Teleflex blows past Q1 estimates

Teleflex (NYSE:TFX) today blew past the consensus estimate with its first-quarter results and announced a manufacturing consolidation plan it hops will save $25 million to $30 million annually.

Wayne, Pa.-based Teleflex posted profits of $56.2 million, or $1.20 per share, on sales of $587.3 million for the three months ended April 1. That amounts to bottom-line growth of 39.9% on a top-line gain of 20.4% compared with Q1 2017.

Adjusted to exclude one-time items, earnings per share were $2.15, a full 21¢ ahead of The Street, where analysts were looking for sales of $568.9 million.

“I am pleased to report that Teleflex is off to a solid start in 2018, as we generated constant-currency revenue growth of approximately 15% and adjusted earnings per share growth of approximately 19%,” president & CEO Liam Kelly said in prepared remarks. “During the first quarter of 2018, we saw a rebound in distributor buying patterns that had negatively impacted us during the fourth quarter of 2017 and we saw an acceleration in our organic constant currency revenue growth rate. In addition to an improvement in our organic revenue growth rate, we continued to see benefits from recently completed acquisitions, including NeoTract which generated over $42 million in revenue during the first quarter, which represented growth of approximately 87% year-over-year.”

Teleflex raised its earnings and sales guidance for the rest of 2018, saying it now expects to report adjusted EPS of $9.70 to $9.90, up from $9.55 to $9.75 previously, on sales growth of 15% to 16% compared with 14% to 15% previously.

The manufacturing realignment, which began May 1 and is slated to be complete by the end of 2024, “is intended to enhance our competitive position in the medical device industry and improve our longer-term profitability,” Kelly said.

“The plan will focus on the consolidation of certain facilities, the relocation of operations from certain higher-cost locations to existing lower-cost locations and the outsourcing of certain distribution operations and should result in higher adjusted gross and operating margins for the company in the future,” he said.

TFX shares were up 0.1% to $269.90 apiece today in early trading.

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