Full Transcript: Teleflex Q2 2026 Earnings Call

Teleflex (NYSE: TFX ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

76, surpassing expectations. 5 billion in proceeds used for debt reduction and share repurchases. 20. Teleflex emphasized innovation, highlighting FDA approval of EZ Plasma and progress in clinical trials for FreeZolv, underscoring a focus on long-term growth through R&D.

Management remains confident in the strategic transformation, aiming for improved margins and EPS in 2027, and has committed to a $1 billion share repurchase and $800 million debt reduction. Full Transcript OPERATOR Good morning, ladies and gentlemen, and welcome to the Teleflex second quarter 2026 earnings conference call. At this time, all participants have been placed in a listen-only mode. At the end of the company's prepared remarks, we will conduct a question-and-answer session.

Please note that this conference call is being recorded and will be available on the company's website for replay shortly. And now we'll turn the call over to Mr. Lawrence Kirsch, Vice President of Investor Relations and Strategy Development. Please go ahead.

Lawrence Kirsch, Vice President of Investor Relations and Strategy Development Good morning, everyone, and welcome to the Teleflex Incorporated second quarter 2026 earnings conference call. com. As a reminder, a replay will be available on our website. Those wishing to access the replay can refer to our press release from this morning for details.

Participating on today's call are Jason Weidman, President and Chief Executive Officer, and John Deren, Executive Vice President and Chief Financial Officer. Jason and John will provide prepared remarks and then we will open the call to Q&A. Before we begin, I'd like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in the slides posted to the Investor Relations section of the Teleflex website. We wish to caution you that such statements are in fact forward-looking in nature and are subject to risks and uncertainties, and actual events or results may differ materially.

The factors that could cause actual results or events to differ materially include, but are not limited to, factors referenced in our press release today as well as our filings with the SEC, including our Form 10-K which can be accessed on our website. Now I'll turn the call over to Jason for his remarks. Jason Weidman, President and Chief Executive Officer Thank you, Larry, and good morning, everyone. Let me begin by saying it's been a great start to my time at Teleflex.

Over the past two months I've really focused on learning our business, our products, and our organization. This has meant considerable time visiting many of our sites around the globe, meeting with employees across the organization, engaging with customers and physicians, and reviewing the company's portfolio, operating priorities, and long-term growth opportunities. While it's still early, a couple of things have stood out immediately to me. Our employees are fantastic.

They're dedicated, there's real pride and belief in what we do for patients, and they're eager to build on our accomplishments and drive execution. Second is the strength of Teleflex's underlying businesses. We have great products with market-leading positions in many important categories, strong brands, and a substantial global commercial footprint. My initial observations have also reinforced my belief that there is substantial opportunity ahead for Teleflex and that we have the right foundation to capture this potential.

We remain focused on executing key initiatives underway, including completing the announced divestitures, deploying the proceeds through our committed debt reduction and share repurchase initiatives, and mitigating stranded costs associated with the divestitures. Taken together, these actions will create a more focused portfolio, give us greater exposure to core critical care and high-acuity hospital markets, and further strengthen Teleflex's financial and strategic flexibility in its next phase of growth.

The divestitures and capital allocation plan reflect a thoughtful and proactive approach to value creation, but realizing our full potential will require continued deliberate action and consistent execution across the company. As I step into this role, my top priority is to thoroughly assess the business and to develop a strategic and operational plan that focuses our resources on the areas where we see the greatest opportunities for sustainable growth, innovation, and operational leverage, with the objective of maximizing value for our shareholders.

While this review is ongoing, like most medical device companies, the focus will center on operational rigor and predictability across the organization, accelerating growth and innovation-driven platforms, and ensuring disciplined and balanced capital deployment. I look forward to partnering with the leadership team and our employees to build upon the strong foundation that's already in place and continue advancing Teleflex's transformation into a more focused medical technologies leader with durable long-term growth. Now I'd like to transition to the second quarter highlights. 6%.

