(Mark One) | |
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 23-1147939 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification no.) |
550 E. Swedesford Rd., Suite 400, Wayne, PA | 19087 | |
(Address of principal executive offices) | (Zip Code) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨ |
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨ |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. |
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ | (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | ||
Emerging growth company | ¨ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x |
The registrant had 45,049,267 shares of common stock, par value $1.00 per share, outstanding as of October 30, 2017. |
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Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||||||
(Dollars and shares in thousands, except per share) | |||||||||||||||
Net revenues | $ | 534,703 | $ | 455,648 | $ | 1,551,197 | $ | 1,354,094 | |||||||
Cost of goods sold | 239,476 | 214,046 | 710,126 | 630,946 | |||||||||||
Gross profit | 295,227 | 241,602 | 841,071 | 723,148 | |||||||||||
Selling, general and administrative expenses | 163,771 | 139,797 | 486,674 | 419,128 | |||||||||||
Research and development expenses | 21,194 | 15,067 | 59,299 | 42,892 | |||||||||||
Restructuring (credits) charges | (92 | ) | 3,027 | 13,723 | 12,876 | ||||||||||
Gain on sale of assets | — | (2,776 | ) | — | (4,173 | ) | |||||||||
Income from continuing operations before interest, loss on extinguishment of debt and taxes | 110,354 | 86,487 | 281,375 | 252,425 | |||||||||||
Interest expense | 21,264 | 12,888 | 58,884 | 38,579 | |||||||||||
Interest income | (286 | ) | (115 | ) | (616 | ) | (324 | ) | |||||||
Loss on extinguishment of debt | — | — | 5,593 | 19,261 | |||||||||||
Income from continuing operations before taxes | 89,376 | 73,714 | 217,514 | 194,909 | |||||||||||
Taxes on income from continuing operations | 9,978 | 7,514 | 19,404 | 18,134 | |||||||||||
Income from continuing operations | 79,398 | 66,200 | 198,110 | 176,775 | |||||||||||
Operating (loss) income from discontinued operations | (3,749 | ) | 260 | (4,597 | ) | (116 | ) | ||||||||
(Benefit) taxes on income (loss) from discontinued operations | (1,366 | ) | 138 | (1,675 | ) | (119 | ) | ||||||||
(Loss) income from discontinued operations | (2,383 | ) | 122 | (2,922 | ) | 3 | |||||||||
Net income | 77,015 | 66,322 | 195,188 | 176,778 | |||||||||||
Less: Income from continuing operations attributable to noncontrolling interest | — | — | — | 464 | |||||||||||
Net income attributable to common shareholders | $ | 77,015 | $ | 66,322 | $ | 195,188 | $ | 176,314 | |||||||
Earnings per share available to common shareholders: | |||||||||||||||
Basic: | |||||||||||||||
Income from continuing operations | $ | 1.76 | $ | 1.50 | $ | 4.40 | $ | 4.09 | |||||||
Income (loss) from discontinued operations | (0.05 | ) | 0.01 | (0.06 | ) | — | |||||||||
Net income | $ | 1.71 | $ | 1.51 | $ | 4.34 | $ | 4.09 | |||||||
Diluted: | |||||||||||||||
Income from continuing operations | $ | 1.70 | $ | 1.40 | $ | 4.24 | $ | 3.69 | |||||||
Loss from discontinued operations | (0.05 | ) | — | (0.06 | ) | — | |||||||||
Net income | $ | 1.65 | $ | 1.40 | $ | 4.18 | $ | 3.69 | |||||||
Dividends per share | $ | 0.34 | $ | 0.34 | $ | 1.02 | $ | 1.02 | |||||||
Weighted average common shares outstanding | |||||||||||||||
Basic | 45,035 | 44,045 | 44,975 | 43,081 | |||||||||||
Diluted | 46,587 | 47,446 | 46,673 | 47,824 | |||||||||||
Amounts attributable to common shareholders: | |||||||||||||||
Income from continuing operations, net of tax | $ | 79,398 | $ | 66,200 | $ | 198,110 | $ | 176,311 | |||||||
(Loss) income from discontinued operations, net of tax | (2,383 | ) | 122 | (2,922 | ) | 3 | |||||||||
Net income | $ | 77,015 | $ | 66,322 | $ | 195,188 | $ | 176,314 |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Net income | $ | 77,015 | $ | 66,322 | $ | 195,188 | $ | 176,778 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Foreign currency translation, net of tax of $(8,429), $(327), $(26,910), and $(2,978) for the three and nine month periods, respectively | 43,345 | (130 | ) | 156,012 | 11,088 | ||||||||||
Pension and other postretirement benefit plans adjustment, net of tax of $(479), $(737), $(1,476) $(2,007) for the three and nine month periods, respectively | 743 | 1,430 | 2,337 | 3,914 | |||||||||||
Derivatives qualifying as hedges, net of tax of $141, $(393), $(1,029), and $212 for the three and nine month periods, respectively | (243 | ) | (223 | ) | 4,918 | 761 | |||||||||
Other comprehensive income (loss), net of tax: | 43,845 | 1,077 | 163,267 | 15,763 | |||||||||||
Comprehensive income | 120,860 | 67,399 | 358,455 | 192,541 | |||||||||||
Less: comprehensive income attributable to noncontrolling interest | — | 24 | — | 421 | |||||||||||
Comprehensive income attributable to common shareholders | $ | 120,860 | $ | 67,375 | $ | 358,455 | $ | 192,120 |
October 1, 2017 | December 31, 2016 | ||||||
(Dollars in thousands) | |||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 1,017,573 | $ | 543,789 | |||
Accounts receivable, net | 306,472 | 271,993 | |||||
Inventories, net | 382,417 | 316,171 | |||||
Prepaid expenses and other current assets | 51,599 | 40,382 | |||||
Prepaid taxes | 8,690 | 8,179 | |||||
Assets held for sale | — | 2,879 | |||||
Total current assets | 1,766,751 | 1,183,393 | |||||
Property, plant and equipment, net | 374,461 | 302,899 | |||||
Goodwill | 1,886,157 | 1,276,720 | |||||
Intangible assets, net | 1,606,943 | 1,091,663 | |||||
Deferred tax assets | 2,020 | 1,712 | |||||
Other assets | 44,401 | 34,826 | |||||
Total assets | $ | 5,680,733 | $ | 3,891,213 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities | |||||||
Current borrowings | $ | 77,250 | $ | 183,071 | |||
Accounts payable | 85,419 | 69,400 | |||||
Accrued expenses | 88,095 | 65,149 | |||||
Current portion of contingent consideration | 591 | 587 | |||||
Payroll and benefit-related liabilities | 88,091 | 82,679 | |||||
Accrued interest | 13,430 | 10,450 | |||||
Income taxes payable | 12,857 | 7,908 | |||||
Other current liabilities | 8,912 | 8,402 | |||||
Total current liabilities | 374,645 | 427,646 | |||||
Long-term borrowings | 2,172,805 | 850,252 | |||||
Deferred tax liabilities | 471,667 | 271,377 | |||||
Pension and postretirement benefit liabilities | 116,441 | 133,062 | |||||
Noncurrent liability for uncertain tax positions | 14,238 | 17,520 | |||||
Other liabilities | 58,460 | 52,015 | |||||
Total liabilities | 3,208,256 | 1,751,872 | |||||
Commitments and contingencies | |||||||
Convertible notes - redeemable equity component | — | 1,824 | |||||
Mezzanine equity | — | 1,824 | |||||
Total shareholders' equity | 2,472,477 | 2,137,517 | |||||
Total liabilities and shareholders' equity | $ | 5,680,733 | $ | 3,891,213 |
Nine Months Ended | |||||||
October 1, 2017 | September 25, 2016 | ||||||
(Dollars in thousands) | |||||||
Cash flows from operating activities of continuing operations: | |||||||
Net income | $ | 195,188 | $ | 176,778 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Loss (income) from discontinued operations | 2,922 | (3 | ) | ||||
Depreciation expense | 42,390 | 40,272 | |||||
Amortization expense of intangible assets | 63,976 | 47,486 | |||||
Amortization expense of deferred financing costs and debt discount | 3,940 | 8,506 | |||||
Loss on extinguishment of debt | 5,593 | 19,261 | |||||
Gain on sale of assets | — | (4,173 | ) | ||||
Fair value step up of acquired inventory sold | 10,442 | — | |||||
Changes in contingent consideration | (109 | ) | 1,672 | ||||
Stock-based compensation | 14,519 | 12,540 | |||||
Deferred income taxes, net | (15,682 | ) | (8,699 | ) | |||
Other | (13,559 | ) | (15,132 | ) | |||
Changes in operating assets and liabilities, net of effects of acquisitions and disposals: | |||||||
Accounts receivable | 6,428 | 4,316 | |||||
Inventories | (20,257 | ) | (5,617 | ) | |||
Prepaid expenses and other current assets | (4,009 | ) | 1,184 | ||||
Accounts payable and accrued expenses | 24,128 | 17,390 | |||||
Income taxes receivable and payable, net | 3,798 | 5,817 | |||||
Net cash provided by operating activities from continuing operations | 319,708 | 301,598 | |||||
Cash flows from investing activities of continuing operations: | |||||||
Expenditures for property, plant and equipment | (53,977 | ) | (35,912 | ) | |||
Proceeds from sale of assets | 6,332 | 9,792 | |||||
Payments for businesses and intangibles acquired, net of cash acquired | (1,010,711 | ) | (14,040 | ) | |||
Net cash used in investing activities from continuing operations | (1,058,356 | ) | (40,160 | ) | |||
Cash flows from financing activities of continuing operations: | |||||||
Proceeds from new borrowings | 1,963,500 | 671,700 | |||||
Reduction in borrowings | (747,576 | ) | (714,487 | ) | |||
Debt extinguishment, issuance and amendment fees | (19,114 | ) | (8,958 | ) | |||
Net proceeds from share based compensation plans and the related tax impacts | 4,739 | 7,647 | |||||
Payments to noncontrolling interest shareholders | — | (464 | ) | ||||
Payments for contingent consideration | (245 | ) | (133 | ) | |||
Payments for acquisition of noncontrolling interest | — | (9,231 | ) | ||||
Dividends paid | (45,905 | ) | (43,980 | ) | |||
Net cash provided by (used in) financing activities from continuing operations | 1,155,399 | (97,906 | ) | ||||
Cash flows from discontinued operations: | |||||||
Net cash used in operating activities | (1,140 | ) | (1,451 | ) | |||
Net cash used in discontinued operations | (1,140 | ) | (1,451 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 58,173 | (988 | ) | ||||
Net increase in cash and cash equivalents | 473,784 | 161,093 | |||||
Cash and cash equivalents at the beginning of the period | 543,789 | 338,366 | |||||
Cash and cash equivalents at the end of the period | $ | 1,017,573 | $ | 499,459 | |||
Non cash financing activities of continuing operations: | |||||||
Settlement and exchange of convertible notes with common or treasury stock | $ | 53,207 | $ | 35,205 | |||
Acquisition of treasury stock associated with settlement and exchange of convertible note hedge and warrant agreements | $ | 127,158 | $ | 85,909 |
Common Stock | Additional Paid In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total | ||||||||||||||||||||||||
Shares | Dollars | Shares | Dollars | ||||||||||||||||||||||||||
(Dollars and shares in thousands, except per share) | |||||||||||||||||||||||||||||
Balance at December 31, 2016 | 45,814 | $ | 45,814 | $ | 506,800 | $ | 2,194,593 | $ | (438,717 | ) | 1,741 | $ | (170,973 | ) | $ | 2,137,517 | |||||||||||||
Net income | 195,188 | 195,188 | |||||||||||||||||||||||||||
Cash dividends ($1.02 per share) | (45,905 | ) | (45,905 | ) | |||||||||||||||||||||||||
Other comprehensive income | 163,267 | 163,267 | |||||||||||||||||||||||||||
Settlements of convertible notes | 927 | 927 | (48,375 | ) | (503 | ) | 52,279 | 4,831 | |||||||||||||||||||||
Settlements of note hedges associated with convertible notes and warrants | 127,158 | 622 | (127,155 | ) | 3 | ||||||||||||||||||||||||
Shares issued under compensation plans | 119 | 119 | 15,050 | (46 | ) | 2,319 | 17,488 | ||||||||||||||||||||||
Deferred compensation | (2 | ) | 88 | 88 | |||||||||||||||||||||||||
Balance as of October 1, 2017 | 46,860 | $ | 46,860 | $ | 600,633 | $ | 2,343,876 | $ | (275,450 | ) | 1,812 | $ | (243,442 | ) | $ | 2,472,477 |
(Dollars in thousands) | |||
Assets | |||
Current assets | $ | 63,867 | |
Property, plant and equipment | 46,616 | ||
Intangible assets | 539,250 | ||
Goodwill | 522,614 | ||
Other assets | 728 | ||
Total assets acquired | 1,173,075 | ||
Less: | |||
Current liabilities | 15,079 | ||
Deferred tax liabilities | 182,472 | ||
Liabilities assumed | 197,551 | ||
Net assets acquired | $ | 975,524 |
Fair value | Useful life range | |||
(Dollars in thousands) | (Years) | |||
Intellectual property | 248,200 | 10- 20 | ||
In-process research and development ("IPR&D") | 15,600 | Indefinite | ||
Trade names | 16,650 | 20 | ||
Customer lists | 258,800 | 25 |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||||||
(Dollars and shares in thousands, except per share) | |||||||||||||||
Net revenue | $ | 534,703 | $ | 497,253 | $ | 1,574,021 | $ | 1,475,950 | |||||||
Net income | $ | 76,194 | $ | 63,578 | $ | 209,630 | $ | 136,493 | |||||||
Basic earnings per common share: | |||||||||||||||
Net income | $ | 1.69 | $ | 1.44 | $ | 4.66 | $ | 3.17 | |||||||
Diluted earnings per common share: | |||||||||||||||
Net income | $ | 1.64 | $ | 1.34 | $ | 4.49 | $ | 2.85 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 45,035 | 44,045 | 44,975 | 43,081 | |||||||||||
Diluted | 46,587 | 47,446 | 46,673 | 47,824 |
• | On September 2, 2016, the Company acquired certain assets of CarTika Medical, Inc., ("CarTika"), an original equipment manufacturer (OEM) of catheters and other medical devices that complement the Company's OEM product portfolio. |
• | On July 1, 2016, the Company, which previously owned a 74% controlling interest in its Indian affiliate, Teleflex Medical Private Limited, acquired the remaining 26% ownership interest from the noncontrolling shareholders. Teleflex Medical Private Limited is part of the Company's Asia reportable operating segment. As this acquisition did not result in a change in the Company's control of the entity, the Company recognized the $7.5 million excess of the purchase price of the noncontrolling interest over its carrying value as equity. |
• | During the second quarter 2016, the Company acquired certain assets of two medical device and supplies distributors in New Zealand. |
Three Months Ended October 1, 2017 | |||||||||||||||||||
Termination Benefits | Facility Closure Costs | Contract Termination Costs | Other Exit Costs | Total | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
2017 Vascular Solutions integration program | $ | (319 | ) | $ | — | $ | — | $ | 58 | $ | (261 | ) | |||||||
2017 EMEA restructuring program | (714 | ) | — | — | 84 | (630 | ) | ||||||||||||
2016 Footprint realignment plan | 274 | 72 | — | 85 | 431 | ||||||||||||||
2014 Footprint realignment plan | 197 | 46 | — | 6 | 249 | ||||||||||||||
Other restructuring programs (1) | 8 | — | 104 | 7 | 119 | ||||||||||||||
Total restructuring (credits) charges | $ | (554 | ) | $ | 118 | $ | 104 | $ | 240 | $ | (92 | ) |
Three Months Ended September 25, 2016 | |||||||||||||||||||
Termination Benefits | Facility Closure Costs | Contract Termination Costs | Other Exit Costs | Total | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
2016 Other Restructuring programs | $ | 1,713 | $ | — | $ | — | $ | — | $ | 1,713 | |||||||||
2016 Footprint realignment plan | 851 | — | — | 74 | 925 | ||||||||||||||
2014 Footprint realignment plan | 308 | — | — | 6 | 314 | ||||||||||||||
Other restructuring programs (2) | (88 | ) | 54 | 107 | 2 | 75 | |||||||||||||
Total restructuring charges | $ | 2,784 | $ | 54 | $ | 107 | $ | 82 | $ | 3,027 |
Nine Months Ended October 1, 2017 | |||||||||||||||||||
Termination Benefits | Facility Closure Costs | Contract Termination Costs | Other Exit Costs | Total | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
