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 October 1, 2023

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 and 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 46,992,664 shares of common stock, par value $1.00 per share, outstanding as of October 31, 2023 .

TELEFLEX INCORPORATED

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED OCTOBER 1, 2023

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	19
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4:	Controls and Procedures	26
PART II — OTHER INFORMATION
Item 1:	Legal Proceedings	28
Item 1A:	Risk Factors	28
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3:	Defaults Upon Senior Securities	28
Item 4:	Mine Safety Disclosures	28
Item 5:	Other Information	28
Item 6:	Exhibits	29
SIGNATURES		30

1

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended				Nine Months Ended
	October 1, 2023		September 25, 2022		October 1, 2023		September 25, 2022
	(Dollars and shares in thousands, except per share)
Net revenues	$	746,389	$	686,788	$	2,200,580	$	2,033,045
Cost of goods sold	330,078		312,833		985,066		924,024
Gross profit	416,311		373,955		1,215,514		1,109,021
Selling, general and administrative expenses	213,194		209,616		669,216		630,373
Research and development expenses	37,576		37,770		118,493		111,064
Restructuring and impairment charges	231		628		3,960		2,950
Gains on sale of asset and business	—		(6,504)		—		(6,504)
Income from continuing operations before interest and taxes	165,310		132,445		423,845		371,138
Interest expense	23,192		13,375		59,291		35,212
Interest income	(7,487)		(126)		(9,486)		(577)
Income from continuing operations before taxes	149,605		119,196		374,040		336,503
Taxes on income from continuing operations	11,935		17,315		47,651		51,700
Income from continuing operations	137,670		101,881		326,389		284,803
Operating (loss) income from discontinued operations	(687)		19		(1,512)		(329)
Tax (benefit) expense on operating loss from discontinued operations	(157)		5		(346)		(76)
(Loss) income from discontinued operations	(530)		14		(1,166)		(253)
Net income	$	137,140	$	101,895	$	325,223	$	284,550
Earnings per share:
Basic:
Income from continuing operations	$	2.93	$	2.17	$	6.95	$	6.07
Loss from discontinued operations	(0.01)		—		(0.03)		—
Net income	$	2.92	$	2.17	$	6.92	$	6.07
Diluted:
Income from continuing operations	$	2.91	$	2.16	$	6.90	$	6.02
Loss from discontinued operations	(0.01)		—		(0.02)		(0.01)
Net income	$	2.90	$	2.16	$	6.88	$	6.01
Weighted average common shares outstanding
Basic	46,992		46,906		46,974		46,894
Diluted	47,299		47,263		47,304		47,337

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				Nine Months Ended
	October 1, 2023		September 25, 2022		October 1, 2023		September 25, 2022
	(Dollars in thousands)
Net income	$	137,140	$	101,895	$	325,223	$	284,550
Other comprehensive (loss) income, net of tax:
Foreign currency translation, net of tax of $(4,667), $(12,477), $(434), and $(20,300) for the three and nine months periods, respectively	(29,417)		(55,194)		(13,368)		(123,576)
Pension and other postretirement benefit plans adjustment, net of tax of $(476), $(716), $(1,182), and $(1,862) for the three and nine months periods, respectively	1,543		2,195		3,951		5,807
Derivatives qualifying as hedges, net of tax of $(116), $(196), $334, and $(330) for the three and nine months periods, respectively	(2,412)		2,502		789		5,536
Other comprehensive (loss) income, net of tax:	(30,286)		(50,497)		(8,628)		(112,233)
Comprehensive income	$	106,854	$	51,398	$	316,595	$	172,317

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

3

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	October 1, 2023		December 31, 2022
	(Dollars in thousands)
ASSETS
Current assets
Cash and cash equivalents	$	881,499	$	292,034
Accounts receivable, net	425,194		408,834
Inventories	625,075		578,507
Prepaid expenses and other current assets	138,657		125,084
Prepaid taxes	26,846		6,524
Total current assets	2,097,271		1,410,983
Property, plant and equipment, net	464,467		447,205
Operating lease assets	123,604		131,211
Goodwill	2,528,305		2,536,730
Intangible assets, net	2,180,539		2,306,165
Deferred tax assets	6,167		6,402
Other assets	93,281		89,367
Total assets	$	7,493,634	$	6,928,063
LIABILITIES AND EQUITY
Current liabilities
Current borrowings	$	87,500	$	87,500
Accounts payable	130,686		126,807
Accrued expenses	133,067		140,644
Payroll and benefit-related liabilities	127,101		133,092
Accrued interest	17,428		5,332
Income taxes payable	24,375		24,736
Other current liabilities	65,265		63,381
Total current liabilities	585,422		581,492
Long-term borrowings	1,950,123		1,624,023
Deferred tax liabilities	389,080		388,886
Pension and postretirement benefit liabilities	30,051		31,394
Noncurrent liability for uncertain tax positions	6,545		5,805
Noncurrent operating lease liabilities	111,810		120,437
Other liabilities	106,555		154,058
Total liabilities	3,179,586		2,906,095
Commitments and contingencies
Total shareholders' equity	4,314,048		4,021,968
Total liabilities and shareholders' equity	$	7,493,634	$	6,928,063

