UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                    .

Commission file number 1-5353

TELEFLEX INCORPORATED

(Exact name of registrant as specified in its charter)

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)

(610) 225-6800

(Registrant’s telephone number, including area code)

(None)

(Former Name, Former Address and Former Fiscal Year,

If Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:
	Title of each class	Trading Symbol(s)	Name of each exchange on which registered
	Common Stock, par value $1.00 per share	TFX	New York Stock Exchange

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   ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    Yes  ☒    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	☒	Accelerated filer	☐
Non-accelerated filer	☐	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  ☒

The registrant had 46,232,846 shares of common stock, par value $1.00 per share, outstanding as of July 30, 2019.

TELEFLEX INCORPORATED

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2019

TABLE OF CONTENTS

		Page
PART I — FINANCIAL INFORMATION
Item 1:	Financial Statements (Unaudited):	2
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statements of Changes in Equity	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4:	Controls and Procedures	40
PART II — OTHER INFORMATION
Item 1:	Legal Proceedings	41
Item 1A:	Risk Factors	41
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3:	Defaults Upon Senior Securities	41
Item 4:	Mine Safety Disclosures	41
Item 5:	Other Information	41
Item 6:	Exhibits	42
SIGNATURES		43

1

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30, 2019			July 1, 2018			June 30, 2019			July 1, 2018
	(Dollars and shares in thousands, except per share)
Net revenues	$	652,507		$	609,866		$	1,266,091		$	1,197,096
Cost of goods sold	279,583			265,088			548,425			521,048
Gross profit	372,924			344,778			717,666			676,048
Selling, general and administrative expenses	236,186			229,917			463,879			445,254
Research and development expenses	27,595			26,018			54,745			52,045
Restructuring and impairment charges	1,685			55,353			19,080			58,416
Gain on sale of assets	—			—			(2,739		)	—
Income from continuing operations before interest and taxes	107,458			33,490			182,701			120,333
Interest expense	20,758			26,649			43,450			52,592
Interest income	(472		)	(183		)	(811		)	(456		)
Income from continuing operations before taxes	87,172			7,024			140,062			68,197
Taxes on income from continuing operations	3,844			9,576			14,816			15,818
Income (loss) from continuing operations	83,328			(2,552		)	125,246			52,379
Operating income (loss) from discontinued operations	61			94			(1,282		)	1,329
Tax (benefit) on income (loss) from discontinued operations	14			38			(308		)	20
Income (loss) from discontinued operations	47			56			(974		)	1,309
Net income (loss)	$	83,375		$	(2,496	)	$	124,272		$	53,688
Earnings per share:
Basic:
Income (loss) from continuing operations	$	1.80		$	(0.06	)	$	2.72		$	1.15
Income (loss) from discontinued operations	0.01			0.01			(0.02		)	0.03
Net income (loss)	$	1.81		$	(0.05	)	$	2.70		$	1.18
Diluted:
Income (loss) from continuing operations	$	1.77		$	(0.06	)	$	2.67		$	1.12
Income (loss) from discontinued operations	—			0.01			(0.03		)	0.03
Net income (loss)	$	1.77		$	(0.05	)	$	2.64		$	1.15
Weighted average common shares outstanding
Basic	46,172			45,581			46,111			45,455
Diluted	47,036			45,581			46,989			46,771

The accompanying notes are an integral part of the condensed consolidated financial statements.

2

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended					Six Months Ended
	June 30, 2019		July 1, 2018			June 30, 2019		July 1, 2018
	(Dollars in thousands)
Net income (loss)	$	83,375	$	(2,496	)	$	124,272	$	53,688
Other comprehensive income (loss), net of tax:
Foreign currency translation, net of tax of $0, $9,378, $0, and $3,505, for the three and six months periods, respectively	12,568		(125,705		)	12,332		(44,517		)
Pension and other postretirement benefit plans adjustment, net of tax of $(446), $(656), $(836), and $(890) for the three and six months periods, respectively	1,459		2,015			2,688		2,896
Derivatives qualifying as hedges, net of tax of $83, $100, $82, and $(111) for the three and six months periods, respectively	755		(329		)	158		292
Other comprehensive income (loss), net of tax:	14,782		(124,019		)	15,178		(41,329		)
Comprehensive income (loss)	$	98,157	$	(126,515	)	$	139,450	$	12,359

The accompanying notes are an integral part of the condensed consolidated financial statements.

