11.5 $18.7 $53.2 $1.27 41,915  

(A) In 2014, losses and other charges include approximately ($4.4) million, net of tax, or ($0.09) per share, related to the reversal of contingent consideration liabilities; and approximately $4.2 million, net of tax, or $0.09 per share, related to acquisition and integration costs, and charges related to facility consolidations. In 2013, losses and other charges include approximately ($7.1) million, net of tax, or ($0.16) per share, related to the reversal of contingent consideration liabilities; approximately $1.5 million, net of tax, or $0.04 per share, related to acquisition and integration costs; and approximately ($0.4) million, net of tax, or ($0.01) per share, related to a reserve reversal associated with a previously announced stock keeping unit (“SKU”) rationalization charge.

(B) The tax adjustment represents a net benefit resulting from the resolution of, or the expiration of statute of limitations with respect to various prior years’ U.S. federal, state and foreign tax matters.

(C) Adjusted diluted shares are calculated by giving effect to the anti-dilutive impact of the Company’s convertible note hedge agreements, which reduce the potential economic dilution that otherwise would occur upon conversion of our senior subordinated convertible notes. Under GAAP, the anti-dilutive impact of the convertible note hedge agreements is not reflected in diluted shares.

              RECONCILIATION OF CONSOLIDATED STATEMENT OF INCOME ITEMS Dollars in millions, except per share amounts   Six Months Ended - June 29, 2014     Net income Shares used in (loss) attributable Diluted calculation of Cost Selling, Restructuring to common earnings per GAAP and of general and Research and and other Interest shareholders share available adjusted goods administrative development impairment expense, Income from continuing to common earnings per sold expenses expenses charges net taxes operations shareholders share GAAP Basis $441.4 $287.1 $28.9 $15.4 $31.1 $18.5 $83.5 $1.81 46,071 Adjustments

Restructuring and other impairment charges

— — — 15.4 — 4.5 10.9 $0.24 —

Losses and other charges (A)

0.9 (1.2) 0.1 — — 0.8 (1.1) ($0.03) —

Amortization of debt discount on convertible notes

— — — — 6.0 2.2 3.8 $0.08 — Intangible amortization expense — 32.1 — — — 9.9 22.2 $0.48 — Tax adjustment (B) — — — — — 0.2 (0.2) ($0.01) —

Shares due to Teleflex under note hedge (C)

— — — — — — — $0.15 (2,582) Adjusted basis $440.5 $256.3 $28.9 — $25.1 $36.3 $118.9 $2.73 43,489   Six Months Ended – June 30, 2013 Net income Shares used in (loss) attributable Diluted calculation of Cost Selling, Restructuring to common earnings per GAAP and of general and Research and and other Interest shareholders share available adjusted goods administrative Development impairment expense, Income from continuing to common earnings per sold expenses expenses charges net taxes operations shareholders share GAAP Basis $421.9 $243.2 $31.5 $22.1 $28.3 $13.7 $70.7 $1.64 43,238 Adjustments

Restructuring and other impairment charges

— — — 22.1 — 4.6 17.5 $0.41 — Losses and other charges (A) 0.2 (3.4) — — — 1.6 (4.7) ($0.11) —

Amortization of debt discount on convertible notes

— — — — 5.5 2.0 3.5 $0.08 — Intangible amortization expense — 24.6 — — — 8.5 16.1 $0.37 —

Tax adjustment (B)

— — — — — 5.6 (5.6) ($0.13) —

Shares due to Teleflex under note hedge (C)

— — — — — — — $0.07 (1,443) Adjusted basis $421.7 $222.0 $31.5 — $22.8 $36.0 $97.5 $2.33 41,795  

(A) In 2014, losses and other charges include approximately ($6.7) million, net of tax, or ($0.15) per share, related to the reversal of contingent consideration liabilities; and approximately $5.6 million, net of tax, or $0.12 per share, related to acquisition and integration costs, and charges related to facility consolidations. In 2013, losses and other charges include approximately ($8.1) million, net of tax, or ($0.19) per share, related to the reversal of contingent consideration liabilities; approximately $0.8 million, net of tax, or $0.02 per share, related to a litigation verdict against the Company with respect to a non-operating joint venture; and $3.0 million, net of tax, or $0.07 per share, related to acquisition and integration costs; and ($0.4) million, net of tax, or ($0.01) per share, related to a reserve reversal associated with a previously announced stock keeping unit (“SKU”) rationalization charge.

(B) The tax adjustment represents a net benefit resulting from the resolution of, or the expiration of statute of limitations with respect to various prior years’ U.S. federal, state and foreign tax matters.

(C) Adjusted diluted shares are calculated by giving effect to the anti-dilutive impact of the Company’s convertible note hedge agreements, which reduce the potential economic dilution that otherwise would occur upon conversion of our senior subordinated convertible notes. Under GAAP, the anti-dilutive impact of the convertible note hedge agreements is not reflected in diluted shares.