2017 Vascular Solutions integration program | $ | 4,534 | $ | — | $ | — | $ | 92 | $ | 4,626 | |||||||||
2017 EMEA restructuring program | 5,822 | — | — | 84 | 5,906 | ||||||||||||||
2016 Footprint realignment plan | 1,099 | 94 | (75 | ) | 214 | 1,332 | |||||||||||||
2014 Footprint realignment plan | 379 | 60 | — | 7 | 446 | ||||||||||||||
Other restructuring programs (3) | 973 | 58 | 313 | 69 | 1,413 | ||||||||||||||
Total restructuring charges | $ | 12,807 | $ | 212 | $ | 238 | $ | 466 | $ | 13,723 |
Nine Months Ended September 25, 2016 | |||||||||||||||||||
Termination Benefits | Facility Closure Costs | Contract Termination Costs | Other Exit Costs | Total | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
2016 Other Restructuring programs | $ | 1,713 | $ | — | $ | — | $ | — | $ | 1,713 | |||||||||
2016 Footprint realignment plan | 10,919 | — | — | 360 | 11,279 | ||||||||||||||
2014 Footprint realignment plan | (118 | ) | — | — | 17 | (101 | ) | ||||||||||||
Other restructuring programs (4) | (487 | ) | $ | 232 | $ | 114 | 126 | (15 | ) | ||||||||||
Total restructuring charges | $ | 12,027 | $ | 232 | $ | 114 | $ | 503 | $ | 12,876 |
(1) | Other restructuring programs include the 2017 Pyng Integration program and the 2016 Other Restructuring programs. The Company committed to the 2017 Pyng Integration program, which relates to the integration of Pyng into Teleflex, during the second quarter 2017. |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||||||
(Dollars in thousands) | (Dollars in thousands) | ||||||||||||||
Restructuring (credits) charges | |||||||||||||||
Vascular North America | $ | 606 | $ | 960 | $ | 1,715 | $ | 5,474 | |||||||
Anesthesia North America | 220 | 946 | 1,031 | 3,185 | |||||||||||
Surgical North America | — | 277 | — | 257 | |||||||||||
EMEA | (632 | ) | 89 | 6,503 | 3,012 | ||||||||||
OEM | — | 187 | — | 191 | |||||||||||
All other | (286 | ) | 568 | 4,474 | 757 | ||||||||||
Total restructuring (credits) charges | $ | (92 | ) | $ | 3,027 | $ | 13,723 | $ | 12,876 |
October 1, 2017 | December 31, 2016 | ||||||
(Dollars in thousands) | |||||||
Raw materials | $ | 98,322 | $ | 65,319 | |||
Work-in-process | 60,020 | 54,555 | |||||
Finished goods | 224,075 | 196,297 | |||||
Inventories, net | $ | 382,417 | $ | 316,171 |
Vascular North America | Anesthesia North America | Surgical North America | EMEA | Asia | OEM | All Other | Total | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||
Balance as of December 31, 2016 | $ | 345,546 | $ | 141,253 | $ | 250,912 | $ | 290,041 | $ | 138,185 | $ | 4,883 | $ | 105,900 | $ | 1,276,720 | |||||||||||||||
Goodwill related to acquisitions | — | 15,594 | — | 9,139 | 2,927 | — | 522,614 | 550,274 | |||||||||||||||||||||||
Currency translation and other adjustments | (1,590 | ) | 458 | — | 33,665 | 8,585 | — | 18,045 | 59,163 | ||||||||||||||||||||||
Balance as of October 1, 2017 | $ | 343,956 | $ | 157,305 | $ | 250,912 | $ | 332,845 | $ | 149,697 | $ | 4,883 | $ | 646,559 | $ | 1,886,157 |
Gross Carrying Amount | Accumulated Amortization | ||||||||||||||
October 1, 2017 | December 31, 2016 | October 1, 2017 | December 31, 2016 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Customer relationships | $ | 901,367 | $ | 622,428 | $ | (269,447 | ) | $ | (239,055 | ) | |||||
In-process research and development | 34,296 | 16,532 | — | — | |||||||||||
Intellectual property | 778,292 | 519,962 | (238,236 | ) | (203,390 | ) | |||||||||
Distribution rights | 23,637 | 23,021 | (16,663 | ) | (15,239 | ) | |||||||||
Trade names | 408,362 | 379,724 | (18,343 | ) | (13,974 | ) | |||||||||
Non-compete agreements | 5,354 | 2,692 | (1,676 | ) | (1,038 | ) | |||||||||
$ | 2,151,308 | $ | 1,564,359 | $ | (544,365 | ) | $ | (472,696 | ) |
October 1, 2017 | December 31, 2016 | ||||||
(Dollars in thousands) | |||||||
Senior Credit Facility: | |||||||
Revolving credit facility, at a rate of 3.24% at October 1, 2017, due 2022 | $ | 841,000 | $ | 210,000 | |||
Term loan facility, at a rate of 3.24% at October 1, 2017, due 2022 | 721,000 | — | |||||
3.875% Convertible Senior Subordinated Notes due 2017 | — | 136,076 | |||||
4.875% Senior Notes due 2026 | 400,000 | 400,000 | |||||
5.25% Senior Notes due 2024 | 250,000 | 250,000 | |||||
Securitization program, at a rate of 1.98% at October 1, 2017 | 50,000 | 50,000 | |||||
2,262,000 | 1,046,076 | ||||||
Less: Unamortized debt discount on 3.875% Convertible Senior Subordinated Notes due 2017 | — | (2,707 | ) | ||||
Less: Unamortized debt issuance costs | (11,945 | ) | (10,046 | ) | |||
2,250,055 | 1,033,323 | ||||||
Current borrowings | (77,250 | ) | (183,071 | ) | |||
Long-term borrowings | $ | 2,172,805 | $ | 850,252 |
October 1, 2017 | December 31, 2016 | ||||||
(Dollars in thousands) | |||||||
Level 1 | $ | — | $ | 344,765 | |||
Level 2 | 2,254,376 | 929,362 | |||||
Total | $ | 2,254,376 | $ | 1,274,127 |
October 1, 2017 | December 31, 2016 | ||||||
Fair Value | |||||||
(Dollars in thousands) | |||||||
Asset derivatives: | |||||||
Designated foreign currency forward contracts | $ | 1,684 | $ | 667 | |||
Non-designated foreign currency forward contracts | 318 | 490 | |||||
Prepaid expenses and other current assets | $ | 2,002 | $ | 1,157 | |||
Total asset derivatives | $ | 2,002 | $ | 1,157 | |||
Liability derivatives: | |||||||
Designated foreign currency forward contracts | $ | 237 | $ | 2,139 | |||
Non-designated foreign currency forward contracts | 93 | 118 | |||||
Other current liabilities | $ | 330 | $ | 2,257 | |||
Total liability derivatives | $ | 330 | $ | 2,257 |
October 1, 2017 | December 31, 2016 | ||||||
(Dollars in thousands) | |||||||
Allowance for doubtful accounts(1) | $ | 10,084 | $ | 8,630 | |||
Current and long-term trade accounts receivable in Greece, Italy, Spain and Portugal (2) | $ | 50,613 | $ | 51,098 | |||
Percentage of total net current and long-term trade accounts receivable - Greece, Italy, Spain and Portugal | 16.9 | % | 19.3 | % |
(1) | The current portion of the allowance for doubtful accounts was $3.1 million and $2.0 million as of October 1, 2017 and December 31, 2016, respectively, and was recognized in accounts receivable, net. |
(2) | The long-term portion of trade accounts receivable, net from customers in Greece, Italy, Spain and Portugal at October 1, 2017 and December 31, 2016 was $3.5 million and $2.7 million, respectively. In January 2017, the Company sold $16.1 million of receivables outstanding with respect to publicly funded hospitals in Italy for $16.0 million. |
Total carrying value at October 1, 2017 | Quoted prices in active markets (Level 1) | Significant other observable Inputs (Level 2) | Significant unobservable Inputs (Level 3) | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Investments in marketable securities | $ | 8,563 | $ | 8,563 | $ | — | $ | — | |||||||
Derivative assets | 2,002 | — | 2,002 | — | |||||||||||
Derivative liabilities | 330 | — | 330 | — | |||||||||||
Contingent consideration liabilities (1) | 12,117 | — | — | 12,117 |
Total carrying value at December 31, 2016 | Quoted prices in active markets (Level 1) | Significant other observable Inputs (Level 2) | Significant unobservable Inputs (Level 3) | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Investments in marketable securities | $ | 7,660 | $ | 7,660 | $ | — | $ | — | |||||||
Derivative assets | 1,157 | — | 1,157 | — | |||||||||||
Derivative liabilities | 2,257 | — | 2,257 | — | |||||||||||
Contingent consideration liabilities (1) | 7,102 | — | — | 7,102 |
(1) | As of October 1, 2017 and December 31, 2016, (a) $0.6 million of contingent consideration liabilities were recognized in the current portion of contingent consideration, and (b) $11.5 million and $6.5 million of contingent consideration liabilities, respectively, were recognized in other liabilities in the condensed consolidated balance sheet. |
Contingent consideration | |||
2017 | |||
(Dollars in thousands) | |||
Balance - December 31, 2016 | $ | 7,102 | |
Additions (1) | 5,369 | ||
Payment | (245 | ) | |
Revaluations | (109 | ) | |
Balance - October 1, 2017 | $ | 12,117 |
Three Months Ended | Nine Months Ended | ||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||
(Shares in thousands) | |||||||||||
Basic | 45,035 | 44,045 | 44,975 | 43,081 | |||||||
Dilutive effect of share-based awards | 934 | 639 | 873 | 574 | |||||||
Dilutive effect of 3.875% Convertible Notes and warrants (1) | 618 | 2,762 | 825 | 4,169 | |||||||
Diluted | 46,587 | 47,446 | 46,673 | 47,824 |
(1) | The reduction in the dilutive effect of the Convertible Notes and warrants during the three and nine months ended October 1, 2017 as compared to three and nine months ended September 25, 2016 is due principally to the Company’s repurchase of Convertible Notes and conversions by holders of the Convertible Notes. |
Cash Flow Hedges | Pension and Other Postretirement Benefit Plans | Foreign Currency Translation Adjustment | Accumulated Other Comprehensive (Loss) Income | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Balance as of December 31, 2016 | $ | (2,424 | ) | $ | (136,596 | ) | $ | (299,697 | ) | $ | (438,717 | ) | |||
Other comprehensive income (loss) before reclassifications | 3,383 | (1,050 | ) | 156,012 | 158,345 | ||||||||||
Amounts reclassified from accumulated other comprehensive income | 1,535 | 3,387 | — | 4,922 | |||||||||||
Net current-period other comprehensive income | 4,918 | 2,337 | 156,012 | 163,267 | |||||||||||
Balance as of October 1, 2017 | $ | 2,494 | $ | (134,259 | ) | $ | (143,685 | ) | $ | (275,450 | ) |
Cash Flow Hedges | Pension and Other Postretirement Benefit Plans | Foreign Currency Translation Adjustment | Accumulated Other Comprehensive (Loss) Income | ||||||||||||
(Dollars in thousands) | |||||||||||||||
Balance at December 31, 2015 | $ | (2,491 | ) | $ | (138,887 | ) | $ | (229,746 | ) | $ | (371,124 | ) | |||
Other comprehensive (loss) before reclassifications | (2,255 | ) | 618 | 11,131 | 9,494 | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | 3,016 | 3,296 | — | 6,312 | |||||||||||
Net current-period other comprehensive income | 761 | 3,914 | 11,131 | 15,806 | |||||||||||
Reclassification related to acquisition of noncontrolling interest | — | — | (832 | ) | (832 | ) | |||||||||
Balance at September 25, 2016 | $ | (1,730 | ) | $ | (134,973 | ) | $ | (219,447 | ) | $ | (356,150 | ) |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||||||
(Dollars in thousands) | |||||||||||||||
(Gains) losses on foreign exchange contracts: | |||||||||||||||
Cost of goods sold | $ | (1,179 | ) | $ | 535 | $ | 1,769 | $ | 3,907 | ||||||
Total before tax | (1,179 | ) | 535 | 1,769 | 3,907 | ||||||||||
Taxes (benefit) | 237 | (187 | ) | (234 | ) | (891 | ) | ||||||||
Net of tax | $ | (942 | ) | $ | 348 | $ | 1,535 | $ | 3,016 | ||||||
Amortization of pension and other postretirement benefit items: | |||||||||||||||
Actuarial losses (1) | $ | 1,723 | $ | 1,829 | $ | 5,176 | $ | 5,071 | |||||||
Prior-service costs(1) | 20 | 15 | 79 | 43 | |||||||||||
Total before tax | 1,743 | 1,844 | 5,255 | 5,114 | |||||||||||
Tax benefit | (619 | ) | (657 | ) | (1,868 | ) | (1,818 | ) | |||||||
Net of tax | $ | 1,124 | $ | 1,187 | $ | 3,387 | $ | 3,296 | |||||||
Total reclassifications, net of tax | $ | 182 | $ | 1,535 | $ | 4,922 | $ | 6,312 |
Three Months Ended | Nine Months Ended | ||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||
Effective income tax rate | 11.2% | 10.2% | 8.9% | 9.3% |
Pension Three Months Ended | Other Postretirement Benefits Three Months Ended | Pension Nine Months Ended | Other Postretirement Benefits Nine Months Ended | ||||||||||||||||||||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||
Service cost | $ | 725 | $ | 656 | $ | 61 | $ | 44 | $ | 2,162 | $ | 1,963 | $ | 210 | $ | 266 | |||||||||||||||
Interest cost | 3,773 | 3,948 | 426 | 383 | 11,347 | 11,797 | 1,183 | 1,196 | |||||||||||||||||||||||
Expected return on plan assets | (6,607 | ) | (6,209 | ) | — | — | (20,100 | ) | (18,606 | ) | — | — | |||||||||||||||||||
Net amortization and deferral | 1,668 | 1,781 | 75 | 63 | 5,049 | 4,937 | 206 | 177 | |||||||||||||||||||||||
Net benefits expense (income) | $ | (441 | ) | $ | 176 | $ | 562 | $ | 490 | $ | (1,542 | ) | $ | 91 | $ | 1,599 | $ | 1,639 |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||||||
(Dollars in thousands) | (Dollars in thousands) | ||||||||||||||
Revenue | |||||||||||||||
Vascular North America | $ | 90,979 | $ | 85,118 | $ | 278,350 | $ | 254,817 | |||||||
Anesthesia North America | 50,819 | 48,670 | 148,107 | 143,821 | |||||||||||
Surgical North America | 40,804 | 41,827 | 131,464 | 123,904 | |||||||||||
EMEA | 131,517 | 121,398 | 394,212 | 375,198 | |||||||||||
Asia | 72,387 | 64,087 | 185,328 | 176,434 | |||||||||||
OEM | 48,589 | 41,418 | 137,067 | 115,693 | |||||||||||
All other | 99,608 | 53,130 | 276,669 | 164,227 | |||||||||||
Consolidated net revenues | $ | 534,703 | $ | 455,648 | $ | 1,551,197 | $ | 1,354,094 |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||||||
(Dollars in thousands) | (Dollars in thousands) | ||||||||||||||
Operating profit | |||||||||||||||
Vascular North America | $ | 25,212 | $ | 21,781 | $ | 75,286 | $ | 63,431 | |||||||
Anesthesia North America | 15,684 | 13,954 | 49,727 | 41,181 | |||||||||||
Surgical North America | 13,618 | 14,050 | 47,285 | 39,654 | |||||||||||
EMEA | 24,187 | 16,576 | 69,677 | 61,563 | |||||||||||
Asia | 20,217 | 18,072 | 49,619 | 52,831 | |||||||||||
OEM | 12,256 | 10,201 | 31,714 | 24,605 | |||||||||||
All other | 11,987 | 3,444 | 16,953 | 16,623 | |||||||||||
Total segment operating profit (1) | 123,161 | 98,078 | 340,261 | 299,888 | |||||||||||
Unallocated expenses (2) | (12,807 | ) | (11,591 | ) | (58,886 | ) | (47,463 | ) | |||||||
Income from continuing operations before interest, loss on extinguishment of debt and taxes | $ | 110,354 | $ | 86,487 | $ | 281,375 | $ | 252,425 |
(1) | Segment operating profit includes segment net revenues from external customers reduced by the segment's standard cost of goods sold, adjusted for fixed manufacturing cost absorption variances, selling, general and administrative expenses, research and development expenses and an allocation of corporate expenses. Corporate expenses are allocated among the segments in proportion to the respective |
(2) | Unallocated expenses primarily include manufacturing variances other than fixed manufacturing cost absorption variances, restructuring charges and gain on sale of assets. |
a. | Parent Company, the issuer of the guaranteed obligations; |
b. | Guarantor Subsidiaries, on a combined basis; |
c. | Non-Guarantor Subsidiaries (i.e., those subsidiaries of the Parent Company that have not guaranteed payment of the 2024 Notes and 2026 Notes), on a combined basis; and |
d. | Parent Company and its subsidiaries on a consolidated basis. |
Three Months Ended October 1, 2017 | |||||||||||||||||||
Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Condensed Consolidated | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Net revenues | $ | — | $ | 335,051 | $ | 303,676 | $ | (104,024 | ) | $ | 534,703 | ||||||||
Cost of goods sold | — | 194,262 | 149,302 | (104,088 | ) | 239,476 | |||||||||||||
Gross profit | — | 140,789 | 154,374 | 64 | 295,227 | ||||||||||||||
Selling, general and administrative expenses | 10,536 | 89,315 | 64,046 | (126 | ) | 163,771 | |||||||||||||