3

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30, 2019		December 31, 2018
	(Dollars in thousands)
ASSETS
Current assets
Cash and cash equivalents	$	303,896	$	357,161
Accounts receivable, net	382,142		366,286
Inventories, net	461,320		427,778
Prepaid expenses and other current assets	78,477		72,481
Prepaid taxes	19,306		12,463
Total current assets	1,245,141		1,236,169
Property, plant and equipment, net	425,475		432,766
Operating lease assets	107,543		—
Goodwill	2,250,219		2,246,579
Intangible assets, net	2,242,267		2,325,052
Deferred tax assets	3,056		2,446
Other assets	40,709		34,979
Total assets	$	6,314,410	$	6,277,991
LIABILITIES AND EQUITY
Current liabilities
Current borrowings	$	50,000	$	86,625
Accounts payable	108,059		106,709
Accrued expenses	87,698		97,551
Current portion of contingent consideration	119,706		136,877
Payroll and benefit-related liabilities	88,888		104,670
Accrued interest	6,009		6,031
Income taxes payable	4,448		5,943
Other current liabilities	29,084		38,050
Total current liabilities	493,892		582,456
Long-term borrowings	2,081,372		2,072,200
Deferred tax liabilities	604,856		608,221
Pension and postretirement benefit liabilities	86,149		92,914
Noncurrent liability for uncertain tax positions	11,029		10,718
Noncurrent contingent consideration	71,965		167,370
Noncurrent operating lease liabilities	96,502		—
Other liabilities	203,801		204,134
Total liabilities	3,649,566		3,738,013
Commitments and contingencies
Total shareholders' equity	2,664,844		2,539,978
Total liabilities and shareholders' equity	$	6,314,410	$	6,277,991

The accompanying notes are an integral part of the condensed consolidated financial statements.

4

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended
	June 30, 2019			July 1, 2018
	(Dollars in thousands)
Cash flows from operating activities of continuing operations:
Net income	$	124,272		$	53,688
Adjustments to reconcile net income to net cash provided by operating activities:
Loss (income) from discontinued operations	974			(1,309		)
Depreciation expense	31,966			29,527
Amortization expense of intangible assets	75,285			75,008
Amortization expense of deferred financing costs and debt discount	2,249			2,368
Gain on sale of assets	(2,739		)	—
Changes in contingent consideration	25,456			34,618
Impairment of long-lived assets	6,911			1,865
Stock-based compensation	12,700			10,737
Deferred income taxes, net	(5,495		)	4,821
Payments for contingent consideration	(26,092		)	—
Other	(4,527		)	(3,669		)
Changes in assets and liabilities, net of effects of acquisitions and disposals:
Accounts receivable	(19,747		)	(15,886		)
Inventories	(33,970		)	(15,017		)
Prepaid expenses and other assets	(6,381		)	(3,611		)
Accounts payable, accrued expenses and other liabilities	(6,231		)	38,112
Income taxes receivable and payable, net	(17,347		)	(29,668		)
Net cash provided by operating activities from continuing operations	157,284			181,584
Cash flows from investing activities of continuing operations:
Expenditures for property, plant and equipment	(56,107		)	(38,004		)
Proceeds from sale of assets	1,178			—
Payments for businesses and intangibles acquired, net of cash acquired	(1,025		)	(22,450		)
Net interest proceeds on swaps designated as net investment hedges	8,330			—
Net cash used in investing activities from continuing operations	(47,624		)	(60,454		)
Cash flows from financing activities of continuing operations:
Proceeds from new borrowings	25,000			—
Reduction in borrowings	(52,500		)	(18,500		)
Debt extinguishment, issuance and amendment fees	(4,703		)	(188		)
Net proceeds from share based compensation plans and the related tax impacts	7,829			9,800
Payments for contingent consideration	(111,928		)	(62,574		)
Dividends paid	(31,347		)	(30,938		)
Net cash used in financing activities from continuing operations	(167,649		)	(102,400		)
Cash flows from discontinued operations:
Net cash provided by (used in) operating activities	2,799			(464		)
Net cash provided by (used in) discontinued operations	2,799			(464		)
Effect of exchange rate changes on cash and cash equivalents	1,925			(5,520		)
Net (decrease) increase in cash and cash equivalents	(53,265		)	12,746
Cash and cash equivalents at the beginning of the period	357,161			333,558
Cash and cash equivalents at the end of the period	$	303,896		$	346,304
Non cash investing activities of continuing operations:
Property, plant and equipment additions due to build-to-suit lease transaction	$	—		$	28,147
Non cash financing activities of continuing operations:
Acquisition of treasury stock associated with settlement and exchange of convertible note hedge and warrant agreements	$	—		$	36,877

The accompanying notes are an integral part of the condensed consolidated financial statements.

