TFX Teleflex Inc

Third Quarter Revenues of $457.2 million, up 10.5% over prior year period; up 10.2% on Constant Currency Basis

Third Quarter GAAP Diluted EPS of $1.18, up 12.4% over the prior year period; Adjusted Diluted EPS of $1.57 up 18.0%

2014 Guidance Range for Constant Currency Revenue Growth Increased from 7% to 9% to 7.5% to 9%

2014 Guidance Range for Adjusted Diluted EPS Increased from $5.45 to $5.60 to $5.60 to $5.70

Teleflex Incorporated (NYSE: TFX) (the “Company”) today announced financial results for the third quarter ended September 28, 2014.

Third quarter 2014 net revenues were $457.2 million, an increase of 10.5% over the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 10.2% over the prior year period.

Third quarter 2014 GAAP diluted earnings per share from continuing operations were $1.18, as compared to $1.05 in the prior year period, an increase of 12.4%. Third quarter 2014 adjusted diluted earnings per share from continuing operations were $1.57, as compared to $1.33 in the prior year period, an increase of 18.0%.

“Building upon our performance in the first half of the year, Teleflex once again delivered double-digit constant currency revenue and adjusted earnings per share growth,” said Benson Smith, Chairman, President and Chief Executive Officer. “In addition, during the third quarter, the Company continued to expand operating margin and made progress in the initial phases of our facility restructuring initiatives.”

Added Mr. Smith, “Based on the Company’s performance during the first nine months of 2014, and our outlook for the fourth quarter, we are increasing our full year constant currency revenue growth guidance range from 7% to 9% to 7.5% to 9%, and increasing our full year adjusted diluted earnings per share guidance range from $5.45 to $5.60 to $5.60 to $5.70.”

THIRD QUARTER NET REVENUE BY SEGMENT

Vascular North America third quarter 2014 net revenues were $63.8 million, an increase of 15.9% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 16.1% compared to the prior year period. The increase in constant currency revenue was largely due to product sales resulting from our acquisition of Vidacare, higher sales volume of existing products and new product sales.

Anesthesia/Respiratory North America third quarter 2014 net revenues were $54.7 million, an increase of 1.6% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 1.8% compared to the prior year period. The increase in constant currency revenue was largely due to new product sales and price increases, somewhat offset by lower sales volume of existing products.

Surgical North America third quarter 2014 net revenues were $36.1 million, an increase of 5.8% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 6.2% compared to the prior year period. The increase in constant currency revenue was largely due to higher sales volume of existing products and price increases.

EMEA third quarter 2014 net revenues were $141.2 million, an increase of 6.7% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 5.6% 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, new product sales and price increases.

Asia third quarter 2014 net revenues were $62.0 million, an increase of 12.3% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 11.8% compared to the prior year period. The increase in constant currency revenue was largely due to product sales resulting from the acquisitions of Mayo Healthcare and Vidacare, price increases and new product sales, somewhat offset by lower sales volume of existing products.

OEM and Development Services (“OEM”) third quarter 2014 net revenues were $39.2 million, an increase of 16.0% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 15.9% compared to the prior year period. The increase in constant currency revenue was largely due to higher sales volume of existing products and new product sales, somewhat offset by lower average selling prices.

        Three Months Ended % Increase/ (Decrease) September 28,     September 29, Constant     Foreign    

Total

2014 2013 Currency Currency

Change

(Dollars in millions) Vascular North America $ 63.8 $ 55.1 16.1 % (0.2 %) 15.9 % Anesthesia/Respiratory North America 54.7 53.8 1.8 % (0.2 %) 1.6 % Surgical North America 36.1 34.1 6.2 % (0.4 %) 5.8 % EMEA 141.2 132.3 5.6 % 1.1 % 6.7 % Asia 62.0 55.3 11.8 % 0.5 % 12.3 % OEM 39.2 33.7 15.9 % 0.1 % 16.0 % All Other   60.2   49.4 22.3 % (0.6 %) 21.7 % Total $ 457.2 $ 413.8 10.2 % 0.3 % 10.5 %  

OTHER FINANCIAL HIGHLIGHTS AND KEY PERFORMANCE METRICS

Depreciation expense and amortization of intangible assets and deferred financing costs for first nine months of 2014 were $96.3 million compared to $79.0 million for the prior year period.