Research and development expenses | 220 | 14,788 | 6,186 | — | 21,194 | ||||||||||||||
Restructuring charges (credits) | — | 552 | (644 | ) | — | (92 | ) | ||||||||||||
(Loss) income from continuing operations before interest and taxes | (10,756 | ) | 36,134 | 84,786 | 190 | 110,354 | |||||||||||||
Interest, net | 53,521 | (33,392 | ) | 849 | — | 20,978 | |||||||||||||
(Loss) income from continuing operations before taxes | (64,277 | ) | 69,526 | 83,937 | 190 | 89,376 | |||||||||||||
(Benefit) taxes on (loss) income from continuing operations | (30,845 | ) | 23,453 | 17,364 | 6 | 9,978 | |||||||||||||
Equity in net income of consolidated subsidiaries | 112,830 | 61,027 | 257 | (174,114 | ) | — | |||||||||||||
Income from continuing operations | 79,398 | 107,100 | 66,830 | (173,930 | ) | 79,398 | |||||||||||||
Operating loss from discontinued operations | (3,749 | ) | — | — | — | (3,749 | ) | ||||||||||||
Benefit on loss from discontinued operations | (1,366 | ) | — | — | — | (1,366 | ) | ||||||||||||
Loss from discontinued operations | (2,383 | ) | — | — | — | (2,383 | ) | ||||||||||||
Net income | 77,015 | 107,100 | 66,830 | (173,930 | ) | 77,015 | |||||||||||||
Other comprehensive income | 43,845 | 30,196 | 56,286 | (86,482 | ) | 43,845 | |||||||||||||
Comprehensive income | $ | 120,860 | $ | 137,296 | $ | 123,116 | $ | (260,412 | ) | $ | 120,860 |
Three Months Ended September 25, 2016 | |||||||||||||||||||
Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Condensed Consolidated | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Net revenues | $ | — | $ | 270,610 | $ | 281,258 | $ | (96,220 | ) | $ | 455,648 | ||||||||
Cost of goods sold | — | 163,052 | 147,240 | (96,246 | ) | 214,046 | |||||||||||||
Gross profit | — | 107,558 | 134,018 | 26 | 241,602 | ||||||||||||||
Selling, general and administrative expenses | 11,208 | 80,333 | 48,285 | (29 | ) | 139,797 | |||||||||||||
Research and development expenses | 179 | 8,422 | 6,466 | — | 15,067 | ||||||||||||||
Restructuring charges | 380 | 1,712 | 935 | — | 3,027 | ||||||||||||||
(Gain) loss on sale of assets | (2,707 | ) | 104 | (173 | ) | — | (2,776 | ) | |||||||||||
(Loss) income from continuing operations before interest and taxes | (9,060 | ) | 16,987 | 78,505 | 55 | 86,487 | |||||||||||||
Interest, net | 41,344 | (29,612 | ) | 1,041 | — | 12,773 | |||||||||||||
(Loss) income from continuing operations before taxes | (50,404 | ) | 46,599 | 77,464 | 55 | 73,714 | |||||||||||||
(Benefit) taxes on (loss) income from continuing operations | (18,017 | ) | 13,166 | 12,437 | (72 | ) | 7,514 | ||||||||||||
Equity in net income of consolidated subsidiaries | 98,544 | 57,837 | 183 | (156,564 | ) | — | |||||||||||||
Income from continuing operations | 66,157 | 91,270 | 65,210 | (156,437 | ) | 66,200 | |||||||||||||
Operating income from discontinued operations | 260 | — | — | — | 260 | ||||||||||||||
Taxes on income from discontinued operations | 95 | — | 43 | — | 138 | ||||||||||||||
Income (loss) from discontinued operations | 165 | — | (43 | ) | — | 122 | |||||||||||||
Net income attributable to common shareholders | 66,322 | 91,270 | 65,167 | (156,437 | ) | 66,322 | |||||||||||||
Other comprehensive income (loss) attributable to common shareholders | 1,053 | (501 | ) | 1,243 | (742 | ) | 1,053 | ||||||||||||
Comprehensive income attributable to common shareholders | $ | 67,375 | $ | 90,769 | $ | 66,410 | $ | (157,179 | ) | $ | 67,375 |
Nine Months Ended October 1, 2017 | |||||||||||||||||||
Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Condensed Consolidated | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Net revenues | $ | — | $ | 989,314 | $ | 876,968 | $ | (315,085 | ) | $ | 1,551,197 | ||||||||
Cost of goods sold | — | 576,465 | 445,638 | (311,977 | ) | 710,126 | |||||||||||||
Gross profit | — | 412,849 | 431,330 | (3,108 | ) | 841,071 | |||||||||||||
Selling, general and administrative expenses | 38,523 | 278,529 | 169,224 | 398 | 486,674 | ||||||||||||||
Research and development expenses | 719 | 39,568 | 19,012 | — | 59,299 | ||||||||||||||
Restructuring charges | — | 7,261 | 6,462 | — | 13,723 | ||||||||||||||
(Loss) income from continuing operations before interest, extinguishment of debt and taxes | (39,242 | ) | 87,491 | 236,632 | (3,506 | ) | 281,375 | ||||||||||||
Interest, net | 152,268 | (96,776 | ) | 2,776 | — | 58,268 | |||||||||||||
Loss on extinguishment of debt | 5,593 | — | — | — | 5,593 | ||||||||||||||
(Loss) income from continuing operations before taxes | (197,103 | ) | 184,267 | 233,856 | (3,506 | ) | 217,514 | ||||||||||||
(Benefit) taxes on (loss) income from continuing operations | (83,867 | ) | 60,061 | 43,803 | (593 | ) | 19,404 | ||||||||||||
Equity in net income of consolidated subsidiaries | 311,346 | 175,690 | 713 | (487,749 | ) | — | |||||||||||||
Income from continuing operations | 198,110 | 299,896 | 190,766 | (490,662 | ) | 198,110 | |||||||||||||
Operating loss from discontinued operations | (4,597 | ) | — | — | — | (4,597 | ) | ||||||||||||
Benefit on loss from discontinued operations | (1,675 | ) | — | — | — | (1,675 | ) | ||||||||||||
Loss from discontinued operations | (2,922 | ) | — | — | — | (2,922 | ) | ||||||||||||
Net income | 195,188 | 299,896 | 190,766 | (490,662 | ) | 195,188 | |||||||||||||
Other comprehensive income | 163,267 | 147,727 | 179,561 | (327,288 | ) | 163,267 | |||||||||||||
Comprehensive income | $ | 358,455 | $ | 447,623 | $ | 370,327 | $ | (817,950 | ) | $ | 358,455 |
Nine Months Ended September 25, 2016 | |||||||||||||||||||
Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Condensed Consolidated | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Net revenues | $ | — | $ | 809,951 | $ | 833,390 | $ | (289,247 | ) | $ | 1,354,094 | ||||||||
Cost of goods sold | — | 489,293 | 427,200 | (285,547 | ) | 630,946 | |||||||||||||
Gross profit | — | 320,658 | 406,190 | (3,700 | ) | 723,148 | |||||||||||||
Selling, general and administrative expenses | 30,822 | 248,195 | 139,641 | 470 | 419,128 | ||||||||||||||
Research and development expenses | 319 | 23,501 | 19,072 | — | 42,892 | ||||||||||||||
Restructuring charges | 380 | 7,027 | 5,469 | — | 12,876 | ||||||||||||||
Gain on sale of assets | (2,707 | ) | (274 | ) | (1,192 | ) | — | (4,173 | ) | ||||||||||
(Loss) income from continuing operations before interest, extinguishment of debt and taxes | (28,814 | ) | 42,209 | 243,200 | (4,170 | ) | 252,425 | ||||||||||||
Interest, net | 107,534 | (72,367 | ) | 3,088 | — | 38,255 | |||||||||||||
Loss on extinguishment of debt | 19,261 | — | — | — | 19,261 | ||||||||||||||
(Loss) income from continuing operations before taxes | (155,609 | ) | 114,576 | 240,112 | (4,170 | ) | 194,909 | ||||||||||||
(Benefit) taxes on (loss) income from continuing operations | (56,942 | ) | 39,347 | 36,210 | (481 | ) | 18,134 | ||||||||||||
Equity in net income of consolidated subsidiaries | 275,296 | 179,342 | 526 | (455,164 | ) | — | |||||||||||||
Income from continuing operations | 176,629 | 254,571 | 204,428 | (458,853 | ) | 176,775 | |||||||||||||
Operating (loss) income from discontinued operations | (495 | ) | — | 379 | — | (116 | ) | ||||||||||||
(Benefit) taxes on (loss) income from discontinued operations | (180 | ) | — | 61 | — | (119 | ) | ||||||||||||
(Loss) income from discontinued operations | (315 | ) | — | 318 | — | 3 | |||||||||||||
Net income | 176,314 | 254,571 | 204,746 | (458,853 | ) | 176,778 | |||||||||||||
Less: Income from continuing operations attributable to noncontrolling interest | — | — | 464 | — | 464 | ||||||||||||||
Net income attributable to common shareholders | 176,314 | 254,571 | 204,282 | (458,853 | ) | 176,314 | |||||||||||||
Other comprehensive income attributable to common shareholders | 15,806 | 8,387 | 12,277 | (20,664 | ) | 15,806 | |||||||||||||
Comprehensive income attributable to common shareholders | $ | 192,120 | $ | 262,958 | $ | 216,559 | $ | (479,517 | ) | $ | 192,120 |
October 1, 2017 | |||||||||||||||||||
Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Condensed Consolidated | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
ASSETS | |||||||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | 45,189 | $ | 748,412 | $ | 223,972 | $ | — | $ | 1,017,573 | |||||||||
Accounts receivable, net | 2,232 | 36,055 | 263,725 | 4,460 | 306,472 | ||||||||||||||
Accounts receivable from consolidated subsidiaries | 9,095 | 2,273,240 | 359,560 | (2,641,895 | ) | — | |||||||||||||
Inventories, net | — | 236,355 | 174,561 | (28,499 | ) | 382,417 | |||||||||||||
Prepaid expenses and other current assets | 15,492 | 8,722 | 24,048 | 3,337 | 51,599 | ||||||||||||||
Prepaid taxes | — | — | 8,690 | — | 8,690 | ||||||||||||||
Total current assets | 72,008 | 3,302,784 | 1,054,556 | (2,662,597 | ) | 1,766,751 | |||||||||||||
Property, plant and equipment, net | 2,247 | 209,966 | 162,248 | — | 374,461 | ||||||||||||||
Goodwill | — | 902,429 | 983,728 | — | 1,886,157 | ||||||||||||||
Intangibles assets, net | — | 612,745 | 994,198 | — | 1,606,943 | ||||||||||||||
Investments in consolidated subsidiaries | 7,245,740 | 1,801,602 | 23,546 | (9,070,888 | ) | — | |||||||||||||
Deferred tax assets | — | — | 5,496 | (3,476 | ) | 2,020 | |||||||||||||
Notes receivable and other amounts due from consolidated subsidiaries | 2,082,206 | 2,256,368 | — | (4,338,574 | ) | — | |||||||||||||
Other assets | 29,378 | 6,308 | 8,715 | — | 44,401 | ||||||||||||||
Total assets | $ | 9,431,579 | $ | 9,092,202 | $ | 3,232,487 | $ | (16,075,535 | ) | $ | 5,680,733 | ||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||
Current liabilities | |||||||||||||||||||
Current borrowings | $ | 27,250 | $ | — | $ | 50,000 | $ | — | $ | 77,250 | |||||||||
Accounts payable | 2,343 | 47,014 | 36,062 | — | 85,419 | ||||||||||||||
Accounts payable to consolidated subsidiaries | 2,307,797 | 275,465 | 58,633 | (2,641,895 | ) | — | |||||||||||||
Accrued expenses | 20,127 | 24,398 | 43,570 | — | 88,095 | ||||||||||||||
Current portion of contingent consideration | — | 591 | — | — | 591 | ||||||||||||||
Payroll and benefit-related liabilities | 19,973 | 28,011 | 40,107 | — | 88,091 | ||||||||||||||
Accrued interest | 13,402 | — | 28 | — | 13,430 | ||||||||||||||
Income taxes payable | 2,168 | — | 11,282 | (593 | ) | 12,857 | |||||||||||||
Other current liabilities | 344 | 5,335 | 3,233 | — | 8,912 | ||||||||||||||
Total current liabilities | 2,393,404 | 380,814 | 242,915 | (2,642,488 | ) | 374,645 | |||||||||||||
Long-term borrowings | 2,172,805 | — | — | — | 2,172,805 | ||||||||||||||
Deferred tax liabilities | 118,891 | 314,168 | 42,084 | (3,476 | ) | 471,667 | |||||||||||||
Pension and postretirement benefit liabilities | 67,836 | 30,928 | 17,677 | — | 116,441 | ||||||||||||||
Noncurrent liability for uncertain tax positions | 2,035 | 9,175 | 3,028 | — | 14,238 | ||||||||||||||
Notes payable and other amounts due to consolidated subsidiaries | 2,178,181 | 1,954,051 | 206,342 | (4,338,574 | ) | — | |||||||||||||
Other liabilities | 25,950 | 13,943 | 18,567 | — | 58,460 | ||||||||||||||
Total liabilities | 6,959,102 | 2,703,079 | 530,613 | (6,984,538 | ) | 3,208,256 | |||||||||||||
Total shareholders' equity | 2,472,477 | 6,389,123 | 2,701,874 | (9,090,997 | ) | 2,472,477 | |||||||||||||
Total liabilities and shareholders' equity | $ | 9,431,579 | $ | 9,092,202 | $ | 3,232,487 | $ | (16,075,535 | ) | $ | 5,680,733 |
December 31, 2016 | |||||||||||||||||||
Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Condensed Consolidated | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
ASSETS | |||||||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | 14,571 | $ | 1,031 | $ | 528,187 | $ | — | $ | 543,789 | |||||||||
Accounts receivable, net | 2,551 | 8,768 | 255,815 | 4,859 | 271,993 | ||||||||||||||
Accounts receivable from consolidated subsidiaries | 4,861 | 2,176,059 | 309,149 | (2,490,069 | ) | — | |||||||||||||
Inventories, net | — | 200,852 | 140,406 | (25,087 | ) | 316,171 | |||||||||||||
Prepaid expenses and other current assets | 14,239 | 5,332 | 17,474 | 3,337 | 40,382 | ||||||||||||||
Prepaid taxes | — | — | 7,766 | 413 | 8,179 | ||||||||||||||
Assets held for sale | — | — | 2,879 | — | 2,879 | ||||||||||||||
Total current assets | 36,222 | 2,392,042 | 1,261,676 | (2,506,547 | ) | 1,183,393 | |||||||||||||
Property, plant and equipment, net | 2,566 | 163,847 | 136,486 | — | 302,899 | ||||||||||||||
Goodwill | — | 708,546 | 568,174 | — | 1,276,720 | ||||||||||||||
Intangibles assets, net | — | 640,999 | 450,664 | — | 1,091,663 | ||||||||||||||
Investments in consolidated subsidiaries | 6,022,042 | 1,519,031 | 23,685 | (7,564,758 | ) | — | |||||||||||||
Deferred tax assets | 73,051 | — | 5,185 | (76,524 | ) | 1,712 | |||||||||||||
Notes receivable and other amounts due from consolidated subsidiaries | 1,387,615 | 2,085,538 | — | (3,473,153 | ) | — | |||||||||||||
Other assets | 22,295 | 6,254 | 6,277 | — | 34,826 | ||||||||||||||
Total assets | $ | 7,543,791 | $ | 7,516,257 | $ | 2,452,147 | $ | (13,620,982 | ) | $ | 3,891,213 | ||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||
Current liabilities | |||||||||||||||||||
Current borrowings | $ | 133,071 | $ | — | $ | 50,000 | $ | — | $ | 183,071 | |||||||||
Accounts payable | 4,540 | 30,924 | 33,936 | — | 69,400 | ||||||||||||||
Accounts payable to consolidated subsidiaries | 2,242,814 | 214,203 | 33,052 | (2,490,069 | ) | — | |||||||||||||
Accrued expenses | 16,827 | 18,126 | 30,196 | — | 65,149 | ||||||||||||||
Current portion of contingent consideration | — | 587 | — | — | 587 | ||||||||||||||
Payroll and benefit-related liabilities | 20,610 | 26,672 | 35,397 | — | 82,679 | ||||||||||||||
Accrued interest | 10,429 | — | 21 | — | 10,450 | ||||||||||||||
Income taxes payable | 1,246 | — | 6,577 | 85 | 7,908 | ||||||||||||||
Other current liabilities | 2,262 | 3,643 | 2,497 | — | 8,402 | ||||||||||||||
Total current liabilities | 2,431,799 | 294,155 | 191,676 | (2,489,984 | ) | 427,646 | |||||||||||||
Long-term borrowings | 850,252 | — | — | — | 850,252 | ||||||||||||||
Deferred tax liabilities | — | 316,526 | 31,375 | (76,524 | ) | 271,377 | |||||||||||||
Pension and postretirement benefit liabilities | 85,645 | 31,561 | 15,856 | — | 133,062 | ||||||||||||||
Noncurrent liability for uncertain tax positions | 1,169 | 13,684 | 2,667 | — | 17,520 | ||||||||||||||
Notes payable and other amounts due to consolidated subsidiaries | 2,011,737 | 1,264,004 | 197,412 | (3,473,153 | ) | — | |||||||||||||
Other liabilities | 23,848 | 15,695 | 12,472 | — | 52,015 | ||||||||||||||
Total liabilities | 5,404,450 | 1,935,625 | 451,458 | (6,039,661 | ) | 1,751,872 | |||||||||||||
Convertible notes - redeemable equity component | 1,824 | — | — | — | 1,824 | ||||||||||||||
Mezzanine equity | 1,824 | — | — | — | 1,824 | ||||||||||||||
Total shareholders' equity | 2,137,517 | 5,580,632 | 2,000,689 | (7,581,321 | ) | 2,137,517 | |||||||||||||
Total liabilities and shareholders' equity | $ | 7,543,791 | $ | 7,516,257 | $ | 2,452,147 | $ | (13,620,982 | ) | $ | 3,891,213 |
Nine Months Ended October 1, 2017 | |||||||||||||||||||
Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Condensed Consolidated | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Net cash (used in) provided by operating activities from continuing operations | $ | (156,643 | ) | $ | 300,961 | $ | 237,308 | $ | (61,918 | ) | $ | 319,708 | |||||||