5

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

	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, 2018	47,248	$	47,248	$	574,761	$	2,427,599		$	(341,085	)	1,232		$	(168,545	)	$	2,539,978
Cumulative effect adjustment resulting from the adoption of new accounting standards						(1,321		)									(1,321		)
Net income						40,897											40,897
Cash dividends ($0.34 per share)						(15,650		)									(15,650		)
Other comprehensive income									396								396
Shares issued under compensation plans	75	75		3,094								(40	)	2,029			5,198
Deferred compensation				127								(4	)	253			380
Balance at March 31, 2019	47,323	47,323		577,982		2,451,525			(340,689		)	1,188		(166,263		)	2,569,878
Net income						83,375											83,375
Cash dividends ($0.34 per share)						(15,697		)									(15,697		)
Other comprehensive income									14,782								14,782
Shares issued under compensation plans	77	77		12,252								(2	)	177			12,506
Balance as of June 30, 2019	47,400	$	47,400	$	590,234	$	2,519,203		$	(325,907	)	1,186		$	(166,086	)	$	2,664,844

	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, 2017	46,871	$	46,871	$	591,721		$	2,285,886		$	(265,091	)	1,704		$	(228,856	)	$	2,430,531
Cumulative effect adjustment resulting from the adoption of new accounting standards							3,076											3,076
Net income							56,184											56,184
Cash dividends ($0.34 per share)							(15,447		)									(15,447		)
Other comprehensive income										82,690								82,690
Settlements of warrants				(17,884		)							(132	)	17,872			(12		)
Shares issued under compensation plans	97	97		992									(43	)	3,033			4,122
Deferred compensation													(8	)	322			322
Balance at April 1, 2018	46,968	46,968		574,829			2,329,699			(182,401		)	1,521		(207,629		)	2,561,466
Net income							(2,496		)									(2,496		)
Cash dividends ($0.34 per share)							(15,491		)									(15,491		)
Other comprehensive income										(124,019		)						(124,019		)
Settlements of warrants				(19,019		)							(140	)	19,005			(14		)
Shares issued under compensation plans	114	114		13,992									(2	)	194			14,300
Deferred compensation				235														235
Balance as of July 1, 2018	47,082	$	47,082	$	570,037		$	2,311,712		$	(306,420	)	1,379		$	(188,430	)	$	2,433,981

The accompanying notes are an integral part of the condensed consolidated financial statements.

6

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 presentation of financial statements for interim periods in accordance with accounting principles generally accepted in the United States of America ("GAAP") and Rule 10-01 of Securities and Exchange Commission ("SEC") Regulation S-X, which sets forth the instructions for the form and content of presentation of 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 and as permitted by Rule 10-01 of Regulation S-X, 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. Therefore, 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, 2018.

Note 2 — Recently issued accounting standards

In February 2016, the FASB issued guidance that changes the requirements for accounting for leases. Under the new guidance, in connection with a lease as to which an entity is a lessee, the entity generally must 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 previous guidance, operating leases were not recognized on the balance sheet. The Company adopted the new standard on January 1, 2019 using a modified retrospective transition approach, which requires leases existing at, or entered into after, January 1, 2019 to be recognized and measured in the condensed consolidated balance sheet. The Company recognized additional net lease assets and lease liabilities of $105.3 million and $106.6 million, respectively, upon adoption of the guidance. The difference between the additional lease assets and lease liabilities was recorded as an adjustment to the Company's opening balance of retained earnings. Prior period amounts have not been adjusted and continue to reflect the Company's historical accounting. 

