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2021 ANNUAL REPORT
Delivering Results
PATIENTS
CLINICIANS
COMMUNITIES
Financial Highlights
FROM CONTINUING OPERATIONS (Dollars in millions, except per share data)
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Net Revenues
10.7%
Variance
Research and
Development
Adjusted Earnings
Per Share1
Net Cash Provided by
Operating Activities
9.3%
Variance
24.9%
Variance
49.2%
Variance
¹ A table reconciling adjusted earnings per share to the most directly comparable
GAAP measure can be found at the end of this Annual Report.
2021
Revenues
by Geography
2021
Revenues
by Product Profile
59.1%
21.6%
10.6%
8.7%
24.5%
63.5%
12.0%
Americas
Europe,
Middle East
and Africa
Asia
Pacific
OEM
High
Growth
Durable
Core
Other
• Our “high growth” portfolio is spread across several business units, and includes UroLift®, MANTA®, EZ-IO®, and OnControl ®, as well as
hemostats and PICCs.
• Our “durable core” portfolio includes Teleflex products outside of the “high growth” and “other” categories.
• Our “other” category includes sales of respiratory products not included in the divestiture to Medline, as well as urology care products
and revenues associated with the manufacturing and supply transition agreements we entered into in connection with the respiratory
business divestiture.
Delivering Results
Teleflex is committed to delivering meaningful
Teleflex is committed to delivering meaningful
results to patients, clinicians, and the communities
results to patients, clinicians, and the communities
where we operate around the globe. At the heart of
where we operate around the globe. At the heart of
this effort is our core purpose of providing clinically
this effort is our core purpose of providing clinically
effective medical technologies that improve the
effective medical technologies that improve the
health and quality of people’s lives. This purpose
health and quality of people’s lives. This purpose
is more vital than ever before, and we are fulfilling
is more vital than ever before, and we are fulfilling
it by finding safe and effective ways to develop
it by finding safe and effective ways to develop
our patient-centered portfolio, interact with our
our patient-centered portfolio, interact with our
customers, maintain a robust supply chain, and
customers, maintain a robust supply chain, and
execute our business strategy.
execute our business strategy.
PATIENTS
We are leveraging our innovation strength
to identify unmet patient needs and to
develop advanced medical devices that
can improve patient outcomes across a
growing range of medical specialties.
CLINICIANS
We are collaborating with clinicians
to innovate devices that minimize
complications, expedite recovery times,
and reduce costs, and we are maintaining
an efficient global supply chain to
deliver these products worldwide.
COMMUNITIES
We are speeding life-altering products
to key regions around the world, and we
are advancing social responsibility
programs that support our employees,
enrich our communities, and help protect
the environment.
DIVERSE PORTFOLIO
Teleflex has a strong and growing
product portfolio that comprises many
trusted names in medical technology,
including Arrow®, Deknatel®, LMA®,
Pilling®, Rüsch®, UroLift®, QuikClot®,
and Weck®. Each of these brands
holds a dominant position within
its market, founded on a reputation
for delivering unique solutions and
maintaining exceptional quality.
Together, our brands help us to fulfill
our core purpose of delivering improved
healthcare outcomes worldwide.
2021 TELEFLEX ANNUAL REPORT | 1
To Our Shareholders
For companies in the healthcare industry, 2021 was a year
of extraordinary challenges. Supply chain disruptions, new
government mandates, and regulatory shifts impacted
numerous world markets, while the COVID-19 pandemic
continued to affect individuals, communities, and
healthcare systems across the globe. Within this high-
pressure environment, Teleflex did not merely survive.
We excelled. Our management team took decisive action
to meet our customer commitments and to ensure the
safety of our employees. At the same time, we diligently
executed our business plan, driving product innovation,
growing margins, and optimizing our business. As a result,
we met the challenges of 2021, while delivering both
operational excellence and record financial performance.
Delivering Results in 2021:
• We delivered revenue growth of 10.7%
year-over-year by developing and marketing key
products, and generating balanced growth across our
entire product portfolio.
• We generated strong gross and operating margin
expansion, and our adjusted earnings per share
increased by 24.9% year-over-year.1
• We optimized our business, integrating Z-Medica,
divesting our respiratory assets, and embarking on a new
global restructuring plan.
• We deepened our Corporate Social Responsibility
commitment, expanding vital programs, including
our Diversity, Equity & Inclusion initiative, and taking
measures to advance our environmental goals.
• We continued to prioritize people, offering expanded
professional development opportunities to our
employees, and delivering measurable improvements
in employee engagement, and customer service.
• We supported excellent patient care, providing
product training to more than 130,000 clinicians globally.
Our 2021 performance underscores the strength of our
business model, and the value of our diversified product
portfolio—but the true force behind our success remains
our people. Our employees around the world have worked
steadily through the pandemic, serving the needs of patients,
clinicians, and communities. We are deeply grateful to
them for their hard work and ongoing commitment to our
corporate objectives.
Navigating A Dynamic Market
The COVID-19 pandemic has severely taxed global
healthcare systems, restricting elective medical procedures,
spiking demand for select products, and generating
significant inflationary and supply chain pressures.
1. A table reconciling adjusted earnings per share to the most comparable
GAAP measure can be found at the end of this Annual Report.
The COVID-19 pandemic continues to exact
a heavy toll on companies and communities
around the world, and Teleflex is no
exception. We wish to express our deepest
sympathies to those within the Teleflex
community who have endured suffering
and loss due to the pandemic. Teleflex is
a family, and our people are both our top
priority and our driving force. On behalf
of our entire management team, we want
to pledge our company’s ongoing support
to our employees, and to commend their
courage and selflessness.
We are also facing government and regulatory shifts,
including a ruling by the Centers for Medicare &
Medicaid Services, which will impact reimbursement
for the UroLift® System over the next few years. In
addition, the new Medical Device Regulation (MDR)
went into effect in Europe during 2021, requiring us
to overhaul our core manufacturing processes and
recertify our products. Teleflex is meeting these
challenges decisively. We are leveraging our diversified
portfolio to insulate us from downturns in individual
market segments, while meeting higher demand
in others. We are empowering our people to find
effective ways to engage our customers in a remote
environment. We are drawing on our strong project
execution skills to address regulatory demands, and
to maintain a reliable supply chain. And we are
leveraging our durable growth model to advance our
strategy, and capitalize on emerging opportunities.
Executing Our Strategy
We are committed to driving growth by investing in
key clinical markets, fueling product innovation, and
leveraging our infrastructure to increase margins. During
2021, we made notable progress in advancing these
objectives. In North America, we continued to execute
our national, direct-to-consumer marketing campaign
for the UroLift® System, and to roll out the UroLift® 2
System, which will be available throughout North
America by the end of 2022. We also continued to
market the UroLift® System around the world, setting
the stage for a full commercial launch of this product in
Japan during 2022. The pandemic fueled strong demand
for key products, including our portfolio of central venous
catheters. We also experienced strong uptake for our
peripherally inserted central catheters and our Arrow®
EZ-IO® Intraoasseous Vascular Access System, which
provides intravenous access where access is difficult to
obtain in emergent situations. We launched the Arrow®
ErgoPack® Complete System, a convenient, all-inclusive
kit that provides everything clinicians need to insert
vascular access devices safely and confidently. We also
worked to expand use of our MANTA® Vascular Closure
Device, completing a real-world study, and embarking
on a major sales force expansion for this product.
Another key component of our growth strategy is our
well-established M&A program. Teleflex is a serial
acquirer, having completed 80 transactions since 2011
with a total value of $4.4 billion. Collectively, these
transactions have improved our growth rate, while
expanding and strengthening our product portfolio and
infrastructure. In 2021, we integrated the two companies
we acquired last year, namely Z-Medica and HPC, into
our business. We also ramped up marketing for our
hemostatic control product portfolio, and worked to
extend the utilization of these products into adjacent
clinical areas. In addition to these measures,
we continued to refine our portfolio by divesting the
majority of our respiratory assets to Medline Industries.
This transaction positions us to reallocate our resources
to higher growth opportunities, and it was immediately
accretive to our pro forma revenue growth and our
long-term margin profile.
Moving Forward
Our long-term outlook remains excellent. Populations
around the world are aging rapidly, fueling greater
demand for healthcare, and lower acuity patients are
seeking lower cost sites of service, creating a growing
need for effective and affordable solutions. Teleflex
is firmly positioned to capitalize on these trends. Our
diversified portfolio includes products that can increase
the efficiency of vital medical procedures and minimize
overall healthcare costs. Moreover, we have the
strengths to navigate market challenges, and to excel.
We are a global leader, with a powerful portfolio of
respected brands in multiple growth markets. We have
the scale to succeed in today’s healthcare marketplace,
along with the culture and reflexes to react quickly
to market shifts. We have a track record for efficient
execution that spans every area of our business. And, we
have exceptional people who have a deep commitment
to our corporate purpose.
As we move ahead, we will marshal these strengths
to continue our progress. We will drive organic growth
and innovation, fuel continued revenue growth and
margin expansion, pursue select M&A opportunities,
and develop our commitment to Corporate Social
Responsibility. Above all, we will continue to focus
on delivering meaningful results to our constituents—
from our employees and shareholders, to patients,
clinicians and communities around the world.
LIAM KELLY
Chairman, President and
Chief Executive Officer
THOMAS E. POWELL
Executive Vice President
and Chief Financial Officer
2021 TELEFLEX ANNUAL REPORT | 3
Prioritizing Patients
At Teleflex, people are our priority—from our customers and their patients, to our employees, partners,
and suppliers around the world. Our deep commitment to putting people first has driven us to build a unique,
patient-centric portfolio of differentiated medical devices that are designed to deliver improved outcomes. This
includes products that help to save lives, as well as those that can minimize pain, reduce the risk of complications,
and expedite recovery times. Collectively, our products touch many aspects of patient care—from vascular access,
to interventional cardiology, surgical, intensive care, men’s health, and emergency medicine—making a meaningful
difference for patients and clinicians in every corner of the world, every day.
UroLift® System
A minimally invasive technology for the treatment of benign prostatic hyperplasia (BPH),
the UroLift® System enables rapid relief of BPH symptoms with minimal downtime,1,2
and improved quality of life.3 During 2021, we continued to execute our national,
direct-to-consumer marketing campaign for the UroLift® System, and to roll out the
next-generation UroLift® 2 System in North America. We also ramped up our internal
processes and resources in preparation for a full commercial launch in Japan in 2022.
Arrowg+ard Blue Advance™ PICC
Arrowg+ard Blue Advance™ Peripherally Inserted Central Catheter (PICC) offers both
antimicrobial and antithrombogenic protection, reducing the risk of catheter colonization
and fibrin sheath accumulation on catheter surfaces.4 Many of our vascular access
products are used to facilitate administration of therapies to and management of patients
with COVID-19, and we are investing to grow these products in markets around the world.
QuikClot Control+® Hemostatic Dressing
QuikClot Control+® Hemostatic Dressing is a proprietary hemostatic technology indicated
for severe bleeding in the internal organ space. QuikClot Control+® Hemostatic Dressing
achieves faster bleeding control than standard gauze5, which may improve visualization
of the surgical field6, giving it important applications in trauma surgery. In 2021, we
initiated an IDE study to evaluate the performance of this product for mild to moderate
bleeding in cardiac procedures as compared to standard gauze. We currently intend to
apply with FDA for the expanded use of this device following completion of this IDE study.*
MANTA® Vascular Closure Device
MANTA® Vascular Closure Device is the first commercially available biomechanical
vascular closure device designed specifically for large bore femoral arterial access site
closure.7 In 2021, we completed the largest prospective observational study for large
bore arterial closure to date in Canada and Europe. The MARVEL registry studied the
safety and performance of the MANTA® Device under real-world conditions in 500
patients who underwent transfemoral large bore percutaneous procedures at ten
centers. The study yielded a high technical success rate, rapid hemostasis, and low
complication rates, as defined in the study protocol.8
1. Roehrborn, J Urology 2013 LIFT Study; 2. Shore, Can J Urol 2014; 3. Roehrborn, et al. Can J Urol 2017, 42% (2 point) improvement at 1
month, 47% (2.2 point) at 3 months, 52% (2.4 point) at 6 months, 51% (2.4 point) at 12 months; 4. Antimicrobial – In vitro data on file 2010:
AVER-004371, AVER-004483, AVAR-000427; Antithrombogenic – As compared to uncoated PICCs, intravascular ovine model inoculated with
Staph aureus: AVAR-000427; In each case, no correlation between in vitro / in vivo testing methods and clinical outcomes have currently been
ascertained; 5. Data on file at Teleflex. Comparative data may not be indicative of clinical performance. Based on in-vitro testing when
compared to standard gauze.; 6. Moss R. Management of Surgical Hemostasis: An Independent Study Guide. Association of Perioperative
Registered Nurses. 2013; 1-39.; 7. Data on file at Teleflex. 8. Kroon HG, Tonino PAL, Savontaus M, et al. Dedicated plug based closure
for large bore access – The MARVEL prospective registry. Catheter Cardiovasc Interv. 2020;1–9. https://doi.org/10.1002/ccd.29439
* Intended uses under IDE study are subject to FDA submission and clearance.
4 | 2021 TELEFLEX ANNUAL REPORT
Teleflex Management Team
Liam Kelly
Chairman, President
and Chief Executive
Officer
Thomas E. Powell
Executive Vice
President and
Chief Financial Officer
Karen Boylan
Corporate Vice
President, Global
Strategic Projects
Howard Cyr
Corporate Vice
President and Chief
Compliance Officer
John Deren
Corporate Vice
President and Chief
Accounting Officer
Michelle Fox
Corporate Vice
President and
Chief Medical Officer
Cameron Hicks
Corporate Vice President
and Chief Human
Resources Officer
Daniel V. Logue
Corporate Vice
President, General
Counsel and Secretary
Daniel Price
Corporate Vice President,
Commercial Finance
Dominik Reterski
Corporate Vice President,
Quality Assurance/
Regulatory Affairs
Jay White
Corporate Vice President
and President, Global
Commercial
James Winters
Corporate Vice President,
Manufacturing and
Supply Chain
OUR PURPOSE is to provide clinically effective medical technologies that improve the health and
quality of people’s lives. In today’s dynamic healthcare climate, this purpose is more vital than ever
before. Our management team is committed to identifying unmet clinical needs, and to developing
innovative products and technologies that provide unique benefits to both patients and healthcare
providers. In the following pages, some of our key functional business leaders discuss our progress
in 2021, and outline our strategies for the future.
2021 TELEFLEX ANNUAL REPORT | 5
Exceptional Execution
We are delivering excellence across our entire
supply chain, fueling sustainable business growth
while driving margin improvement.”
James Winters, Corporate Vice President, Manufacturing and Supply Chain
In 2021, our supply chain function faced significant challenges, underscoring the value of our commitment
to continuous business optimization. As companies across the globe shifted to a remote work environment,
Teleflex employees continued to work on-site to ensure we were serving our customers every day, and running
our facilities safely and efficiently. Our top priority was employee safety, and we adopted a series of stringent
operating protocols. At the same time, we faced unprecedented disruptions due to sick employees, regional
lockdowns, severe weather events, and manufacturing delays. These challenges were compounded by raw materials
shortages, and significant price inflation on raw materials, labor, logistics, and distribution. While many providers
within our marketplace struggled, Teleflex continued to serve our customers and maintain a reliable end-to-end
supply chain, while delivering sustainable business growth and improved margins.
Our exceptional performance is founded on the dedication of our people, including our regional management teams
around the world. These teams are empowered to make key leadership decisions that reflect the precise needs of
their regions, enabling us to manage both global and local challenges quickly and effectively. In 2021, we drew on
these teams to address the operational challenges our facilities faced due to the pandemic and to reassess our supply
chain effectiveness. This intelligence positioned us to refine our inventory parameters, balance our manufacturing
capacity, ramp up production of select products, and adjust our product allocation system to meet market demand.
We also launched a restructuring initiative designed to maximize the efficiency of our global footprint, improve
customer care, reduce costs, and build appropriate supply chain redundancy to deliver sustainable business growth.
TELEFLEX PRODUCTS ARE USED EVERY DAY
24,000
In over 24,000 surgical procedures
in the United States
8,000
To care for more than 8,000 patients
in the Intensive Care Unit from
neonates to adults
200
To treat nearly 200 men with benign
prostatic hyperplasia (BPH)
2,000
By Interventional Cardiologists, Radiologists,
and Vascular Surgeons in over 2,000 patients
who require vascular intervention
4,400
By emergency responders to treat 4,400
patients in the field, including more than 900
cardiac arrests
3,500
By Interventional Cardiologists to treat over
3,500 Interventional Cardiology procedures
Statistics included in the graphic above were calculated based on 2020 sales data, and management assumptions and estimates.
6 | 2021 TELEFLEX ANNUAL REPORT
We are evaluating every customer interaction,
and delivering a measurably superior experience
across the entire customer journey.”
Jay White, Corporate Vice President and President, Global Commercial
The COVID-19 pandemic strained healthcare systems worldwide, affecting every region in which we operate
in a unique way. Elective procedures were largely restricted, sharply affecting the demand for certain products.
At the same time, we faced a range of global supply chain and inflation pressures. Within this climate, Teleflex
continued to prioritize people—including our employees, suppliers, and customers—working tirelessly to fulfill
our commitments and avoid any deterioration in our service. We leveraged the virtual working environment, and
found new, effective ways to interact with our customers, and to conduct key business functions, including sales,
training, and troubleshooting. We also launched a new customer experience program in North America to assess
each service interaction and to identify areas for improvement. Despite the extreme challenges of 2021, we
generated a 10% improvement in our net promoter score in North America, underscoring our success in meeting
customer needs. Our decisive measures to address the impact of the pandemic also enabled Teleflex to deliver
exceptional financial performance for the year. This included meeting our internal targets for revenue growth and
exceeding market expectations for this metric.
We are driving health outcomes by delivering
value for patients and healthcare systems.”