Cash and cash equivalents at September 28, 2014 were $286.4 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 September 28, 2014 were $287.2 million compared to $295.3 million at December 31, 2013.

Net inventories at September 28, 2014 were $353.2 million compared to $333.6 million at December 31, 2013.

Net debt obligations at September 28, 2014 were $818.3 million compared to $902.7 million at December 31, 2013.

2014 OUTLOOK

The Company increased its full year 2014 constant currency revenue growth guidance from a range of 7% to 9% to a range of 7.5% to 9%, and increased its full year 2014 adjusted diluted earnings per share guidance from a range of $5.45 to $5.60 to a range of $5.60 to $5.70.

 

FORECASTED 2014 CONSTANT CURRENCY REVENUE GROWTH RECONCILIATION

        Low     High   Forecasted 2014 GAAP revenue growth 7.5% 9.0%   Estimated impact of foreign currency fluctuations —     —   Forecasted 2014 constant currency revenue growth 7.5%     9.0%    

FORECASTED 2014 ADJUSTED EARNINGS PER SHARE RECONCILIATION

        Low     High   Forecasted 2014 diluted earnings per share attributable to common shareholders $3.83 $3.88   Restructuring, impairment charges and special items, net of tax 1 $0.65 $0.70   Intangible amortization expense, net of tax $0.95 $0.95   Amortization of debt discount on convertible notes, net of tax $0.17     $0.17   Forecasted 2014 adjusted diluted earnings per share $5.60     $5.70  

1= The reduction in restructuring, impairment charges and special items, net of tax reflects a shift in the estimated timing of certain restructuring costs from 2014 to 2015.

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 November 5, 2014 at 11:59pm (ET), by calling 888-286-8010 (U.S./Canada) or 617-801-6888 (International), Passcode: 14097601.

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, other charges and charge reversals, including acquisition and integration costs, charges related to facility consolidations, 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 and reversal of a reserve related to a previously announced stock keeping unit benefit program; (iii) amortization of the debt discount on the Company’s convertible notes; (iv) intangible amortization expense; (v) loss on extinguishment of debt; and (vi) 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 – September 28, 2014     Net income Shares used in (loss) attributable Diluted calculation of Cost Selling, Restructuring Loss on

to common

earnings per

GAAP and

of

general and

Research and and other Interest extinguish- shareholders share available adjusted goods administrative development impairment expense, ment of Income from continuing to common earnings per sold expenses expenses charges net debt taxes operations shareholders share GAAP Basis $221.0 $138.3 $14.9 $1.1 $17.0 — $9.7 $55.1 $1.18 46,628 Adjustments

Restructuring and other impairment charges

— — — 1.1 — — 0.1 1.0 $0.02 —

Losses, other charges and reversals (A)

1.9 (0.9) 0.0 — — — 1.1 — $0.00 —

Amortization of debt discount on convertible notes

— — — — 3.1 — 1.1 2.0 $0.04 — Intangible amortization expense — 15.0 — — — — 4.0 11.0 $0.24 — Tax adjustment (B) — — — — — — — — $0.00 —

Shares due to Teleflex under note hedge (C)

— — — — — — — — $0.09 (2,799) Adjusted basis $219.1 $124.2 $14.8 — $13.9 — $16.0 $69.0 $1.57 43,829   Quarter Ended – September 29, 2013 Net income Shares used in (loss) attributable Diluted calculation of Cost Selling, Restructuring Loss on to common earnings per GAAP and of general and Research and and other Interest extinguish- shareholders share available adjusted goods administrative Development impairment expense, ment of Income from continuing to common earnings per sold expenses expenses charges net debt taxes operations shareholders share GAAP Basis $209.8 $115.2 $15.6 $7.1 $13.8 $1.3 $5.2 $45.5 $1.05 43,264 Adjustments

Restructuring and other impairment charges

— — — 7.1 — — 1.5 5.6 $0.13 — Losses, other charges and reversals (A) 1.8 (3.3) — — — — 0.9 (2.3) ($0.05) —