As permitted under the new guidance, the Company has made an accounting policy election not to apply the recognition provisions of the new guidance to short term leases (leases with a lease term of 12 months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise); instead, the Company will recognize the lease payments for short term leases on a straight-line basis over the lease term. In addition, the Company has elected to apply certain practical expedients available under the new guidance. As a result, and in connection with the transition to the new guidance, the Company did not reassess (i) whether any expired or existing contracts are or contain leases, (ii) the classification of any expired or existing leases, or (iii) initial direct costs for any existing leases. The Company applied the practical expedients described above to its entire lease portfolio at the January 1, 2019 adoption date. Furthermore, as permitted under the new guidance, the Company has made, as a practical expedient, an accounting policy election to not separate lease and non-lease components and instead will account for each separate lease component and the non-lease components associated with that lease component as a single lease component. Additional information and disclosures required by this standard are contained in Note 8.

In February 2018, the FASB issued new guidance to address a narrow-scope financial reporting issue that arose as a consequence of federal tax legislation commonly referred to as the Tax Cuts and Jobs Act ("the TCJA"). Existing guidance requires that deferred tax liabilities and assets be adjusted for a change in tax laws or rates with the effect included in income from continuing operations in the reporting period that includes the enactment date. The guidance is applicable even in situations in which the related income tax effects of items in accumulated other comprehensive income were originally recognized in other comprehensive income (rather than in net income), such as amounts related

7

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

to benefit plans and hedging activity. As a result, the tax effects of items within accumulated other comprehensive income (referred to as stranded tax effects) do not reflect the appropriate tax rate. The new guidance, which was effective January 1, 2019, permits reclassification of these amounts from accumulated other comprehensive income to retained earnings thereby eliminating the stranded tax effects. The new guidance also requires certain disclosures about the stranded tax effects. The Company elected not to reclassify stranded tax effects from accumulated other comprehensive income to retained earnings.

In June 2016, the FASB issued new guidance that changes the methodology to be used to measure credit losses for certain financial instruments and financial assets, including trade receivables. Under current guidance, an entity reflects credit losses on financial assets measured on an amortized cost basis only when it is probable that losses have been incurred, generally considering only past events and current conditions in determining incurred loss. The new guidance requires the recognition of an allowance that reflects the current estimate of credit losses expected to be incurred over the life of the financial asset, based not only on historical experience and current conditions, but also on reasonable forecasts. The main objective of the new guidance is to provide financial statement users with more useful information in making decisions about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The new guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The new guidance will be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the annual period in which the adoption is effective. The Company is currently evaluating the impact the guidance will have on its consolidated financial statements and related disclosures, but it is not expected to have a material effect on the consolidated financial statements.

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.

Note 3 - Net revenues

The Company primarily generates revenue from the sale of medical devices including single use disposable devices and, to a lesser extent, reusable devices, instruments and capital equipment. Revenue is recognized when obligations under the terms of a contract with the Company’s customer are satisfied; this occurs upon the transfer of control of the products. Generally, transfer of control to the customer occurs at the point in time when the Company’s products are shipped from the manufacturing or distribution facility. For the Company’s Original Equipment and Development Services ("OEM") segment, most revenue is recognized over time because the OEM segment generates revenue from the sale of custom products that have no alternative use and the Company has an enforceable right to payment to the extent that performance has been completed. The Company markets and sells products through its direct sales force and distributors to customers within the following end markets: (1) hospitals and healthcare providers; (2) other medical device manufacturers; and (3) home care providers such as pharmacies, which comprised 88%, 10% and 2% of consolidated net revenues, respectively, for the six months ended June 30, 2019. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. With respect to the custom products sold in the OEM segment, revenue is measured using the units produced output method. Payment is generally due 30 days from the date of invoice.

8

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The following table disaggregates revenue by global product category for the three and six months ended June 30, 2019 and July 1, 2018.

	Three Months Ended				Six Months Ended
	June 30, 2019		July 1, 2018		June 30, 2019		July 1, 2018
	(Dollars in thousands)
Vascular access	$	153,647	$	140,149	$	297,544	$	284,177
Anesthesia	85,723		89,311		165,975		174,233
Interventional	104,785		98,189		207,969		188,331
Surgical	95,570		90,517		182,289		176,138
Interventional urology	67,952		47,674		127,683		89,974
OEM	56,428		52,594		110,666		98,448
Other (1)	88,402		91,432		173,965		185,795
Net revenues (2)	$	652,507	$	609,866	$	1,266,091	$	1,197,096

(1) Revenues in the "Other" category in the table above include revenues generated from sales of the Company’s respiratory and urology products (other than interventional urology products). For the three and six months ended June 30, 2019, the Company reclassified its cardiac products from "Other" to "Interventional". The comparative prior year period has been restated to conform to the current period presentation.