 

RECONCILIATION OF NET DEBT OBLIGATIONS

  June 29, 2014   December 31, 2013   (Dollars in thousands) Note payable and current portion of long term borrowings $ 362,273   $ 356,287   Long term borrowings 700,000 930,000   Unamortized debt discount 42,427 48,413   Total debt obligations 1,104,700 1,334,700   Less: cash and cash equivalents 237,382 431,984   Net debt obligations $ 867,318 $ 902,716  

ABOUT TELEFLEX INCORPORATED

Teleflex is a leading global provider of specialty medical devices for a range of procedures in critical care and surgery. Our mission is to provide solutions that enable healthcare providers to improve outcomes and enhance patient and provider safety. Headquartered in Wayne, PA, Teleflex employs approximately 11,500 people worldwide and serves healthcare providers in more than 150 countries. For additional information about Teleflex please refer to www.teleflex.com.

CAUTION CONCERNING FORWARD-LOOKING INFORMATION

This press release contains forward-looking statements, including, but not limited to, forecasted 2014 GAAP and constant currency revenue growth and GAAP and adjusted diluted earnings per share. Actual results could differ materially from those in the forward-looking statements due to, among other things, conditions in the end markets we serve, customer reaction to new products and programs, our ability to achieve sales growth, price increases or cost reductions; changes in the reimbursement practices of third party payors; our ability to realize efficiencies and to execute on our strategic initiatives; changes in material costs and surcharges; market acceptance and unanticipated difficulties in connection with the introduction of new products and product line extensions; product recalls; unanticipated difficulties in connection with the consolidation of manufacturing and administrative functions, including as a result of difficulties with various employees, labor representatives or regulators; the loss of skilled employees in connection with such initiatives; unanticipated difficulties, expenditures and delays in complying with government regulations applicable to our businesses; the impact of government healthcare reform legislation; our ability to meet our debt obligations; changes in general and international economic conditions; and other factors described or incorporated in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2013.

  TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)   Three Months Ended

June 29,2014

 

June 30,2013

(Dollars and shares inthousands, except per share)

  Net revenues $ 468,105 $ 420,059 Cost of goods sold   224,017   210,569 Gross profit 244,088 209,490 Selling, general and administrative expenses 146,843 116,253 Research and development expenses 14,870 16,524 Restructuring and other impairment charges   7,623   12,962 Income from continuing operations before interest and taxes 74,752 63,751 Interest expense 16,062 14,425 Interest income   (146 )   (157 ) Income from continuing operations before taxes 58,836 49,483 Taxes on income from continuing operations   10,006   6,082 Income from continuing operations   48,830   43,401 Operating loss from discontinued operations (1,594 ) (1,026 ) Tax benefit on loss from discontinued operations   (469 )   (260 ) Loss from discontinued operations   (1,125 )   (766 ) Net income 47,705 42,635 Less: Income from continuing operations attributable to noncontrolling interest   453   194 Net income attributable to common shareholders $ 47,252 $ 42,441   Earnings per share available to common shareholders: Basic: Income from continuing operations $ 1.17 $ 1.05 Loss from discontinued operations   (0.03 )   (0.02 ) Net income $ 1.14 $ 1.03   Diluted: Income from continuing operations $ 1.04 $ 0.99 Loss from discontinued operations   (0.02 )   (0.01 ) Net income $ 1.02 $ 0.98   Dividends per common share $ 0.34 $ 0.34   Weighted average common shares outstanding: Basic 41,380 41,115 Diluted 46,392 43,429   Amounts attributable to common shareholders: Income from continuing operations, net of tax $ 48,377 $ 43,207 Loss from discontinued operations, net of tax   (1,125 )   (766 ) Net income $ 47,252 $ 42,441   TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)   Six Months Ended

June 29,2014

 

June 30,2013

(Dollars and shares inthousands, except per share)