Amortization of debt discount on convertible notes

— — — — 2.9 — 1.0 1.8 $0.04 — Intangible amortization expense — 12.5 — — — — 4.2 8.3 $0.19 — Loss on extinguishment of debt — — — — — 1.3 0.5 0.8 $0.02 —

Tax adjustment (B)

— — — — — — 4.1 (4.1) ($0.09) —

Shares due to Teleflex under note hedge (C)

— — — — — — — — $0.04 (1,428) Adjusted basis $208.0 $106.0 $15.6 — $10.9 — $17.4 $55.6 $1.33 41,836  

(A) In 2014, losses, other charges and charge reversals include approximately ($1.5) million, net of tax, or ($0.03) per share, related to the reversal of contingent consideration liabilities; and approximately $1.5 million, net of tax, or $0.03 per share, related to acquisition and integration costs, and charges related to facility consolidations. In 2013, losses and other charges include approximately ($4.4) million, net of tax, or ($0.10) per share, related to the reversal of contingent consideration liabilities; approximately $2.1 million, net of tax, or $0.05 per share, related to acquisition and integration costs.

(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   Nine Months Ended – September 28, 2014       Net income Shares used in (loss) attributable Diluted calculation of Cost Selling, Restructuring Loss on to common earnings per GAAP and of general and Research and and other Interest extinguish- shareholders share available adjusted goods administrative development impairment expense, ment of Income from continuing to common earnings per sold expenses expenses charges net debt taxes operations shareholders share GAAP Basis $662.4 $425.4 $43.8 $16.5 $48.2 — $28.2 $138.6 $3.00 46,256 Adjustments

Restructuring and other impairment charges

— — — 16.5 — — 4.7 11.8 $0.26 —

Losses, other charges and reversals (A)

2.8 (2.1) 0.1 — — — 1.9 (1.1) ($0.02) —

Amortization of debt discount on convertible notes

— — — — 9.1 — 3.3 5.8 $0.12 — Intangible amortization expense — 47.1 — — — — 13.9 33.1 $0.72 — Tax adjustment (B) — — — — — — 0.2 (0.2) ($0.01) —

Shares due to Teleflex under note hedge (C)

— — — — — — — — $0.25 (2,654) Adjusted basis $659.6 $380.4 $43.7 — $39.1 — $52.3 $187.9 $4.31 43,602   Nine Months Ended – September 29, 2013 Net income Shares used in (loss) attributable Diluted calculation of Cost Selling, Restructuring Loss on to common earnings per GAAP and of general and Research and and other Interest extinguish- shareholders share available adjusted goods administrative Development impairment expense, ment of Income from continuing to common earnings per sold expenses expenses charges net debt taxes operations shareholders share GAAP Basis $631.7 $358.4 $47.2 $29.2 $42.1 $1.3 $19.0 $116.3 $2.69 43,246 Adjustments

Restructuring and other impairment charges

— — — 29.2 — — 6.1 23.1 $0.53 — Losses, other charges and reversals (A) 2.0 (6.7) — — — — 2.4 (7.0) ($0.16) —

Amortization of debt discount on convertible notes

— — — — 8.4 — 3.1 5.3 $0.12 — Intangible amortization expense — 37.1 — — — — 12.7 24.3 $0.56 — Loss on extinguishment of debt — — — — — 1.3 0.5 0.8 $0.02 —

Tax adjustment (B)

— — — — — — 9.6 (9.6) ($0.22) —

Shares due to Teleflex under note hedge (C)

— — — — — — — — $0.12 (1,438) Adjusted basis $629.7 $328.0 $47.2 — $33.7 — $53.4 $153.1 $3.66 41,808  

(A) In 2014, losses, other charges and charge reversals include approximately ($8.1) million, net of tax, or ($0.18) per share, related to the reversal of contingent consideration liabilities; and approximately $7.0 million, net of tax, or $0.16 per share, related to acquisition and integration costs, and charges related to facility consolidations. In 2013, losses and other charges include approximately ($12.4) million, net of tax, or ($0.29) 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; $5.0 million, net of tax, or $0.12 per share, related to acquisition and integration costs; and ($0.4) million, net of tax, or ($0.01) per share, related to reversal of a reserve with respect to 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

 