(2) The product categories listed above are presented on a global basis; in contrast, each of the Company’s reportable segments other than the OEM reportable segment are defined exclusively based on the geographic location of its operations; the OEM reportable segment operates globally. Each of the Company’s geographically based reportable segments include net revenues from each of the non-OEM product categories listed above.

Note 4 — Divestitures

On February 4, 2019, the Company sold substantially all of the assets related to its vein catheter reprocessing business for $12.6 million. The Company recognized a $2.7 million pre-tax gain on the sale of assets, which represents the excess of the $9.7 million fair value of consideration received over the carrying value of the assets sold. In connection with the sale, the purchaser of the assets issued a secured promissory note to the Company in the principal amount of $10.5 million. The purchaser's obligations under the notes are secured by a lien on substantially all of the purchaser's assets. The purchaser is obligated to repay the principal amount of the promissory note in annual installments of $2.1 million through the fifth anniversary of the date of sale. On the date of sale, the fair value of the promissory note was $7.6 million, which the Company calculated by applying a discount rate determined after taking into account the creditworthiness of the purchaser. As of June 30, 2019, the Company had $8.0 million in receivables related to the promissory note, of which $2.0 million and $6.0 million are included in accounts receivable, net and other assets, respectively, within the condensed consolidated balance sheet.

9

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Note 5 — Restructuring and impairment charges (credits)

The following tables provide information regarding restructuring and impairment charges recognized by the Company for the three and six months ended June 30, 2019 and July 1, 2018: 

Three Months Ended June 30, 2019
	Termination benefits			Other costs (1)		Total
	(Dollars in thousands)
2019 Footprint realignment plan	$	(459	)	$	30	$	(429	)
2018 Footprint realignment plan	(2,275		)	134		$	(2,141	)
Other restructuring programs (2)	62			312		374
Restructuring charges (credits)	(2,672		)	476		(2,196		)
Asset impairment charges	—			3,881		3,881
Restructuring and impairment charges (credits)	$	(2,672	)	$	4,357	$	1,685

Three Months Ended July 1, 2018
	Termination benefits		Other costs (1)		Total
	(Dollars in thousands)
2018 Footprint realignment plan	$	52,345	$	129	$	52,474
Other restructuring programs (4)	574		440		1,014
Restructuring charges	52,919		569		53,488
Asset impairment charges	—		1,865		1,865
Restructuring and impairment charges	$	52,919	$	2,434	$	55,353

Six Months Ended June 30, 2019
	Termination Benefits			Other costs (1)		Total
	(Dollars in thousands)
2019 Footprint realignment plan	$	12,516		$	30	$	12,546
2018 Footprint realignment plan	(1,838		)	708		(1,130		)
Other restructuring programs (2)	188			565		753
Restructuring charges	10,866			1,303		12,169
Asset impairment charges	—			6,911		6,911
Restructuring and impairment charges	$	10,866		$	8,214	$	19,080

Six Months Ended July 1, 2018
	Termination Benefits		Other costs (1)		Total
	(Dollars in thousands)
2018 Footprint realignment plan	$	52,345	$	129	$	52,474
2016 Footprint realignment plan (3)	2,199		291		2,490
Other restructuring programs (4)	1,032		555		1,587
Restructuring charges	55,576		975		56,551
Asset impairment charges	—		1,865		1,865
Restructuring and impairment charges	$	55,576	$	2,840	$	58,416

(1) Other restructuring costs include facility closure, contract termination and other exit costs.

(2) Includes the Vascular Solutions integration program (initiated in 2017) as well as the 2016 and 2014 Footprint realignment plans.

(3) The 2016 Footprint realignment plan involved 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. The program is substantially complete and the Company expects future restructuring expenses associated with the program, if any, to be immaterial.

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(Unaudited)

(4) Includes the 2014 Footprint realignment plan, the Vascular Solutions integration program and the EMEA restructuring program (initiated in 2017).

2019 Footprint Realignment Plan

In February 2019, the Company initiated a restructuring plan primarily involving the relocation of certain manufacturing operations to existing lower-cost locations and related workforce reductions (the "2019 Footprint realignment plan"). These actions are expected to be substantially completed during 2022. The following table provides a summary of the Company’s cost estimates by major type of expense associated with the 2019 Footprint realignment plan:

Type of expense	Total estimated amount expected to be incurred
Termination benefits	$19 million to $23 million
Other exit costs (1)	$1 million to $2 million
Restructuring charges	$20 million to $25 million
Restructuring related charges (2)	$36 million to $45 million
Total restructuring and restructuring related charges	$56 million to $70 million

(1) Includes facility closure, employee relocation, equipment relocation and outplacement costs.