Michelle Fox, Corporate Vice President and Chief Medical Officer
Clinical and Medical Affairs (CMA) has thrived in a dynamic environment. When access was increasingly restricted,
our function served as the “bridge” between our organization and the external medical community. Our extensive
in-house team of professionals—including nurses, physicians, paramedics, medical and clinical affairs representatives,
scientists, researchers, and reimbursement experts—executed on key initiatives that supported healthcare providers
around the world in delivering essential care. Through collaboration with healthcare professionals, our team gains
an in-depth understanding of patient needs, which we translate into meaningful healthcare solutions. In 2021, we
welcomed Human Factors into CMA, recognizing a cohesive, patient-centric development strategy creates an R&D
pipeline in-tune with an evolving healthcare ecosystem. We administered a growing range of clinical education
programs to train healthcare professionals in the safe and effective use of our products, thereby delivering on our
purpose of improving health outcomes. In 2021, CMA adapted to a remote training environment. By combining
virtual platforms with our ability to conduct safe in-person education and case support, we reached a record 130,000
healthcare practitioners across a broad scope of products and disciplines. Thanks to the notable dedication of global
CMA professionals, we created a strategic competitive advantage while safeguarding the public trust.
2021 TELEFLEX ANNUAL REPORT | 7
Superior Standards
Our goal is to deliver superior project execution
across every facet of our business.”
Karen Boylan, Corporate Vice President, Global Strategic Projects
Our Strategic Projects team supports project management across the Teleflex enterprise and provides guidance
to special functions, including crisis management and Corporate Social Responsibility (CSR). During 2021, we
faced formidable challenges, as we continued to implement our corporate response to the COVID-19 pandemic
and executed global projects remotely. We excelled in this regard, leveraging our “can-do” culture and established
technology platform to ensure the strong and timely execution of critical projects. We advanced our corporate
strategy by facilitating the integration of Z-Medica and the divestiture of our respiratory assets. We fostered
continuous performance improvement by implementing new standard operating processes. We supported the
adoption of Medical Device Regulation (MDR) standards, and developed new methodology for product labeling.
We also promoted our CSR platform, creating a clear structure for this effort founded on four distinct pillars. We
defined goals and growth plans for each pillar, which we communicated to our global workforce. We have already
advanced some key initiatives, including reducing packaging waste, installing solar paneling, and issuing our
first global CSR report.
In a year of persistent uncertainty, Teleflex
expertly managed a range of market
challenges, while growing our business beyond
pre-pandemic levels.”
Lawrence Keusch, Vice President of Investor Relations
and Strategy Development
The COVID-19 pandemic dominated the global landscape in 2021, impacting hospitals and clinicians worldwide,
and affecting both the willingness and the ability of patients to seek medical treatment. The precise timing, nature
and duration of these effects varied across different regions, creating a constantly moving target that required
flexibility, agility, and attentiveness. Our company’s deeply embedded financial discipline, our history of building
trust and transparency with investors, and our commitment to diversification across products, segments, and
geographic regions served us well. We continued to leverage our product portfolio, relying on its highly diversified
nature to insulate us against downturns in certain segments, and thereby minimize the impact of the pandemic.
We capitalized on our “right-sized” corporate structure to manage market challenges from a global perspective,
while reacting quickly to regional dynamics. We also continued to execute our established M&A strategy, which is
focused on identifying acquisition candidates that fuel the high-quality growth of our business. We have a strong
track record for acquiring assets that accelerate growth, strengthen our product portfolio, expand our business
into high-margin markets, and extend our global reach.
8 | 2021 TELEFLEX ANNUAL REPORT
Our commitment to delivering the highest quality,
reliability, and service is a global effort that yields
meaningful value for our customers.”
Dominik Reterski, Corporate Vice President, Quality Assurance/
Regulatory Affairs
In 2021, our teams provided excellent service to our customers, while ensuring that our foundation for the future
remains strong. We continuously strengthen and adapt our Quality and Regulatory systems and processes to meet
tightening or changing regulatory needs across the globe. One of the projects we are currently executing is to
comply with the Medical Device Regulation (MDR), a significant regulatory shift, which went into effect during
2021. MDR imposes an extensive range of new standards on the production and distribution of medical devices
in Europe, including new protocols for technical documentation and labeling. These changes have profound
implications, requiring us to overhaul our core processes and recertify our existing products. We are fully
committed to complying with MDR standards, while maintaining a steady supply of devices to our customers.
We have allocated significant resources to this initiative, including creating a dedicated multidisciplinary task
force to manage each step of the process. We are closely collaborating with our suppliers and customers in the
development and implementation of best practices, and the use of advanced technology.
Leadership is revealed during tough times,
and in 2021 we showcased the exceptional
quality of the Teleflex team.”
Cameron Hicks, Corporate Vice President and Chief Human
Resources Officer
Every successful business ultimately comes down to people, and we are committed to attracting and retaining the
high-caliber talent necessary to propel our continued success. This includes creating a welcoming culture, offering
attractive growth opportunities, and rewarding employees for dedication and performance. These objectives were
put to the test in 2021, as we managed the implications of COVID-19. The safety of our employees was our top
priority, and we took decisive steps to minimize workplace exposure to the virus. We also provided global support
for employee families, from launching an online forum to provide educational resources to homeschooling parents,
to delivering food during lockdowns, to enabling access to vaccines in areas where they were scarce. In addition to
these measures, we continued to perfect our use of the virtual work environment, developing effective ways to engage
our remote employees, and to manage recruiting, onboarding, and training virtually. The success of these initiatives
was evident in our employee referral rate for externally-filled positions, which reached 35% during the year. We
were also proud to be awarded the MedReps Best Places to Work commendation for the fifth consecutive year.
2021 TELEFLEX ANNUAL REPORT | 9
Culture of Commitment
We have an enduring commitment to Corporate Social Responsibility (CSR) that we demonstrate
through a broad and growing range of programs. In 2021, we set the stage to expand and enrich these
efforts by defining four distinct pillars for our CSR platform. We have established clear goals and growth
plans for each pillar, and we are engaging our entire global workforce in advancing these objectives. We
also issued the Teleflex Global Impact report. Our first-ever global CSR report, this catalogues our extensive
range of CSR programs and accomplishments, and can be viewed on our website at Teleflex.com.
Highlights from this report include:
PRINCIPLES
OF ETHICS &
GOVERNANCE
We have a deep
commitment to practicing
strong business ethics
and maintaining
exceptional compliance
standards, which we
continuously reinforce
through ongoing
assessment and training.
PLANET &
ENVIRONMENT
PEOPLE
We maintain a Zero Harm
vision, which guides us
to make ecologically
responsible decisions,
including reducing waste,
tracking our global
energy consumption,
and installing solar
energy panels at our
manufacturing facilities.
We provide professional
development
opportunities,
offer attractive benefits
packages, and administer
employee recognition
programs. In 2020,
we established Crisis
Management Teams to
support employees and
their families affected
by COVID-19.
PROSPERITY &
SUSTAINABLE
HEALTHCARE
We encourage employee
volunteer activities,
fund medical grants
and humanitarian
aid, and support local
organizations. We
also administer our
Humanitarian Donation
program, providing
Personal Protective
Equipment to healthcare
practitioners.
Diversity, Equity & Inclusion
One way we prioritize our people is through our Diversity, Equity & Inclusion (DE&I) Council. This council is tasked
with promoting diversity across our workforce, while creating an inclusive work environment where employees can
achieve their personal best. Our Regional DE&I Councils in the United States and Canada, Latin America, EMEA,
and APAC advance these objectives on a global scale.
Liam Kelly
Global Chair
Shanté Demary
United States
and Canada
Monika Vikander-
Hegarty
EMEA
Dennis Diaz
Latin America
Ruby Liu
APAC
10 | 2021 TELEFLEX ANNUAL REPORT
Our Core Values
Our success is firmly rooted in our Core Values, which revolve entirely around
people. These values highlight the qualities that define Teleflex, including a
pervasive entrepreneurial spirit that encourages innovation, a deep commitment
to building and maintaining trust, and an active belief in cultivating a fun work
environment. We continuously communicate these values to our employees, and
we integrate them into our review processes, ensuring that our entire global
workforce is “living” the Teleflex Core Values every day.
THE TELEFLEX FOUNDATION
For more than four decades, the Teleflex Foundation has encouraged social responsibility
by providing financial support to qualified nonprofit organizations. Our Teleflex Foundation
programs include the Make a Difference (MAD) Grant, which awards cash grants to select
healthcare charities in which our employees are involved. Our Matching Gifts Program matches
employee gifts of $50 and above to most organizations that are qualified for exemptions under
Section 501(c)(3) of the Internal Revenue Code. The Teleflex Foundation is also a long-time
supporter of Americares and an established Americares Emergency Response Partner.
JOIN Act with Purpose
JOIN Act with Purpose is an employee-driven forum
that facilitates the social responsibility activities of our
employees by providing a platform where they can access
information about local volunteer opportunities and share
personal volunteer experiences. These activities are
summarized in the JOIN Impact Report, which is available
at www.teleflex.com. JOIN IN It Together provides Teleflex
employees who work remotely with an online forum
for support and connection.
MedReps Best Place to Work
In December 2021, Teleflex was named one of the
Best Places to Work by the MedReps community
of medical sales talent, marking the fifth consecutive
year we have earned this award. This is especially
meaningful, because MedReps redefined some
of the evaluation criteria for the award this year,
making the candidate pool for 2021 much larger
and more competitive than in the past.
2021 TELEFLEX ANNUAL REPORT | 11
TELEFLEX CHAIRMAN’S AWARD
We present the Teleflex Chairman’s Award annually to individual employees and employee teams
who earn the attention of their colleagues by delivering exceptional performance in the areas of
innovation, customer focus, productivity, and/or sustainability. In 2021, we evaluated a record
number of submissions for this peer-nominated award, and we presented it to:
Individual Winner
When the New Zealand Ministry of Health
faced a critical shortage of filters, they called
John for help. He quickly located excess
Teleflex inventory, gathered clinical data to
demonstrate product suitability for use and
enable training, and secured rapid product
delivery, impacting thousands of patient lives.
John Reidy
Specialty EPIC Center Team in OEM
This team drove the implementation of the IDEA Process in
our OEM EPIC Centers in Limerick, Ireland; Maple Grove,
Minnesota; and, most recently, in Plymouth, Minnesota. In 2021,
team members opened the Plymouth location and immediately
exceeded expectations for securing new business, and
collaborating with customers. They significantly outpaced their
original target for 2021 Non-Recurring Engineering revenue.
Malaysia Crisis Management Team
As a result of COVID-19, the Malaysian government set
stringent parameters for allowing our manufacturing facilities
to operate at full capacity. Teleflex was required to conduct
bi-weekly testing for all employees, as well as to provide
acceptable PPE, ensure employee permits met shifting
formatting standards, and maintain a minimum of 90%
vaccination status at the site. This team implemented an
internal online tracking tool in less than two weeks, and
manually collected data for production associates, helping
to ensure employee safety.
(Pictured from top left to bottom right) Nate Rhodes,
John Kirchgessner, Greg Gabay, Philip O’Malley, Jason
Purcell, Patrick Campion, Ray Ledinsky
(Pictured from top left to bottom right) Mohamad Zaidi
Ismail, Charles Schrenk, Muneswaren Gandhi, Lin Im Tan,
Bathmanathan Kallianna Gounder, Norsurianti Karim, Sharifah
Shafini Tungku Syed Petra, Maruthavaanam Ponnusamy,
Azhar Ahmad Ahmed Rifaie, Muniandy A/L Songappen
IT Cyber Security Team
To meet compliance requirements, this team implemented
a multi-factor authentication VPN solution—a process that
typically takes up to four months—in just 47 days. The
new technology was deployed to 7,000 Teleflex VPN users,
with no disruption to employee productivity. The solution
strengthened our cyber security, improved user experience,
and ensured transparent access to Teleflex resources for
employees working remotely due to COVID-19.
(Pictured from top left to bottom right) Matt Bartush, Angelo
Candler, Pavel Gonda, Will Hardeman, Jason Lesko, Bobby Neal,
Alan Olivas, Nick Sabinske, Eric Scott
12 | 2021 TELEFLEX ANNUAL REPORT
FORM 10K
FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2021
This page intentionally left blank.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________________
FORM 10-K
_________________________________________________
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021 or
(Mark One)
For the transition period from to .
Commission file number 1-5353
_________________________________________________
TELEFLEX INCORPORATED
(Exact name of registrant as specified in its charter)
_________________________________________________
Delaware
(State or other jurisdiction of
incorporation or organization)
23-1147939
(I.R.S. employer identification no.)
550 East Swedesford Road, Suite 400, Wayne, Pennsylvania
(Address of principal executive offices)
19087
(Zip Code)
Registrant’s telephone number, including area code: (610) 225-6800
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
Securities registered pursuant to Section 12(g) of the Act:
NONE
_________________________________________________
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No ý
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically 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 x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and
"emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting 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. ¨ ¨
Emerging growth company ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that prepared or
issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x
The aggregate market value of the Common Stock of the registrant held by non-affiliates of the registrant (29,100,050 shares) on June 27, 2021
(the last business day of the registrant’s most recently completed fiscal second quarter) was $11,995,331,611(1). The aggregate market value
was computed by reference to the closing price of the Common Stock on such date, as reported by the New York Stock Exchange.
The registrant had 46,870,014 shares of Common Stock outstanding as of February 22, 2022.
DOCUMENT INCORPORATED BY REFERENCE:
Certain provisions of the registrant’s definitive proxy statement in connection with its 2022 Annual Meeting of Stockholders, to be filed
within 120 days of the close of the registrant’s fiscal year, are incorporated by reference in Part III hereof.
(1) For purposes of this computation only, the registrant has defined “affiliate” as including executive officers and directors of the
registrant and owners of more than five percent of the common stock of the registrant, without conceding that all such persons are
“affiliates” for purposes of the federal securities laws.
TELEFLEX INCORPORATED
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2021
TABLE OF CONTENTS
PART I
BUSINESS
RISK FACTORS
UNRESOLVED STAFF COMMENTS
PROPERTIES
LEGAL PROCEEDINGS
MINE SAFETY DISCLOSURES
PART II
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES
RESERVED
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
CONTROLS AND PROCEDURES
OTHER INFORMATION
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT
INSPECTIONS
PART III
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
EXECUTIVE COMPENSATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE
PRINCIPAL ACCOUNTING FEES AND SERVICES
PART IV
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
FORM 10-K SUMMARY
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Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Item 15.
Item 16.
SIGNATURES
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Information Concerning Forward-Looking Statements
All statements made in this Annual Report on Form 10-K, other than statements of historical fact, are forward-
looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,”
“should,” “guidance,” “potential,” “continue,” “project,” “forecast,” “confident,” “prospects” and similar expressions
typically are used to identify forward-looking statements. Forward-looking statements are based on the then-current
expectations, beliefs, assumptions, estimates and forecasts about our business and the industry and markets in
which we operate. These statements are not guarantees of future performance and are subject to risks and
uncertainties, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is
expressed or implied by these forward-looking statements due to a number of factors, including:
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•
•
•
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changes in business relationships with and purchases by or from major customers or suppliers;
delays or cancellations in shipments;
demand for and market acceptance of new and existing products;
our inability to provide products to our customers, which may be due to, among other things, events that impact
key distributors, suppliers and vendors that sterilize our products;
our inability to integrate acquired businesses into our operations, realize planned synergies and operate such
businesses profitably in accordance with our expectations;
our inability to effectively execute our restructuring programs;
our inability to realize anticipated savings resulting from restructuring plans and programs;
the impact of enacted healthcare reform legislation and proposals to amend, replace or repeal the legislation;
changes in Medicare, Medicaid and third-party coverage and reimbursements;
the impact of tax legislation and related regulations;
competitive market conditions and resulting effects on revenues and pricing;
increases in raw material costs that cannot be recovered in product pricing;
global economic factors, including currency exchange rates, interest rates, trade disputes, sovereign debt
issues and international conflicts and hostilities, such as the ongoing conflict between Russia and Ukraine;
public health epidemics including the novel coronavirus (referred to as COVID-19);
difficulties entering new markets; and
general economic conditions.
For a further discussion of the risks relating to our business, see Item 1A, “Risk Factors” in this Annual Report
on Form 10-K. We expressly disclaim any obligation to update these forward-looking statements, except as
otherwise explicitly stated by us or as required by law or regulation.
3
ITEM 1. BUSINESS
PART I
Teleflex Incorporated is referred to herein as “we,” “us,” “our,” “Teleflex” and the “Company.”
THE COMPANY
Teleflex is a global provider of medical technology products that enhance clinical benefits, improve patient and
provider safety and reduce total procedural costs. We primarily design, develop, manufacture and supply single-use
medical devices used by hospitals and healthcare providers for common diagnostic and therapeutic procedures in
critical care and surgical applications. We market and sell our products to hospitals and healthcare providers
worldwide through a combination of our direct sales force and distributors. Because our products are used in
numerous markets and for a variety of procedures, we are not dependent upon any one end-market or procedure.
Our major manufacturing operations are located in the Czech Republic, Malaysia, Mexico and the United States
(the "U.S.").
We are focused on achieving consistent, sustainable and profitable growth and improving our financial
performance by increasing our market share and improving our operating efficiencies through:
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•
development of new products and product line extensions;
investment in new technologies and broadening the application of our existing technologies;
expansion of the use of our products in existing markets and introduction of our products into new geographic
markets;
achievement of economies of scale as we continue to expand by utilizing our direct sales force and distribution
network to sell new products, as well as by increasing efficiencies in our sales and marketing organizations,
research and development activities and manufacturing and distribution facilities; and
expansion of our product portfolio through select acquisitions, licensing arrangements and business
partnerships that enhance, expand or expedite our development initiatives or our ability to increase our market
share.