Cash flows from investing activities of continuing operations: | |||||||||||||||||||
Expenditures for property, plant and equipment | (233 | ) | (27,527 | ) | (26,217 | ) | — | (53,977 | ) | ||||||||||
Proceeds from sale of assets and investments | 464,982 | — | 6,332 | (464,982 | ) | 6,332 | |||||||||||||
Payments for businesses and intangibles acquired, net of cash acquired | (975,524 | ) | — | (35,187 | ) | — | (1,010,711 | ) | |||||||||||
Net cash used in investing activities from continuing operations | (510,775 | ) | (27,527 | ) | (55,072 | ) | (464,982 | ) | (1,058,356 | ) | |||||||||
Cash flows from financing activities of continuing operations: | |||||||||||||||||||
Proceeds from new borrowings | 1,963,500 | — | — | — | 1,963,500 | ||||||||||||||
Reduction in borrowings | (747,576 | ) | — | — | — | (747,576 | ) | ||||||||||||
Debt extinguishment, issuance and amendment fees | (19,114 | ) | — | — | — | (19,114 | ) | ||||||||||||
Net proceeds from share based compensation plans and the related tax impacts | 4,739 | — | — | — | 4,739 | ||||||||||||||
Payments for contingent consideration | — | (245 | ) | — | — | (245 | ) | ||||||||||||
Dividends paid | (45,905 | ) | — | — | — | (45,905 | ) | ||||||||||||
Intercompany transactions | (456,468 | ) | 474,192 | (482,706 | ) | 464,982 | — | ||||||||||||
Intercompany dividends paid | — | — | (61,918 | ) | 61,918 | — | |||||||||||||
Net cash provided by (used in) financing activities from continuing operations | 699,176 | 473,947 | (544,624 | ) | 526,900 | 1,155,399 | |||||||||||||
Cash flows from discontinued operations: | |||||||||||||||||||
Net cash used in operating activities | (1,140 | ) | — | — | — | (1,140 | ) | ||||||||||||
Net cash used in discontinued operations | (1,140 | ) | — | — | — | (1,140 | ) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 58,173 | — | 58,173 | ||||||||||||||
Net increase in cash and cash equivalents | 30,618 | 747,381 | (304,215 | ) | — | 473,784 | |||||||||||||
Cash and cash equivalents at the beginning of the period | 14,571 | 1,031 | 528,187 | — | 543,789 | ||||||||||||||
Cash and cash equivalents at the end of the period | $ | 45,189 | $ | 748,412 | $ | 223,972 | $ | — | $ | 1,017,573 |
Nine Months Ended September 25, 2016 | |||||||||||||||||||
Parent Company | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Condensed Consolidated | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Net cash (used in) provided by operating activities from continuing operations | $ | (72,542 | ) | $ | 123,249 | $ | 253,166 | $ | (2,275 | ) | $ | 301,598 | |||||||
Cash flows from investing activities of continuing operations: | |||||||||||||||||||
Expenditures for property, plant and equipment | (191 | ) | (15,713 | ) | (20,008 | ) | — | (35,912 | ) | ||||||||||
Proceeds from sale of assets | 5,607 | 49,571 | 1,451 | (46,837 | ) | 9,792 | |||||||||||||
Payments for businesses and intangibles acquired, net of cash acquired | — | (10,305 | ) | (50,572 | ) | 46,837 | (14,040 | ) | |||||||||||
Net cash (used in) provided by investing activities from continuing operations | 5,416 | 23,553 | (69,129 | ) | — | (40,160 | ) | ||||||||||||
Cash flows from financing activities of continuing operations: | |||||||||||||||||||
Proceeds from new borrowings | 665,000 | — | 6,700 | — | 671,700 | ||||||||||||||
Reduction in borrowings | (714,487 | ) | — | — | — | (714,487 | ) | ||||||||||||
Debt extinguishment, issuance and amendment fees | (8,958 | ) | — | — | — | (8,958 | ) | ||||||||||||
Net proceeds from share based compensation plans and the related tax impacts | 7,647 | — | — | — | 7,647 | ||||||||||||||
Payments to noncontrolling interest shareholders | — | — | (464 | ) | — | (464 | ) | ||||||||||||
Payments for contingent consideration | — | (133 | ) | — | — | (133 | ) | ||||||||||||
Payments for acquisition of noncontrolling interest | — | — | (9,231 | ) | — | (9,231 | ) | ||||||||||||
Dividends paid | (43,980 | ) | — | — | — | (43,980 | ) | ||||||||||||
Intercompany transactions | 175,203 | (145,645 | ) | (29,558 | ) | — | — | ||||||||||||
Intercompany dividends paid | — | — | (2,275 | ) | 2,275 | — | |||||||||||||
Net cash provided by (used in) financing activities from continuing operations | 80,425 | (145,778 | ) | (34,828 | ) | 2,275 | (97,906 | ) | |||||||||||
Cash flows from discontinued operations: | |||||||||||||||||||
Net cash used in operating activities | (1,451 | ) | — | — | — | (1,451 | ) | ||||||||||||
Net cash used in discontinued operations | (1,451 | ) | — | — | — | (1,451 | ) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (988 | ) | — | (988 | ) | ||||||||||||
Net increase in cash and cash equivalents | 11,848 | 1,024 | 148,221 | — | 161,093 | ||||||||||||||
Cash and cash equivalents at the beginning of the period | 21,612 | — | 316,754 | — | 338,366 | ||||||||||||||
Cash and cash equivalents at the end of the period | $ | 33,460 | $ | 1,024 | $ | 464,975 | $ | — | $ | 499,459 |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||||||
(Dollars in millions) | (Dollars in millions) | ||||||||||||||
Net Revenues | $ | 534.7 | $ | 455.6 | $ | 1,551.2 | $ | 1,354.1 |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||||||
(Dollars in millions) | (Dollars in millions) | ||||||||||||||
Gross profit | $ | 295.2 | $ | 241.6 | $ | 841.1 | $ | 723.1 | |||||||
Percentage of sales | 55.2 | % | 53.0 | % | 54.2 | % | 53.4 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||||||
(Dollars in millions) | (Dollars in millions) | ||||||||||||||
Selling, general and administrative | $ | 163.8 | $ | 139.8 | $ | 486.7 | $ | 419.1 | |||||||
Percentage of sales | 30.6 | % | 30.7 | % | 31.4 | % | 31.0 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||||||
(Dollars in millions) | (Dollars in millions) | ||||||||||||||
Research and development | $ | 21.2 | $ | 15.1 | $ | 59.3 | $ | 42.9 | |||||||
Percentage of sales | 4.0 | % | 3.3 | % | 3.8 | % | 3.2 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||||||
(Dollars in millions) | (Dollars in millions) | ||||||||||||||
Restructuring (credits) charges | $ | (0.1 | ) | $ | 3.0 | $ | 13.7 | $ | 12.9 |
Ongoing Restructuring Plans and Programs | |||||
Estimated Total | Through December 31, 2016 | Estimated Remaining from January 1, 2017 through December 31, 2021(2) | |||
(Dollars in millions) | |||||
Restructuring charges | $52 - $60 | $33 | $19 - $27 | ||
Restructuring related charges (1) | 53 - 65 | 30 | 23 - 35 | ||
Total charges | $105 - $125 | $63 | $42 - $62 | ||
Pre-tax savings (3) | $67 - $75 | $31 | $36 - $44 | ||
Vascular Solutions and Pyng integration programs - synergies (4) | $21 - $27 | — | $21 - $27 |
(1) | Restructuring related charges principally constitute accelerated depreciation and other costs primarily related to the transfer of manufacturing operations to new locations and are expected to be recognized primarily in cost of goods sold. |
(2) | We expect to incur substantially all of the costs prior to the end of 2018, and to have realized substantially all of the estimated annual pre-tax savings and synergies by the year ended December 31, 2019. |
(3) | Approximately 65% of the savings is expected to result in reductions to cost of goods sold. During 2016, in connection with our execution of the 2014 footprint realignment plan, we implemented changes to medication delivery devices included in certain of our kits, which are expected to result in increased product costs (and therefore reduce the annual savings that were estimated at the inception of the program). However, we also expect to achieve improved pricing on these kits to offset the cost, which is expected to result in estimated annual increased revenues of $5 million to $6 million. We expect to begin realizing the benefits of this incremental pricing in 2017. Savings generated from restructuring programs are difficult to estimate, given the nature and timing of the restructuring activities and the possibility that unanticipated expenditures may be required as the programs progress. Moreover, predictions of revenues related to increased pricing are particularly uncertain and can be affected by a number of factors, including customer resistance to price increases and competition. |
(4) | While pre-tax savings address anticipated cost savings to be realized with respect to our historical expense items, synergies reflect anticipated efficiencies to be realized with respect to increased costs that otherwise would have resulted from our acquisition of Vascular Solutions and Pyng Medical Corp. ("Pyng," which we acquired in April 2017). In this regard, the synergies are expected to result from the elimination of redundancies between our operations and Vascular Solutions’ and Pyng's operations, principally through the elimination of personnel redundancies. |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||||||
(Dollars in millions) | (Dollars in millions) | ||||||||||||||
Interest expense | $ | 21.3 | $ | 12.9 | $ | 58.9 | $ | 38.6 | |||||||
Average interest rate on debt | 3.8 | % | 4.1 | % | 3.6 | % | 3.7 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||||||
(Dollars in millions) | (Dollars in millions) | ||||||||||||||
Loss on extinguishment of debt | $ | — | $ | — | $ | 5.6 | $ | 19.3 |
Three Months Ended | Nine Months Ended | ||||||||||
October 1, 2017 | September 25, 2016 | October 1, 2017 | September 25, 2016 | ||||||||
Effective income tax rate | 11.2 | % | 10.2 | % | 8.9 | % | 9.3 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
October 1, 2017 | September 25, 2016 | % Increase/ (Decrease) | October 1, 2017 | September 25, 2016 | % Increase/ (Decrease) | ||||||||||||||||
Segment Revenue | (Dollars in millions) | (Dollars in millions) | |||||||||||||||||||
Vascular North America | $ | 91.0 | $ | 85.1 | 6.9 | $ | 278.3 | $ | 254.8 | 9.2 | |||||||||||
Anesthesia North America | 50.8 | 48.7 | 4.4 | 148.1 | 143.9 | 3.0 | |||||||||||||||
Surgical North America | 40.8 | 41.9 | (2.4 | ) | 131.5 | 123.9 | 6.1 | ||||||||||||||
EMEA | 131.5 | 121.4 | 8.3 | 394.2 | 375.2 | 5.1 | |||||||||||||||
Asia | 72.4 | 64.0 | 13.0 | 185.3 | 176.4 | 5.0 | |||||||||||||||
OEM | 48.6 | 41.4 | 17.3 | 137.1 | 115.7 | 18.5 | |||||||||||||||
All other | 99.6 | 53.1 | 87.5 | 276.7 | 164.2 | 68.5 | |||||||||||||||
Segment net revenues | $ | 534.7 | $ | 455.6 | 17.4 | $ | 1,551.2 | $ | 1,354.1 | 14.6 | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
October 1, 2017 | September 25, 2016 | % Increase/ (Decrease) | October 1, 2017 | September 25, 2016 | % Increase/ (Decrease) | ||||||||||||||||
Segment Operating Profit | (Dollars in millions) | (Dollars in millions) | |||||||||||||||||||
Vascular North America | $ | 25.2 | $ | 21.7 | 15.8 | $ | 75.3 | $ | 63.4 | 18.7 | |||||||||||
Anesthesia North America | 15.7 | 14.0 | 12.4 | 49.7 | 41.2 | 20.8 | |||||||||||||||
Surgical North America | 13.6 | 14.1 | (3.1 | ) | 47.3 | 39.7 | 19.2 | ||||||||||||||
EMEA | 24.2 | 16.6 | 45.9 | 69.7 | 61.6 | 13.2 | |||||||||||||||
Asia | 20.2 | 18.1 | 11.9 | 49.6 | 52.9 | (6.1 | ) | ||||||||||||||
OEM | 12.3 | 10.2 | 20.1 | 31.7 | 24.6 | 28.9 | |||||||||||||||
All other | 12.0 | 3.4 | 248.1 | 17.0 | 16.5 | 2.0 | |||||||||||||||
Segment operating profit (1) | $ | 123.2 | $ | 98.1 | 25.6 | $ | 340.3 | $ | 299.9 | 13.5 |
(1) | See Note 14 to our condensed consolidated financial statements included in this report for a reconciliation of segment operating profit to our condensed consolidated income from continuing operations before interest, loss on extinguishment of debt and taxes. |
Payments due by period | |||||||||||||||||||
Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Total borrowings | $ | 2,262,000 | $ | 77,250 | $ | 84,375 | $ | 1,450,375 | $ | 650,000 | |||||||||
Interest obligations(1) | 472,048 | 85,050 | 165,031 | 128,045 | 93,922 |
(1) | Interest payments on floating rate debt are based on the interest rate in effect on October 1, 2017 . |
Exhibit No. | Description | |||
31.1 | — | |||
31.2 | — | |||
32.1 | — | |||
32.2 | — | |||
101.1 | — | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended October 1, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income for the three and nine months ended October 1, 2017 and September 25, 2016; (ii) the Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended October 1, 2017 and September 25, 2016; (iii) the Condensed Consolidated Balance Sheets as of October 1, 2017 and December 31, 2016; (iv) the Condensed Consolidated Statements of Cash Flows for the nine months ended October 1, 2017 and September 25, 2016; (v) the Condensed Consolidated Statements of Changes in Equity for the three and nine months ended October 1, 2017 and September 25, 2016; and (vi) Notes to Condensed Consolidated Financial Statements. |
TELEFLEX INCORPORATED | ||||
By: | /s/ Benson F. Smith | |||
Benson F. Smith Chairman and Chief Executive Officer (Principal Executive Officer) | ||||
By: | /s/ Thomas E. Powell | |||
Thomas E. Powell Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
Date: November 2, 2017 | /s/ Benson F. Smith | |
Benson F. Smith | ||
Chairman and Chief Executive Officer |
Date: November 2, 2017 | /s/ Thomas E. Powell | |
Thomas E. Powell | ||
Executive Vice President and Chief Financial Officer |
Date: November 2, 2017 | /s/ Benson F. Smith | |
Benson F. Smith Chairman and Chief Executive Officer |
Date: November 2, 2017 | /s/ Thomas E. Powell | |
Thomas E. Powell Executive Vice President and Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Oct. 01, 2017 |
Oct. 30, 2017 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Oct. 01, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | TFX | |
Entity Registrant Name | TELEFLEX INCORPORATED | |
Entity Central Index Key | 0000096943 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 45,049,267 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Sep. 25, 2016 |
Oct. 01, 2017 |
Sep. 25, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation, tax | $ (8,429) | $ (327) | $ (26,910) | $ (2,978) |
Pension and other postretirement benefits plans adjustment, tax | (479) | (737) | (1,476) | (2,007) |
Derivatives qualifying as hedges, tax | $ 141 | $ (393) | $ (1,029) | $ 212 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Sep. 25, 2016 |
Oct. 01, 2017 |
Sep. 25, 2016 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Dividends per share (in dollars per share) | $ 0.34 | $ 0.34 | $ 1.02 | $ 1.02 |
Basis of presentation |
9 Months Ended |
---|---|