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

4

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
	October 1, 2023		September 25, 2022
	(Dollars in thousands)
Cash flows from operating activities of continuing operations:
Net income	$	325,223	$	284,550
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations	1,166		253
Depreciation expense	52,687		49,076
Intangible asset amortization expense	125,230		121,904
Deferred financing costs and debt discount amortization expense	2,547		3,150
Changes in contingent consideration	(24,482)		237
Assets impairment charges	—		1,497
Stock-based compensation	22,135		19,804
Gain on sale of business	—		(6,504)
Deferred income taxes, net	2,076		63
Payments for contingent consideration	(289)		(2,983)
Interest benefit on swaps designated as net investment hedges	(15,459)		(15,677)
Other	4,743		(3,953)
Changes in assets and liabilities, net of effects of acquisitions and disposals:
Accounts receivable	(18,313)		(36,402)
Inventories	(50,702)		(85,293)
Prepaid expenses and other assets	7,487		21,298
Accounts payable, accrued expenses and other liabilities	(16,674)		(26,726)
Income taxes receivable and payable, net	(45,014)		(79,879)
Net cash provided by operating activities from continuing operations	372,361		244,415
Cash flows from investing activities of continuing operations:
Expenditures for property, plant and equipment	(63,768)		(52,648)
Proceeds from sale of business and assets	—		12,434
Payments for businesses and intangibles acquired, net of cash acquired	(205)		(27,308)
Net interest proceeds on swaps designated as net investment hedges	10,275		10,314
Proceeds from sales of investments	7,300		7,300
Purchase of investments	(11,300)		(7,300)
Net cash used in investing activities from continuing operations	(57,698)		(57,208)
Cash flows from financing activities of continuing operations:
Proceeds from new borrowings	646,000		—
Reduction in borrowings	(321,625)		(144,250)
Net proceeds (payments) from share based compensation plans and related tax impacts	534		(4,398)
Payments for contingent consideration	(949)		(3,885)
Dividends paid	(47,919)		(47,840)
Net cash provided by (used in) financing activities from continuing operations	276,041		(200,373)
Cash flows from discontinued operations:
Net cash used in operating activities	(579)		(482)
Net cash used in discontinued operations	(579)		(482)
Effect of exchange rate changes on cash and cash equivalents	(660)		(34,177)
Net increase (decrease) in cash and cash equivalents	589,465		(47,825)
Cash and cash equivalents at the beginning of the period	292,034		445,084
Cash and cash equivalents at the end of the period	$	881,499	$	397,259

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, 2022	47,957	$	47,957	$	715,118	$	3,817,304	$	(403,522)	1,032	$	(154,889)	$	4,021,968
Net income						76,748							76,748
Cash dividends ($0.34 per share)						(15,969)							(15,969)
Other comprehensive income								22,191					22,191
Shares issued under compensation plans	18	18		2,333						(19)	2,639		4,990
Deferred compensation	—	—		324						(6)	1		325
Balance at April 2, 2023	47,975	47,975		717,775		3,878,083		(381,331)		1,007	(152,249)		4,110,253
Net income						111,335							111,335
Cash dividends ($0.34 per share)						(15,972)							(15,972)
Other comprehensive loss								(533)					(533)
Shares issued under compensation plans	23	23		9,920						—	66		10,009
Balance at July 2, 2023	47,998	47,998		727,695		3,973,446		(381,864)		1,007	(152,183)		4,215,092
Net income						137,140							137,140
Cash dividends ($0.34 per share)						(15,978)							(15,978)
Other comprehensive loss								(30,286)					(30,286)
Shares issued under compensation plans	1	1		8,057						(1)	22		8,080
Balance at October 1, 2023	47,999	$	47,999	$	735,752	$	4,094,608	$	(412,150)	1,006	$	(152,161)	$	4,314,048

	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, 2021	47,929	$	47,929	$	693,090	$	3,517,954	$	(346,959)	1,069	$	(157,266)	$	3,754,748
Net income						77,141							77,141
Cash dividends ($0.34 per share)						(15,946)							(15,946)
Other comprehensive loss								(21,286)					(21,286)
Shares issued under compensation plans	5	5		(950)						(27)	894		(51)
Deferred compensation	—	—		100						(5)	828		928
Balance at March 27, 2022	47,934	47,934		692,240		3,579,149		(368,245)		1,037	(155,544)		3,795,534
Net income						105,514							105,514
Cash dividends ($0.34 per share)						(15,946)							(15,946)
Other comprehensive loss								(40,450)					(40,450)
Shares issued under compensation plans	6	6		7,918						(2)	151		8,075
Deferred compensation	—	—		(2)						—	5		3
Balance at June 26, 2022	47,940	47,940		700,156		3,668,717		$	(408,695)	1,035	(155,388)		3,852,730
Net income						101,895							101,895
Cash dividends ($0.34 per share)						(15,948)							(15,948)
Other comprehensive loss								(50,497)					(50,497)
Shares issued under compensation plans	1	1		6,904						(1)	76		6,981
Balance at September 25, 2022	47,941	$	47,941	$	707,060	$	3,754,664	$	(459,192)	1,034	$	(155,312)	$	3,895,161