Our research and development capabilities, commitment to engineering excellence and focus on low-cost
manufacturing enable us to bring to market cost effective, innovative products that improve the safety, efficacy and
quality of healthcare. Our research and development initiatives focus on developing these products for both existing
and new therapeutic applications, as well as developing enhancements to, and product line extensions of, existing
products. During 2021 we introduced several product line extensions and five new products. Our portfolio of existing
products and products under development consists primarily of Class I and Class II medical devices, most of which
require 510(k) clearance by the U.S. Food and Drug Administration ("FDA") for sale in the U.S., and some of which
are exempt from the requirement to obtain 510(k) clearance. We believe that seeking 510(k) clearance or qualifying
for 510(k)-exempt status reduces our research and development costs and risks, and typically results in a shorter
timetable for new product introductions as compared to the premarket approval, or PMA, process that would be
required for Class III medical devices. See "Government Regulation" below for additional information.
HISTORY AND RECENT DEVELOPMENTS
Teleflex was founded in 1943 as a manufacturer of precision mechanical push/pull controls for military aircraft.
From this original single market, single product orientation, we expanded and evolved through entries into new
businesses, development of new products, introduction of products into new geographic or end-markets and
acquisitions and dispositions of businesses. Throughout our history, we have continually focused on providing
innovative, technology-driven, specialty-engineered products that help our customers meet their business
requirements.
Beginning in 2007, we significantly changed the composition of our portfolio of businesses, expanding our
presence in the medical device industry, while divesting all of our other businesses, which served the aerospace,
automotive, industrial and marine markets. Following the divestitures of our marine business and cargo container
and systems businesses in 2011, we became exclusively a medical device company.
In 2017, we completed two large scale acquisitions: NeoTract, Inc. ("NeoTract") and Vascular Solutions, Inc.
(“Vascular Solutions”). NeoTract was a medical device company that developed and commercialized the UroLift
System, a minimally invasive medical device for treating lower urinary tract symptoms due to benign prostatic
hyperplasia, or BPH. Vascular Solutions was a medical device company that developed and marketed clinical
products for use in minimally invasive coronary and peripheral vascular procedures.
4
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 (the
"Respiratory business divestiture"). We completed the initial phase of the Respiratory business divestiture on June
28, 2021, pursuant to which we received cash proceeds of $259 million. The second and final 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.
See "Our Products" below and Note 4 to the consolidated financial statements included in this Annual Report on
Form 10-K for additional information.
We expect to continue to increase the size of our business through a combination of acquisitions and organic
growth initiatives.
Restructuring programs
We continue to execute our footprint realignment and other restructuring programs designed to improve
efficiencies in our manufacturing and distribution facilities and, to a lesser extent, our sales and marketing and
research and development organizations. See Note 5 to the consolidated financial statements included in this
Annual Report on Form 10-K for additional information.
OUR SEGMENTS
We have four segments: Americas, EMEA (Europe, the Middle East and Africa), Asia (Asia Pacific) and OEM
(Original Equipment Manufacturer and Development Services).
Each of our three geographic segments provides a comprehensive portfolio of medical technology products
used by hospitals and healthcare providers. However, certain of our products are more heavily concentrated within
certain segments. For example, most of our urology products are sold by our EMEA segment and most of our
interventional urology products are sold by our Americas segment. Our product portfolio is described in the products
section below.
Our OEM segment designs, manufactures and supplies devices and instruments for other medical device
manufacturers. Our OEM division, which includes the TFX Medical OEM, TFX OEM, Deknatel and HPC Medical
brands, provides custom extrusions, micro-diameter film-cast tubing, diagnostic and interventional catheters,
balloons and balloon catheters, film-insulated fine wire, coated mandrel wire, conductors, sheath/dilator introducers,
specialized sutures and performance fibers, bioabsorbable sutures, yarns and resins.
The following charts depict our net revenues by reportable operating segment as a percentage of our total
consolidated net revenues for the years ended December 31, 2021, 2020 and 2019:
OUR PRODUCTS
Our product categories within our geographic segments include vascular access, anesthesia, interventional,
surgical, interventional urology, respiratory and urology. Each of these categories and the key products sold therein
are described in more detail below.
5
Vascular Access: Our Vascular Access product category offers devices that facilitate a variety of critical care
therapies and other applications with a focus on helping reduce vascular-related complications. These products
primarily consist of our Arrow branded catheters, catheter navigation and tip positioning systems and our
intraosseous, or in the bone, access systems.
Our catheters are used in a wide range of procedures, including the administration of intravenous therapies, the
measurement of blood pressure and the withdrawal of blood samples through a single puncture site. Many of our
catheters provide antimicrobial and antithrombogenic protection technology that have been shown to reduce the risk
of catheter related bloodstream infections and microbial colonization and thrombus accumulation on catheter
surfaces.
Our intraosseous access systems are designed for the delivery of medications and fluids when intravenous
access is difficult to obtain in emergent, urgent or medically necessary cases. Our products offer a method for
vascular access that can be administered quickly and effectively in the hospital and pre-hospital environments and
include the EZ-IO Intraosseous Vascular Access System and Arrow FAST1 Sternal Intraosseous Infusion System.
Interventional: Our Interventional product category offers devices that facilitate a variety of applications to
diagnose and deliver treatment via the vascular system of the body. These products primarily consist of a variety of
coronary catheters, structural heart therapies, peripheral intervention products and cardiac assist products that are
used by interventional cardiologists, interventional radiologists and vascular surgeons. Clinical benefits of our
products include increased vein and artery access and increased support during complex medical procedures. Our
product offerings consist of a portfolio of Arrow branded catheters, Guideline and Trapliner catheters, the Manta
Vascular Closure and Arrow OnControl devices.
Anesthesia: Our Anesthesia product category is comprised of airway, pain management and hemostatic
product lines that support hospital, emergency medicine and military channels.
Our airway management products and related devices are designed to enable use of standard and advanced
anesthesia techniques in both pre-hospital emergency and hospital settings. Our key products include
laryngoscopes, supraglottic airways, endotracheal tubes and atomization devices, which are branded under our
LMA, Rusch and MAD trade names.
Our pain management product line includes catheters and disposable pain pumps for regional anesthesia,
designed to improve patients’ post-operative pain experience, which are branded under our Arrow trade name.
Our hemostatic products accelerate the body's natural clotting cascade and are used in trauma situations where
bleeding is difficult to control. The portfolio consists of external hemostats used by first responders, interventional
products used in the catheter lab, and trauma products used by trauma surgeons, which are branded under our
QuikClot trade name.
Surgical: Our Surgical product category consists of single-use and reusable products designed to provide
surgeons with devices for use in a variety of surgical procedures. These products primarily consist of metal and
polymer ligation clips, fascial closure surgical systems used in laparoscopic surgical procedures, percutaneous
surgical systems and other surgical instruments. Our significant surgical brands include Weck, Minilap, Pleur-Evac,
Deknatel, KMedic and Pilling.
Interventional Urology: Our interventional urology product category includes the UroLift System, a minimally
invasive technology for treating lower urinary tract symptoms due to benign prostatic hyperplasia, or BPH. The
UroLift System involves the placement of permanent implants, typically through a transurethral outpatient
procedure, that hold the prostate lobes apart to relieve compression on the urethra without cutting, heating or
removing prostate tissue. Our Interventional Urology product portfolio is most heavily weighted in our Americas
segment.
Respiratory: Our respiratory products are used in a variety of care settings and primarily consist of oxygen
therapy products. The Respiratory business divestiture included products marketed under the Hudson RCI brand
name that comprised oxygen therapy products, aerosol therapy products, spirometry products and ventilation
management products.
Urology: Our urology product portfolio provides bladder management for patients in the hospital and individuals
in the home care markets. The product portfolio consists principally of a wide range of catheters (including Foley
and intermittent), urine collectors, catheterization accessories and products for operative endourology, which are
6
marketed under the Teleflex and Rusch brand names. Our urology product portfolio is most heavily weighted in our
EMEA segment.
OUR MARKETS
We generally serve three end-markets: hospitals and healthcare providers, medical device manufacturers and
home care. These markets are affected by a number of factors, including demographics, utilization and
reimbursement patterns. The following charts depict the percentage of net revenues for the years ended
December 31, 2021, 2020 and 2019 derived from each of our end markets:
GOVERNMENT REGULATION
We are subject to comprehensive government regulation both within and outside the U.S. relating to the
development, manufacture, sale and distribution of our products.
Regulation of Medical Devices in the U.S
All of our medical devices manufactured or distributed in the U.S. are subject to requirements set forth by the
Federal Food, Drug, and Cosmetic Act (“FDC Act”) and regulations promulgated by the FDA under the FDC Act,
which are enforced by the FDA. The FDA and, in some cases, other government agencies administer requirements
for the methods used in, and the facilities and controls used for, the design, manufacture, packaging, labeling,
storage, installation, servicing, marketing, importing and exporting of all finished devices intended for human use.
Additional FDA requirements include premarket clearance and approval, advertising and promotion, distribution and
post-market surveillance of our medical devices and establishment of registration and device listing for our facilities.
Unless an exemption, pre-amendment grandfather status (that is, medical devices legally marketed in the U.S.
before May 28, 1976) or FDA enforcement discretion applies, each medical device that we market in the U.S. must
first receive either clearance as a Class I or, typically, a Class II device (after submitting a premarket notification
(“510(k)”) or approval as a Class III device (after filing a premarket approval application (“PMA”)) from the FDA
pursuant to the FDC Act. To obtain 510(k) clearance, a manufacturer must demonstrate to the FDA that the
proposed device is substantially equivalent to a legally marketed device (a 510(k)-cleared device, a pre-amendment
device for which FDA has not called for PMAs or a device with a de novo authorization), referred to as the
"predicate device." Substantial equivalence is established by the applicant showing that the proposed device has
the same intended use as the predicate device, and it either has the same technological characteristics or has been
shown to be equally safe and effective and does not raise different questions of safety and effectiveness as
compared to the predicate device. The FDA’s 510(k) clearance process requires regulatory competence to execute
and usually takes four to nine months, but it can last longer. A device that is not eligible for the 510(k) process
because there is no predicate device may be reviewed by the FDA through the de novo process (the process for
granting marketing authorization when no substantially equivalent device exists) if the FDA agrees it is a low to
moderate risk device. A device that is not exempt from premarket review and is not eligible for 510(k) clearance or
de novo authorization is categorized as Class III and must follow the PMA approval pathway, which requires proof of
the safety and effectiveness of the device to the FDA’s satisfaction. The process of obtaining PMA approval also
requires specific regulatory competence and is more costly, lengthy and uncertain than the 510(k) or de novo
7
processes. The PMA process generally takes from one to three years or even longer. Our portfolio of existing
products and pipeline of potential new products consist primarily of Class I (510(k) exempt) and Class II devices that
require 510(k) clearance, although a few are 510(k)-exempt. In addition, certain modifications made to devices after
they receive clearance or approval may require a new 510(k) clearance or approval of a PMA or PMA supplement.
We cannot be sure that 510(k) clearance or PMA approval will be obtained in a timely matter if at all for any device
that we propose to market.
A clinical trial is almost always required to support a PMA application and is sometimes required for a 510(k)
clearance or a de novo authorization. The sponsor of a clinical trial must comply with and conduct the study in
accordance with the applicable federal regulations, including FDA’s requirements for investigational device
exemptions (“IDE”) requirements and good clinical practice (“GCP”). Clinical trials must also be approved by an
institutional review board ("IRB"), which is an appropriately constituted group that has been formally designated to
review biomedical research involving human subjects and which has the authority to approve, require modifications
to, or disapprove research to protect the rights, safety, and welfare of human research subjects. The FDA may order
the temporary or permanent hold or discontinuation of a clinical trial at any time, or impose other sanctions, if it
believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents an
unacceptable risk to the clinical trial subjects. An IRB may also require the clinical trial to be halted at a given clinical
trial site for failure to comply with the IRB’s requirements or to adequately ensure the protection of human subjects,
or may impose other conditions. Conducting medical device clinical trials is a complex and costly activity and
frequently requires the use of outsourced resources that specialize in planning, conducting and/or monitoring the
clinical trial for the medical device manufacturer.
A device placed on the market must comply with numerous regulatory requirements. Those regulatory
requirements include, but are not limited to, the following:
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device listing and establishment registration;
adherence to the Quality System Regulation (“QSR”), which requires stringent design, testing, control,
documentation, complaint handling and other quality assurance procedures;
labeling, including advertising and promotion, requirements;
prohibitions against the promotion of off-label uses or indications;
adverse event and malfunction reporting (Medical Device Reports or "MDRs");
post-approval restrictions or conditions, potentially including post-approval clinical trials or other required
testing;
post-market surveillance requirements;
the FDA’s recall authority, whereby it can require or request the recall of products from the market; and
reporting and documentation of voluntary corrections or removals.
The FDA has issued final regulations regarding the Unique Device Identification (“UDI”) System, which requires
manufacturers to label or mark certain medical devices and/or their packaging with unique identifiers. Although the
FDA expects that the UDI System will help track products during recalls and improve patient safety, it has required
us to make changes to our manufacturing and labeling, which could increase our costs. The UDI System is being
implemented in stages based on device risk, with the first requirements having taken effect in September 2014 and
the last taking effect in September 2022.
Certain of our medical devices are sold in kits that include a drug component, such as lidocaine. These types of
kits are generally regulated as combination products within the Center for Devices and Radiological Health
("CDRH") under the device regulations because the device provides the primary mode of action of the kit. Although
the kit as a whole is regulated as a medical device, it may be subject to certain drug requirements such as current
good manufacturing practices (“cGMPs”) and adverse drug experience reporting requirements, to the extent
applicable to the drug-component repackaging activities and subject to inspection to verify compliance with cGMPs
as well as other regulatory requirements.
Our manufacturing facilities, as well as those of certain of our suppliers, are subject to periodic and for-cause
inspections by FDA personnel to verify compliance with the QSR (21 CFR Part 820) as well as other regulatory
requirements. Similar inspections and audits are performed by Notified Bodies to verify compliance to applicable
ISO standards (e.g. ISO 13485:2016), by auditing organizations under the Medical Device Single Audit Program
8
("MDSAP") applicable to regulatory requirements of Australia, Brazil, Canada, Japan and the U.S., and/or by
regulatory authorities to verify compliance with medical device regulations and requirements from the countries in
which we distribute product. If the FDA were to find that we or certain of our suppliers have failed to comply with
applicable regulations, it could institute a wide variety of enforcement actions, ranging from issuance of a warning or
untitled letter to more severe sanctions, such as product recalls or seizures, civil penalties, consent decrees,
injunctions, criminal prosecution, operating restrictions, partial suspension or total shutdown of production, refusal to
permit importation or exportation, refusal to grant, or delays in granting, clearances or approvals or withdrawal or
suspension of existing clearances or approvals. The FDA also has the authority under certain circumstances to
request repair, replacement or refund of the cost of any medical device manufactured or distributed by us. Any of
these actions could have an adverse effect on our business.
Regulation of Medical Devices Outside of the U.S.
Medical device laws also are in effect in many of the markets outside of the U.S. in which we do business.
These laws range from comprehensive device approval requirements for some or all of our products to requests for
product data or certifications. Inspection of and controls over manufacturing, as well as monitoring of device-related
adverse events, are components of most of these regulatory systems. Manufacturing certification requirements and
audits through the MDSAP program or other regulatory authority inspections also apply. In addition, the European
Union (“EU”) has adopted the EU Medical Device Regulation (the “EU MDR”), which imposes stricter requirements
for the marketing and sale of medical devices (as compared to the predecessor Medical Device Directive (the "EU
MDD")), including in the area of clinical evaluation requirements, quality systems, economic operators and post-
market surveillance. The EU MDR went into effect in May 2021. As of the effective date, new and modified devices
must be certified under, and be compliant with, the EU MDR. Devices that previously satisfied EU MDD
requirements can continue to be marketed in the EU, subject to certain limitations, until the expiration of their
current EU MDD certifications, which may be no later than May 2024. Failure to obtain EU MDR certifications prior
to the expiration of existing EU MDD certifications may limit our ability to sell certain products in the EU until EU
MDR certification is obtained. Additionally, certain EU MDR requirements will go into effect for all devices in May
2024. Failure to meet the applicable EU MDR requirements could adversely impact our business in the EU and
other regions that tie their product registrations to the EU requirements.
Healthcare Laws
We are subject to various federal, state and local laws in the U.S. targeting fraud and abuse in the healthcare
industry. These laws prohibit us from, among other things, soliciting, offering, receiving or paying any remuneration
to induce the referral or use of any item or service reimbursable under Medicare, Medicaid or other federally or state
financed healthcare programs. Violations of these laws are punishable by imprisonment, criminal fines, civil
monetary penalties and exclusion from participation in federal healthcare programs. In addition, we are subject to
federal and state false claims laws in the U.S. that prohibit the submission of false payment claims under Medicare,
Medicaid or other federally or state funded programs. Certain marketing practices, such as off-label promotion, and
violations of federal anti-kickback laws may also constitute violations of these laws.
In addition, we are subject to various federal and state reporting and disclosure requirements related to the
healthcare industry. Rules issued by the Centers for Medicare & Medicaid Services ("CMS") require us to collect
and report information on payments or transfers of value to physicians and teaching hospitals, as well as investment
interests held by physicians and their immediate family members. Effective January 2022, we are also required to
collect and report information on payments or transfers of value to physician assistants, nurse practitioners, clinical
nurse specialists, certified registered nurse anesthetists and certified nurse-midwives. The reported data is available
to the public on the CMS website. Failure to submit required information may result in civil monetary penalties. In
addition, several states now require medical device companies to report expenses relating to the marketing and
promotion of device products and to report gifts and payments to individual physicians in these states. Other states
prohibit various other marketing-related activities. The federal government and certain other states require the
posting of information relating to clinical studies and their outcomes. The shifting commercial compliance
environment and the need to build and maintain robust and expandable systems to comply with the different
compliance and/or reporting requirements among a number of jurisdictions increases the possibility that a
healthcare company may violate one or more of the requirements, resulting in increased compliance costs that
could adversely impact our results of operations.
Further, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education
Reconciliation Act (collectively, the “Affordable Care Act”), imposed regulatory mandates and other measures
designed to contain the cost of healthcare, in addition to annual reporting and disclosure requirements on device
9
manufacturers for any “transfer of value” made or distributed to physicians or teaching hospitals. Violations of these
laws are punishable by a range of fines, penalties and other sanctions.