We delivered better-than-expected revenue, adjusted margin, and adjusted EPS, with excellent performance in the vascular and surgical businesses in particular. At the same time, interventional performance fell short of our expectations as the integration associated with the BI acquisition is taking longer than anticipated. As John will discuss, we have updated our full-year revenue outlook to reflect a more tempered expectation for interventional growth while maintaining our adjusted operating margin outlook and increasing our adjusted EPS guide.

We previously emphasized that 2026 would be a transition year for Teleflex as we become a stronger, more focused company for the future. To that end, I'm pleased to share that we're making significant progress on our strategic transformation and our commitment to maximizing shareholder value. In December of 2025, we announced agreements to sell the acute care, interventional urology, and OEM businesses as part of our overall transformation plan. 25 billion.

The OEM strategic divestiture generates the majority of the proceeds from the planned strategic divestitures and will fund both debt reduction and share repurchase. John will get into more details on the use of proceeds from the OEM close and capital allocation in a few minutes. Turning to the acute care and interventional urology divestiture, we remain confident in closing the transaction. As previously disclosed, the FTC issued a second request in March seeking additional information in connection with its review of the transaction.

Both parties are working cooperatively with the FTC. The strategic divestiture is currently anticipated to be completed in the fourth quarter of 2026, although the timing is dependent on the regulatory approval process and remaining steps to complete the transaction. As I focus on durable future growth, driving innovation is a key priority for Teleflex. 9% of sales in the first half of 2026.

As I look ahead, we will focus on effectively allocating capital to new R&D opportunities that fortify our existing product portfolio, leverage our call points, and are accretive to our long-term growth profile. Importantly, we have had a number of exciting new product innovation developments recently, including the late July BLA approval from the FDA for EZ Plasma freeze-dried plasma, as well as the achievement of important clinical trial milestones for freeze all our novel drug-eluting resorbable magnesium scaffold. EZPLAS is the first freeze-dried plasma licensed by the FDA.

EZPLAS uses an innovative flexible plastic bag technology that enables quick and efficient reconstitution of freeze-dried plasma. It fills an unmet need by enabling the transfusion of plasma in situations where it is critically needed, including on the battlefield or on air and road ambulances where the use of traditional plasma products is limited by logistical and operational challenges. Turning to the future for the interventional business and as part of our commitment to increasing R&D investment in innovative technologies, we continue to advance our clinical study program with a highly differentiated FreeZolv drug-eluting resorbable magnesium scaffold technology.

FreeZolv pairs temporary scaffolding with drug delivery to target a long-sought goal in interventional cardiology and is anticipated to address the rapidly growing trend in coronary and endovascular procedures towards treatments that leave nothing behind. During the second quarter we announced several milestones from the FreeZolv clinical program. Four-year follow-up data from the single-arm BioMag 1 study were presented in May and at the Paris Course of Revascularization, demonstrating sustained long-term performance and a favorable long-term safety profile of FreeZolv.

We also announced the completion of patient enrollment ahead of schedule for the BioMag 2 study, which is the first randomized controlled trial for FreeZolv run outside of the United States. This positions us for a late 2027 data readout. , with the first patient procedures completed in June at the MedStar Washington Hospital Center. While this comprehensive clinical program is still in its early phases, we are encouraged by the data to date and excited about the optionality that FreeZolv provides us in the future.

In summary, taken together, all of these updates and actions reflect a more focused portfolio, disciplined capital allocation and innovation progression. We believe they position Teleflex to deliver improved execution and stronger long-term performance. We are building a clearer financial profile and path to value creation through improved adjusted margins, lower interest expense and stronger adjusted earnings per share over time. 2026 remains a transition year for the company and our transformation is well underway with tangible milestones being met including the close of the OEM strategic divestiture and return of capital to shareholders.

As we continue to execute on our priorities, we expect a meaningful step-up in our financial performance in 2027 and beyond. Now let's move on to our second quarter continuing operations, detailed results and updated financial guidance for 2026. All growth rates that I refer to are on a year-over-year pro forma adjusted constant currency basis unless otherwise noted.