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

6

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 (all tabular amounts in thousands unless otherwise noted)

Note 1 — Basis of presentation

The accompanying unaudited condensed consolidated financial statements of Teleflex Incorporated and its subsidiaries (“we,” “us,” “our" and “Teleflex”) 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 the 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 our annual consolidated financial statements. Therefore, our quarterly condensed consolidated financial statements should be read in conjunction with our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022.

Note 2 — Recently issued accounting standards

From time to time, new accounting guidance is issued by the FASB or other standard setting bodies that is adopted by us as of the effective date or, in some cases where early adoption is permitted, in advance of the effective date. We have assessed the recently issued guidance that is not yet effective and believe the new guidance will not have a material impact on the consolidated results of operations, cash flows or financial position.

Note 3 — Net revenues

We primarily generate 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 our 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 our products are shipped from the manufacturing or distribution facility. For our 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 we have an enforceable right to payment to the extent that performance has been completed. We market and sell products through our 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, which constituted 87%, 11% and 2% of consolidated net revenues, respectively, for the nine months ended October 1, 2023. Revenue is measured as the amount of consideration we expect 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.

7

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The following table disaggregates revenue by global product category for the three and nine months ended October 1, 2023 and September 25, 2022.

	Three Months Ended				Nine Months Ended
	October 1, 2023		September 25, 2022		October 1, 2023		September 25, 2022
Vascular access	$	169,919	$	167,147	$	521,356	$	497,188
Anesthesia	97,612		97,608		291,786		289,260
Interventional	134,089		108,738		375,766		319,939
Surgical	112,805		93,124		317,781		282,468
Interventional urology	73,622		78,969		226,819		233,682
OEM	82,309		71,288		243,434		198,947
Other (1)	76,033		69,914		223,638		211,561
Net revenues (2)	$	746,389	$	686,788	$	2,200,580	$	2,033,045

(1)    Includes revenues generated from sales of our respiratory and urology products (other than interventional urology products).

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

Note 4 — Acquisitions and Divestiture

2023 acquisition

On July 25, 2023, we executed a definitive agreement to acquire Palette Life Sciences AB (“Palette”), a privately held medical device company that sells a portfolio of hyaluronic acid gel-based products primarily utilized in the treatment of urology diseases including a rectal spacing product used in connection with radiation therapy treatment of prostate cancer. The acquisition will complement our interventional urology product portfolio. On October 10, 2023, we completed the acquisition of Palette using borrowings under our revolving credit facility and cash on hand. Under the terms of the agreement, we acquired Palette for an initial cash payment of $600 million, with additional consideration of up to $50 million payable upon the achievement of certain commercial milestones.

2022 acquisition

In the fourth quarter of 2022, we completed the acquisition of Standard Bariatrics, Inc. (“Standard Bariatrics”), a privately-held medical device company that commercialized a powered stapling technology for bariatric surgery that complements our surgical product portfolio. Under the terms of the agreement, we acquired Standard Bariatrics for cash payments of $173 million, with the potential to make three milestone payments up to $130 million in the aggregate if certain commercial milestones are met.

Divestiture

On May 15, 2021, we entered into a definitive agreement to sell certain product lines within our global respiratory product portfolio (the "Divested respiratory business") to Medline Industries, Inc. (“Medline”) for consideration of $286.0 million, reduced by $12 million in working capital not transferring to Medline, which is subject to customary post close adjustments (the "Respiratory business divestiture"). In connection with the Respiratory business divestiture, we also entered into several ancillary agreements with Medline to help facilitate the transfer of the business, which provide for transition support, quality, supply and manufacturing services, including a manufacturing and supply transition agreement (the "MSTA").

On June 28, 2021, the first day of the third quarter of 2021, we completed the initial phase of the Respiratory business divestiture, pursuant to which we received cash proceeds of $259 million. The second phase of the Respiratory business divestiture will occur once we transfer certain additional manufacturing assets to Medline and is expected to occur prior to the end of 2023. We plan to recognize the remaining consideration, and any gain on sale resulting from the completion of the second phase of the divestiture, when it becomes realizable.

8

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Net revenues attributed to services provided to Medline in accordance with the MSTA, which are presented within our Americas reporting segment, were $21.7 million and $62.7 million for the three and nine months ended October 1, 2023, respectively, and $19.1 million and $60.5 million for the three and nine months ended September 25, 2022, respectively.