Other Regulatory Requirements
We are also subject to the U.S. Foreign Corrupt Practices Act and similar anti-bribery laws applicable in
jurisdictions outside the U.S. that generally prohibit companies and their intermediaries from improperly offering or
paying anything of value to non-U.S. government officials for the purpose of obtaining or retaining business.
Because of the predominance of government-sponsored healthcare systems around the world, most of our
customer relationships outside of the U.S. are with government entities and are therefore subject to such anti-
bribery laws. Our policies mandate compliance with these anti-bribery laws. We operate in many parts of the world
that have experienced government corruption to some degree, and in certain circumstances, strict compliance with
anti-bribery laws may conflict with local customs and practices. In the sale, delivery and servicing of our medical
devices and software outside of the U.S., we must also comply with various export control and trade embargo laws
and regulations, including those administered by the Department of Treasury’s Office of Foreign Assets Control
(“OFAC”) and the Department of Commerce’s Bureau of Industry and Security (“BIS”) which may require licenses or
other authorizations for transactions relating to certain countries and/or with certain individuals identified by the U.S.
government. Despite our global trade and compliance program, our internal control policies and procedures may not
always protect us from reckless or criminal acts committed by our employees, distributors or other agents.
Violations of these requirements are punishable by criminal or civil sanctions, including substantial fines and
imprisonment.
COMPETITION
The medical device industry is highly competitive. We compete with many companies, ranging from small start-
up enterprises to companies that are larger and more established than us and have access to significantly greater
financial resources. Furthermore, extensive product research and development and rapid technological advances
characterize the market in which we compete. We must continue to develop and acquire new products and
technologies for our businesses to remain competitive. We believe that we compete primarily on the basis of clinical
superiority and innovative features that enhance patient benefit, product reliability, performance, customer and sales
support, and cost-effectiveness.
SALES AND MARKETING
Our product sales are made directly to hospitals, healthcare providers, distributors and to original equipment
manufacturers of medical devices through our own sales forces, independent representatives and independent
distributor networks.
BACKLOG
Most of our products are sold to hospitals or healthcare providers on orders calling for delivery within a few days
or weeks, with longer order times for products sold to medical device manufacturers. Therefore, our backlog of
orders is not indicative of revenues to be anticipated in any future 12-month period.
PATENTS AND TRADEMARKS
We own a portfolio of patents, patents pending and trademarks. We also license various patents and
trademarks. Patents for individual products extend for varying periods based upon the date of patent filing or grant
and the legal term of patents in the various countries where patent protection is obtained. Trademark rights may
potentially extend for longer periods of time and are dependent upon national laws and use of the marks. All product
names throughout this document are trademarks owned by, or licensed to, us or our subsidiaries. Although these
have been of value and are expected to continue to be of value in the future, we do not consider any single patent
or trademark, except for the Teleflex name and the Arrow and UroLift brands, to be essential to the operation of our
business.
SUPPLIERS AND MATERIALS
Materials used in the manufacture and sterilization of our products are purchased from a large number of
suppliers in diverse geographic locations. We are not dependent on any single supplier for a substantial amount of
the materials used, the components supplied and the sterilization services provided for our overall operations. Most
of the materials, components and sterilization services we utilize are available from multiple sources, and where
practical, we attempt to identify alternative suppliers. However, our ability to establish alternate sources of supply of
materials and sterilization services may be delayed due to FDA and other regulatory authority requirements
10
regarding the manufacture and sterilization of our products. Volatility in commodity prices, and freight costs, can
have a significant impact on the cost of producing and supplying certain of our products.
RESEARCH AND DEVELOPMENT
We are engaged in both internal and external research and development. Our research and development efforts
support our strategic objectives to provide innovative new, safe and effective products that enhance clinical value by
reducing infections, improving patient and clinician safety, enhancing patient outcomes and enabling less invasive
procedures.
We also acquire or license products and technologies that are consistent with our strategic objectives and
enhance our ability to provide a full range of product and service options to our customers.
SEASONALITY
Portions of our revenues are subject to seasonal fluctuations. Incidence of flu and other disease patterns and, to
to single-use
lesser extent,
a
products. Historically, we have experienced higher sales in the fourth quarter as a result of these factors.
frequency of elective medical procedures affect revenues related
the
HUMAN CAPITAL RESOURCES
As of December 31, 2021, we employed approximately 14,000 employees, including 4,000 employees in the
U.S. and 10,000 employees in 31 other countries around the world. Our manufacturing employees make up 58% of
the total employee population and are located primarily in Mexico, Malaysia and the Czech Republic. Our
commercial organization comprises 25% of the employee base, located throughout the globe. The remaining 17%
of employees work in various corporate functions, based in each of our locations.
We believe our employees are a significant differentiating factor and play a critical role in our ability to deliver on
our commitments to patients and execute our strategy to our customers and shareholders. Our management team
places significant focus and attention to matters affecting our people, particularly our commitment to our Core
Values, capability development, total rewards and diversity, as well as how each employee experiences our culture.
Culture
The culture of our organization is critical to the human capital we attract, develop and retain and who, in turn,
contribute to the results and success of our organization. Our culture is framed by our Core Values – building trust,
entrepreneurial spirit and making our workplace fun, with people at the center of all we do. We strive to develop and
sustain our culture by embedding these values in all aspects of our organization, including our human capital
strategies.
Talent Management, Development and Learning
We are committed to providing our employees with opportunities for growth, development and career
advancement and to building a high-performance culture that supports our Core Values throughout the employee
lifecycle. We have implemented a talent management process that provides regular coaching check-ins between
employees and their managers to review the employee’s developmental objectives and career progression. We also
regularly review our talent portfolio and succession plans to ensure we can deliver on our company strategy.
In addition, we offer a number of internal educational and training resources to employees throughout our
organization. Among these resources is the Teleflex Academy, a curriculum that provides learning opportunities for
our employees to further develop their skills and receive training across broad subject areas such as leadership;
communications; diversity, equity and inclusion; sales; customer service; and business acumen. We have recently
implemented a diversity, equity and inclusion development program for all of our people managers within Teleflex to
support our employees and continue to drive a culture of inclusion. Additionally, we provide support opportunities for
diverse candidates through our Global Coaching and Mentoring Programs.
Diversity, Equity and Inclusion
We believe that diversity, equity, and inclusion (DEI) drives value for employees, patients, customers and
shareholders by engaging a broad range of perspectives and experiences to enrich our offering to these
communities. We are continuing to cultivate this diversity through the efforts of our Corporate DEI Council and four
regional DEI councils (North America, Latin America, EMEA and APAC), whose goals include supporting the
attraction, development and retention of diverse employees in alignment with our Core Values.
11
One pillar of our DEI platform includes sponsoring our globally expanding Employee Resource Groups (ERGs),
which we initiated with Women Inspiring Learning and Leadership in 2016, and have expanded to include several
other ERGs across our geographic regions. Examples of new initiatives in 2021 include the establishment of a
women, parents and caregiver support group in our EMEA region and a young professional support group in our
APAC region. Our ERGs are managed by employees and participation is open to all.
In our efforts to provide a diverse slate of candidates to our hiring managers, we deploy several recruitment
channels to source talent from a variety of organizations including multiple social media outlets, co-op placement,
local universities and technology institutes. We also work with numerous external recruiting firms that focus on
diverse candidates and work to ensure diverse interviewing panels whenever possible.
Total Rewards
We actively manage our global compensation and benefit programs to ensure we can attract and retain the
critical human capital we need to continue to deliver on our commitments to employees, customers, patients and
shareholders. We believe our compensation offering is aligned to competitive market pay levels and, along with our
culture and Core Values, acts to incentivize the right behaviors and actions to achieve the best results for the
organization. We structure our compensation to include a mix of pay components of base salary, short-term cash
incentives and long-term incentives. We offer our employees health, welfare and retirement benefits and have
implemented policies addressing paid time off, flexible work schedules, employee assistance, parental leave and
family benefits, among others.
In 2021, we engaged external consultants to perform an in-depth pay equity analysis on the pay practices within
our organization. No systemic gender or ethnicity bias was identified within our compensation programs.
Environmental, Health and Safety
Our Environmental Health and Safety (EHS) vision is to protect the safety and health of Teleflex personnel and
the environments in which we operate. We have a vested interest in protecting our most valuable assets – our
employees. Everyone is a steward of EHS, fostering a culture of being actively responsible in all our operations. We
remain fully committed to complying with all relevant EHS legislation and to achieving our vision. We have and will
continue to expend resources to construct, maintain, operate and improve our facilities across the globe for
environmental, health, safety and sustainability of our operations. For example, in response to the risks associated
with the COVID-19 pandemic, we have expended resources to implement various safety measures, including
implementing social distancing protocols and expanding personal protective equipment availability and usage,
across our facilities globally in an effort to protect the health and safety of our employees and others. Further, we
understand that our environment is both complex and delicate, and we prioritize managing and limiting the impact
our business has on the environment as part of our Zero Harm Culture. In response to protecting the environment,
we have initiated programs to track and lower our consumption of energy, water and gas as well as reduce waste
and the use of hazardous materials. In addition, we have developed an EHS program focused in the areas of
training our personnel with respect to, deploying and auditing global EHS standards as well as other programs to
engage our employees on EHS initiatives.
ENVIRONMENTAL
We are subject to various environmental laws and regulations both within and outside the U.S. Our operations,
like those of other medical device companies, involve the use of substances regulated under environmental laws,
primarily in manufacturing and sterilization processes. While we continue to devote resources to compliance with
existing environmental laws and regulations, we cannot ensure that our costs of complying with current or future
environmental protection, health and safety laws and regulations will not exceed our estimates or will not have a
material adverse effect on our business, financial condition, results of operations and cash flows. Further, we cannot
ensure that we will not be subject to environmental claims for personal injury or cleanup in the future based on our
past, present or future business activities.
INVESTOR INFORMATION
We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). Therefore, we file reports, proxy statements and other information with the Securities and
Exchange Commission (SEC). The SEC maintains a website (http://www.sec.gov) that contains reports, proxy and
information statements and other information regarding issuers that file electronically with the SEC.
You can access financial and other information about us in the Investors section of our website, which can be
accessed at www.teleflex.com. We make available through our website, free of charge, copies of our annual report
12
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed
with or furnished to the SEC under Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable
after electronically filing or furnishing such material to the SEC. The information on our website is not part of this
Annual Report on Form 10-K. The reference to our website address is intended to be an inactive textual reference
only.
We are a Delaware corporation incorporated in 1943. Our executive offices are located at 550 East Swedesford
Road, Suite 400, Wayne, PA 19087.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
The names and ages of our executive officers and the positions and offices held by each such officer are as
follows:
Name
Liam J. Kelly
Thomas E. Powell
Cameron P. Hicks
Daniel V. Logue
Jay White
James Winters
Age
55
60
57
48
48
49
Positions and Offices with Company
Chairman, President and Chief Executive Officer
Executive Vice President and Chief Financial Officer
Corporate Vice President, Human Resources and Communications
Corporate Vice President, General Counsel and Secretary
Corporate Vice President and President, Global Commercial
Corporate Vice President, Manufacturing and Supply Chain
Mr. Kelly has been our President and Chief Executive Officer since January 2018 and has been Chairman of
our Board of Directors since May 2020. From May 2016 to December 31, 2017, Mr. Kelly served as our President
and Chief Operating Officer. From April 2015 to April 2016, he served as Executive Vice President and Chief
Operating Officer. From April 2014 to April 2015, Mr. Kelly served as Executive Vice President and President,
Americas. From June 2012 to April 2014 Mr. Kelly served as Executive Vice President and President, International.
He also has held several positions with regard to our EMEA segment, including President from June 2011 to
June 2012, Executive Vice President from November 2009 to June 2011, and Vice President of Marketing from
April 2009 to November 2009. Prior to joining Teleflex, Mr. Kelly held various senior level positions with Hill-Rom
Holdings, Inc., a medical device company, from October 2002 to April 2009, serving as its Vice President of
International Marketing and R&D from August 2006 to February 2009.
Mr. Powell has been our Executive Vice President and Chief Financial Officer since February 2013. From
March 2012 to February 2013, Mr. Powell was Senior Vice President and Chief Financial Officer. He joined Teleflex
in August 2011 as Senior Vice President, Global Finance. Prior to joining Teleflex, Mr. Powell served as Chief
Financial Officer and Treasurer of Tomotherapy Incorporated, a medical device company, from June 2009 until
June 2011. In 2008, he served as Chief Financial Officer of Textura Corporation, a software provider. From
April 2001 until January 2008, Mr. Powell was employed by Midway Games, Inc., a software provider, serving as its
Executive Vice President, Chief Financial Officer and Treasurer from September 2001 until January 2008.
Mr. Powell has also held leadership positions with Dade Behring, Inc., PepsiCo, Bain & Company, Tenneco Inc. and
Arthur Andersen & Company.
Mr. Hicks has been our Corporate Vice President, Human Resources and Communications since April 2013.
Prior to joining Teleflex, Mr. Hicks served as Executive Vice President of Human Resources & Organizational
Effectiveness for Harlan Laboratories, Inc., a private global provider of pre-clinical and non-clinical research
services, from July 2010 to March 2013. From April 1990 to January 2010, Mr. Hicks held various leadership roles
with MDS Inc., a provider of products and services for the development of drugs and the diagnosis and treatment of
disease, including Senior Vice President of Human Resources for MDS’ global Pharma Services division from
November 2000 to January 2010.
Mr. Logue has been our Corporate Vice President, General Counsel and Secretary since January 2021. Mr.
Logue joined Teleflex in 2004 and previously held the positions of Deputy General Counsel from February 2017 to
December 2020, Associate General Counsel from March 2013 to January 2017 and Assistant General Counsel from
June 2004 to February 2013. Prior to joining Teleflex, Mr. Logue was an associate at the law firm of Pepper
Hamilton LLP (now Troutman Pepper Hamilton Sanders LLP) from September 1999 to June 2004.
Mr. White has been our Corporate Vice President and President, Global Commercial since February 2021.
From February 2017 to January 2021, Mr. White served as our President, The Americas, and from December 2013
to January 2017 he served as President and General Manager, Vascular. From January 2013 to November 2013,
13
Mr. White served as our President and General Manager, Surgical. Prior to that, he served as our Vice President
and General Manager, Surgical from January 2010 to December 2012. Mr. White joined Teleflex in March 2005 as
our Director of Marketing, North America. Prior to joining Teleflex, Mr. White worked at Covidien plc (now part of
Medtronic plc) where he held senior leadership positions in sales and marketing over a five-year period.
Mr. Winters has been our Corporate Vice President, Manufacturing and Supply Chain since February 2020. He
previously held the position of Vice President, Global Manufacturing from March 2018 to January 2020. Prior to
joining Teleflex, Mr. Winters held various senior management and operational roles with the DePuy Synthes division
of Johnson & Johnson, a healthcare company, from August 2005 to February 2018. Most recently, Mr. Winters
served as Vice President of Global Manufacturing for Global Joint Reconstruction for DePuy Synthes from February
2015 to February 2018. Prior to that, Mr. Winters served as Plant Manager for the DePuy Synthes Ireland
Manufacturing Operation.
Our officers are elected annually by our board of directors. Each officer serves at the discretion of the board.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this Annual Report on Form 10-K, you should carefully consider
the following factors which could have a material adverse effect on our business, financial condition, results of
operations, cash flows or stock price. The risks below are not the only risks we face. Additional risks and
uncertainties not currently known to us or that we currently deem to be immaterial may also adversely affect our
business, financial condition, results of operations or stock price.
Risks Relating to our Business and Operations
We face strong competition. Our failure to successfully develop and market new products could
adversely affect our business.
The medical device industry is highly competitive. We compete with many domestic and foreign medical device
companies ranging from small start-up enterprises that might sell only a single or limited number of competitive
products or compete only in a specific market segment, to companies that are larger and more established than us,
have a broad range of competitive products, participate in numerous markets and have access to significantly
greater financial and marketing resources than we do.
In addition, the medical device industry is characterized by extensive product research and development and
rapid technological advances. The future success of our business will depend, in part, on our ability to design and
manufacture new competitive products and enhance existing products. Our product development efforts may
require us to make substantial investments. There can be no assurance that we will be able to successfully develop
new products, enhance existing products or achieve market acceptance of our products, due to, among other
things, our inability to:
•
identify viable new products;
• maintain sufficient liquidity to fund our investments in research and development and product acquisitions;
•
•
•
obtain adequate intellectual property protection;
gain market acceptance of new products; or
successfully obtain regulatory approvals.
In addition, our competitors currently may be developing, or may develop in the future, products that provide
better features, clinical outcomes or economic value than those that we currently offer or subsequently develop. Our
failure to successfully develop and market new products or enhance existing products could have a material
adverse effect on our business, financial condition and results of operations.
Our results of operations and financial condition may be adversely affected by public health epidemics,
including the ongoing COVID-19 global health pandemic.
We are subject to risks associated with public health threats, including the ongoing COVID-19 pandemic. The
COVID-19 pandemic has significantly impacted economic activity and markets around the world and has negatively
impacted our operations, financial performance and cash flows. Because the severity, magnitude, and duration of
the COVID-19 pandemic and its economic consequences are uncertain, rapidly changing and difficult to predict, the
pandemic’s impact on our operations and financial performance, as well as its impact on our ability to execute our
business strategies and initiatives successfully, remains uncertain and difficult to predict. Further, the ultimate
14
impact of the COVID-19 pandemic on our operations and financial performance depends on many factors that are
not within our control, including, but not limited, to: governmental, business and individuals’ actions that have been
and continue to be taken in response to the pandemic (including restrictions on travel, transport and workforce
pressures, and deferrals or postponements of elective procedures); the impact of the pandemic and actions taken in
response on global and regional economies, travel and economic activity; the availability of federal, state, local or
non-U.S. funding programs; general economic uncertainty in key global markets and financial market volatility;
global economic conditions and levels of economic growth; and the timing and pace of recovery when the
COVID-19 pandemic subsides, which could be impacted by a number of factors, including limited provider capacity
to perform procedures using our products that were deferred as a result of the pandemic.