Pro forma adjusted constant currency growth for 2026 excludes the impact of foreign exchange, the $9 million Italian payback measure recorded in the second half of 2025, and the impact of approximately $14 million in continuing operations product revenue that was discontinued at the end of 2025 due to a strategic realignment, but includes revenue generated by the acquired vascular intervention business for the prior full-year period. All comments relate to continuing operations for the second quarter of 2026. 7% on a pro forma adjusted constant currency basis in the quarter.

Our revenue performance reflected strong execution in our vascular and surgical businesses, partially offset by the performance of our interventional business, which was impacted by integration and restructuring activities related to the VI business. 7% increase year over year and ahead of our expectations. Now let's take a deeper dive into our second quarter revenue performance. I will begin with a review of our revenues by global product category for the second quarter.

3 million, an increase of 8% year over year, primarily driven by growth in our hemostatic products and in our central access portfolio. 2%, which was primarily driven by strong performance in ligation clips, our instrument portfolio and skin stapling. 9 million, a decrease of 1%. While several categories including hemostatic products, right heart catheters, intraosseous and complex catheters outperformed, growth was softer than expected in the quarter, reflecting ongoing integration and restructuring activities associated with the VI acquisition.

Although 2026 was always expected to be a transition year, the integration in the quarter was slower than anticipated, reflecting several transition factors that we expect to be temporary. We are making progress on mitigation actions to address the primary drivers of these temporary impacts and we remain confident in the long-term strategic and financial prospects for this business.

That said, while the original plan contemplated that the integration would be largely completed towards the middle of 2026, we believe it is prudent to extend the timeline for full integration through the second half of 2026, given some of the lingering transition issues still impacting the business. I've spent the last 20 years of my career working in the interventional space and that experience gives me real conviction in the opportunity ahead for Teleflex.

At a high level, the legacy Teleflex interventional and acquired vascular intervention business fit together very well and with highly complementary product portfolios and geographic strengths, I believe that these are the right assets for Teleflex to expand its presence in interventional, coronary and peripheral procedures. Drilling down a bit more, we have great products, a broad portfolio that includes specialty devices that physicians rely on and appreciate. I see meaningful opportunities to gain share, expand geographically and bring new products to market, including through our innovation pipeline, which features differentiated products like FreeZolv.

As we actively work through the 2026 transition year, my focus is on positioning the business for success in 2027 and beyond. My broader review is ongoing, but my immediate priorities are to complete the integration associated with the VI acquisition and position Teleflex for improved growth as we continue the overall transformation of our business. That completes my comments on the second quarter revenue performance. Now I'd like to turn the call over to John for a more detailed review of our financial results.

John Deren (Executive Vice President and Chief Financial Officer) Thanks, Jason, and good morning. All results that I speak to will be on a continuing operations basis for 2026 through the reclassification to discontinued operations. Historical continuing operations reflect the impact of stranded costs in all periods presented. Given Jason's previous discussion of revenue, I'll begin with margins.

7%. The 280 basis point decrease year over year was primarily due to the adverse impact of tariffs and the addition of the vascular intervention business, which has a slightly lower gross margin than the corporate average. Of note, there was no recognition of IPA tariff refunds in the second quarter. 6%.

The 520 basis point decrease reflects year-over-year gross margin pressure and higher operating expenses associated with the acquired vascular intervention business as well as increased R&D investment. 3 million in the prior period. The year-over-year increase is primarily due to the borrowings used to finance the vascular intervention acquisition and a portion of the open market share repurchases in the second quarter of 2026, partially offset by lower interest rates. 1% in the prior period.

The year-over-year decrease is primarily due to the beneficial tax provisions included in the One Big Beautiful Bill act, increased utilization of US tax credits and favorable jurisdictional mix in the quarter. 7% increase year over year. The year-over-year increase was primarily due to a lower share count and tax rate and, to a lesser extent, higher adjusted operating income partially offset by tariffs and higher interest expense.