Note 5 — Restructuring and impairment charges

Restructuring and impairment charges recognized for the three and nine months ended October 1, 2023 and September 25, 2022 consisted of the following:

Three Months Ended October 1, 2023	Termination Benefits		Other Costs (1)		Total
2023 Footprint realignment plan	$	1,296	$	—	$	1,296
2022 Restructuring plan	244		102		346
Respiratory divestiture plan	(851)		5		(846)
Other restructuring programs (2)	(612)		47		(565)
Restructuring charges	$	77	$	154	$	231

Three Months Ended September 25, 2022
	Termination Benefits		Other Costs (1)		Total
Respiratory divestiture plan	$	123	$	22	$	145
2019 Footprint realignment plan	(50)		16		(34)
2018 Footprint realignment plan	203		252		455
Other restructuring programs (3)	24		38		62
Restructuring charges	$	300	$	328	$	628

Nine Months Ended October 1, 2023
	Termination Benefits		Other Costs (1)		Total
2023 Footprint realignment plan	$	1,296	$	—	$	1,296
2022 Restructuring plan	3,361		313		3,674
Respiratory divestiture plan	(596)		17		(579)
Other restructuring programs (2)	(853)		422		(431)
Restructuring charges	$	3,208	$	752	$	3,960

Nine Months Ended September 25, 2022
	Termination Benefits		Other Costs (1)		Total
Respiratory divestiture plan	$	358	$	67	$	425
2019 Footprint realignment plan	(1,120)		61		(1,059)
2018 Footprint realignment plan	514		547		1,061
Other restructuring programs (3)	750		276		1,026
Restructuring charges	502		951		1,453
Asset impairment charges	—		1,497		1,497
Restructuring and impairment charges	$	502	$	2,448	$	2,950

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

(2) Includes activity primarily related to a restructuring plan initiated in the first quarter of 2022 that is designed to relocate manufacturing operations at certain of our facilities (the "2022 Manufacturing relocation plan") and our 2014, 2018, and 2019 Footprint realignment plans.

(3) Includes activity primarily related to the 2022 Manufacturing relocation plan, the 2021 Restructuring plan and the 2014 Footprint realignment plan.

9

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

2023 Footprint Realignment plan

In September 2023, we initiated a restructuring plan primarily involving the relocation of certain manufacturing operations to existing lower-cost locations, the outsourcing of certain manufacturing processes and related workforce reductions (the "2023 Footprint realignment plan"). These actions are expected to be substantially completed by the end of 2027. The following table provides a summary of our estimates of restructuring and restructuring related charges by major type of expense associated with the 2023 Footprint realignment plan:

	Total estimated amount expected to be incurred
Plan expense estimates:	(Dollars in millions)
Restructuring charges (1)	$4 million to $6 million
Restructuring related charges (2)	$7 million to $9 million
Total restructuring and restructuring related charges	$11 million to $15 million

(1) Substantially all of the charges consist of employee termination benefit costs.

(2)Restructuring related charges represent costs that are directly related to the 2023 Footprint realignment plan and principally constitute costs to transfer manufacturing operations to existing lower-cost locations and project management costs. Substantially all of these charges are expected to be recognized within cost of goods sold.

We expect substantially all of the restructuring and restructuring related charges will result in future cash outlays, the majority of which will be made between 2024 and 2025. Additionally, we expect to incur $2 million to $3 million in aggregate capital expenditures under the plan, which are expected to be incurred mostly in 2024.

As of October 1, 2023, we maintain a restructuring reserve of $1.3 million in connection with this plan, all of which relate to termination benefits.

Respiratory divestiture plan

During 2021, in connection with the Respiratory business divestiture, we committed to a restructuring plan designed to separate the manufacturing operations to be transferred to Medline from those that will remain with Teleflex, which includes related workforce reductions (the “Respiratory divestiture plan”). The plan includes expanding certain of our existing locations to accommodate the transfer of capacity from the sites being transferred to Medline and replicating the manufacturing processes at alternate existing locations. We expect this plan will be substantially completed by the end of 2023. The following table provides a summary of our cost estimates by major type of expense associated with the Respiratory divestiture plan:

	Total estimated amount expected to be incurred
Plan expense estimates:	(Dollars in millions)
Restructuring charges (1)	$3 million to $3 million
Restructuring related charges (2)	$19 million to $21 million
Total restructuring and restructuring related charges	$22 million to $24 million

(1) Substantially all of the charges consist of employee termination benefit costs.

(2)Consist of charges that are directly related to the Respiratory divestiture plan and principally constitute costs to transfer manufacturing operations to other locations and project management costs. Substantially all of the charges are expected to be recognized within costs of goods sold.

We expect substantially all of the restructuring and restructuring related charges will result in future cash outlays, and we expect to incur $22 million to $24 million in aggregate capital expenditures under the plan.

We recorded restructuring related charges with respect to the Respiratory divestiture plan of $1.6 million and $5.6 million for the three and nine months ended October 1, 2023, respectively, and $2.1 million and $6.5 million for the three and nine months ended September 25, 2022, respectively. The restructuring related charges were included within cost of goods sold.