The COVID-19 pandemic has subjected, and is expected to continue to subject, our operations, financial
performance and financial condition to a number of risks, including, but not limited to those discussed below:
•
•
•
It has resulted, and we expect it will continue to result, in lower revenues in certain of our product categories,
including our interventional urology (which revenues are primarily concentrated in our Americas segment),
surgical, interventional, anesthesia and OEM product categories, in which we sell products largely utilized in
elective procedures, which have been significantly reduced or suspended due to the pandemic.
It has resulted in higher revenues in our respiratory and vascular access product categories. However, we are
unable to predict how long this increased demand will last or how significant it will be.
It has caused and may continue to cause disruptions in the manufacture of our products. We rely on our major
manufacturing operations located in the Czech Republic, Malaysia, Mexico and the U.S., to manufacture our
products. The COVID-19 pandemic, and/or the governmental or regulatory actions taken in response to
COVID-19 pandemic, may interfere with our ability, or that of our employees or suppliers to perform our and
their respective responsibilities and obligations relative to the conduct of our business and create a risk to our
ability to manufacture our products in a timely manner, or at all. We have experienced and expect to continue to
experience inefficiencies in our manufacturing operations due to government-mandated and self-imposed
restrictions placed on facilities in certain locations primarily in North America and Asia. Additionally, we have
experienced and continue to experience a higher than normal level of absenteeism across our global
manufacturing sites. In an effort to increase the wider availability of needed medical device products, we may
elect to, or the government may require us to, allocate manufacturing capacity (for example, pursuant to the
U.S. Defense Production Act) in a way that adversely affects our regular operations and financial results, results
in differential treatment of customers and/or adversely affects our customer relationships and reputation.
• While we have not experienced significant payment defaults by, or identified other significant collectability
concerns with, our customers to date, we may be adversely impacted by delays in payments of outstanding
receivables if our customers experience financial difficulties or are unable to borrow money to fund their
operations, which may adversely impact their ability to pay for our products on a timely basis, if at all.
•
•
•
The COVID-19 pandemic, including related illness, border closures, travel restrictions, quarantines, lockdowns
or other workforce disruptions, has generally had an adverse effect on macroeconomic conditions across the
globe. Accordingly, this has impacted various aspects of our global supply chain, including causing logistical
transport challenges for our freight transport providers, and has resulted in cost inflation. While we have not yet
experienced significant disruptions in the global supply chain for our products that are in high demand, we have
in some cases experienced lengthened delivery times, resulting in backorders for some of our products. These
disruptions, or our failure to respond to them, could increase manufacturing or distribution costs or cause further
delays in delivering, or an inability to deliver, products to our customers.
The COVID-19 pandemic has increased volatility and pricing in the capital markets, and volatility is likely to
continue. We might not be able to continue to access preferred sources of liquidity when we would like, and our
borrowing costs could increase.
As a U.S. federal government contractor, we are subject to a federal executive order requiring our U.S.
employees to be vaccinated unless they qualify for medical or religious exemptions. The order has been
challenged in court, and its ultimate status and impact on our business is uncertain. However, this requirement
or other future vaccine mandates could adversely affect our workforce retention and hiring, which may
adversely affect our business and results of operations, including through the disruption of our manufacturing
and distribution operations.
These and other impacts of the COVID-19 pandemic, or other pandemics or epidemics, could have the effect of
heightening many of the other risks described herein. We might not be able to predict or respond to all impacts on a
timely basis to prevent near- or long-term adverse impacts to our results. However, these effects could have an
15
adverse impact on our liquidity, capital resources, operations and business and those of the third parties on which
we rely, and such impact could be material.
Our customers depend on third party coverage and reimbursements, and the failure of healthcare
programs to provide sufficient coverage and reimbursement for our medical products could adversely
affect us.
The ability of our customers to obtain coverage and reimbursement for our products is important to our
business. Demand for many of our existing and new medical products is, and will continue to be, affected by the
extent to which government healthcare programs and private health insurers reimburse our customers for patients’
medical expenses in the countries where we do business. Even when we develop or acquire a promising new
product, demand for the product may be limited unless reimbursement approval is obtained from private and
government third party payors. Internationally, healthcare reimbursement systems vary significantly. In some
countries, medical centers are constrained by fixed budgets, regardless of the volume and nature of patient
treatment. Other countries require application for, and approval of, government or third party reimbursement.
Without both favorable coverage determinations by, and the financial support of, government and third party
insurers, the market for many of our medical products would be adversely affected. In this regard, we cannot be
sure that third party payors will maintain the current level of coverage and reimbursement to our customers for use
of our existing products. Adverse coverage determinations, including reductions in the amount of reimbursement,
could harm our business by discouraging customers’ selection of, and reducing the prices they are willing to pay for,
our products.
In addition, as a result of their purchasing power, third party payors have implemented and are continuing to
implement cost cutting measures such as seeking discounts, price reductions or other incentives from medical
products suppliers and imposing limitations on coverage and reimbursement for medical technologies and
procedures. These trends could compel us to reduce prices for our products and could cause a decrease in the size
of the market or a potential increase in competition that could negatively affect our business, financial condition and
results of operations.
We are subject to extensive government regulation, which may require us to incur significant expenses
to ensure compliance. Our failure to comply with those regulations could have a material adverse effect on
our business, results of operations, financial condition and cash flows.
Our products are medical devices and are subject to extensive regulation in the U.S. by the FDA and by
comparable government agencies in other countries. The regulations govern, among other things, the development,
design, clinical testing, premarket clearance and approval, manufacturing, labeling, importing and exporting and
sale and marketing of many of our products. Moreover, these regulations are subject to future change.
In the U.S., before we can market a new medical device, or a new use of, or claim for, or significant modification
to, an existing product, we generally must first receive either 510(k) clearance or de novo authorization or approval
of a premarket approval application, or PMA, from the FDA. Similarly, most major markets for medical devices
outside the U.S. also require clearance, approval, authorization or compliance with certain standards before a
product can be commercially marketed. In the EU, the EU MDR went into effect in May 2021 and includes
significant additional pre- and post-market requirements. The process of obtaining regulatory clearances and
approvals to market a medical device, particularly from the FDA and certain foreign government authorities, can be
costly and time consuming, and clearances and approvals might not be granted for new products on a timely basis,
if at all. In addition, once a device has been cleared or approved, a new clearance or approval may be required
before the device may be modified or its labeling changed. Furthermore, the FDA or a foreign government authority
may make its review and clearance or approval process more rigorous, which could require us to generate
additional clinical or other data, and expend more time and effort, in obtaining future product clearances or
approvals. The regulatory clearance and approval process may result in, among other things, delayed realization of
product revenues, substantial additional costs or limitations on indicated uses of products, any one of which could
have a material adverse effect on our financial condition and results of operations. Even after a product has
received marketing approval or clearance, such product approval or clearance can be withdrawn or limited due to
unforeseen problems with the device or issues relating to its application, or the FDA or a foreign government
authority may change the classification of a product, which could require additional clinical studies and new
marketing submissions.
Failure to comply with applicable regulations could lead to adverse effects on our business, which could include:
•
partial suspension or total shutdown of manufacturing;
16
•
•
•
•
•
•
•
•
•
•
•
•
product shortages;
delays in product manufacturing;
warning or untitled letters;
fines or civil penalties;
delays in or restrictions on obtaining new regulatory clearances or approvals;
withdrawal or suspension of required clearances, approvals or licenses;
product seizures or recalls;
injunctions;
criminal prosecution;
advisories or other field actions;
operating restrictions; and
prohibitions against exporting of products to, or importing products from, countries outside the U.S.
We could be required to expend significant financial and human resources to remediate failures to comply with
applicable regulations and quality assurance guidelines. In addition, civil and criminal penalties, including exclusion
under Medicaid or Medicare, could result from certain regulatory violations. Any one or more of these events could
have a material adverse effect on our business, financial condition and results of operations.
Medical devices are cleared or approved for one or more specific intended uses and performance claims must
be adequately substantiated. Promoting a device for a use outside of the cleared or approved intended use or
population, that is, an off-label use, or making false, misleading or unsubstantiated claims could result in
government enforcement action.
Furthermore, our facilities are subject to periodic inspection by the FDA and other federal, state and foreign
government authorities, which require manufacturers of medical devices to adhere to certain regulations, including
the FDA’s Quality System Regulation ("QSR"), which requires, among other things, periodic audits, design controls,
quality control testing and documentation procedures, as well as complaint evaluations and investigation. In
addition, any facilities assembling kits that include drug components and are registered as drug repackaging
establishments are also subject to current good manufacturing practices requirements for drugs. The FDA also
requires the reporting of certain adverse events and product malfunctions and requires the reporting of certain
recalls or other field safety corrective actions for medical devices. Issues identified through such inspections and
reports may result in FDA enforcement action through any of the actions discussed above. Moreover, issues
identified through such inspections and reports may require significant resources to resolve.
We are subject to healthcare fraud and abuse laws, regulation and enforcement; our failure to comply
with those laws could have a material adverse effect on our results of operations and financial condition.
We are subject to healthcare fraud and abuse regulation and enforcement by the federal government and the
governments of those states and foreign countries in which we conduct our business. The laws that may affect our
ability to operate include:
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the federal healthcare anti-kickback statute, which, among other things, prohibits persons from knowingly and
willfully offering or paying remuneration, one purpose of which is to induce either the referral of an individual for,
or the purchase, order or recommendation of, any good or service for which payment may be made under
federal healthcare programs such as Medicare and Medicaid, or soliciting payment for such referrals,
purchases, orders and recommendations;
federal false claims laws which, among other things, prohibit individuals or entities from knowingly presenting, or
causing to be presented, false or fraudulent claims for payment from the federal government, including
Medicare, Medicaid or other third-party payors;
the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which prohibits schemes to
defraud any healthcare benefit program and false statements relating to healthcare matters; and
state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may
apply to items or services reimbursed by any third-party payor, including commercial insurers.
If our operations are found to be in violation of any of these laws or any other government regulations, we may
be subject to penalties, including civil and criminal penalties, damages, fines, the curtailment or restructuring of our
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operations, the exclusion from participation in federal and state healthcare programs and imprisonment of
personnel, any of which could adversely affect our ability to operate our business and our financial results. The risk
of our being found to have violated these laws is increased by the fact that many of them have not been fully
interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations.
Further, the Affordable Care Act imposed annual reporting and disclosure requirements on device
manufacturers for any “transfer of value” made or distributed to physicians or teaching hospitals. Effective January
2021, we are required to collect and report information on payments or transfers of value to physician assistants,
nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists (including anesthesiology
assistants) and certified nurse-midwives. The reported information is made publicly available in a searchable format.
In addition, device manufacturers are required to report and disclose any ownership or investment interests held by
physicians and their immediate family members during the preceding calendar year. Failure to submit required
information may result in civil monetary penalties for each payment, transfer of value or ownership or investment
interests not reported in an annual submission, up to an aggregate of $150,000 per year (and up to an aggregate of
$1 million per year for “knowing failures”).
There are also certain states, including Connecticut, Massachusetts, and Vermont, that require device
manufacturers to track and report payments or transfers of value provided to certain health care providers and
health care entities. In addition, some states, such as California, Connecticut, Nevada and Massachusetts, mandate
implementation of compliance programs that include the tracking and reporting of gifts, compensation for consulting
and other services, and other remuneration to healthcare providers. The shifting commercial compliance
environment and the need to build and maintain robust and expandable systems to comply with the different
compliance and/or reporting requirements among a number of jurisdictions increases the possibility that we may
inadvertently violate one or more of the requirements, resulting in increased compliance costs that could adversely
impact our results of operations.
We may not be successful in achieving expected operating efficiencies and sustaining or improving
operating expense reductions, and may experience business disruptions associated with restructuring,
facility consolidations, realignment, cost reduction and other strategic initiatives.
Over the past several years we have implemented a number of restructuring, realignment and cost reduction
initiatives, including facility consolidations, organizational realignments and reductions in our workforce, and we may
engage in similar efforts in the future. While we have realized some efficiencies from these initiatives, we may not
realize the benefits of these or future initiatives to the extent we anticipated. Further, such benefits may be realized
later than expected, and the ongoing difficulties in implementing these measures may be greater than anticipated,
which could cause us to incur additional costs or result in business disruptions. In addition, if these measures are
not successful or sustainable, we may be compelled to undertake additional restructuring, realignment and cost
reduction efforts, which could result in significant additional charges. Moreover, if our restructuring, realignment and
cost reduction efforts prove ineffective, our ability to achieve our strategic and business plan goals may be
adversely affected.
In addition, as part of our efforts to increase operating efficiencies, we have implemented a number of initiatives
over the past several years to consolidate our enterprise resource planning, or ERP, systems. To date, we have not
experienced any significant disruptions to our business or operations in connection with these initiatives. However,
as we continue our efforts to further consolidate our ERP systems, we could experience business disruptions, which
could adversely affect customer relationships and divert the attention of management away from daily operations. In
addition, any delays in the implementation of these initiatives could cause us to incur additional unexpected costs.
Should we experience such difficulties, our business, cash flows and results of operations could be adversely
affected.
Disruptions in sterilization of our products or regulatory initiatives further restricting the use of
ethylene oxide in sterilization facilities could adversely affect our results of operations and financial
condition.
Many of our products require sterilization prior to sale. A common method for sterilizing medical products
involves the use of ethylene oxide, which is listed as a hazardous air pollutant under the Clean Air Act, as amended,
and emissions of which are regulated by the U.S. Environmental Protection Agency ("EPA") and other regulatory
authorities. One of our contract sterilizers, Sterigenics U.S., LLC, uses ethylene oxide in its sterilization process,
including at its facilities in Smyrna, Cobb County, Georgia and Santa Teresa, New Mexico, which have sterilized
some of our vascular, surgical, intermittent catheter and OEM products. During the fourth quarter of the year ended
December 31, 2019, operations at the Smyrna facility were suspended by state and local officials due to issues
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associated with the facility's use of ethylene oxide in its sterilization operations, but have since reopened. In
December 2020, the New Mexico Attorney General initiated legal proceedings involving the Santa Teresa facility,
alleging that its operations have resulted in impermissible ethylene oxide emissions. While both plants are currently
operating normally, should their operations be suspended or adversely affected, our ability to provide affected
products to our customers could be impaired if we are unable to utilize alternate facilities and sources for
sterilization services.
In addition, on October 10, 2019, the attorneys general of 15 states and the District of Columbia sent a letter to
the EPA urging that the EPA promptly propose and finalize stricter standards for ethylene oxide emissions. Among
other things, the attorneys general stated that the current EPA standard for ethylene oxide fails to adequately
protect workers and communities, and that the use of ethylene oxide, particularly in the medical device sterilization
industry, must be reduced. On December 12, 2019, the EPA issued an Advance Notice of Proposed Rulemaking to
solicit information and request comments that will aid in the EPA’s future revisions of the regulations concerning
ethylene oxide omissions. Subsequently, on September 13, 2021, the EPA issued an information collection request
to commercial sterilization facilities to gather additional information and data about ethylene oxide sterilization
processes and emissions. The EPA has indicated it expects to issue a proposed rule in 2022. Any additional
regulatory restrictions on the emission of ethylene oxide by sterilization facilities might impair our ability to provide
sufficient quantities of sterilized products to our customers and compel us to seek sterilization alternatives that do
not entail the use of ethylene oxide. We cannot assure that we would be able to identify such alternatives. In the
event we were to experience any disruptions in our ability to sterilize our products, whether due to capacity
constraints or regulatory or other impediments (including, among other things, regulatory initiatives directed
generally to sterilization facilities that utilize ethylene oxide), or we are unable to transition to alternative facilities in a
timely or cost effective manner in the event one or more of the facilities we use is affected, we could experience a
material adverse impact with respect to our results of operations and financial condition.
A significant portion of our U.S. revenues is derived from sales to distributors, and “destocking”
activity by these distributors can adversely affect our revenues and results of operations.
A significant portion of our revenues in the U.S. is derived from sales to distributors, which, in turn, sell our
products to hospitals and other health care institutions. From time to time, these distributors may decide to reduce
their levels of inventory with regard to certain of our products, a practice we refer to as “destocking.” A distributor's
decision to reduce inventory levels with respect to our products may be based on a number of factors, such as
distributor expectations regarding demand for a particular product, distributor buying decisions (including decisions
to purchase competing products), changes in distributor policies regarding the maintenance of inventory levels,
economic conditions and other factors. Following such instances of reduced purchases, distributors may revert to
previous purchasing levels; nevertheless, we cannot assure that distributors will, in fact, increase purchases of our
products in this manner. A decline in the level of product purchases by our U.S. distributors in the future could have
a material adverse effect on our revenues and results of operations during a reporting period, and an extended
decline in such product purchases could have a longer term material adverse effect.
We may incur material losses and costs as a result of product liability and warranty claims, as well as
product recalls, any of which may adversely affect our results of operations and financial condition.
Furthermore, our reputation as a medical device company may be damaged if one or more of our products
are, or are alleged to be, defective.
Our businesses expose us to potential product liability risks related to the design, manufacture and marketing of
our products. In particular, our medical device products are often used in surgical and intensive care settings for
procedures involving seriously ill patients. In addition, many of our products are designed to be implanted in the
human body for varying periods of time. Product defects or inadequate disclosure of product-related risks with
respect to products we manufacture or sell could result in patient injury or death. Product liability and warranty
claims often involve very large or indeterminate amounts, including punitive damages. The magnitude of potential
losses from product liability lawsuits may remain unknown for substantial periods of time, and the related legal
defense costs may be significant. We could experience material warranty or product liability losses in the future and
incur significant costs to defend these claims.
In addition, if any of our products are, or are alleged to be, defective, we may voluntarily conduct, or be required
by regulatory authorities to conduct, a recall of that product. In the event of a recall, we may lose sales and be
exposed to individual or class-action litigation claims. Moreover, negative publicity regarding a quality or safety
issue, whether accurate or inaccurate, could harm our reputation, decrease demand for our products, lead to
product withdrawals or impair our ability to successfully launch and market our products in the future. Product
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liability, warranty and recall costs may have a material adverse effect on our business, financial condition, results of
operations and cash flows.