Oct. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Note 1 — Basis of presentation The accompanying unaudited condensed consolidated financial statements of Teleflex Incorporated and its subsidiaries (“we,” “us,” “our,” “Teleflex” and the “Company”) are prepared on the same basis as its annual consolidated financial statements. In the opinion of management, the financial statements reflect all adjustments, which are of a normal recurring nature, necessary for the fair statement of financial statements for interim periods in accordance with accounting principles generally accepted in the United States of America ("GAAP") and with Rule 10-01 of Securities and Exchange Commission ("SEC") Regulation S-X, which sets forth the instructions for financial statements included in Form 10-Q. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The results of operations for the periods reported are not necessarily indicative of those that may be expected for a full year. In accordance with applicable accounting standards, the accompanying condensed consolidated financial statements do not include all of the information and footnote disclosures that are required to be included in the Company's annual consolidated financial statements. The year-end condensed consolidated balance sheet data was derived from the Company's audited financial statements, but, as permitted by Rule 10-01 of Regulation S-X, does not include all disclosures required by GAAP for complete financial statements. Accordingly, the Company's quarterly condensed consolidated financial statements should be read in conjunction with the Company's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2016. |
New accounting standards |
9 Months Ended |
---|---|
Oct. 01, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New accounting standards | Note 2 — New accounting standards In May 2014, the Financial Accounting Standards Board ("FASB"), in a joint effort with the International Accounting Standards Board ("IASB"), issued new accounting guidance to clarify the principles for recognizing revenue. This new guidance, collectively with related guidance provided by the FASB, is designed to enhance the comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets, and will affect any entity that enters into contracts with customers or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. The new guidance establishes principles for reporting information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from an entity's contracts with customers. The core principle of the new guidance is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those years. The Company will adopt this standard in the first quarter 2018 and expects to use the modified retrospective method of adoption by recognizing the cumulative effect of adopting this guidance as an adjustment to the Company's opening balance of retained earnings at January 1, 2018. Although the Company's evaluation of this guidance is ongoing, based on its assessment to date, the Company believes that the adoption of this guidance will not have a material impact on its consolidated results of operations, cash flows and financial position. In February 2016, the FASB issued guidance that will change the requirements for accounting for leases. Under the new guidance, lessees (including lessees under both leases classified as finance leases, which are to be classified based on criteria similar to that applicable to capital leases under current guidance, and leases classified as operating leases) will recognize a right-to-use asset and a lease liability on the balance sheet, initially measured as the present value of lease payments under the lease. Under current guidance, operating leases are not recognized on the balance sheet. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements; the guidance provides certain practical expedients. The Company is currently evaluating this guidance to determine its impact on the Company’s consolidated results of operations, cash flows and financial position. In March 2016, the FASB issued new guidance designed to simplify several aspects of the accounting for share-based payment transactions, including, among other things, guidance related to accounting for income taxes, modification of the criteria for classification of awards as either equity awards or liability awards where an employer withholds shares from an employee's share-based award for tax withholding purposes, and classification on the statement of cash flows of cash payments to a tax authority by an employer that withholds shares from an employee's award for tax withholding purposes. The Company adopted this guidance as of January 1, 2017. The Company has applied the new guidance requiring recognition of excess tax deficiencies and tax benefits in the income statement, rather than in additional paid-in-capital, as previously required. The adoption of the new standard increased net income and cash flows from operating activities by $1.5 million and $5.9 million and increased diluted earnings per share by $0.03 and $0.13 for the three and nine months ended October 1, 2017, respectively. The Company will continue to estimate forfeitures of share-based awards at the time of grant, rather than recognize actual forfeitures as they occur, as permitted under the new guidance. In August 2016, the FASB issued new guidance with regard to eight specific issues pertaining to the classification of certain cash receipts and cash payments within the statement of cash flows. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The new guidance should generally be adopted using a retrospective transition method for each period presented. The Company believes that its adoption of the new guidance will not have a material impact on its cash flows. In October 2016, the FASB issued new guidance requiring companies to recognize the income tax effects of intra-entity sales and transfers of assets, other than inventory, in the income statement as income tax expense (or benefit) in the period in which the transfer occurs. Previously, recognition was prohibited until the assets were sold to an outside party or otherwise utilized. The guidance is effective for annual periods beginning after December 15, 2017. The guidance should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the annual period of adoption. The Company is evaluating the impact of the adoption of this guidance, but currently does not anticipate the guidance will have a material impact on its consolidated financial position or results of operations. In January 2017, the FASB issued new guidance to clarify the definition of a “business,” with the objective of assisting entities in evaluating whether a transaction should be accounted for as an acquisition (or disposal) of assets or as an acquisition of a business. The definition of a business affects many areas of accounting, including acquisitions, disposals, goodwill and consolidation. The guidance generally defines a business as an integrated set of activities and assets (collectively referred to as a “set”) that is capable of being conducted and managed for the purpose of providing a return to investors or other owners, members, or participants. The guidance further provides that, to be considered a business, a set must meet specified requirements. However, the guidance also states that, if substantially all of the fair value of gross assets acquired (subject to specified exceptions) is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business and no further analysis is required. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The guidance permits early adoption, and the Company adopted this guidance during the fourth quarter 2017. The Company does not anticipate that the guidance will have a material impact on its consolidated financial position or results of operations. In January 2017, the FASB issued guidance to simplify the quantitative test for goodwill impairment. Under current guidance, if a reporting unit’s carrying value exceeds its fair value, the entity must determine the implied value of goodwill. This determination is made by deducting the fair value of a reporting unit’s identifiable assets and liabilities from the fair value of the reporting unit as a whole as if the reporting unit had just been acquired. Under the new guidance, a determination of the implied value of goodwill will no longer be required; a goodwill impairment will be equal to the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The revised guidance is effective for fiscal years, and any interim goodwill impairment tests within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any impairment tests performed after January 1, 2017. The Company is evaluating the impact of the adoption of this guidance, but currently does not anticipate the guidance will have a material impact on its consolidated financial position or results of operations. In March 2017, the FASB issued guidance for employers that sponsor defined benefit pension or other postretirement benefit plans. The guidance requires that these employers disaggregate specified components of net periodic pension cost and net periodic postretirement benefit cost (collectively, "net benefit cost"). Specifically, the guidance generally requires employers to present in the income statement the service cost component of net benefit cost in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 and generally is required to be applied retrospectively. Early adoption is permitted. The Company is evaluating the impact of the adoption of this guidance, but currently does not anticipate the guidance will have a material impact on its consolidated results of operations. In August 2017, the FASB issued guidance with the objective of improving the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. The new guidance provides for changes to current designation and measurement guidance for qualifying hedging relationships and to the method of presenting hedge results. In addition, the new guidance includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The new guidance is effective for reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated results of operations and financial position. From time to time, new accounting guidance is issued by the FASB or other standard setting bodies that is adopted by the Company as of the effective date or, in some cases where early adoption is permitted, in advance of the effective date. The Company has assessed the recently issued guidance that is not yet effective and, unless otherwise indicated above, believes the new guidance will not have a material impact on the its consolidated results of operations, cash flows or financial position. |
Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Note 3 — Acquisitions On October 2, 2017, the Company acquired NeoTract, Inc. ("NeoTract"). See Note 16, Subsequent events, for additional information related to this acquisition. During the nine months ended October 1, 2017, the Company completed three acquisitions, all of which were accounted for as business combinations. Tianjin Medis Medical Device Co. On September 15, 2017, the Company acquired certain assets from one of its contract manufacturers, Tianjin Medis Medical Co. LTD ("Tianjin Medis"), consisting of substantially all of the assets used by Tianjin Medis to manufacture a line of the Company's laryngeal masks. The aggregate consideration for the assets was $21.3 million, which included payments of $16.0 million and $5.3 million in estimated fair value of contingent consideration. The assets acquired include goodwill and finite-lived intangible assets (consisting of intellectual property, customer lists and a non-compete agreement) of $14.7 million and $6.9 million, respectively. Pyng On April 3, 2017, the Company completed the acquisition of Pyng Medical Corp ("Pyng"), a medical device company that develops and markets sternal intraosseous infusion products, which complement the Company's anesthesia product portfolio. The Company acquired all of the issued and outstanding common shares of Pyng utilizing available cash. The aggregate consideration was $17.9 million, net of cash acquired. The assets acquired include goodwill and finite-lived intangible assets (primarily intellectual property and customer lists) of $13.0 million and $5.5 million, respectively. The goodwill resulting from the acquisition primarily reflects synergies currently expected to be realized from the integration of the acquired business. Vascular Solutions On February 17, 2017, the Company completed the acquisition of Vascular Solutions, Inc. (“Vascular Solutions”) pursuant to a merger transaction. Vascular Solutions is a medical device company that develops and markets products for use in minimally invasive coronary and peripheral vascular procedures. In connection with the merger, subject to specified exclusions, each share of common stock of Vascular Solutions (each, a "Share" and collectively, the “Shares”) was converted into the right to receive $56.00 per Share in cash, without interest and subject to applicable withholding tax. In addition, each outstanding option or similar right to purchase Shares issued under the Vascular Solutions’ Stock Option and Stock Award Plan (the "Company Options") was cancelled and converted into the right to receive an amount in cash, without interest, equal to the product of (i) the total number of Shares subject to such Company Option immediately prior to the acquisition and (ii) the excess, if any, of $56.00 over the exercise price of such Company Option. The aggregate consideration paid by the Company in connection with the merger was approximately $975.5 million, net of cash acquired. For the three and nine months ended October 1, 2017 the Company incurred $0.1 million and $8.3 million, respectively, in transaction expenses associated with the Vascular Solutions acquisition, which are included in selling, general and administrative expenses in the condensed consolidated statement of income. For the three months ended October 1, 2017, the Company recorded post acquisition revenue and operating profit of $43.9 million and $4.8 million, respectively, related to Vascular Solutions. For the nine months ended October 1, 2017, the Company recorded post acquisition revenue and operating loss of $110.5 million and $6.8 million, respectively. Financial information of Vascular Solutions is presented within the "All Other" category in the Company's presentation of segment information. The Vascular Solutions acquisition was financed utilizing borrowings under the Amended and Restated Credit Agreement, dated January 20, 2017 (the "Credit Agreement"), which is described in Note 7. The following table presents the purchase price allocation among the assets acquired and liabilities assumed with respect to the Vascular Solutions acquisition:
The Company is continuing to evaluate the initial purchase price allocations, and further adjustments may be necessary as a result of the Company's assessment of additional information related to the fair values of the assets acquired and liabilities assumed, primarily deferred tax liabilities, certain intangible assets and goodwill. The goodwill resulting from the Vascular Solutions acquisition primarily reflects synergies currently expected to be realized from the integration of the acquired businesses. The following table sets forth the components of identifiable intangible assets acquired and the ranges of the useful lives as of the date of the Vascular Solutions acquisition:
Pro forma combined financial information The following unaudited pro forma combined financial information for the three and nine months ended October 1, 2017 and September 25, 2016, respectively, gives effect to the Vascular Solutions acquisition as if it was completed at the beginning of the earliest period presented. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have occurred under the ownership and management of the Company.