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(Unaudited)

As of October 1, 2023, we have incurred net aggregate restructuring expenses related to the Respiratory divestiture plan of $2.7 million. Additionally, as of October 1, 2023, we have incurred net aggregate restructuring related charges in connection with the Respiratory divestiture plan of $17.9 million, which were primarily included in cost of goods sold. As of October 1, 2023, we have a restructuring reserve of $2.5 million in connection with this plan.

2022 Restructuring plan

In November 2022, we initiated a strategic restructuring plan designed to improve operating performance and position the organization to deliver long-term durable growth by creating efficiencies that align with our high growth strategic objectives (the “2022 Restructuring plan”). The plan is substantially complete and as a result, we expect future restructuring expenses associated with the plan, if any, to be immaterial.

Note 6 — Inventories

Inventories as of October 1, 2023 and December 31, 2022 consisted of the following:

	October 1, 2023		December 31, 2022
Raw materials	$	186,216	$	186,641
Work-in-process	111,371		98,993
Finished goods	327,488		292,873
Inventories	$	625,075	$	578,507

Note 7 — Goodwill and other intangible assets

The following table provides information relating to changes in the carrying amount of goodwill by reportable operating segment for the nine months ended October 1, 2023:

	Americas		EMEA		Asia		OEM		Total
December 31, 2022	$	1,731,093	$	468,524	$	225,103	$	112,010	$	2,536,730
Currency translation adjustment	2,608		(4,011)		(7,022)		—		(8,425)
October 1, 2023	$	1,733,701	$	464,513	$	218,081	$	112,010	$	2,528,305

The gross carrying amount of, and accumulated amortization relating to, intangible assets as of October 1, 2023 and December 31, 2022 were as follows:

	Gross Carrying Amount				Accumulated Amortization
	October 1, 2023		December 31, 2022		October 1, 2023		December 31, 2022
Customer relationships	$	1,326,706	$	1,328,539	$	(542,216)	$	(497,335)
In-process research and development	26,979		27,075		—		—
Intellectual property	1,600,259		1,599,355		(714,308)		(646,643)
Distribution rights	23,087		23,115		(21,643)		(21,090)
Trade names	562,461		564,023		(80,787)		(71,128)
Non-compete agreements	21,311		21,429		(21,310)		(21,175)
	$	3,560,803	$	3,563,536	$	(1,380,264)	$	(1,257,371)

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(Unaudited)

Note 8 — Borrowings

Our borrowings at October 1, 2023 and December 31, 2022 were as follows:

	October 1, 2023		December 31, 2022
Senior Credit Facility:
Revolving credit facility, at a rate of 6.67% at October 1, 2023, due 2027	$	482,000	$	148,250
Term loan facility, at a rate of 6.67% at October 1, 2023, due 2027	490,625		500,000
4.625% Senior Notes due 2027	500,000		500,000
4.25% Senior Notes due 2028	500,000		500,000
Securitization program, at a rate of 6.29% at October 1, 2023	75,000		75,000
	2,047,625		1,723,250
Less: Unamortized debt issuance costs	(10,002)		(11,727)
	2,037,623		1,711,523
Current borrowings	(87,500)		(87,500)
Long-term borrowings	$	1,950,123	$	1,624,023

Note 9 — Financial instruments

Foreign currency forward contracts

We use derivative instruments for risk management purposes. Foreign currency forward contracts designated as cash flow hedges are used to manage foreign currency transaction exposure. Foreign currency forward contracts not designated as hedges for accounting purposes are used to manage exposure related to near term foreign currency denominated monetary assets and liabilities. We enter into the non-designated foreign currency forward contracts for periods consistent with our currency translation exposures, which generally approximate one month. For the three and nine months ended October 1, 2023, we recognized a loss of $1.0 million and a gain of $1.0 million, respectively, related to non-designated foreign currency forward contracts. For the three and nine months ended September 25, 2022, we recognized losses of $1.0 million and $4.2 million, respectively, related to non-designated foreign currency forward contracts.

The total notional amount for all open foreign currency forward contracts designated as cash flow hedges as of October 1, 2023 and December 31, 2022 was $238.1 million and $184.8 million, respectively. The total notional amount for all open non-designated foreign currency forward contracts as of October 1, 2023 and December 31, 2022 was $140.3 million and $152.9 million, respectively. All open foreign currency forward contracts as of October 1, 2023 have durations of 12 months or less.

Cross-currency interest rate swaps

During 2019, we entered into cross-currency swap agreements with five different financial institution counterparties to hedge against the effect of variability in the U.S. dollar to euro exchange rate. Under the terms of the cross-currency swap agreements, we have notionally exchanged $250 million at an annual interest rate of 4.88% for €219.2 million at an annual interest rate of 2.46%. The swap agreements are designed as net investment hedges and expire on March 4, 2024.