Volatility in domestic and global financial markets could adversely impact our results of operations,
financial condition and liquidity.
We are subject to risks arising from adverse changes in general domestic and global economic conditions. The
economic slowdown and disruption of credit markets that occurred several years ago led to recessionary conditions
and depressed levels of consumer and commercial spending, resulting in reductions, delays or cancellations of
purchases of our products and services. We cannot predict the duration or extent of any economic recovery or the
extent to which our customers will return to more typical spending behaviors. The continuation in a number of
markets of weak economic growth, constricted credit, public sector austerity measures in response to public budget
deficits and foreign currency volatility, particularly with respect to the euro, could have a material adverse effect on
our results of operations, financial condition and liquidity.
Although we maintain allowances for doubtful accounts to cover the estimated losses which may occur when
customers cannot make their required payments, we cannot assure that the loss rate will not increase in the future
given the volatility in the worldwide economy. If our allowance for doubtful accounts is insufficient to address
receivables we ultimately determine are uncollectible, we would be required to incur additional charges, which could
materially adversely affect our results of operations. Moreover, our inability to collect outstanding receivables could
adversely affect our financial condition and cash flow from operations.
In addition, adverse economic and financial market conditions may result in future impairment charges with
respect to our goodwill and other intangible assets, which would not directly affect our liquidity but could have a
material adverse effect on our reported financial results.
Our strategic initiatives, including acquisitions, may not produce the intended growth in revenue and
operating income, which could have a material adverse effect on our operating results.
Our strategic initiatives include making significant investments designed to achieve revenue growth and to
enable us to meet or exceed margin improvement targets. If we do not achieve the expected benefits from these
investments or otherwise fail to execute on our strategic initiatives, we may not achieve the growth improvement we
are targeting and our results of operations may be adversely affected.
In addition, as part of our strategy for growth, we have made, and may continue to make, acquisitions and
divestitures and enter into strategic alliances such as joint ventures and joint development agreements. However,
we may not be able to identify suitable acquisition candidates, complete acquisitions or integrate acquisitions
successfully, and our joint ventures or strategic alliances may not prove to be successful. In this regard, acquisitions
involve numerous risks, including difficulties in the integration of acquired operations, technologies, services and
products and the diversion of management’s attention from other business concerns. Moreover, the products and
technologies that we acquire may not be successful or may require us to devote significantly greater development,
marketing and other resources, as well as significantly greater investments, than we anticipated. We could also
experience negative effects on our results of operations and financial condition from acquisition-related charges,
amortization of intangible assets, asset impairment charges and other matters that could arise in connection with
the acquisition of a company or business, including matters related to internal control over financial reporting and
regulatory compliance, as well as the short-term effects of increased costs on results of operations. Although our
management will endeavor to evaluate the risks inherent in any particular transaction, there can be no assurance
that we will identify all such risks or the magnitude of the risks. In addition, prior acquisitions have resulted, and
future acquisitions could result, in the incurrence of substantial additional indebtedness and expenditures. Future
acquisitions may also result in potentially dilutive issuances of equity securities. There can be no assurance that
difficulties encountered in connection with acquisitions will not have a material adverse effect on our business,
financial condition and results of operations.
In connection with certain of our completed acquisitions, we have agreed to pay consideration that is contingent
upon the achievement of specified objectives, such as receipt of regulatory approval, commercialization of a product
or achievement of sales targets. As of the acquisition date, we record a contingent liability representing the
estimated fair value of the contingent consideration we expect to pay. On a quarterly basis, we reassess these
obligations and, in the event our estimate of the fair value of the contingent consideration changes, we record
increases or decreases in the fair value as an adjustment to operating earnings, which could have a material impact
on our results of operations. As of December 31, 2021, we accrued $9.8 million of contingent consideration, most of
which related to our acquisition of Z-Medica, LLC ("Z-Medica"). In addition, actual payments may differ materially
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from the amount of the contingent liability, which could have a material impact on our results of operations, cash
flows and liquidity. For information regarding assumptions related to our contingent consideration liabilities, see
“Critical Accounting Policies and Estimates” under Item 7, Management’s Discussion and Analysis of Financial
Condition and Results of Operations included in this Annual Report on Form 10-K. For additional information
regarding our acquisitions, see Note 4 to the consolidated financial statements included in this Annual Report on
Form 10-K.
Health care reform may have a material adverse effect on our industry and our business.
Political, economic and regulatory developments have effected fundamental changes in the healthcare industry.
The Affordable Care Act substantially changed the way health care is financed by both government and private
insurers. It also encourages improvements in the quality of health care products and services and significantly
impacts the U.S. pharmaceutical and medical device industries. Among other things, the Affordable Care Act:
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established a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct
comparative clinical effectiveness research;
implemented payment system reforms, including a national pilot program to encourage hospitals, physicians
and other providers to improve the coordination, quality and efficiency of certain health care services through
bundled payment models; and
created an independent payment advisory board that will submit recommendations to reduce Medicare
spending if projected Medicare spending exceeds a specified growth rate.
We cannot predict at this time the full impact of the Affordable Care Act or other healthcare reform measures
that may be adopted in the future on our financial condition, results of operations and cash flows. In this regard,
several legislative initiatives to repeal and replace the Affordable Care Act were proposed, but not adopted in 2017.
However, U.S. tax legislation adopted in December 2017 and commonly referred to as the Tax Cuts and Jobs Act
("TCJA") eliminated the individual mandate under the Affordable Care Act, which has resulted in increased
uncertainty regarding insurance premium prices for participants in insurance exchanges under the act, and may
have other effects. Moreover, on December 14, 2018, the U.S. District Court for the Northern District of Texas ruled
that the individual mandate provision of the Affordable Care Act is unconstitutional and the remainder of the act is
invalid, although the Court stayed its ruling pending appeal. The nature and effect of any modification or repeal of,
or legislative substitution for, the Affordable Care Act, or any court decision regarding the act's validity, is uncertain,
and we cannot predict the effect that any of these events would have on the longer-term viability of the act, or on
our financial condition, results of operations or cash flows.
We are subject to risks associated with our non-U.S. operations.
We have significant manufacturing and distribution facilities, research and development facilities, sales
personnel and customer support operations in a number of countries outside the U.S., including Belgium, the Czech
Republic, Ireland, Malaysia and Mexico. In addition, a significant portion of our non-U.S. revenues are derived from
sales to third party distributors. As of December 31, 2021, approximately 70% of our full-time employees were
employed in countries outside of the U.S., and approximately 50% of our net property, plant and equipment was
located outside the U.S. In addition, for the years ended December 31, 2021, 2020 and 2019, 37%, 38% and 38%,
respectively, of our net revenues (based on the Teleflex entity generating the sale) were derived from operations
outside the U.S.
Our international operations are subject to risks inherent in doing business outside the U.S., including:
exchange controls, currency restrictions and fluctuations in currency values;
trade protection measures, tariffs and other duties, especially in light of trade disputes between the U.S. and
several foreign countries, including China;
potentially costly and burdensome import or export requirements;
laws and business practices that favor local companies;
changes in foreign medical reimbursement policies and procedures;
subsidies or increased access to capital for firms that currently are or may emerge as competitors in countries in
which we have operations;
substantial non-U.S. tax liabilities, including potentially negative consequences resulting from changes in tax
laws;
restrictions and taxes related to the repatriation of non-U.S. earnings;
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differing labor regulations;
additional U.S. and foreign government controls or regulations;
the impact of the United Kingdom's departure from the European Union, commonly referred to as "Brexit";
public health epidemics;
difficulties in the protection of intellectual property; and
unsettled political and economic conditions and possible terrorist attacks against American interests.
In addition, the U.S. Foreign Corrupt Practices Act (the “FCPA”) prohibits companies and their intermediaries
from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. Similar anti-
bribery laws are in effect in several foreign jurisdictions. The FCPA also imposes accounting standards and
requirements on publicly traded U.S. corporations and their foreign affiliates, which, among other things, are
intended to prevent the diversion of corporate funds to the payment of bribes and other improper payments to
government officials, and to prevent the establishment of “off the books” slush funds from which such improper
payments can be made. Because of the predominance of government-sponsored health care systems around the
world, many of our customer relationships outside of the U.S. are with government entities and are therefore subject
to such anti-bribery laws. Our policies mandate compliance with these anti-bribery laws. However, we operate in
many parts of the world that have experienced government corruption to some degree. Despite meaningful
measures that we undertake to facilitate lawful conduct, which include training and compliance programs and
internal control policies and procedures, we may not always prevent reckless or criminal acts by our employees,
distributors or other agents. In addition, we may be exposed to liability due to pre-acquisition conduct of employees,
distributors or other agents of businesses or operations we acquire. Violations of anti-bribery laws, or allegations of
such violations, could disrupt our operations, involve significant management distraction and have a material
adverse effect on our business, financial condition, results of operations and cash flows. We also could be subject to
severe penalties and other adverse consequences, including criminal and civil penalties, disgorgement, substantial
expenditures related to further enhancements to our procedures, policies and controls, personnel changes and
other remedial actions, as well as harm to our reputation.
Furthermore, we are subject to the export controls and economic embargo rules and regulations of the U.S.,
including the Export Administration Regulations and trade sanctions against embargoed countries, which are
administered by the Office of Foreign Assets Control within the Department of the Treasury, as well as other laws
and regulations administered by the Department of Commerce. These regulations limit our ability to market, sell,
distribute or otherwise transfer our products or technology to prohibited countries or persons. While we train our
employees and contractually obligate our distributors to comply with these regulations, we cannot assure that a
violation will not occur, whether knowingly or inadvertently. Failure to comply with these rules and regulations may
result in substantial civil and criminal penalties, including fines and the disgorgement of profits, the imposition of a
court-appointed monitor, the denial of export privileges and debarment from participation in U.S. government
contracts, any of which could have a material adverse effect on our international operations or on our business,
results of operations, financial condition and cash flows.
Additionally, in connection with the ongoing conflict between Russia and Ukraine, the U.S. government has
imposed enhanced export controls on certain products and sanctions on certain industry sectors and parties in
Russia, and has indicated it will consider imposing additional sanctions and other similar measures in the near
future. Although our sales into Russia did not constitute a material portion of our total revenue in 2021, further
escalation of geopolitical tensions could have a broader impact that expands into other markets where we do
business, which could adversely affect our business and/or our supply chain, business partners or customers in the
broader region.
Foreign currency exchange rate, commodity price and interest rate fluctuations may adversely affect
our results.
We are exposed to a variety of market risks, including the effects of changes in foreign currency exchange
rates, commodity prices and interest rates. Products manufactured in, and sold into, foreign markets represent a
significant portion of our operations. Our consolidated financial statements reflect translation of financial statements
denominated in non-U.S. currencies to U.S. dollars, our reporting currency, as well as the foreign currency
exchange gains and losses resulting from the remeasurement of assets and liabilities and from transactions
denominated in currencies other than the primary currency of the country in which the entity operates, which we
refer to as "non-functional currencies." A strengthening or weakening of the U.S. dollar in relation to the foreign
currencies of the countries in which we sell or manufacture our products, such as the euro, will affect our
U.S. dollar-reported revenue and income. Although we have entered into forward contracts with several major
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financial institutions to hedge a portion of our monetary assets and liabilities and projected cash flows denominated
in non-functional currencies in order to reduce the effects of currency rate fluctuations, changes in the relative
values of currencies may, in some instances, have a significant effect on our results of operations.
Many of our products have significant plastic resin content. We also use quantities of other commodities, such
as aluminum and steel. Increases in the prices of these commodities could increase the costs of our products and
services. We may not be able to pass on these costs to our customers, particularly with respect to those products
we sell under group purchase agreements, which could have a material adverse effect on our results of operations
and cash flows.
Increases in interest rates may adversely affect the financial health of our customers and suppliers, thereby
adversely affecting their ability to buy our products and supply the components or raw materials we need. In
addition, our borrowing costs have been adversely affected by recent interest rate increases, and could be further
affected if interest rates continue to increase. Any of these events could have a material adverse effect on our
financial condition, results of operations and cash flows.
Fluctuations in our effective tax rate and changes to tax laws may adversely affect us.
As a global company, we are subject to taxation in numerous countries, states and other jurisdictions. Our
effective tax rate is derived from a combination of applicable tax rates in the various countries, states and other
jurisdictions in which we operate. In preparing our financial statements, we estimate the amount of tax that will
become payable in each of these jurisdictions. Our effective tax rate may, however, differ from the estimated amount
due to numerous factors, including a change in the mix of our profitability from country to country and changes in tax
laws. Any of these factors could cause us to experience an effective tax rate significantly different from previous
periods or our current expectations, which could have an adverse effect on our business, financial condition, results
of operations and cash flows.
An interruption in our manufacturing or distribution operations or our supply of raw materials may
adversely affect our business.
Many of our key products are manufactured at or distributed from single locations, and the availability of
alternate facilities is limited. If operations at one or more of our facilities is suspended due to natural disasters or
other events, we may not be able to timely manufacture or distribute one or more of our products at previous levels
or at all. Furthermore, our ability to establish replacement facilities or to substitute suppliers may be delayed due to
regulations and requirements of the FDA and other regulatory authorities regarding the manufacture of our products.
In addition, in the event of delays or cancellations in shipments of raw materials by our suppliers, we may not be
able to timely manufacture or supply the affected products at previous levels or at all. The manufacture of our
products is highly exacting and complex, due in part to strict regulatory requirements. Problems in the
manufacturing process, including equipment malfunction, failure to follow specific protocols and procedures,
defective raw materials and environmental factors, could lead to delays in product releases, product shortages,
unanticipated costs, lost revenues and damage to our reputation. A failure to identify and address manufacturing
problems prior to the release of products to our customers may also result in quality or safety issues. A reduction or
interruption in manufacturing or distribution, or our inability to secure suitable alternative sources of raw materials or
components, could have a material adverse effect on our business, results of operations, financial condition and
cash flows.
Our ability to attract, train, develop and retain key employees is important to our success.
Our success depends, in part, on our ability to continue to retain key personnel, including our executive officers
and other members of our senior management team. Our success also depends, in part, on our ability to attract,
train, develop and retain other key employees, including research and development, sales, marketing and
operations personnel. We may experience difficulties in retaining executives and other employees due to many
factors, including:
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the intense competition for skilled personnel in our industry;
fluctuations in global economic and industry conditions;
changes in our organizational structure;
our restructuring initiatives;
competitors’ hiring practices; and
the effectiveness of our compensation programs.
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Our inability to attract, train, develop and retain such personnel could have an adverse effect on our business,
results of operations, financial condition and cash flows.
Our failure to maintain strong relationships with physicians and other health care professionals could
adversely affect us.
We depend on our ability to maintain strong working relationships with physicians and other healthcare
professionals in connection with research and development for some of our products. We rely on these
professionals to provide us with considerable knowledge and advice regarding the development and use of these
products. Physicians assist us as researchers, product consultants, inventors and public speakers. If we fail to
maintain our working relationships with physicians and, as a result, no longer have the benefit of their knowledge
and advice, our products may not be developed in a manner that is responsive to the needs and expectations of the
professionals who use and support our products, which could have a material adverse effect on our business,
financial condition, results of operations and cash flows.
Our technology is important to our success, and our failure to protect our intellectual property rights
could put us at a competitive disadvantage.
We rely on the patent, trademark, copyright and trade secret laws of the U.S. and other countries to protect our
proprietary rights. Although we own numerous U.S. and foreign patents and have submitted numerous patent
applications, we cannot be assured that any pending patent applications will issue, or that any patents, issued or
pending, will provide us with any competitive advantage or will not be challenged, invalidated or circumvented by
third parties. In addition, we rely on confidentiality and non-disclosure agreements with employees and take other
measures to protect our know-how and trade secrets. The steps we have taken may not prevent unauthorized use
of our technology by competitors or other persons who may copy or otherwise obtain and use these products or
technology, particularly in foreign countries where the laws may not protect our proprietary rights to the same extent
as in the U.S. We cannot assure that current and former employees, contractors and other parties will not breach
their confidentiality agreements with us, misappropriate proprietary information, copy or otherwise obtain and use
our information and proprietary technology without authorization or otherwise infringe on our intellectual property
rights. Our inability to protect our proprietary technology could adversely affect our business, financial condition,
results of operations and cash flows. Moreover, there can be no assurance that others will not independently
develop know-how and trade secrets comparable to ours or develop better technology than our own, which could
reduce or eliminate any competitive advantage we have developed.
Our products or processes may infringe the intellectual property rights of others, which may cause us
to pay unexpected litigation costs or damages or prevent us from selling our products.
We cannot be certain that our products do not and will not infringe issued patents or other intellectual property
rights of third parties. We may be subject to legal proceedings and claims in the ordinary course of our business,
including claims of alleged infringement of the intellectual property rights of third parties. Any such claims, whether
or not meritorious, could result in litigation and divert the efforts of our personnel. If we are found liable for
infringement, we may be compelled to enter into licensing agreements (which may not be available on acceptable
terms or at all) or to pay damages or cease making or selling certain products. We may need to redesign some of
our products or processes to avoid future infringement liability. Any of the foregoing events could be detrimental to
our business.
Other pending and future litigation may involve significant costs and adversely affect our business.
We are party to various lawsuits and claims arising in the normal course of business involving, among other
things, contracts, intellectual property, import and export regulations, and employment and environmental matters.
The defense of these lawsuits may divert our management’s attention, and may involve significant legal expenses.
In addition, we may be required to pay damage awards or settlements, or become subject to injunctions or other
equitable remedies, that could have a material adverse effect on our financial condition and results of operations.
While we do not believe that any litigation in which we are currently engaged would have such an adverse effect,
the outcome of litigation, including regulatory matters, is often difficult to predict, and we cannot assure that the
outcome of pending or future litigation will not have a material adverse effect on our business, financial condition,
results of operations or cash flows.