The unaudited pro forma combined financial information presented above includes the accounting effects of the Vascular Solutions business combination, including amortization charges from acquired intangible assets, adjustments for depreciation of property, plant and equipment; interest expense; the revaluation of inventory; and the related tax effects. The unaudited pro forma financial information also includes non-recurring charges specifically related to the Vascular Solutions acquisition and interest expense associated with a bridge loan facility that was put in place to, among other things, assist the Company in financing the acquisition of Vascular Solutions. The unaudited pro forma combined financial information for the three and nine months ended September 25, 2016 reflects the historical results of Vascular Solutions for its three and nine months ended September 30, 2016, respectively, and the effects of the pro forma adjustments listed above. 2016 acquisitions The Company made the following acquisitions during 2016 (the "2016 acquisitions"), which, with the exception of its acquisition of the outstanding noncontrolling interest in Teleflex Medical Private Limited, were accounted for as business combinations:
The aggregate purchase price paid in connection with the 2016 acquisitions was $22.8 million. The results of operations of the acquired businesses and assets are included in the condensed consolidated statements of income from their respective acquisition dates. Pro forma information is not presented, as the operations of the acquired businesses are not significant to the overall operations of the Company. |
Restructuring (credits) charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring charges | Note 4 — Restructuring (credits) charges The following tables provide information regarding restructuring (credits) charges recognized by the Company for the three and nine months ended October 1, 2017 and September 25, 2016:
(2) Other restructuring programs include the 2015 Restructuring programs and the 2014 European Restructuring Plan. (3) Other restructuring programs include the 2017 Pyng Integration program, the 2016 Other Restructuring programs, the 2015 Restructuring programs and the 2014 European Restructuring plan. (4) Other restructuring programs include the 2014 European Restructuring Plan and the 2012 Restructuring program. 2017 Vascular Solutions Integration Program During the first quarter 2017, the Company committed to a restructuring program related to the integration of Vascular Solutions into Teleflex. The program commenced in the first quarter 2017 and is expected to be substantially completed by the end of the second quarter 2018. The Company estimates that it will record aggregate pre-tax restructuring charges of $6.0 million to $7.5 million related to this program, of which $4.5 million to $5.3 million will constitute termination benefits, while $1.5 million to $2.2 million will relate to other exit costs, including employee relocation and outplacement costs. Additionally, the Company expects to incur $2.5 million to $3.0 million of restructuring related charges consisting primarily of retention bonuses offered to certain employees expected to remain with the Company after completion of the program. All of these charges will result in future cash outlays. As of October 1, 2017, the Company has a restructuring reserve of $1.7 million related to this program. 2017 EMEA Restructuring Program During the first quarter 2017, the Company committed to a restructuring program to centralize certain administrative functions in Europe. The program commenced in the second quarter 2017 and is expected to be substantially completed by the end of 2018. The Company estimates that it will record aggregate pre-tax restructuring charges of $7.1 million to $8.5 million related to this program, almost all of which constitute termination benefits, and all of which will result in future cash outlays. As of October 1, 2017, the Company has a restructuring reserve of $6.0 million related to this program. 2016 Other Restructuring Programs During 2016, the Company committed to programs designed to improve operating efficiencies and reduce costs. The programs involve the consolidation of certain global administrative functions and manufacturing operations. The programs commenced in the second half of 2016 and are expected to be substantially complete by the end of the first quarter 2018. The Company estimates that it will record aggregate pre-tax charges of $3.8 million to $4.7 million related to these programs, substantially all of which constitute termination benefits that will result in future cash outlays. Additionally, the Company expects to incur approximately $1.5 million of accelerated depreciation and other costs directly related to these programs, which the Company anticipates will be recognized in cost of goods sold. Approximately $1.0 million of these costs are expected to result in future outlays. As of October 1, 2017, the Company has a restructuring reserve of $0.8 million related to these programs. 2016 Footprint Realignment Plan In 2016, the Company initiated a restructuring plan (the “2016 footprint realignment plan") designed to reduce costs, improve operating efficiencies and enhance the Company’s long term competitive position. The plan involves the relocation of certain manufacturing operations, the relocation and outsourcing of certain distribution operations and a related workforce reduction at certain of the Company's facilities. These actions commenced in the first quarter of 2016 and are expected to be substantially completed by the end of 2018. The Company estimates that it will incur aggregate pre-tax restructuring and restructuring related charges in connection with the 2016 footprint realignment plan of between approximately $34 million to $44 million, of which an estimated $27 million to $31 million are expected to result in future cash outlays. Most of these charges, and the related cash outlays, are expected to be made prior to the end of 2018. In addition to the restructuring charges shown in the tables above, the Company recorded charges related to the 2016 footprint realignment plan of $1.4 million and $5.5 million for the three and nine months ended October 1, 2017, respectively, and $1.9 million and $4.2 million for the three and nine months ended September 25, 2016, respectively. The majority of these restructuring related charges in both periods constituted accelerated depreciation and other costs arising principally as a result of the transfer of manufacturing operations to new locations. As of October 1, 2017, the Company has incurred restructuring charges in connection with the 2016 footprint realignment plan aggregating to $13.8 million. Additionally, as of October 1, 2017, the Company has incurred restructuring related charges aggregating to $12.0 million related to the 2016 footprint realignment plan, consisting of accelerated depreciation and certain other costs that principally resulted from the transfer of manufacturing operations to new locations. These costs primarily were included in cost of goods sold. As of October 1, 2017, the Company has a restructuring reserve of $7.9 million related to this plan, the majority of which relates to termination benefits. 2014 Footprint Realignment Plan In 2014, the Company initiated a restructuring plan (“the 2014 footprint realignment plan”) involving the consolidation of operations and a related reduction in workforce at certain facilities, and the relocation of manufacturing operations from certain higher-cost locations to existing lower-cost locations. These actions commenced in the second quarter 2014 and are expected to be substantially completed by the end of the first half of 2020. The Company estimates that it will incur aggregate pre-tax restructuring and restructuring related charges in connection with the 2014 footprint realignment plan of approximately $43 million to $48 million, of which an estimated $33 million to $38 million are expected to result in future cash outlays. The Company expects to incur $24 million to $30 million in aggregate capital expenditures under the plan. In addition to the restructuring charges set forth in the tables above, the Company recorded charges related to the 2014 footprint realignment plan of $1.0 million and $3.1 million for the three and nine months ended October 1, 2017, respectively, and $2.5 million and $6.9 million for the three and nine months ended September 25, 2016, respectively. The majority of these restructuring related charges in both periods constituted accelerated depreciation and other costs arising principally as a result of the transfer of manufacturing operations to new locations. As of October 1, 2017, the Company has incurred restructuring charges in connection with the 2014 footprint realignment plan aggregating to $11.5 million. Additionally, as of October 1, 2017, the Company has incurred restructuring related charges aggregating to $25.9 million related to the 2014 footprint realignment plan, consisting of accelerated depreciation and certain other costs that principally resulted from the transfer of manufacturing operations from the existing locations to new locations. These restructuring related charges primarily were included in cost of goods sold. As of October 1, 2017, the Company has a restructuring reserve of $4.2 million in connection with the plan, all of which relates to termination benefits. For additional information regarding the Company's restructuring programs, see Note 4 to the Company's consolidated financial statements included in its annual report on Form 10-K for the year ended December 31, 2016. Restructuring (credits) charges by reportable operating segment, and by all other operating segments in the aggregate, for the three and nine months ended October 1, 2017 and September 25, 2016 are set forth in the following table:
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Inventories, net | Note 5 — Inventories, net Inventories as of October 1, 2017 and December 31, 2016 consisted of the following:
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Goodwill and other intangible assets, net |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and other intangible assets, net | Note 6 — Goodwill and other intangible assets, net The following table provides information relating to changes in the carrying amount of goodwill by reportable operating segment, and by all other operating segments in the aggregate, for the nine months ended October 1, 2017:
The following table provides information as of October 1, 2017 and December 31, 2016 regarding the gross carrying amount of, and accumulated amortization relating to, intangible assets:
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Borrowings |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | Note 7 — Borrowings The Company's borrowings at October 1, 2017 and December 31, 2016 were as follows:
Amended and restated senior credit facility On January 20, 2017, the Company entered into the Credit Agreement, which provides for a five year revolving credit facility of $1.0 billion and a term loan facility of $750.0 million. The obligations under the Credit Agreement are guaranteed (subject to certain exceptions and limitations) by substantially all of the material domestic subsidiaries of the Company and are secured by a lien on substantially all of the assets owned by the Company and each guarantor. The maturity date of the revolving credit facility under the Credit Agreement is January 20, 2022, and the term loan facility will mature on February 17, 2022. At the Company’s option, loans under the Credit Agreement will bear interest at a rate equal to adjusted LIBOR plus an applicable margin ranging from 1.25% to 2.50% or at an alternate base rate, which generally is defined as the highest of (i) the publicly announced prime rate of JPMorgan Chase Bank, N.A., the administrative agent under the Credit Agreement, (ii) 0.5% above the federal funds rate and (iii) 1% above adjusted LIBOR for a one month interest period, plus an applicable margin ranging from 0.25% to 1.50%, in each case subject to adjustment based on the Company’s consolidated total leverage ratio (generally, Consolidated Total Funded Indebtedness, as defined in the Credit Agreement, on the date of determination to Consolidated EBITDA, as defined in the Credit Agreement, for the four most recent fiscal quarters ending on or preceding the date of determination). Overdue loans will bear interest at the rate otherwise applicable to such loans plus 2.00%. The Company is required to maintain a total consolidated leverage ratio of not more than 4.50 to 1.00 and a consolidated senior secured leverage ratio (generally, Consolidated Senior Secured Funded Indebtedness, as defined in the Credit Agreement, on the date of determination to Consolidated EBITDA for the four most recent quarters ending on or preceding the date of determination) of not more than 3.50 to 1.00. The Company is further required to maintain a consolidated interest coverage ratio (generally, Consolidated EBITDA for the four most recent fiscal quarters ending on or preceding the date of determination to Consolidated Interest Expense, as defined in the Credit Agreement, paid in cash for such period) of not less than 3.50 to 1.00. The Company capitalized $12.0 million related to transaction fees, including underwriters’ discounts and commissions, incurred in connection with the Credit Agreement. In addition, because the Company's entry into the Credit Agreement was considered a partial extinguishment of the indebtedness under its previously outstanding credit agreement, the Company recognized a loss on extinguishment of debt of $0.4 million during the first quarter 2017. 3.875% Convertible Senior Subordinated Notes Exchange Transactions On January 5, 2017, pursuant to separate, privately negotiated agreements between the Company and certain holders (the "Holders") of its 3.875% Convertible Senior Subordinated Notes due 2017 (the "Convertible Notes"), the Company paid cash and common stock (the "Exchange Consideration") to the Holders in exchange for $91.7 million aggregate principal amount of the Convertible Notes (the "Exchange Transactions"). The Exchange Consideration paid to each of the Holders per $1,000 principal amount of Convertible Notes was equal to: (i) $1,000 in cash, (ii) a number of shares of the Company's common stock equal to the amount of the conversion value of the Convertible Notes in excess of the $1,000 principal amount (the "Conversion Shares"), calculated on the basis of the average daily volume weighted average price per share of Company common stock over a specified period (the "Average Daily VWAP"), (iii) an inducement payment in additional shares of common stock (the "Inducement Shares") calculated based on the Average Daily VWAP; and (iv) cash in an amount equal to accrued and unpaid interest to, but not including, the closing date. As a result of the Exchange Transactions, the Company paid the Holders aggregate cash consideration of approximately $93.2 million (which includes approximately $1.5 million in accrued but previously unpaid interest) and issued and delivered to the Holders approximately 0.93 million shares of Company common stock (including both Conversion Shares and Inducement Shares). The Company funded the $93.2 million cash payment constituting part of the Exchange Consideration through borrowings under its revolving credit facility. As a result of the Exchange Transactions, the Company recognized a loss on extinguishment of debt of $5.2 million during the first quarter 2017. In connection with its entry into the Exchange Transactions, the Company also entered into bond hedge unwind agreements (the "Hedge Unwind Agreements") and warrant unwind agreements (the "Warrant Unwind Agreements") with the dealer counterparties to the convertible note hedge transactions and warrant transactions that were effected at the time of the initial issuance of the Convertible Notes. Under the Hedge Unwind Agreements, the number of then-outstanding call options issued to the Company under the Convertible Note hedge transactions (the "Call Options") was reduced to reflect proportionately the reduction in the outstanding principal amount of the Convertible Notes following the Exchange Transactions. Under the Warrant Unwind Agreements, the number of warrants then held by the dealer counterparties also was reduced. On a net basis, after giving effect to the Hedge Unwind Agreements and Warrant Unwind Agreements, the Company received 0.12 million shares of Company common stock from the dealer counterparties. Settlement and Conversions Upon Maturity The Convertible Notes matured on August 1, 2017 (the "Maturity Date"). On the Maturity Date, the Company repaid the remaining $44.3 million in aggregate principal amount of the Convertible Notes outstanding, together with unpaid interest due and owing on the Convertible Notes (the “Cash Payment”). In connection with the maturity of the Convertible Notes, $44.2 million in aggregate principal amount of the Convertible Notes were tendered to the Company for conversion (the "Converted Notes"). On the Maturity Date, in addition to the Cash Payment, the Company delivered to the holders of the Converted Notes, in the aggregate, 0.5 million shares of Company common stock. In connection with the conversions described above, the Company exercised the outstanding Call Options, and the counterparties to the Convertible Note hedge transactions delivered to the Company 0.5 million shares of Company common stock. The counterparties continue to hold warrants to purchase Company common stock that they acquired at the time of the initial issuance of the Convertible Notes. At October 1, 2017, the warrants, which entitle the holders to purchase 724,648 shares at an exercise price of $74.65 per share, had an intrinsic value of $121.3 million. The warrants are divided into components that expire ratably over a 180 day period commencing November 1, 2017. Fair Value of Long-Term Borrowings The following table provides information regarding the fair value of the Company’s debt as of October 1, 2017 and December 31, 2016, categorized by the level of inputs within the fair value hierarchy used to measure fair value:
To determine the fair value of the debt categorized as Level 2 in the table above, the Company uses a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration, optionality and risk profile. The Company’s implied credit rating is a factor in determining the market interest yield curve. |
Financial instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial instruments | Note 8 — Financial instruments Foreign Currency Forward Contracts The Company uses derivative instruments for risk management purposes. Foreign currency forward contracts designated as cash flow hedges are used to manage exposure related to foreign currency transactions. Foreign currency forward contracts not designated as hedges for accounting purposes are used to manage near term foreign currency denominated monetary assets and liabilities. For the three and nine months ended October 1, 2017, the Company recognized a loss related to non-designated foreign currency forward contracts of $0.6 million and $3.7 million, respectively. For the three and nine months ended September 25, 2016, the Company recognized a loss related to non-designated foreign currency forward contracts of $0.1 million and $1.7 million, respectively. The following table presents the locations in the condensed consolidated balance sheet and fair value of derivative financial instruments as of October 1, 2017 and December 31, 2016:
The total notional amount for all open foreign currency forward contracts designated as cash flow hedges as of October 1, 2017 and December 31, 2016 was $76.1 million and $101.8 million, respectively. The total notional amount for all open non-designated foreign currency forward contracts as of October 1, 2017 and December 31, 2016 was $112.3 million and $73.4 million, respectively. All open foreign currency forward contracts as of October 1, 2017 have durations of twelve months or less. There was no ineffectiveness related to the Company’s cash flow hedges during the three and nine months ended October 1, 2017 and September 25, 2016. Concentration of Credit Risk Concentrations of credit risk with respect to trade accounts receivable are generally limited due to the Company’s large number of customers and their diversity across many geographic areas. A portion of the Company’s trade accounts receivable outside the United States, however, include sales to government-owned or supported healthcare systems in several countries, which are subject to payment delays. Payment is dependent upon the creditworthiness of those countries and the financial stability of their economies. Certain of the Company’s customers, particularly in Greece, Italy, Spain and Portugal, have extended or delayed payments for products and services already provided, raising collectability concerns regarding the Company’s accounts receivable from these customers. As a result, the Company continues to closely monitor the allowance for doubtful accounts with respect to these customers. The following table provides information regarding the Company's allowance for doubtful accounts, the aggregate net current and long-term trade accounts receivable related to customers in Greece, Italy, Spain and Portugal and the percentage of the Company’s total net current and long-term trade accounts receivable represented by these customers' trade accounts receivable at October 1, 2017 and December 31, 2016:
For the nine months ended October 1, 2017 and September 25, 2016, net revenues from customers in Greece, Italy, Spain and Portugal were $96.0 million and $95.8 million, respectively. |
Fair value measurement |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurement | Note 9 — Fair value measurement For a description of the fair value hierarchy, see Note 10 to the Company’s consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2016. The following tables provide information regarding the Company's financial assets and liabilities that are measured at fair value on a recurring basis as of October 1, 2017 and December 31, 2016:
There were no transfers of financial assets or liabilities reported at fair value among Level 1, Level 2 or Level 3 within the fair value hierarchy during the nine months ended October 1, 2017. The following table provides information regarding changes, during the nine months ended October 1, 2017, in Level 3 financial liabilities related to contingent consideration, which are described below in this Note 9 under "Valuation Techniques":
(1) The Company established a liability related to the estimated fair value of contingent consideration associated with the Tianjin Medis acquisition. Valuation Techniques The Company’s financial assets valued based upon Level 1 inputs are comprised of investments in marketable securities held in trust, which are available to satisfy benefit obligations under Company benefit plans and other arrangements. The investment assets of the trust are valued using quoted market prices. The Company’s financial assets and liabilities valued based upon Level 2 inputs are comprised of foreign currency forward contracts. The Company uses foreign currency forward contracts to manage foreign currency transaction exposure as well as exposure to foreign currency denominated monetary assets and liabilities. The Company measures the fair value of the foreign currency forward contracts by calculating the amount required to enter into offsetting contracts with similar remaining maturities as of the measurement date, based on quoted market prices, and taking into account the creditworthiness of the counterparties. The Company’s financial liabilities valued based upon Level 3 inputs are comprised of contingent consideration arrangements pertaining to the Company’s acquisitions. The Company determines the fair value of the liabilities for contingent consideration based on discounted cash flow analysis. This fair value measurement is based on significant inputs unobservable in the market, primarily estimated sales royalties and the discount rate and, therefore, constitutes a Level 3 measurement within the fair value hierarchy. |
Shareholders' equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' equity | Note 10 — Shareholders’ equity Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed in the same manner except that the weighted average number of shares is increased to include dilutive securities. The following table provides a reconciliation of basic to diluted weighted average number of common shares outstanding:
The weighted average number of shares that were antidilutive and therefore excluded from the calculation of earnings per share were 0.6 million for the three and nine months ended October 1, 2017 and 1.4 million and 3.9 million for the three and nine months ended September 25, 2016, respectively. In connection with the issuance of the Convertible Notes, the Company entered into convertible note hedge and warrant agreements. The convertible note hedge, consisting of call options held by the Company, economically reduced the dilutive impact of the Convertible Notes. However, applicable accounting guidance requires the Company to separately address the dilutive impact of the warrants issued under the warrant agreements in computing diluted weighted average number of common shares outstanding, without giving effect to the anti-dilutive impact of the call options. The reduction in the weighted average number of diluted shares that would result from giving effect to the anti-dilutive impact of the call options would have been 0.1 million and 0.4 million for the three and nine months ended October 1, 2017, respectively, and 1.5 million and 2.3 million for the three and nine months ended September 25, 2016, respectively. The treasury stock method is applied to the warrants because the average market price of the Company's common stock during the reporting periods presented exceeds the warrant exercise price of $74.65 per share, and assumes the proceeds from the exercise of the warrants are used by the Company to repurchase shares based on such average market price. Shares issuable upon exercise of the warrants that were included in the total diluted shares outstanding were 0.5 million for the three and nine months ended October 1, 2017 and 1.3 million and 1.9 million for the three and nine months ended September 25, 2016, respectively. The following tables provide information relating to the changes in accumulated other comprehensive loss, net of tax, for the nine months ended October 1, 2017 and September 25, 2016:
The following table provides information relating to the location in the statements of operations and amount of reclassifications of losses/(gains) in accumulated other comprehensive (loss) income into expense/(income), net of tax, for the three and nine months ended October 1, 2017 and September 25, 2016:
(1) These accumulated other comprehensive (loss) income components are included in the computation of net benefit expense for pension and other postretirement benefit plans (see Note 12 for additional information). Mezzanine Equity As of December 31, 2016, the Company reclassified $1.8 million from additional paid-in capital to convertible notes in the mezzanine equity section of the Company's consolidated balance sheet. The reclassified amount represents the aggregate difference between the principal amount and the carrying value of the Convertible Notes purchased by the Company pursuant to the Exchange Transactions (see "3.875% Convertible Senior Subordinated Notes - Exchange Transactions" within Note 7) under agreements that were entered into prior to December 31,2016, but not consummated until January 5, 2017. No reclassification was required as of October 1, 2017. |
Taxes on income from continuing operations |
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Oct. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Taxes on income from continuing operations | Note 11 — Taxes on income from continuing operations
The effective income tax rate for the three and nine months ended October 1, 2017 was 11.2% and 8.9%, respectively, and 10.2% and 9.3% for the three and nine months ended September 25, 2016, respectively. The effective income tax rate for the three months ended October 1, 2017, as compared to the prior year period, reflects a tax cost associated with an increase in the estimated deferred tax with respect to non-permanently reinvested income. |
Pension and other postretirement benefits |
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Pension and other postretirement benefits | Note 12 — Pension and other postretirement benefits The Company has a number of defined benefit pension and postretirement plans covering eligible U.S. and non-U.S. employees. As of October 1, 2017, no further benefits are being accrued under the Company’s U.S. defined benefit pension plans and the Company’s other postretirement benefit plans, other than certain postretirement benefit plans covering employees subject to a collective bargaining agreement. Net pension and other postretirement benefits expense (income) consist of the following:
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Commitments and contingent liabilities |
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Oct. 01, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingent liabilities | Note 13 — Commitments and contingent liabilities Environmental: The Company is subject to contingencies as a result of environmental laws and regulations that in the future may require the Company to take further action to correct the effects on the environment of prior disposal practices or releases of chemical or petroleum substances by the Company or other parties. Much of this liability results from the U.S. Comprehensive Environmental Response, Compensation and Liability Act, often referred to as Superfund, the U.S. Resource Conservation and Recovery Act and similar state laws. These laws require the Company to undertake certain investigative and remedial activities at sites where the Company conducts or once conducted operations or at sites where Company-generated waste was disposed. Remediation activities vary substantially in duration and cost from site to site. These activities, and their associated costs, depend on the mix of unique site characteristics, evolving remediation technologies, the regulatory agencies involved and their enforcement policies, as well as the presence or absence of other potentially responsible parties. At October 1, 2017, the Company has recorded $1.1 million and $5.8 million in accrued liabilities and other liabilities, respectively, relating to these matters. Considerable uncertainty exists with respect to these liabilities and, if adverse changes in circumstances occur, the potential liability may exceed the amount accrued as of October 1, 2017. The time frame over which the accrued amounts may be paid out, based on past history, is estimated to be 15-20 years. Litigation: The Company is a party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims include actions involving product liability, intellectual property, employment, environmental and other matters. As of October 1, 2017, the Company has recorded accrued liabilities of $8.6 million in connection with such contingencies, representing its best estimate of the cost within the range of estimated possible losses that will be incurred to resolve these matters. Of the amount accrued as of October 1, 2017, $5.0 million pertains to discontinued operations. During the first quarter 2017, Teleflex Medical Trading (Shanghai) Company, Ltd. (“Teleflex Shanghai”), one of the Company’s subsidiaries, eliminated a key distributor within its sales channel in China and undertook a distributor to direct sales conversion within that channel. On March 24, 2017, the distributor submitted an application with the Shanghai International Economy and Trade Arbitration Commission (“SHIAC”) for arbitration alleging, among other things, that Teleflex Shanghai wrongfully terminated its relationship with the distributor. Pursuant to a supplementary submission filed by the distributor with SHIAC in July 2017, the distributor is seeking to recover RMB 51.2 million ($7.5 million) in damages, and is also seeking to compel Teleflex Shanghai to repurchase Teleflex products that the distributor claims it purchased from Teleflex Shanghai at a total price of RMB 97.5 million ($14.4 million). Teleflex Shanghai has filed a counterclaim seeking payment from the distributor of RMB 61.2 million ($9.0 million) in respect of outstanding trade receivables owed by the distributor to Teleflex Shanghai. Although the parties are exploring settlement of the claims, Teleflex Shanghai continues to vigorously contest the distributor's claim for damages. The Company has accrued a liability representing its best estimate of probable loss associated with this matter, which is included in the Company’s accrued liabilities for litigation matters. In 2006, the Company was named as a defendant in a wrongful death product liability lawsuit filed in the Louisiana State District Court for the Parish of Calcasieu, involving a product manufactured by the Company’s former marine business. In September 2014, the case was tried before a jury, which returned a verdict in favor of the Company. The plaintiff subsequently filed a motion for a new trial, which was granted, and the case was re-tried before a jury in December 2014. On December 5, 2014, the jury returned a verdict in favor of the plaintiff, awarding $0.1 million in compensatory damages and $23.0 million in punitive damages, plus pre- and post-judgment interest on the compensatory damages and post-judgment interest on the punitive damages. The Company filed an appeal with the Louisiana Court of Appeal, and the plaintiff filed a cross-appeal, seeking to overturn the trial court’s denial of pre-judgment interest on the punitive damages award. On June 29, 2016, the Louisiana Court of Appeal affirmed the trial court verdict in all respects. The Company and the plaintiff filed applications for a writ of certiorari (a request for review) to the Louisiana Supreme Court. On January 13, 2017, the Louisiana Supreme Court granted the Company's writ application, and oral arguments were held on May 1, 2017. On October 18, 2017, the Louisiana Supreme Court issued its decision, affirming the lower court’s judgment in part and reducing the amount of punitive damages awarded to the plaintiff from $23.0 million to $4.3 million. On November 1, 2017, the Company filed an application for a rehearing before the Louisiana Supreme Court. As of October 1, 2017, the Company has accrued a $5.0 million liability, including punitive and compensatory damages as well as interest, representing its best estimate of probable loss associated with this matter, which is included in the Company’s accrued liabilities for litigation matters relating to discontinued operations. Based on information currently available, advice of counsel, established reserves and other resources, the Company does not believe that the outcome of any outstanding litigation and claims is likely to be, individually or in the aggregate, material to its business, financial condition, results of operations or liquidity. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to the Company’s business, financial condition, results of operations or liquidity. Legal costs such as outside counsel fees and expenses are charged to selling, general and administrative expenses in the period incurred. Tax audits and examinations: The Company and its subsidiaries are routinely subject to tax examinations by various tax authorities. As of October 1, 2017, the most significant tax examinations in process are in Canada, Germany and the United States. The Company may establish reserves with respect to its uncertain tax positions, after which it adjusts its reserves to address developments with respect to these uncertain tax positions. Accordingly, developments in tax audits and examinations, including resolution of uncertain tax positions, could result in increases or decreases to the Company’s recorded tax liabilities, which could impact the Company’s financial results. Other: The Company has various purchase commitments for materials, supplies and other items occurring in the ordinary conduct of its business. On average, such commitments are not at prices in excess of current market prices. |
Segment information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment information | Note 14 — Segment information The following tables present the Company’s segment results for the three and nine months ended October 1, 2017 and September 25, 2016:
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Condensed consolidating guarantor financial information |
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Condensed Consolidated Guarantor Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed consolidating guarantor financial information | Note 15 — Condensed consolidating guarantor financial information Teleflex Incorporated (the "Parent Company") is the issuer of its 5.25% Senior Notes due 2024 (the "2024 Notes") and 4.875% Senior Notes due 2026 (the "2026 Notes"). Payment of the Parent Company's obligations under the 2024 Notes and 2026 Notes is guaranteed, jointly and severally, by certain of the Parent Company’s subsidiaries (each, a “Guarantor Subsidiary” and collectively, the “Guarantor Subsidiaries”). The guarantees are full and unconditional, subject to certain customary release provisions. Each Guarantor Subsidiary is directly or indirectly 100% owned by the Parent Company. The Company’s condensed consolidating statements of income and comprehensive income for the three and nine months ended October 1, 2017 and September 25, 2016, condensed consolidating balance sheets as of October 1, 2017 and December 31, 2016 and condensed consolidating statements of cash flows for the nine months ended October 1, 2017 and September 25, 2016, provide consolidated information for:
The same accounting policies as described in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 are used by the Parent Company and each of its subsidiaries in connection with the condensed consolidating financial information, except for the use of the equity method of accounting to reflect ownership interests in subsidiaries, which are eliminated upon consolidation. Consolidating entries and eliminations in the following condensed consolidated financial statements represent adjustments to (a) eliminate intercompany transactions between or among the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries, (b) eliminate the investments in subsidiaries and (c) record consolidating entries. TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS
TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
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Subsequent events (Notes) |
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Oct. 01, 2017 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 16 — Subsequent event NeoTract Acquisition On October 2, 2017, the Company completed the acquisition of NeoTract, a privately-held company, pursuant to an Agreement and Plan of Merger, dated as of September 4, 2017. NeoTract is a medical device company that has developed and commercialized the UroLift® System, a minimally invasive medical device for treating lower urinary tract symptoms due to benign prostatic hyperplasia, or BPH. Under the terms of the agreement, the Company acquired NeoTract for an initial purchase price $725 million in cash, subject to customary purchase price adjustments. In addition, the agreement also provides for four milestone payments by the Company of up to $375 million in the aggregate if certain sales goals are met. The milestone payments are based on net sales (as defined in the agreement) for the periods from January 1, 2018 through April 30, 2018 and the years ended December 31, 2018, 2019 and 2020. The acquisition was financed using borrowings under the Company's revolving credit facility. |
New accounting standards (Policies) |
9 Months Ended |
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Oct. 01, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New accounting standards | New accounting standards In May 2014, the Financial Accounting Standards Board ("FASB"), in a joint effort with the International Accounting Standards Board ("IASB"), issued new accounting guidance to clarify the principles for recognizing revenue. This new guidance, collectively with related guidance provided by the FASB, is designed to enhance the comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets, and will affect any entity that enters into contracts with customers or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. The new guidance establishes principles for reporting information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from an entity's contracts with customers. The core principle of the new guidance is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those years. The Company will adopt this standard in the first quarter 2018 and expects to use the modified retrospective method of adoption by recognizing the cumulative effect of adopting this guidance as an adjustment to the Company's opening balance of retained earnings at January 1, 2018. Although the Company's evaluation of this guidance is ongoing, based on its assessment to date, the Company believes that the adoption of this guidance will not have a material impact on its consolidated results of operations, cash flows and financial position. In February 2016, the FASB issued guidance that will change the requirements for accounting for leases. Under the new guidance, lessees (including lessees under both leases classified as finance leases, which are to be classified based on criteria similar to that applicable to capital leases under current guidance, and leases classified as operating leases) will recognize a right-to-use asset and a lease liability on the balance sheet, initially measured as the present value of lease payments under the lease. Under current guidance, operating leases are not recognized on the balance sheet. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements; the guidance provides certain practical expedients. The Company is currently evaluating this guidance to determine its impact on the Company’s consolidated results of operations, cash flows and financial position. In March 2016, the FASB issued new guidance designed to simplify several aspects of the accounting for share-based payment transactions, including, among other things, guidance related to accounting for income taxes, modification of the criteria for classification of awards as either equity awards or liability awards where an employer withholds shares from an employee's share-based award for tax withholding purposes, and classification on the statement of cash flows of cash payments to a tax authority by an employer that withholds shares from an employee's award for tax withholding purposes. The Company adopted this guidance as of January 1, 2017. The Company has applied the new guidance requiring recognition of excess tax deficiencies and tax benefits in the income statement, rather than in additional paid-in-capital, as previously required. The adoption of the new standard increased net income and cash flows from operating activities by $1.5 million and $5.9 million and increased diluted earnings per share by $0.03 and $0.13 for the three and nine months ended October 1, 2017, respectively. The Company will continue to estimate forfeitures of share-based awards at the time of grant, rather than recognize actual forfeitures as they occur, as permitted under the new guidance. In August 2016, the FASB issued new guidance with regard to eight specific issues pertaining to the classification of certain cash receipts and cash payments within the statement of cash flows. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The new guidance should generally be adopted using a retrospective transition method for each period presented. The Company believes that its adoption of the new guidance will not have a material impact on its cash flows. In October 2016, the FASB issued new guidance requiring companies to recognize the income tax effects of intra-entity sales and transfers of assets, other than inventory, in the income statement as income tax expense (or benefit) in the period in which the transfer occurs. Previously, recognition was prohibited until the assets were sold to an outside party or otherwise utilized. The guidance is effective for annual periods beginning after December 15, 2017. The guidance should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the annual period of adoption. The Company is evaluating the impact of the adoption of this guidance, but currently does not anticipate the guidance will have a material impact on its consolidated financial position or results of operations. In January 2017, the FASB issued new guidance to clarify the definition of a “business,” with the objective of assisting entities in evaluating whether a transaction should be accounted for as an acquisition (or disposal) of assets or as an acquisition of a business. The definition of a business affects many areas of accounting, including acquisitions, disposals, goodwill and consolidation. The guidance generally defines a business as an integrated set of activities and assets (collectively referred to as a “set”) that is capable of being conducted and managed for the purpose of providing a return to investors or other owners, members, or participants. The guidance further provides that, to be considered a business, a set must meet specified requirements. However, the guidance also states that, if substantially all of the fair value of gross assets acquired (subject to specified exceptions) is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not considered a business and no further analysis is required. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The guidance permits early adoption, and the Company adopted this guidance during the fourth quarter 2017. The Company does not anticipate that the guidance will have a material impact on its consolidated financial position or results of operations. In January 2017, the FASB issued guidance to simplify the quantitative test for goodwill impairment. Under current guidance, if a reporting unit’s carrying value exceeds its fair value, the entity must determine the implied value of goodwill. This determination is made by deducting the fair value of a reporting unit’s identifiable assets and liabilities from the fair value of the reporting unit as a whole as if the reporting unit had just been acquired. Under the new guidance, a determination of the implied value of goodwill will no longer be required; a goodwill impairment will be equal to the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The revised guidance is effective for fiscal years, and any interim goodwill impairment tests within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any impairment tests performed after January 1, 2017. The Company is evaluating the impact of the adoption of this guidance, but currently does not anticipate the guidance will have a material impact on its consolidated financial position or results of operations. In March 2017, the FASB issued guidance for employers that sponsor defined benefit pension or other postretirement benefit plans. The guidance requires that these employers disaggregate specified components of net periodic pension cost and net periodic postretirement benefit cost (collectively, "net benefit cost"). Specifically, the guidance generally requires employers to present in the income statement the service cost component of net benefit cost in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 and generally is required to be applied retrospectively. Early adoption is permitted. The Company is evaluating the impact of the adoption of this guidance, but currently does not anticipate the guidance will have a material impact on its consolidated results of operations. In August 2017, the FASB issued guidance with the objective of improving the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. The new guidance provides for changes to current designation and measurement guidance for qualifying hedging relationships and to the method of presenting hedge results. In addition, the new guidance includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. The new guidance is effective for reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this guidance on its consolidated results of operations and financial position. From time to time, new accounting guidance is issued by the FASB or other standard setting bodies that is adopted by the Company as of the effective date or, in some cases where early adoption is permitted, in advance of the effective date. The Company has assessed the recently issued guidance that is not yet effective and, unless otherwise indicated above, believes the new guidance will not have a material impact on the its consolidated results of operations, cash flows or financial position. |
Acquisitions (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table presents the purchase price allocation among the assets acquired and liabilities assumed with respect to the Vascular Solutions acquisition:
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Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The following table sets forth the components of identifiable intangible assets acquired and the ranges of the useful lives as of the date of the Vascular Solutions acquisition:
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Business Acquisition, Pro Forma Information | The following unaudited pro forma combined financial information for the three and nine months ended October 1, 2017 and September 25, 2016, respectively, gives effect to the Vascular Solutions acquisition as if it was completed at the beginning of the earliest period presented. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have occurred under the ownership and management of the Company.