During 2018, we entered into cross-currency swap agreements with six different financial institution counterparties to hedge against the effect of variability in the U.S. dollar to euro exchange rate (the "2018 Cross-currency swap"). Under the terms of the cross-currency swap agreements, we have notionally exchanged $500 million at an annual interest rate of 4.63% for €433.9 million at an annual interest rate of 1.94%. The swap agreements are designed as net investment hedges. For further discussion related to the 2018 Cross-currency swap refer to subsequent event section below.

The swap agreements described above require an exchange of the notional amounts upon expiration or earlier termination of the agreements. We and the counterparties have agreed to effect the exchange through a net settlement.

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(Unaudited)

The cross-currency swaps are marked to market at each reporting date and any changes in fair value are recognized as a component of accumulated other comprehensive income (loss) ("AOCI"). The following table summarizes the foreign exchange gains and losses recognized within AOCI and the interest benefit recognized within interest expense related to cross currency swap for the three and nine months ended October 1, 2023 and September 25, 2022:

	Three Months Ended				Nine Months Ended
	October 1, 2023		September 25, 2022		October 1, 2023		September 25, 2022
Foreign exchange gain	$	15,756	$	42,189	$	1,466	$	68,643
Interest benefit	5,171		5,531		15,459		15,677

Subsequent event

On October 4, 2023, the third day of our fourth quarter, the agreements related to our 2018 Cross-currency swap matured resulting in $43.0 million in cash settlement proceeds. On October 2, 2023, we executed new cross-currency swap agreements with six different financial institution counterparties to hedge against the effect of variability in the U.S. dollar to euro exchange rate. Under the terms of the cross-currency swap agreements, we have notionally exchanged $500 million at an annual interest rate of 4.63% for €474.7 million at an annual interest rate of 3.05%. The swap agreements are designated as net investment hedges and expire on October 4, 2025.

Balance sheet presentation

The following table presents the locations in the condensed consolidated balance sheet and fair value of derivative financial instruments as of October 1, 2023 and December 31, 2022:

	October 1, 2023		December 31, 2022
	Fair Value
Asset derivatives:
Designated foreign currency forward contracts	$	4,288	$	3,154
Non-designated foreign currency forward contracts	158		41
Cross-currency interest rate swaps	67,500		48,503
Prepaid expenses and other current assets	71,946		51,698
Cross-currency interest rate swaps	—		11,912
Other assets	—		11,912
Total asset derivatives	$	71,946	$	63,610
Liability derivatives:
Designated foreign currency forward contracts	$	2,819	$	983
Non-designated foreign currency forward contracts	422		477
Other current liabilities	3,241		1,460
Total liability derivatives	$	3,241	$	1,460

See Note 11 for information on the location and amount of gains and losses attributable to derivatives that were reclassified from AOCI to expense (income), net of tax. There was no ineffectiveness related to our cash flow hedges during the three and nine months ended October 1, 2023 and September 25, 2022.

Trade receivables

The allowance for credit losses as of October 1, 2023 and December 31, 2022 was $9.1 million and $8.6 million, respectively. The current portion of the allowance for credit losses, which was $5.2 million and $4.9 million as of October 1, 2023 and December 31, 2022, respectively, was recognized as a reduction of accounts receivable, net.

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(Unaudited)

Note 10 — Fair value measurement

The following tables provide information regarding our financial assets and liabilities measured at fair value on a recurring basis as of October 1, 2023 and December 31, 2022:

	Total carrying  value at  October 1, 2023		Quoted prices in active markets (Level 1)		Significant other observable Inputs (Level 2)		Significant unobservable Inputs (Level 3)
Investments in marketable securities	$	4,761	$	4,761	$	—	$	—
Derivative assets	71,946		—		71,946		—
Derivative liabilities	3,241		—		3,241		—
Contingent consideration liabilities	18,302		—		—		18,302

	Total carrying value at December 31, 2022		Quoted prices in active markets (Level 1)		Significant other observable Inputs (Level 2)		Significant unobservable Inputs (Level 3)
Investments in marketable securities	$	10,097	$	10,097	$	—	$	—
Derivative assets	63,610		—		63,610		—
Derivative liabilities	1,460		—		1,460		—
Contingent consideration liabilities	44,022		—		—		44,022

Valuation Techniques

Our 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 our benefit plans and other arrangements. The investment assets of the trust are valued using quoted market prices.

Our financial assets and liabilities valued based upon Level 2 inputs are comprised of foreign currency forward contracts and cross-currency interest rate swap agreements. We use foreign currency forwards and cross-currency interest rate swaps to manage foreign currency transaction exposure, as well as exposure to foreign currency denominated monetary assets and liabilities. We measure the fair value of the foreign currency forwards and cross-currency swaps by calculating the amount required to enter into offsetting contracts with similar remaining maturities, based on quoted market prices, and taking into account the creditworthiness of the counterparties.