September 28, 2014

    December 31, 2013 (Dollars in thousands) Note payable and current portion of long term borrowings $ 365,356 $ 356,287   Long term borrowings 700,000 930,000   Unamortized debt discount   39,335   48,413   Total debt obligations 1,104,691 1,334,700   Less: cash and cash equivalents   286,382   431,984   Net debt obligations $ 818,309 $ 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 September 28,     September 29, 2014 2013 (Dollars and shares in thousands, except per share)   Net revenues $ 457,173 $ 413,796 Cost of goods sold   221,007   209,804 Gross profit 236,166 203,992 Selling, general and administrative expenses 138,252 115,228 Research and development expenses 14,871 15,638 Restructuring and other impairment charges   1,108   7,084

Income from continuing operations before interest, loss on extinguishments of debt and taxes

81,935 66,042 Interest expense 17,184 13,948 Interest income (161 ) (144 ) Loss on extinguishments of debt   —   1,250 Income from continuing operations before taxes 64,912 50,988 Taxes on income from continuing operations   9,684   5,209 Income from continuing operations   55,228   45,779 Operating income (loss) from discontinued operations (247 ) 38 Taxes (benefit) on income (loss) from discontinued operations   24   (991 ) Income (loss) from discontinued operations   (271 )   1,029 Net income 54,957 46,808

Less: Income from continuing operations attributable to noncontrolling interest

  126   234 Net income attributable to common shareholders $ 54,831 $ 46,574   Earnings per share available to common shareholders: Basic: Income from continuing operations $ 1.33 $ 1.11 Income (loss) from discontinued operations   (0.01 )   0.02 Net income $ 1.32 $ 1.13   Diluted: Income from continuing operations $ 1.18 $ 1.05 Income from discontinued operations   —   0.03 Net income $ 1.18 $ 1.08   Dividends per share $ 0.34 $ 0.34   Weighted average common shares outstanding: Basic 41,399 41,132 Diluted 46,628 43,264   Amounts attributable to common shareholders: Income from continuing operations, net of tax $ 55,102 $ 45,545 Income (loss) from discontinued operations, net of tax   (271 )   1,029 Net income $ 54,831 $ 46,574       TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)   Nine Months Ended September 28,     September 29, 2014 2013 (Dollars and shares in thousands, except per share)   Net revenues $ 1,363,824 $ 1,245,732 Cost of goods sold   662,411   631,730 Gross profit 701,413 614,002 Selling, general and administrative expenses 425,392 358,431 Research and development expenses 43,803 47,169 Restructuring and other impairment charges   16,511   29,205

Income from continuing operations before interest, loss on extinguishments of debt and taxes

215,707 179,197 Interest expense 48,650 42,566 Interest income (494 ) (458 ) Loss on extinguishments of debt   —   1,250 Income from continuing operations before taxes 167,551 135,839 Taxes on income from continuing operations   28,224   18,958 Income from continuing operations   139,327   116,881 Operating loss from discontinued operations (1,866 ) (1,746 ) Tax benefit on loss from discontinued operations   (345 )   (1,547 ) Loss from discontinued operations   (1,521 )   (199 ) Net income 137,806 116,682