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Restructuring (credits) charges (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Other Impairment Charges | The following tables provide information regarding restructuring (credits) charges recognized by the Company for the three and nine months ended October 1, 2017 and September 25, 2016:
(2) Other restructuring programs include the 2015 Restructuring programs and the 2014 European Restructuring Plan. (3) Other restructuring programs include the 2017 Pyng Integration program, the 2016 Other Restructuring programs, the 2015 Restructuring programs and the 2014 European Restructuring plan. (4) Other restructuring programs include the 2014 European Restructuring Plan and the 2012 Restructuring program. Restructuring (credits) charges by reportable operating segment, and by all other operating segments in the aggregate, for the three and nine months ended October 1, 2017 and September 25, 2016 are set forth in the following table:
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Inventories, net (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories, net | Inventories as of October 1, 2017 and December 31, 2016 consisted of the following:
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Goodwill and other intangible assets, net (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table provides information relating to changes in the carrying amount of goodwill by reportable operating segment, and by all other operating segments in the aggregate, for the nine months ended October 1, 2017:
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Schedule of Finite-Lived Intangible Assets | The following table provides information as of October 1, 2017 and December 31, 2016 regarding the gross carrying amount of, and accumulated amortization relating to, intangible assets:
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Borrowings (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Long-Term Debt | The Company's borrowings at October 1, 2017 and December 31, 2016 were as follows:
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Fair Value of Long-Term Debt | The following table provides information regarding the fair value of the Company’s debt as of October 1, 2017 and December 31, 2016, categorized by the level of inputs within the fair value hierarchy used to measure fair value:
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Financial instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values of Derivative Instruments Designated as Hedging Instruments | The following table presents the locations in the condensed consolidated balance sheet and fair value of derivative financial instruments as of October 1, 2017 and December 31, 2016:
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Aggregate Accounts Receivable, Net of Allowance for Doubtful Accounts | The following table provides information regarding the Company's allowance for doubtful accounts, the aggregate net current and long-term trade accounts receivable related to customers in Greece, Italy, Spain and Portugal and the percentage of the Company’s total net current and long-term trade accounts receivable represented by these customers' trade accounts receivable at October 1, 2017 and December 31, 2016:
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Fair value measurement (Tables) |
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Oct. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Assets and Liabilities Carried at Fair Value Measured on Recurring Basis | The following tables provide information regarding the Company's financial assets and liabilities that are measured at fair value on a recurring basis as of October 1, 2017 and December 31, 2016:
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Reconciliation of Changes in Level 3 Financial Liabilities Measured at Fair Value on Recurring Basis | The following table provides information regarding changes, during the nine months ended October 1, 2017, in Level 3 financial liabilities related to contingent consideration, which are described below in this Note 9 under "Valuation Techniques":
(1) The Company established a liability related to the estimated fair value of contingent consideration associated with the Tianjin Medis acquisition. |
Shareholders' equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Basic to Diluted Weighted Average Common Shares Outstanding | The following table provides a reconciliation of basic to diluted weighted average number of common shares outstanding:
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Change in Accumulated Other Comprehensive Income (Loss) | The following tables provide information relating to the changes in accumulated other comprehensive loss, net of tax, for the nine months ended October 1, 2017 and September 25, 2016:
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Reclassification of Gain/Losses into Income/Expense, Net of Tax | The following table provides information relating to the location in the statements of operations and amount of reclassifications of losses/(gains) in accumulated other comprehensive (loss) income into expense/(income), net of tax, for the three and nine months ended October 1, 2017 and September 25, 2016:
(1) These accumulated other comprehensive (loss) income components are included in the computation of net benefit expense for pension and other postretirement benefit plans (see Note 12 for additional information). |
Taxes on income from continuing operations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Effective Income Tax Rate |
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Pension and other postretirement benefits (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Benefit Cost of Pension and Postretirement Benefit Plans | Net pension and other postretirement benefits expense (income) consist of the following:
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Segment information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Results | The following tables present the Company’s segment results for the three and nine months ended October 1, 2017 and September 25, 2016:
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Condensed consolidating guarantor financial information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Guarantor Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) | TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
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Condensed Consolidating Balance Sheets | TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS
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Condensed Consolidating Statements of Cash Flows | TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
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New accounting standards (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Sep. 25, 2016 |
Oct. 01, 2017 |
Sep. 25, 2016 |
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New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net income attributable to common shareholders | $ 77,015 | $ 66,322 | $ 195,188 | $ 176,314 |
Net income (in dollars per share) | $ 1.65 | $ 1.40 | $ 4.18 | $ 3.69 |
Accounting Standards Update 2016-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net income attributable to common shareholders | $ 1,500 | $ 5,900 | ||
Net income (in dollars per share) | $ 0.03 | $ 0.13 |
Acquisitions - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Oct. 01, 2017 |
Feb. 17, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Assets | |||
Goodwill | $ 1,886,157 | $ 1,276,720 | |
Vascular Solutions, Inc. | |||
Assets | |||
Current assets | $ 63,867 | ||
Property, plant and equipment | 46,616 | ||
Intangible assets | 539,250 | ||
Goodwill | 522,614 | ||
Other assets | 728 | ||
Total assets acquired | 1,173,075 | ||
Less: | |||
Current liabilities | 15,079 | ||
Deferred tax liabilities | 182,472 | ||
Liabilities assumed | 197,551 | ||
Net assets acquired | $ 975,524 |
Acquisitions - Schedule of Intangible Assets Acquired (Details) - Vascular Solutions, Inc. - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Feb. 17, 2017 |
Oct. 01, 2017 |
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Business Acquisition [Line Items] | ||
Fair value | $ 539,250 | |
Intellectual property | ||
Business Acquisition [Line Items] | ||
Fair value | $ 248,200 | |
Intellectual property | Minimum | ||
Business Acquisition [Line Items] | ||
Useful life range | 10 years | |
Intellectual property | Maximum | ||
Business Acquisition [Line Items] | ||
Useful life range | 20 years | |
In-process research and development (IPR&D) | ||
Business Acquisition [Line Items] | ||
Fair value | $ 15,600 | |
Trade names | ||
Business Acquisition [Line Items] | ||
Fair value | 16,650 | |
Useful life range | 20 years | |
Customer lists | ||
Business Acquisition [Line Items] | ||
Fair value | $ 258,800 | |
Useful life range | 25 years |
Acquisitions - Pro Forma (Details) - Vascular Solutions, Inc. - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Sep. 25, 2016 |
Oct. 01, 2017 |
Sep. 25, 2016 |
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Business Acquisition [Line Items] | ||||
Net revenue | $ 534,703 | $ 497,253 | $ 1,574,021 | $ 1,475,950 |
Net income | $ 76,194 | $ 63,578 | $ 209,630 | $ 136,493 |
Net Income, Basic earnings per common share (in USD per share) | $ 1.69 | $ 1.44 | $ 4.66 | $ 3.17 |
Net Income, Diluted earnings per common share (in USD per share) | $ 1.64 | $ 1.34 | $ 4.49 | $ 2.85 |
Basic, weighted average common shares outstanding (in shares) | 45,035 | 44,045 | 44,975 | 43,081 |
Diluted, weighted average common shares outstanding (in shares) | 46,587 | 47,446 | 46,673 | 47,824 |
Restructuring (credits) charges - Charges by segment (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Sep. 25, 2016 |
Oct. 01, 2017 |
Sep. 25, 2016 |
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Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ (92) | $ 3,027 | $ 13,723 | $ 12,876 |
Vascular North America | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 606 | 960 | 1,715 | 5,474 |
Anesthesia North America | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 220 | 946 | 1,031 | 3,185 |
Surgical North America | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 0 | 277 | 0 | 257 |
EMEA | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | (632) | 89 | 6,503 | 3,012 |
OEM | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 0 | 187 | 0 | 191 |
All Other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ (286) | $ 568 | $ 4,474 | $ 757 |
Inventories, net (Detail) - USD ($) $ in Thousands |
Oct. 01, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 98,322 | $ 65,319 |
Work-in-process | 60,020 | 54,555 |
Finished goods | 224,075 | 196,297 |
Inventories, net | $ 382,417 | $ 316,171 |
Borrowings - Fair value of long term debt (Details) - USD ($) $ in Thousands |
Oct. 01, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value Measurements [Line Items] | ||
Fair value of debt | $ 2,254,376 | $ 1,274,127 |
Level 1 | ||
Fair Value Measurements [Line Items] | ||
Fair value of debt | 0 | 344,765 |
Level 2 | ||
Fair Value Measurements [Line Items] | ||
Fair value of debt | $ 2,254,376 | $ 929,362 |
Financial instruments - Additional Information (Detail) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 01, 2017 |
Sep. 25, 2016 |
Oct. 01, 2017 |
Sep. 25, 2016 |
Dec. 31, 2016 |
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Derivatives Fair Value [Line Items] | |||||
Net revenues | $ 534,703,000 | $ 455,648,000 | $ 1,551,197,000 | $ 1,354,094,000 | |
Spain, Italy, Portugal, and Greece | |||||
Derivatives Fair Value [Line Items] | |||||
Net revenues | 96,000,000 | 95,800,000 | |||
Cash flow hedging | |||||
Derivatives Fair Value [Line Items] | |||||
Ineffectiveness related to derivatives | 0 | 0 | 0 | 0 | |
Foreign exchange contract | Designated as Hedging Instrument | Cash flow hedging | |||||
Derivatives Fair Value [Line Items] | |||||
Total notional amount for all open foreign currency forward contracts | 76,100,000 | 76,100,000 | $ 101,800,000 | ||
Foreign exchange contract | Not Designated as Hedging Instrument | |||||
Derivatives Fair Value [Line Items] | |||||
Loss related to currency forward contracts | 600,000 | $ 100,000 | 3,700,000 | $ 1,700,000 | |
Total notional amount for all open foreign currency forward contracts | $ 112,300,000 | $ 112,300,000 | $ 73,400,000 |
Financial instruments - Aggregate accounts receivable, net of allowance for doubtful accounts (Details) - USD ($) $ in Thousands |
1 Months Ended | ||
---|---|---|---|
Jan. 31, 2017 |
Oct. 01, 2017 |
Dec. 31, 2016 |
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Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for doubtful accounts receivable | $ 10,084 | $ 8,630 | |
Allowance for doubtful accounts | 3,100 | 2,000 | |
Spain, Italy, Portugal, and Greece | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Current and long-term trade accounts receivable in Greece, Italy, Spain and Portugal | $ 50,613 | $ 51,098 | |
Percentage of total net current and long-term trade accounts receivable - Greece, Italy, Spain and Portugal | 16.90% | 19.30% | |
Long-term portion of accounts receivable, net | $ 3,500 | $ 2,700 | |
Italy | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, significant sales | $ 16,100 | ||
Proceeds from sale of receivables | $ 16,000 |
Fair value measurement - Reconciliation of changes in financial liabilities measured on recurring basis (Details) $ in Thousands |
9 Months Ended |
---|---|
Oct. 01, 2017
USD ($)
| |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 7,102 |
Additions | 5,369 |
Payment | (245) |
Revaluations | (109) |
Ending balance | $ 12,117 |
Shareholders' equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 01, 2017 |
Apr. 02, 2017 |
Sep. 25, 2016 |
Oct. 01, 2017 |
Sep. 25, 2016 |
Dec. 31, 2016 |
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Shareholders Equity [Line Items] | ||||||
Investment warrants, exercise price (in dollars per share) | $ 74.65 | |||||
Conversion of convertible notes, shares issued upon conversion | 0.5 | 1.3 | 0.5 | 1.9 | ||
Convertible notes - redeemable equity component | $ 0 | $ 0 | $ 1,824 | |||
Equity Option | ||||||
Shareholders Equity [Line Items] | ||||||
Weighted average antidilutive shares which were not included in the calculation of earnings per share | 0.6 | 1.4 | 0.6 | 3.9 | ||
Convertible Note | ||||||
Shareholders Equity [Line Items] | ||||||
Weighted average antidilutive shares which were not included in the calculation of earnings per share | 0.1 | 1.5 | 0.4 | 2.3 |
Shareholders' equity - Reconciliation of basic to diluted weighted average common shares outstanding (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Sep. 25, 2016 |
Oct. 01, 2017 |
Sep. 25, 2016 |
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Debt Instrument [Line Items] | ||||
Basic (in shares) | 45,035 | 44,045 | 44,975 | 43,081 |
Dilutive effect of share-based awards (in shares) | 934 | 639 | 873 | 574 |
Dilutive effect of 3.875% Convertible Notes and warrants (in shares) | 618 | 2,762 | 825 | 4,169 |
Diluted (in shares) | 46,587 | 47,446 | 46,673 | 47,824 |
Senior Notes | 3.875% Convertible Senior Subordinated Notes due 2017 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, stated interest rate | 3.875% | 3.875% |
Taxes on income from continuing operations (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Sep. 25, 2016 |
Oct. 01, 2017 |
Sep. 25, 2016 |
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Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 11.20% | 10.20% | 8.90% | 9.30% |
Pension and other postretirement benefits (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Sep. 25, 2016 |
Oct. 01, 2017 |
Sep. 25, 2016 |
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Pension | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 725 | $ 656 | $ 2,162 | $ 1,963 |
Interest cost | 3,773 | 3,948 | 11,347 | 11,797 |
Expected return on plan assets | (6,607) | (6,209) | (20,100) | (18,606) |
Net amortization and deferral | 1,668 | 1,781 | 5,049 | 4,937 |
Net benefits expense (income) | (441) | 176 | (1,542) | 91 |
Other Postretirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 61 | 44 | 210 | 266 |
Interest cost | 426 | 383 | 1,183 | 1,196 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Net amortization and deferral | 75 | 63 | 206 | 177 |
Net benefits expense (income) | $ 562 | $ 490 | $ 1,599 | $ 1,639 |
Condensed consolidating guarantor financial information - Additional Information (Detail) - Senior Notes |
Oct. 01, 2017 |
---|---|
5.25% Senior Notes due 2024 | |
Condensed Financial Statements Captions [Line Items] | |
Debt instrument, stated interest rate | 5.25% |
Ownership percentage | 100.00% |
4.875% Senior Notes due 2026 | |
Condensed Financial Statements Captions [Line Items] | |
Debt instrument, stated interest rate | 4.875% |
Subsequent events (Details) - Subsequent Event - NeoTract $ in Millions |
Oct. 02, 2017
USD ($)
|
---|---|
Subsequent Event [Line Items] | |
Cash payment to acquire business | $ 725 |
Additional payment upon achievement of certain commercial sales milestones | $ 375 |
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