Our financial liabilities valued based upon Level 3 inputs (inputs that are not observable in the market) are comprised of contingent consideration arrangements pertaining to our acquisitions.

Contingent consideration

Contingent consideration liabilities, which primarily consist of payment obligations that are contingent upon the achievement of revenue-based goals, but also can be based on other milestones such as regulatory approvals, are remeasured to fair value each reporting period using assumptions including estimated revenues (based on internal operational budgets and long-range strategic plans), discount rates, probability of payment and projected payment dates.

We determine the fair value of certain contingent consideration liabilities using a Monte Carlo simulation (which involves a simulation of future revenues during the earn-out period using management's best estimates) or discounted cash flow analysis. Increases in projected revenues, estimated cash flows and probabilities of payment may result in significantly higher fair value measurements; decreases in these items may have the opposite effect. Increases in the discount rates in periods prior to payment may result in significantly lower fair value measurements and decreases in the discount rates may have the opposite effect.

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(Unaudited)

The table below provides additional information regarding the valuation technique and inputs used in determining the fair value of our significant contingent consideration liabilities.

Contingent Consideration Liability	Valuation Technique	Unobservable Input
Revenue-based
	Monte Carlo simulation	Revenue volatility	30.6	%
		Risk free rate	Cost of debt structure
		Projected year of payment	2024 - 2026

The following table provides information regarding changes in our contingent consideration liabilities for the three and nine months ended October 1, 2023:

	Contingent consideration
Balance – December 31, 2022	$	44,022
Payments	(1,238)
Revaluations	(24,482)
Balance – October 1, 2023	$	18,302

Note 11 — 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:

	Three Months Ended		Nine Months Ended
	October 1, 2023	September 25, 2022	October 1, 2023	September 25, 2022
Basic	46,992	46,906	46,974	46,894
Dilutive effect of share-based awards	307	357	330	443
Diluted	47,299	47,263	47,304	47,337

The weighted average number of shares that were antidilutive and therefore excluded from the calculation of earnings per share were 0.8 million and 0.7 million for the three and nine months ended October 1, 2023, respectively, and 0.7 million and 0.5 million for the three and nine months ended September 25, 2022, 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, 2023 and September 25, 2022:

	Cash Flow Hedges		Pension and Other Postretirement Benefit Plans		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive (Loss) Income
Balance as of December 31, 2022	$	4,931	$	(135,799)	$	(272,654)	$	(403,522)
Other comprehensive income (loss) before reclassifications	9,109		(76)		(13,368)		(4,335)
Amounts reclassified from accumulated other comprehensive (loss) income	(8,320)		4,027		—		(4,293)
Net current-period other comprehensive income (loss)	789		3,951		(13,368)		(8,628)
Balance as of October 1, 2023	$	5,720	$	(131,848)	$	(286,022)	$	(412,150)

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(Unaudited)

	Cash Flow Hedges		Pension and Other Postretirement Benefit Plans		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive (Loss) Income
Balance as of December 31, 2021	$	1,081	$	(138,290)	$	(209,750)	$	(346,959)
Other comprehensive income (loss) before reclassifications	6,871		1,980		(123,576)		(114,725)
Amounts reclassified from accumulated other comprehensive (loss) income	(1,335)		3,827		—		2,492
Net current-period other comprehensive income (loss)	5,536		5,807		(123,576)		(112,233)
Balance as of September 25, 2022	$	6,617	$	(132,483)	$	(333,326)	$	(459,192)

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 (income) expense, net of tax, for the three and nine months ended October 1, 2023 and September 25, 2022:

	Three Months Ended				Nine Months Ended
	October 1, 2023		September 25, 2022		October 1, 2023		September 25, 2022
(Gains) Loss on foreign exchange contracts:
Cost of goods sold	$	(3,499)	$	(1,614)	$	(8,734)	$	(1,445)
Total before tax	(3,499)		(1,614)		(8,734)		(1,445)
Taxes	34		84		414		110
Net of tax	(3,465)		(1,530)		(8,320)		(1,335)
Amortization of pension and other postretirement benefit items (1):
Actuarial losses	1,851		1,758		5,986		5,747
Prior-service costs	(252)		(252)		(756)		(756)
Total before tax	1,599		1,506		5,230		4,991
Tax benefit	(368)		(352)		(1,203)		(1,164)
Net of tax	1,231		1,154		4,027		3,827
Total reclassifications, net of tax	$	(2,234)	$	(376)	$	(4,293)	$	2,492

(1) These accumulated other comprehensive (loss) income components are included in the computation of net benefit expense for pension and other postretirement benefit plans.

Note 12 — Taxes on income from continuing operations

	Three Months Ended		Nine Months Ended
	October 1, 2023	September 25, 2022	October 1, 2023	September 25, 2022
Effective income tax rate	8.0%	14.5%	12.7%	15.4%

The effective income tax rates for the three and nine months ended October 1, 2023 were 8.0% and 12.7%, respectively. The effective income tax rates for the three and nine months ended October 1, 2023 reflect the tax impact of a non-taxable contingent consideration adjustment recognized in connection with a decrease in the estimated fair value of our contingent consideration liabilities and tax benefits related to the 2023 Footprint Realignment plan and the 2022 Restructuring plan. The effective income tax rates for all periods reflect a tax benefit from research and development credits.