Disruption of critical information systems or material breaches in the security of our systems may
adversely affect our business and customer relationships.
24
We rely on information technology systems to process, transmit, and store electronic information in our day-to-
day operations. We also rely on our technology infrastructure, among other functions, to enable us to interact with
customers and suppliers, fulfill orders, generate invoices, collect and make payments, ship products, provide
support to customers, fulfill contractual obligations and otherwise perform business functions. Our internal
information technology systems, as well as those systems maintained by third-party providers, may be subjected to
computer viruses or other malicious codes, unauthorized access attempts, and cyber-attacks, any of which could
result in data leaks or otherwise compromise our confidential or proprietary information and disrupt our operations.
Cyber-attacks are becoming more sophisticated and frequent, and in some cases have caused significant harm.
Although we have taken numerous measures to protect our information systems and enhance data security, we
cannot assure that these measures will prevent security breaches that could have a significant impact on our
business, reputation and financial results. If we fail to monitor, maintain or protect our information technology
systems and data integrity effectively or fail to anticipate, plan for or manage significant disruptions to these
systems, we could, among other things, lose customers, have difficulty preventing fraud, have disputes with
customers, physicians and other health care professionals, be subject to regulatory sanctions or penalties, incur
expenses, lose revenues or suffer other adverse consequences. Any of these events could have a material adverse
effect on our business, results of operations, financial condition or cash flows.
Regulations related to conflict minerals have caused us to incur additional costs and may adversely
affect our business.
In 2012, the SEC promulgated rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act
regarding disclosure of the use of tin, tantalum, tungsten and gold, known as "conflict minerals," included in
components of products either manufactured by public companies or for which public companies have contracted to
manufacture. These rules require that we undertake due diligence efforts to determine whether such minerals
originated from the Democratic Republic of Congo (the “DRC”) or an adjoining country and, if so, whether such
minerals helped finance armed conflict in the DRC or an adjoining country. In accordance with applicable
regulations, we have filed conflict minerals reports annually, beginning in 2014. As discussed in these reports, we
have determined that certain of our products contain the specified minerals, and we have undertaken, and continue
to undertake, efforts to identify where such minerals originated. We have incurred, and expect to continue to incur,
costs associated with complying with these disclosure requirements, including costs related to determining the
sources of the specified minerals used in our products. These rules could adversely affect the sourcing, supply and
pricing of materials used in our products. Our customers may require that our products be free of conflict minerals,
and our revenues and margins may be adversely affected if we are unable to provide assurances to our customers
that our products are “DRC conflict free” (generally, the product does not contain conflict minerals originating in the
DRC or an adjoining country that directly or indirectly finance or benefit specified armed groups) due to, among
other things, our inability to procure conflict free minerals at a reasonable price, or at all. Moreover, we may be
adversely affected if we are unable to pass through any increased costs associated with meeting customer
demands that we provide products that are DRC conflict free. We also may face reputational challenges if our due
diligence efforts do not enable us to verify the origins of all conflict minerals or to determine that any conflict
minerals used in products we manufacture or in products manufactured by others for us are DRC conflict-free.
Our operations expose us to the risk of material environmental and health and safety liabilities.
We are subject to numerous foreign, federal, state and local environmental protection and health and safety
laws governing, among other things:
•
•
•
the generation, storage, use and transportation of hazardous materials;
emissions or discharges of substances into the environment; and
the health and safety of our employees.
These laws and regulations are complex, change frequently and have tended to become more stringent over
time. We cannot provide assurance that our costs of complying with current or future environmental protection and
health and safety laws, or our liabilities arising from past or future releases of, or exposures to, hazardous
substances, which may include claims for personal injury or cleanup, will not exceed our estimates or will not
adversely affect our financial condition and results of operations.
Our workforce covered by collective bargaining and similar agreements could cause interruptions in
our provision of products and services.
As of December 31, 2021, approximately 9% of our employees in the U.S. and in other countries were covered
by union contracts or collective bargaining arrangements. It is likely that a portion of our workforce will remain
25
covered by collective bargaining and similar agreements for the foreseeable future. Strikes or work stoppages could
occur that would adversely impact our relationships with our customers and our ability to conduct our business.
Risks Relating to our Financing Arrangements
Our substantial indebtedness could adversely affect our business, financial condition or results of
operations.
As of December 31, 2021, we had total consolidated indebtedness of $1.9 billion.
Our substantial level of indebtedness increases the risk that we may be unable to generate cash sufficient to
satisfy our debt obligations. It could also have significant effects on our business. For example, it could:
•
•
•
•
•
•
increase our vulnerability to general adverse economic and industry conditions;
require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness,
thereby reducing the availability of our cash flow to fund capital expenditures, research and development efforts
and other general corporate expenditures;
limit our ability to borrow additional funds for general corporate purposes;
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
restrict us from pursuing business opportunities; and
place us at a disadvantage compared to competitors that have less indebtedness.
If we do not generate sufficient cash flow from operations or if future borrowings are not available to us in an
amount sufficient to pay our indebtedness when due or to fund our other liquidity needs, we may be forced to:
•
•
•
•
refinance all or a portion of our indebtedness;
sell assets;
reduce or delay capital expenditures; or
seek to raise additional capital.
We may not be able to effect any of these actions on commercially reasonable terms or at all. Our ability to
refinance our indebtedness will depend on our financial condition at the time, the restrictions in the instruments
governing our outstanding indebtedness and other factors, including market conditions.
Our inability to generate sufficient cash flow to satisfy our debt service obligations, or to refinance or restructure
our obligations on commercially reasonable terms or at all, could have a material adverse effect on our business,
financial condition and results of operations.
Our debt agreements impose restrictions on our business, which could prevent us from pursuing
business opportunities and taking other desirable corporate actions, and may adversely affect our ability to
respond to changes in our business and manage our operations.
Our senior credit agreement and the indentures governing our 4.625% senior notes due 2027 (the "2027
Notes") and our 4.25% Senior Notes due 2028 (the "2028 Notes" and, together with the 2027 Notes, the "Senior
Notes") contain covenants that, among other things, impose significant restrictions on our business. The restrictions
that these covenants place on us and our restricted subsidiaries collectively include limitations on our and their
ability to, among other things:
•
•
•
•
incur additional indebtedness or issue preferred stock or otherwise disqualified stock;
create liens;
pay dividends, make investments or make other restricted payments;
sell assets;
• merge, consolidate, sell or otherwise dispose of all or substantially all of our assets; and
•
enter into transactions with our affiliates.
In addition, our senior credit agreement also contains financial covenants, including covenants requiring
maintenance of a consolidated leverage ratio, a secured leverage ratio and a consolidated interest coverage ratio,
calculated in accordance with the terms of the senior credit agreement. A breach of any covenants under any one or
more of our debt agreements could result in a default, which if not cured or waived, could result in the acceleration
26
of all of our debt. In addition, any debt agreements we enter into in the future may further limit our ability to enter
into certain types of transactions.
Under our cross-currency swap agreements, a meaningful decline in the U.S. dollar to euro exchange
rate could have a material adverse effect on our cash flows.
In 2018 and 2019, we entered into cross-currency swap agreements with several financial institutions to hedge
against the effect of variability in the U.S. dollar to euro exchange rate. The swap agreements require an exchange
of the notional amounts between us and the counterparties upon expiration or earlier termination of the agreements.
If, at the expiration or earlier termination of the swap agreements, the U.S. dollar to euro exchange rate has
declined from the rate in effect on the execution date, we are required to pay the counterparties an amount equal to
the excess of the U.S. dollar value over the euro principal amount (we and the counterparties have agreed to a net
settlement with regard to the exchange of the notional amounts at the date of expiration or earlier termination of the
agreements). In the event of a significant decline in the U.S. dollar to euro exchange rate, our payment obligations
to the counterparties could have a material adverse effect on our cash flows. In this regard, if, at the expiration or
earlier termination of our swap agreements, the U.S. dollar to euro exchange rate has declined by 10% from the
rate in effect at the inception of our agreements, we would be required to pay approximately $75 million to the
counterparties in respect of the notional settlement. To the extent we enter into additional cross-currency swap
agreements, a decline in the relevant exchange rates could further adversely affect our cash flows.
Risks Relating to Ownership of our Common Stock
We may issue additional shares of our common stock or instruments convertible into our common
stock, which could cause the price of our common stock to decline.
We are not restricted from issuing additional shares of our common stock or other instruments convertible into
our common stock. As of December 31, 2021, we had outstanding approximately 46.9 million shares of our common
stock, options to purchase 1.1 million shares of our common stock (of which approximately 0.9 million were vested
as of that date), restricted stock units covering 0.2 million shares of our common stock (which are expected to vest
over the next three years), performance stock units covering a maximum of 42,272 shares of our common stock
(which may vest in early 2021, depending on our performance with regard to specified financial measures and
market performance of our common stock compared to designated public companies) and 3,108 shares of our
common stock to be distributed from our deferred compensation plan. As of December 31, 2021, 3.1 million shares
of our common stock were reserved for issuance upon the exercise of stock options. We cannot predict the size of
future issuances or the effect, if any, that they may have on the market price for our common stock.
If we issue additional shares of our common stock or instruments convertible into our common stock, such
issuances may materially and adversely affect the price of our common stock. Furthermore, our issuance of shares
upon the exercise of some or all of the outstanding stock options, as well as the vesting of restricted stock units and
some or all of the performance stock units will dilute the ownership interests of existing stockholders, and the
subsequent sale in the public market of such shares of our common stock could adversely affect prevailing market
prices of our common stock.
We may not pay dividends on our common stock in the future.
Holders of our common stock are entitled to receive dividends only as our board of directors may declare out of
funds legally available for such payments. The declaration and payment of future dividends to holders of our
common stock will be at the discretion of our board of directors and will depend upon many factors, including our
financial condition, earnings, requirements under covenants in our debt instruments, legal requirements and other
factors as our board of directors deems relevant. We cannot assure that our cash dividend will not be reduced, or
eliminated, in the future.
Certain provisions of our corporate governing documents, Delaware law and our Senior Notes could
discourage, delay, or prevent a merger or acquisition.
Provisions of our certificate of incorporation and bylaws could impede a merger, takeover or other business
combination involving us or discourage a potential acquirer from making a tender offer for our common stock. For
example, our certificate of incorporation authorizes our board of directors to determine the number of shares in a
series, the consideration, dividend rights, liquidation preferences, terms of redemption, conversion or exchange
rights and voting rights, if any, of unissued series of preferred stock, without any vote or action by our stockholders.
Thus, our board of directors can authorize and issue shares of preferred stock with voting or conversion rights that
could adversely affect the voting or other rights of holders of our common stock. We are also subject to Section 203
27
of the Delaware General Corporation Law, which imposes restrictions on mergers and other business combinations
between us and any holder of 15% or more of our common stock. These provisions could have the effect of
delaying or deterring a third party from acquiring us even if an acquisition might be in the best interest of our
stockholders, and accordingly could reduce the market price of our common stock.
Certain provisions in the indentures governing the Senior Notes could make it more difficult or more expensive
for a third party to acquire us. Upon an acquisition event that constitutes a “change of control,” as defined in the
indentures governing the Senior Notes, coupled with a downgrade in the ratings of the Senior Notes, holders of
such notes will have the right to require us to purchase their notes in cash. Our obligations under the Senior Notes
could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing
incumbent management, and accordingly could cause a reduction in the market price of our common stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2. PROPERTIES
We own or lease approximately 90 properties consisting of manufacturing plants, engineering and research
centers, distribution warehouses, offices and other facilities. We believe that the properties are maintained in good
operating condition and are suitable for their intended use. In general, our facilities meet current operating
requirements for the activities currently conducted within the facilities.
Our major facilities (those with 50,000 or greater square feet) at December 31, 2021 are as follows:
Location
Olive Branch, MS
Kamunting, Malaysia
Nuevo Laredo, Mexico
Asheboro, NC
Tecate, Mexico
Chihuahua, Mexico
Maple Grove, MN
Morrisville, NC
Primary use
Distribution warehouse
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Office administration
Zdar Nad Sazauou, Czech Republic
Manufacturing
Trenton, GA
Chihuahua, Mexico
Hradec Kralove, Czech Republic
Chelmsford, MA
Kulim, Malaysia
Kernen, Germany
Wayne, PA
Jaffrey, NH
Kamunting, Malaysia
Pleasanton, CA
Chihuahua, Mexico
Reading, PA
Limerick, Ireland
Mansfield, MA
Plymouth, MN
Bad Liebenzell, Germany
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Office administration
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Engineering and research
Manufacturing
Manufacturing
Manufacturing
Manufacturing
Square Footage
Owned or Leased
627,000
286,000
277,000
204,000
172,000
153,000
129,000
121,000
108,000
102,000
100,000
92,000
91,000
90,000
86,000
84,000
81,000
77,000
76,000
63,000
63,000
59,000
57,000
55,000
53,000
Leased
Owned
Leased
Owned
Owned
Owned
Owned
Leased
Owned
Owned
Leased
Owned
Leased
Owned
Leased
Leased
Owned
Leased
Leased
Owned
Leased
Owned
Leased
Leased
Leased
Operations in each of our business segments are conducted at locations both in and outside of the U.S. Of the
facilities listed above, with the exception of Plymouth, MN, Jaffrey, NH, Mansfield, MA, Trenton, GA, and Limerick,
28
Ireland, which are used solely for the OEM segment, our facilities generally serve more than one business segment
and are often used for multiple purposes, such as administrative/sales, manufacturing and warehousing/distribution.
In addition to the properties listed above, we own or lease approximately 700,000 square feet of additional
warehousing, manufacturing and office space worldwide.
ITEM 3. LEGAL PROCEEDINGS
We are party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims
include actions involving product liability and product warranty, intellectual property, contracts, employment and
environmental matters. As of December 31, 2021 and 2020, we accrued liabilities of $0.2 million and $0.3 million
respectively, in connection with these matters, representing our best estimate of the cost within the range of
estimated possible loss 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 any such actions are likely to
be, individually or in the aggregate, material to our business, financial condition, results of operations or cash flows.
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 cash flows. See Note 17 to the consolidated financial statements included in this Annual
Report on Form 10-K for additional information.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
29
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is listed on the New York Stock Exchange under the symbol “TFX.” As of February 22,
2022, we had 387 holders of record of our common stock. A substantially greater number of holders of our common
stock are beneficial owners whose shares are held by brokers and other financial institutions for the accounts of
beneficial owners.
Stock Performance Graph
The following graph provides a comparison of five year cumulative total stockholder returns of Teleflex common
stock, the Standard & Poor’s (S&P) 500 Stock Index and the S&P 500 Healthcare Equipment & Supply Index. The
annual changes for the five-year period shown on the graph are based on the assumption that $100 had been
invested in Teleflex common stock and each index on December 31, 2016 and that all dividends were reinvested.
MARKET PERFORMANCE
Company / Index
Teleflex Incorporated
S&P 500 Index
S&P 500 Healthcare Equipment & Supply Index
2016
100.00
100.00
100.00
2017
155.41
121.83
131.39
2018
162.32
116.49
150.11
2019
237.41
153.17
194.54
2020
260.57
181.35
231.13
2021
208.73
233.41
277.11
ITEM 6. RESERVED
Not applicable.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Overview
We are a global provider of medical technology products focused on enhancing clinical benefits, improving
patient and provider safety and reducing total procedural costs. We primarily design, develop, manufacture and
supply medical devices used by hospitals and healthcare providers for common diagnostic and therapeutic
30
DollarsComparison of Cumulative Five Year Total ReturnTeleflex IncorporatedS&P 500 IndexS&P 500 Healthcare Equipment & Supply Index20162017201820192020202150100150200250300
procedures in critical care and surgical applications. Approximately 95% of our net revenues come from single-use
medical devices. We market and sell our products worldwide through a combination of our direct sales force and
distributors. Because our products are used in numerous markets and for a variety of procedures, we are not
dependent upon any one end-market or procedure. We are focused on achieving consistent, sustainable and
profitable growth by increasing our market share and improving our operating efficiencies.
We evaluate our portfolio of products and businesses on an ongoing basis to ensure alignment with our overall
objectives. Based on our evaluation, we may seek to optimize utilization of our facilities through restructuring
initiatives designed to further reduce our cost base and enhance our competitive position. In addition, we may
continue to explore opportunities to expand the size of our business and improve our margins through a
combination of acquisitions and distributor to direct sales conversions, which generally involve our elimination of a
distributor from the sales channel, either by acquiring the distributor or terminating the distributor relationship (in
some instances, particularly in Asia, the conversions involve our acquisition or termination of a master distributor
and the continued sale of our products through sub-distributors). Our distributor to direct sales conversions are
designed to facilitate improved product pricing and more direct access to the end users of our products within the
sales channel. Further, we may identify opportunities to expand our margins through strategic divestitures of
existing businesses and product lines that do not meet our objectives.
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. We attributed $33.8 million of
the proceeds to our performance obligations pursuant to the MSTA. The resulting liability was measured as the
excess of the estimated fair value of the services to be performed over the estimated proceeds we expect to receive
over the MSTA term. It was recorded within Other current liabilities and Other liabilities in the condensed
consolidated balance sheet and the related proceeds will be recognized in net revenues as the services are
performed.
The second phase of the Respiratory business divestiture will occur once we transfer certain additional
manufacturing assets to Medline. Our receipt of $15.0 million in additional cash proceeds is contingent upon the
transfer of these manufacturing assets and is expected to occur prior to the end of 2023. We plan to recognize the
contingent consideration, and any gain on sale resulting from the second phase of the divestiture, when it becomes
realizable.
Net revenues attributable to our Divested respiratory business recognized prior to the Respiratory business
divestiture are included within each of our geographic segments and were $60.7 million for the year ended
December 31, 2021, and $138.5 million for the year ended December 31, 2020. For the year ended December 31,
2021, we recognized $51.1 million in net revenues attributed to services provided to Medline in accordance with the
MSTA, which are presented within our Americas reporting segment.