(2) Restructuring related charges represent costs that are directly related to the 2019 Footprint realignment plan and principally constitute costs to transfer manufacturing operations to existing lower-cost locations, project management costs and accelerated depreciation. Most of these charges are expected to be recognized within cost of goods sold.

In addition to the restructuring charges shown in the tables above, the Company recorded restructuring related charges with respect to the 2019 Footprint realignment plan of $1.0 million and $1.7 million for the three and six months ended June 30, 2019 within cost of goods sold.

As of June 30, 2019, the Company has a restructuring reserve of $11.8 million in connection with this plan, all of which relate to termination benefits.

2018 Footprint Realignment Plan

On May 1, 2018, the Company initiated a restructuring plan involving the relocation of certain European manufacturing operations to existing lower-cost locations, the outsourcing of certain of the Company’s European distribution operations and related workforce reductions (the “2018 Footprint realignment plan"). These actions are expected to be substantially completed by the end of 2024.

In addition to the restructuring charges shown in the tables above, the Company recorded restructuring related charges with respect to the 2018 Footprint realignment plan of $0.7 million and $1.3 million for the three and six months ended June 30, 2019 and July 1, 2018, respectively and $1.0 million for each of the three and six months ended July 1, 2018. The restructuring related charges were included within cost of goods sold. The majority of the restructuring related charges in both periods constituted costs arising from the transfer of manufacturing operations to new locations.

The Company estimates that is will incur aggregate pre-tax restructuring and restructuring related charges in connection with the 2018 Footprint realignment plan of approximately $102 million to $133 million. As of June 30, 2019, the Company has incurred aggregate restructuring charges in connection with the 2018 Footprint realignment plan of $53.9 million. In addition, as of June 30, 2019, the Company has incurred aggregate restructuring related charges of $5.4 million with respect to the 2018 Footprint realignment plan, consisting of accelerated depreciation and certain other costs that principally resulted from the transfer of manufacturing operations to new locations. The restructuring related charges primarily were included in cost of goods sold. As of June 30, 2019, the Company has a restructuring reserve of $45.0 million in connection with this plan, all of which related 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

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(Unaudited)

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 2020.

The Company recorded restructuring related charges with respect to the 2014 Footprint realignment plan of $0.7 million and $1.3 million for the three and six months ended June 30, 2019, respectively, and $0.6 million and $1.0 million for the three and six months ended July 1, 2018, respectively. The majority of these restructuring related charges in both periods constituted costs arising from the transfer of manufacturing operations to new locations.

The Company estimates that it will incur aggregate pre-tax restructuring and restructuring related charges in connection with the 2014 Footprint realignment plan of $47 million to $52 million. As of June 30, 2019, the Company has incurred aggregate restructuring charges of $12.8 million in connection with the 2014 Footprint realignment plan. Additionally, as of June 30, 2019, the Company has incurred aggregate restructuring related charges of $30.5 million in connection with 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 June 30, 2019, the Company has a restructuring reserve of $3.8 million in connection with the plan, all of which related to termination benefits.

As the restructuring programs progress, management will reevaluate the estimated expenses and charges set forth above, and may revise its estimates, as appropriate, consistent with GAAP. For additional information related to the Company's restructuring programs, see Note 5 to the Company's consolidated financial statements included in its annual report on Form 10-K for the year ended December 31, 2018.

Note 6 — Inventories, net

Inventories as of June 30, 2019 and December 31, 2018 consisted of the following:

	June 30, 2019		December 31, 2018
	(Dollars in thousands)
Raw materials	$	131,252	$	111,105
Work-in-process	63,465		62,334
Finished goods	266,603		254,339
Inventories, net	$	461,320	$	427,778

Note 7 — Goodwill and other intangible assets, net

The following table provides information relating to changes in the carrying amount of goodwill by reportable operating segment for the six months ended June 30, 2019:

	Americas		EMEA		Asia		OEM		Total
	(Dollars in thousands)
December 31, 2018	$	1,549,534	$	480,615	$	211,547	$	4,883	$	2,246,579
Goodwill related to acquisitions	174		75