Note 13 — Commitments and contingent liabilities

Environmental: We are subject to contingencies as a result of environmental laws and regulations that in the future may require us to take further action to correct the effects on the environment of prior disposal practices or releases of chemical or petroleum substances by us 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 us to undertake certain

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

investigative and remedial activities at sites where we conduct 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, 2023, we have recorded $2.5 million and $4.1 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, 2023. The time frame over which the accrued amounts may be paid out, based on past history, is estimated to be 10-15 years.

Legal matters: We are a party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims include actions involving product liability, product warranty, commercial disputes, intellectual property, contract, employment, environmental and other matters. As of October 1, 2023, we have recorded accrued liabilities of $0.6 million in connection with such contingencies, representing our best estimate of the cost within the range of estimated possible losses that will be incurred to resolve these matters.

Based on information currently available, advice of counsel, established reserves and other resources, we do not believe that the outcome of any outstanding litigation and claims is likely to be, individually or in the aggregate, material to our 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 our 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.

Other: In 2015, the Italian parliament enacted legislation that, among other things, imposed a “payback” measure on medical device companies that supply goods and services to the Italian National Healthcare System. Under the measure, companies are required to make payments to the Italian government if medical device expenditures in a given year exceed regional expenditure ceilings established for that year. The payment amounts are calculated based on the amount by which the regional ceilings for the given year were exceeded. Considerable uncertainty exists related to the enforceability of and implementation process for the payback law. In response to decrees issued by the Italian Ministry of Health, the various Italian regions issued invoices to medical device companies, including Teleflex, under the payback measure in the fourth quarter of 2022 seeking payment with respect to excess expenditures for the years 2015 through 2018. Following the issuance of the invoices, we and numerous other medical device companies filed appeals with the Italian administrative courts challenging the enforceability of the payback measure, which appeals remain pending. As of October 1, 2023, our reserve for this matter was $12.9 million, of which $2.2 million was recorded as a reduction of revenue in 2023. If the payback was to ultimately be enforced in its existing form, we estimate that we would be required to remit payments in excess of our current reserve of up to $18.6 million.

On April 4, 2023, one of our Mexican subsidiaries received a notification from the Mexican Federal Tax Administration Service (“SAT”) setting forth its preliminary findings with respect to a foreign trade operations audit carried out by SAT for the period from July 1, 2017 to June 6, 2019. The preliminary findings stated that our Mexican subsidiary did not evidence the export of goods temporarily imported under Mexico’s Manufacturing, Maquila and Export Services Industries Program (“IMMEX Program”), therefore triggering the potential obligation for payment of import duties, value added tax, customs processing fees and other fines and penalties. In response to the notification, our Mexican subsidiary has requested that the matter be referred to the Procuraduría de la Defensa del Contribuyente, or “PRODECON,” (local tax ombudsperson) to help facilitate the process. In June, SAT was provided with the appropriate documentation evidencing the export of the goods in accordance with the requirements of the IMMEX Program.

While we cannot predict with certainty the outcome of this audit, based on currently known information, we do not believe a loss is either probable or estimable. Accordingly, no loss contingency has been recorded in our financial statements as of October 1, 2023 related to this matter. However, if the final resolution of the matter is not favorable to us, our Mexican subsidiary may be required to make payment of certain import duties, fines and surcharges, which could be material.

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(Unaudited)

Tax audits and examinations: We are routinely subject to tax examinations by various tax authorities. As of October 1, 2023, the most significant tax examinations in process were in Ireland and Germany. We may establish reserves with respect to our uncertain tax positions, after we adjust the reserves to address developments with respect to our uncertain tax positions, including developments in these tax examinations. Accordingly, developments in tax audits and examinations, including resolution of uncertain tax positions, could result in increases or decreases to our recorded tax liabilities, which could impact our financial results.

Note 14 — Segment information

The following tables present our segment results for the three and nine months ended October 1, 2023 and September 25, 2022:

	Three Months Ended				Nine Months Ended
	October 1, 2023		September 25, 2022		October 1, 2023		September 25, 2022
Americas	$	428,206	$	405,038	$	1,264,714	$	1,195,739
EMEA	142,723		128,437		433,872		410,535
Asia	93,151		82,025		258,560		227,824
OEM	82,309		71,288		243,434		198,947
Net revenues	$	746,389	$	686,788	$	2,200,580	$	2,033,045

	Three Months Ended				Nine Months Ended
	October 1, 2023		September 25, 2022		October 1, 2023		September 25, 2022
Americas	$	126,340	$	107,180	$	341,261	$	318,548
EMEA	17,876		7,472		43,744