  Net revenues $ 906,651 $ 831,936 Cost of goods sold   441,404   421,926 Gross profit 465,247 410,010 Selling, general and administrative expenses 287,140 243,203 Research and development expenses 28,932 31,531 Restructuring and other impairment charges   15,403   22,121 Income from continuing operations before interest and taxes 133,772 113,155 Interest expense 31,466 28,618 Interest income   (333 )   (314 ) Income from continuing operations before taxes 102,639 84,851 Taxes on income from continuing operations   18,540   13,749 Income from continuing operations   84,099   71,102 Operating loss from discontinued operations (1,619 ) (1,784 ) Tax benefit on loss from discontinued operations   (369 )   (556 ) Loss from discontinued operations   (1,250 )   (1,228 ) Net income 82,849 69,874 Less: Income from continuing operations attributable to noncontrolling interest   639   395 Net income attributable to common shareholders $ 82,210 $ 69,479   Earnings per share available to common shareholders: Basic: Income from continuing operations $ 2.02 $ 1.72 Loss from discontinued operations   (0.03 )   (0.03 ) Net income $ 1.99 $ 1.69   Diluted: Income from continuing operations $ 1.81 $ 1.64 Loss from discontinued operations   (0.03 )   (0.03 ) Net income $ 1.78 $ 1.61   Dividends per common share $ 0.68 $ 0.68   Weighted average common shares outstanding: Basic 41,321 41,064 Diluted 46,071 43,238   Amounts attributable to common shareholders: Income from continuing operations, net of tax $ 83,460 $ 70,707 Loss from discontinued operations, net of tax   (1,250 )   (1,228 ) Net income $ 82,210 $ 69,479     TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)   June 29, December 31, 2014 2013   (Dollars in thousands) ASSETS Current assets Cash and cash equivalents $ 237,382 $ 431,984 Accounts receivable, net 301,720 295,290 Inventories, net 356,467 333,621 Prepaid expenses and other current assets 38,386 39,810 Prepaid taxes 47,641 36,504 Deferred tax assets 50,497 52,917 Assets held for sale   9,161   10,428 Total current assets 1,041,254 1,200,554 Property, plant and equipment, net 343,408 325,900 Goodwill 1,373,356 1,354,203 Intangible assets, net 1,233,905 1,255,597 Investments in affiliates 1,465 1,715 Deferred tax assets 944 943 Other assets   69,501   70,095 Total assets $ 4,063,833 $ 4,209,007   LIABILITIES AND EQUITY Current liabilities Current borrowings $ 362,273 $ 356,287 Accounts payable 73,533 71,967 Accrued expenses 80,040 74,868 Current portion of contingent consideration 2,959 4,131 Payroll and benefit-related liabilities 66,569 73,090 Accrued interest 9,991 8,725 Income taxes payable 21,817 23,821 Other current liabilities   35,308   22,231 Total current liabilities 652,490 635,120 Long-term borrowings 700,000 930,000 Deferred tax liabilities 517,433 514,715 Pension and postretirement benefit liabilities 102,194 109,498 Noncurrent liability for uncertain tax positions 56,687 55,152 Other liabilities   50,650   48,506 Total liabilities 2,079,454 2,292,991 Commitments and contingencies Total common shareholders’ equity 1,982,277 1,913,527 Noncontrolling interest   2,102   2,489 Total equity   1,984,379   1,916,016 Total liabilities and equity $ 4,063,833 $ 4,209,007   TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)   Six Months Ended

June 29, 2014

 

June 30, 2013

(Dollars in thousands) Cash Flows from Operating Activities of Continuing Operations: Net income $ 82,849 $ 69,874 Adjustments to reconcile net income to net cash provided by operating activities: Loss from discontinued operations 1,250 1,228 Depreciation expense 23,997 19,876 Amortization expense of intangible assets 32,102 24,551 Amortization expense of deferred financing costs and debt discount 7,716 7,533 Changes in contingent consideration (6,617 ) (7,926 ) Stock-based compensation 5,726 5,766 Deferred income taxes, net 2,811 (3,351 ) Other (2,142 ) (8,243 )

Changes in operating assets and liabilities, net of effects of acquisitions and disposals:

Accounts receivable 640 (18,084 ) Inventories (16,385 ) (29,354 ) Prepaid expenses and other current assets 2,407 303 Accounts payable and accrued expenses (1,731 ) 1,163 Income taxes receivable and payable, net   (12,462 )   (7,093 ) Net cash provided by operating activities from continuing operations   120,161   56,243   Cash Flows from Investing Activities of Continuing Operations: Expenditures for property, plant and equipment (30,850 ) (36,897 ) Proceeds from sales of assets and investments 4,139 — Payments for businesses and intangibles acquired, net of cash acquired (28,535 ) (36,954 ) Investment in affiliates   (60 )   (50 ) Net cash used in investing activities from continuing operations   (55,306 )   (73,901 )   Cash Flows from Financing Activities of Continuing Operations: Proceeds from long-term borrowings 250,000 — Repayment of long-term borrowings (480,000 ) — Debt issuance fees (3,275 ) — Proceeds from share based compensation plans and the related tax impacts 2,391 3,892 Payments to noncontrolling interest shareholders (1,094 ) (736 ) Payments for contingent consideration — (9,487 ) Dividends   (28,093 )   (27,944 ) Net cash used in financing activities from continuing operations   (260,071 )   (34,275 )   Cash Flows from Discontinued Operations: Net cash used in operating activities   (1,531 )   (1,437 ) Net cash used in discontinued operations   (1,531 )   (1,437 )   Effect of exchange rate changes on cash and cash equivalents   2,145   (2,251 ) Net decrease in cash and cash equivalents (194,602 ) (55,621 ) Cash and cash equivalents at the beginning of the period   431,984   337,039 Cash and cash equivalents at the end of the period $ 237,382 $ 281,418

Teleflex IncorporatedJake ElguiczeTreasurer and Vice President of Investor Relations610-948-2836