Less: Income from continuing operations attributable to noncontrolling interest

  765   629 Net income attributable to common shareholders $ 137,041 $ 116,053   Earnings per share available to common shareholders: Basic: Income from continuing operations $ 3.35 $ 2.83 Loss from discontinued operations   (0.04 )   (0.01 ) Net income $ 3.31 $ 2.82   Diluted: Income from continuing operations $ 3.00 $ 2.69 Loss from discontinued operations   (0.04 )   (0.01 ) Net income $ 2.96 $ 2.68   Dividends per share $ 1.02 $ 1.02   Weighted average common shares outstanding: Basic 41,347 41,087 Diluted 46,256 43,246   Amounts attributable to common shareholders: Income from continuing operations, net of tax $ 138,562 $ 116,252 Loss from discontinued operations, net of tax   (1,521 )   (199 ) Net income $ 137,041 $ 116,053           TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)   September 28, December 31, 2014 2013   (Dollars in thousands) ASSETS Current assets Cash and cash equivalents $ 286,382 $ 431,984 Accounts receivable, net 287,179 295,290 Inventories, net 353,227 333,621 Prepaid expenses and other current assets 43,283 39,810 Prepaid taxes 51,319 36,504 Deferred tax assets 48,141 52,917 Assets held for sale   7,672   10,428 Total current assets 1,077,203 1,200,554 Property, plant and equipment, net 347,233 325,900 Goodwill 1,352,045 1,354,203 Intangible assets, net 1,208,252 1,255,597 Investments in affiliates 1,079 1,715 Deferred tax assets 1,706 943 Other assets   70,274   70,095 Total assets $ 4,057,792 $ 4,209,007   LIABILITIES AND EQUITY Current liabilities Current borrowings $ 365,356 $ 356,287 Accounts payable 71,034 71,967 Accrued expenses 77,333 74,868 Current portion of contingent consideration 2,957 4,131 Payroll and benefit-related liabilities 76,781 73,090 Accrued interest 13,848 8,725 Income taxes payable 26,735 23,821 Other current liabilities   42,272   22,231 Total current liabilities 676,316 635,120 Long-term borrowings 700,000 930,000 Deferred tax liabilities 494,884 514,715 Pension and postretirement benefit liabilities 97,007 109,498 Noncurrent liability for uncertain tax provisions 56,448 55,152 Other liabilities   49,221   48,506 Total liabilities 2,073,876 2,292,991 Commitments and contingencies Total common shareholders’ equity 1,981,728 1,913,527 Noncontrolling interest   2,188   2,489 Total equity   1,983,916   1,916,016 Total liabilities and equity $ 4,057,792 $ 4,209,007       TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)   Nine Months Ended September 28,     September 29, 2014 2013 (Dollars in thousands) Cash Flows from Operating Activities of Continuing Operations: Net income $ 137,806 $ 116,682 Adjustments to reconcile net income to net cash provided by operating activities: Loss from discontinued operations 1,521 199 Depreciation expense 37,409 30,735 Amortization expense of intangible assets 47,053 37,072 Amortization expense of deferred financing costs and debt discount 11,792 11,228 Loss on extinguishments of debt — 1,250 Impairment of long-lived assets — 3,354 Changes in contingent consideration (7,670 ) (12,927 ) Stock-based compensation 9,125 8,426 Deferred income taxes, net (2,808 ) (1,286 ) Other

(4,310

) (8,223 )

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

Accounts receivable 2,442 (12,395 ) Inventories (23,084 ) (23,576 ) Prepaid expenses and other current assets

(4,087

) (5,420 ) Accounts payable and accrued expenses 14,258 1,573 Income taxes receivable and payable, net   (10,649 )   (10,820 ) Net cash provided by operating activities from continuing operations   208,798   135,872   Cash Flows from Investing Activities of Continuing Operations: Expenditures for property, plant and equipment (48,220 ) (54,640 ) Proceeds from sales of assets and investments 5,251 — Payments for businesses and intangibles acquired, net of cash acquired (28,535 ) (40,450 ) Investment in affiliates   (40 )   (50 ) Net cash used in investing activities from continuing operations   (71,544 )   (95,140 )   Cash Flows from Financing Activities of Continuing Operations: Proceeds from long-term borrowings 250,000 382,000 Repayment of long-term borrowings (480,009 ) (375,000 ) Debt extinguishment, issuance and amendment fees (3,689 ) (6,365 ) Proceeds from share based compensation plans and the related tax impacts 2,936 4,740 Payments to noncontrolling interest shareholders (1,094 ) (736 ) Payments for contingent consideration — (16,367 ) Dividends   (42,174 )   (41,915 ) Net cash used in financing activities from continuing operations   (274,030 )   (53,643 )   Cash Flows from Discontinued Operations: Net cash used in operating activities   (1,946 )   (2,167 ) Net cash used in discontinued operations   (1,946 )   (2,167 )   Effect of exchange rate changes on cash and cash equivalents   (6,880 )   4,476 Net decrease in cash and cash equivalents (145,602 ) (10,602 ) Cash and cash equivalents at the beginning of the period   431,984   337,039 Cash and cash equivalents at the end of the period $ 286,382 $ 326,437  

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