COVID-19 pandemic and related economic factors
Beginning in the first half of 2020, the challenges arising from the COVID-19 pandemic have adversely
impacted our financial results, mainly as a result of a decline in demand for certain of our products, and have had an
effect on various aspects of our global operations and employees resulting from precautionary and preventive
measures to reduce the spread of COVID-19. Our business has been impacted by travel restrictions, border
closures and quarantines as they affect our various sites, including our manufacturing sites. We have also
experienced inefficiencies in our manufacturing operations due to temporary or partial work stoppages as well as
government-mandated and self-imposed restrictions placed on, and safety measures implemented at, our facilities
globally. The challenges arising from the pandemic have also impacted our contractors, suppliers, customers and
other business partners and have generally had an adverse effect on macroeconomic conditions across the globe.
Accordingly, this has impacted various aspects of our global supply chain, including causing logistical transport
challenges for our freight transport providers, and has resulted in cost inflation. While we have not yet experienced
31
significant disruptions in the global supply chain for our products that are in high demand, we have in some cases
experienced lengthened delivery times, resulting in backorders for some of our products. We continue to monitor the
impacts resulting from the pandemic on our operations.
To date, our financial results were most severely impacted by the pandemic during the second quarter of 2020
due to reduced elective procedure volumes, partially offset by increased demand for products used in the treatment
of patients with COVID-19. Since the second quarter of 2020, we have experienced varying levels of continuing
recovery across our product lines and geographic segments from the challenges stemming from the pandemic. We
believe that the COVID-19 pandemic will continue to have an impact on our business, particularly in the near term,
and that such impact would be most significant if the virus becomes more prevalent, if vaccine immunization rates
do not increase and if new strains of the virus continue to emerge. As a result of the dynamic nature of the crisis, we
cannot accurately predict the extent or duration of the impacts of the pandemic.
In addition to the impacts of the COVID-19 pandemic, we continue to monitor trade and tariff activity, inflation,
and exchange rate volatility that could impact our financial position, results of operations or liquidity.
Results of Operations
As used in this discussion, "new products" are products for which commercial sales have commenced within the
past 36 months, and “existing products” are products for which commercial sales commenced more than 36 months
ago. Discussion of results of operations items that reference the effect of one or more acquired businesses (except
as noted below with respect to acquired distributors) generally reflects the impact of the acquisitions within the first
12 months following the date of the acquisition. In addition to increases and decreases in the per unit selling prices
of our products to our customers, our discussion of the impact of product price increases and decreases also
reflects the impact on the pricing of our products resulting from any elimination of distributors, either through
acquisition or termination of the distributor, from the sales channel. All dollar amounts in tables are presented in
millions unless otherwise noted.
For a discussion of our results of operations comparison for 2020 and 2019, refer to our Annual Report on Form
10-K for the fiscal year ended December 31, 2020 filed on February 25, 2021.
Comparison of 2021 and 2020
Revenues
Net Revenues
2021
2,809.6 $
2020
2,537.2
$
Net revenues for the year ended December 31, 2021 increased by $272.4 million, or 10.7%,compared to the
prior year, which was primarily attributable to a $94.4 million increase in sales volume of existing products, largely
stemming from the impact that the COVID-19 pandemic had on the prior year, net revenues of $70.4 million
generated by acquired businesses, primarily Z-Medica, a $50.0 million increase in new product sales and $44.9
million of favorable fluctuations in foreign currency exchange rates.
Gross profit
Gross profit
Percentage of revenues
2021
$ 1,549.6
2020
$ 1,324.9
55.2 %
52.2 %
For the year ended December 31, 2021, gross margin increased 300 basis points, or 5.7%, compared to the
prior year period primarily due to higher sales volumes largely stemming from the impact that the COVID-19
pandemic had on the prior year, benefits from cost improvement initiatives, price increases and favorable product
mix. The increases in gross margin were partially offset by an increase in logistics and distribution costs, largely
stemming from the enduring impact of the COVID-19 pandemic.
Selling, general and administrative
Selling, general and administrative
Percentage of revenues
2021
860.1
$
2020
743.6
$
30.6 %
29.3 %
Selling, general and administrative expenses increased $116.5 million for the year ended December 31, 2021,
compared to the prior year. The increase was primarily attributable to the benefit recognized in the prior year
32
resulting from decreases in the estimated fair value of our contingent consideration liabilities stemming from the
adverse impacts of the COVID-19 pandemic, higher selling and marketing expenses across certain of our product
portfolios, operating expenses incurred by acquired businesses, primarily Z-Medica, and higher performance related
employee-benefit expenses.
Research and development
Research and development
Percentage of revenues
2021
130.8
$
2020
119.7
$
4.7 %
4.7 %
Research and development expenses increased $11.1 million for the year ended December 31, 2021,
compared to the prior year, which was primarily attributable to European Union Medical Device Regulation ("EU
MDR") related costs partially offset by lower project spend within certain of our product portfolios.
Restructuring and impairment charges
Respiratory divestiture plan
In 2021, in connection with the Respiratory business divestiture, we committed to a restructuring plan designed
to separate the manufacturing operations that will 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 that will be 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.
We estimate that we will incur aggregate pre-tax restructuring and restructuring related charges in connection
with the Respiratory divestiture plan of $24 million to $30 million and substantially all of these charges will result in
cash outlays, the majority of which will be made in 2022 and 2023. Additionally, we expect to incur $22 million to
$28 million in aggregate capital expenditures under the plan, which we expect will be incurred mostly in 2022 and
2023.
2021 Restructuring plan
During the first quarter of 2021, we committed to a restructuring plan designed to streamline various business
functions across our segments (the "2021 Restructuring plan"). The plan was substantially completed by the end of
2021 and we expect future restructuring charges associated with the program, if any, to be nominal. We will achieve
annual pre-tax savings of $15 million as a result of this plan.
Anticipated charges and pre-tax savings related to restructuring programs and other similar cost savings
initiatives
We have ongoing restructuring programs consisting of the consolidation of our manufacturing operations
(referred to as our 2019, 2018 and 2014 Footprint realignment plans) in addition to the Respiratory divestiture plan
and the 2021 Restructuring plan, both as described above. We also have similar ongoing activities to relocate
certain manufacturing operations within our OEM segment (the "OEM initiative") that do not meet the criteria for a
restructuring program under applicable accounting guidance; nevertheless, the activities should result in cost
savings (we expect only minimal costs to be incurred in connection with the OEM initiative). With respect to the
restructuring programs and the OEM initiative, the table below summarizes charges incurred or estimated to be
incurred and estimated annual pre-tax savings to be realized as follows: (1) with respect to charges (a) the
estimated total charges that will have been incurred once the restructuring programs and the OEM initiative are
completed; (b) the charges incurred through December 31, 2021; and (c) the estimated charges to be incurred from
January 1, 2022 through the last anticipated completion date of the restructuring programs and the OEM initiative,
and (2) with respect to estimated annual pre-tax savings (a) the estimated total annual pre-tax savings to be
realized once the restructuring programs and OEM initiative are completed; (b) the estimated annual pre-tax
savings realized based on the progress of the restructuring programs and the OEM initiative through December 31,
2021; and (c) the estimated additional annual pre-tax savings to be realized from January 1, 2022 through the last
anticipated completion date of the restructuring programs and the OEM initiative.
Estimated charges and pre-tax savings are subject to change based on, among other things, the nature and
timing of restructuring activities and similar activities, changes in the scope of restructuring programs and the OEM
initiative, unanticipated expenditures and other developments, the effect of additional acquisitions or dispositions
33
and other factors that were not reflected in the assumptions made by management in previously estimating
restructuring and restructuring related charges and estimated pre-tax savings. Moreover, estimated pre-tax savings
constituting efficiencies with respect to increased costs that otherwise would have resulted from business
acquisitions involve, among other things, assumptions regarding the cost structure and integration of businesses
that previously were not administered by our management, which are subject to a particularly high degree of risk
and uncertainty. It is likely that estimates of charges and pre-tax savings will change from time to time, and the table
below may reflect changes from amounts previously estimated. Additional details, including estimated charges
expected to be incurred in connection with our restructuring programs and the anticipated completion dates, are
described in Note 5 to the consolidated financial statements included in this Annual Report on Form 10-K.
Pre-tax savings may be realized during, and subsequent to, the completion of the restructuring programs. Pre-
tax savings can also be affected by increases or decreases in sales volumes generated by the businesses impacted
by the consolidation of manufacturing operations; such variations in revenues can increase or decrease pre-tax
savings generated by the consolidation of manufacturing operations. For example, an increase in sales volumes
generated by the impacted businesses, although likely to increase manufacturing costs, may generate additional
savings with respect to costs that otherwise would have been incurred if the manufacturing operations were not
consolidated.
Restructuring programs and other similar cost saving initiatives
Restructuring charges - Restructuring plans (1)
Restructuring charges - Respiratory divestiture plan
Total restructuring charges
Restructuring related charges - Restructuring plans (1)
Restructuring related charges - Respiratory divestiture
plan
Total restructuring related charges (2)
Total charges
OEM initiative annual pre-tax savings
Pre-tax savings- Restructuring plans (1) (3)
Total annual pre-tax savings
Estimated Total
$102 - $110
5 - 8
107 - 118
128 - 146
19 - 22
147 - 168
$254 - $286
$6 - $7
88 - 97
$94 - $104
Actual results
through
December 31, 2021
$99
3
102
101
3
104
$206
$2
55
$57
Estimated
Remaining
$3 - $11
2 - 5
5 - 16
27 - 45
16 - 19
43 - 64
$48 - $80
$4 - $5
33 - 42
$37 - $47
(1) Restructuring plans consist of the 2021 Restructuring program and the 2019, 2018 and 2014 Footprint realignment plans.
(2) Represents charges that are directly related to restructuring programs and principally constitute costs to transfer manufacturing
operations to existing lower-cost locations, project management costs and accelerated depreciation, as well as a charge that is
expected to be imposed by a taxing authority as a result of our exit from facilities in the authority's jurisdiction. Most of these charges
(other than the tax charge) are expected to be recognized as cost of goods sold.
(3) The majority of the pre-tax savings are expected to result in reductions to cost of goods sold. Substantially all of the estimated
remaining savings are expected to be realized between January 1, 2022 and December 31, 2023.
The following discussion provides additional details with respect to our ongoing significant restructuring
programs:
2019 Footprint realignment plan
In February 2019, we 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 by the end of 2022.
We estimate that we will incur charges totaling $54 million to $60 million under the plan, of which we estimate
that $48 million to $54 million of these charges will result in future cash outlays. We expect to incur $31 million to
$33 million in total capital expenditures under the plan.
We expect to achieve annual pre-tax savings of $20 million to $22 million once the plan is fully implemented.
2018 Footprint realignment plan
In May 2018, we initiated a restructuring plan involving the relocation of certain European manufacturing
34
operations to existing lower-cost locations, the outsourcing of certain European distribution operations and related
workforce reductions (the "2018 Footprint realignment plan"). These actions are expected to be substantially
completed by the end of 2022.
We estimate that we will incur total charges in connection with the 2018 Footprint realignment plan of $110
million to $128 million, of which, we estimate that $99 million to $122 million of these charges will result in future
cash outlays. Additionally, we expect to incur $15 million to $16 million in total capital expenditures under the plan.
We expect to achieve annual pre-tax savings of $25 million to $30 million once the plan is fully implemented.
2014 Footprint realignment plan
In April 2014, we initiated a restructuring plan involving the consolidation of operations and a related reduction in
workforce at certain facilities, and the relocation of manufacturing operations from certain higher-cost locations to
existing lower-cost locations (the "2014 Footprint realignment plan"). We expect the plan will be substantially
completed by the end of 2022.
We estimate that we will incur total charges of $53 million to $55 million, which we expect will result in cash
outlays of $43 million to $46 million, and total capital expenditures of $26 million to $27 million under the plan.
We expect to achieve annual pre-tax savings of $28 million to $30 million once the plan is fully implemented.
The following table provides information regarding restructuring charges we have incurred with respect to each
of our restructuring programs, as well as impairment charges, for the years ended December 31, 2021, 2020, and
2019. The restructuring charges listed in the table primarily consist of termination benefits.
Respiratory divestiture plan
2021 Restructuring plan
2020 Workforce reduction plan (1)
2019 Footprint realignment plan
2018 Footprint realignment plan
2014 Footprint realignment plan
Other restructuring programs
Impairment charges (2)
Total
2021
2020
$
2.7 $
7.4
0.9
0.3
2.5
0.3
0.9
6.7
$
21.7 $
—
—
8.8
1.5
6.0
0.6
0.2
21.4
38.5
(1) During the second quarter of 2020, we committed to a workforce reduction designed to improve profitability and reduce cost primarily
by streamlining certain sales and marketing functions in our EMEA segment and certain manufacturing operations in our OEM segment
(the "2020 Workforce reduction plan"). The plan was substantially completed at the end of 2020.
(2) For the year ended December 31, 2021, we recorded impairment charges of $6.7 million related to our decision to abandon intellectual
property and other assets primarily associated with our respiratory product portfolio that was not transferred to Medline as part of the
Respiratory business divestiture. For the year ended December 31, 2020, we recorded impairment charges of $21.4 million, related to
our decision to abandon certain intellectual property and other assets associated with our surgical product portfolio.
Interest expense
Interest expense
Average interest rate on debt during the year
2021
2020
$
57.0
$
66.5
2.2 %
2.5 %
The decrease in interest expense for the year ended December 31, 2021 compared to the prior year was
primarily due to the redemption of the 4.875% Senior Notes due 2026 (the “2026 Notes”) resulting in a lower
average interest rate and lower average debt outstanding after subsequent debt pay downs using proceeds from
the Respiratory business divestiture and operating cash flows.
Gain on sale of business and assets
Gain on sale of business and assets
2021
2020
$
91.2 $
—
During the year ended December 31, 2021, we recognized a gain related to the Respiratory business
divestiture.
35
Loss on extinguishment of debt
Loss on extinguishment of debt
2021
2020
$
13.0 $
—
During the year ended December 31, 2021, we prepaid the $400 million aggregate outstanding principal
amount under our 4.875% Senior Notes due 2026 (the "2026 Notes"). In addition to the prepayment of principal, we
paid to the holders of the 2026 Notes a $9.8 million prepayment make-whole amount plus accrued and unpaid
interest. We recorded the prepayment make-whole amount and a $3.2 million write-off of unamortized debt issuance
costs as a loss on extinguishment of debt.
Taxes on income from continuing operations
Effective income tax rate
2021
13.3 %
2020
6.1 %
We generate substantial earnings from our non-U.S. operations. A number of the non-U.S. jurisdictions in which
we file tax returns historically have had tax rates that are lower than the U.S. statutory tax rate; as a result, our
consolidated effective income tax rate for 2021 and earlier years has been substantially below the U.S. statutory tax
rate. The principal non-U.S. jurisdictions in which the tax rate in 2021 and earlier years was lower than the U.S.
statutory tax rate and from which we derived substantial earnings included Ireland, Bermuda and Singapore.
The effective income tax rate for 2021 reflects tax expense associated with the Respiratory business divestiture.
The effective tax rate for 2020 reflects non-taxable contingent consideration adjustments, recognized in connection
with a decrease in the fair value of our contingent consideration liabilities. Additionally, the effective tax rates for both
2021 and 2020 reflect a net excess tax benefit related to share-based compensation and a tax benefit relating to the
revaluation of state deferred tax assets and liabilities due to business integrations and other changes. See Note 15
to the consolidated financial statements included in this Annual Report on Form 10-K for additional information.
Segment Results
Segment Net Revenues
Americas
EMEA
Asia
OEM
Segment Net Revenues
Segment Operating Profit
Americas
EMEA
Asia
OEM
Year Ended December 31
% Increase/(Decrease)
2021
1,659.3 $
606.8
297.8
245.7
2,809.6 $
2020
1,465.0
584.9
267.0
220.3
2,537.2
$
$
2021 vs 2020
13.3
3.8
11.5
11.5
10.7
Year Ended December 31,
% Increase/(Decrease)
2021
2020
2021 vs 2020
$
424.2 $
94.9
84.6
56.2
401.4
81.3
51.2
44.9
578.8
5.7
16.6
65.2
25.3
14.0
Segment Operating Profit (1)
$
659.9 $
(1) See Note 18 to the consolidated financial statements included in this Annual Report on Form 10-K for a reconciliation of segment
operating profit to our consolidated income from continuing operations before interest, loss on extinguishment of debt and taxes.
Americas
Americas net revenues for the year ended December 31, 2021 increased $194.3 million, or 13.3%, compared to
the prior year, which was primarily attributable to a $68.9 million increase in sales volumes of existing products
largely stemming from the impact that the COVID-19 pandemic had on the prior year, net revenues of $60.6 million
generated by the Z-Medica acquisition, a $32.9 million increase in new product sales and, to a lesser extent, price
increases.
36
Americas operating profit for the year ended December 31, 2021 increased $22.8 million, or 5.7%, compared to
the prior year, which was primarily attributable to an increase in gross profit resulting from higher sales partially
offset by a benefit recognized in the prior year resulting from decreases in the estimated fair value of our contingent
consideration liabilities stemming from the impacts of the COVID-19 pandemic and expenses incurred by Z-Medica.
In November 2021, the Center for Medicare and Medicaid Services (CMS) published its Physician Fee
Schedule (PFS) and Outpatient Prospective Payment System (OPPS) rates for calendar year 2022. The rules,
among other things, provide for updates with respect to the rates used to determine the reimbursement amounts
received by healthcare providers across a broad range of healthcare procedures, including our UroLift System
procedure. Specifically, for UroLift procedures performed in a physician office setting, the reimbursement rates
outlined in the PFS will be reduced by 19-21%, as compared to 2021, and will be phased in over four years, while
the reimbursement rates outlined in the OPPS for UroLift procedures performed in the hospital outpatient or
ambulatory surgical center setting are 3% higher as compared to 2021. On December 10, 2021, President Biden
signed into law the “Protecting Medicare and American Farmers from Sequester Cuts Act”. Among other things, the
law increased the conversion factor in the PFS by 3% for 2022 versus the final rule issued in November. While it is
uncertain how the changes in reimbursement rates will impact the financial performance of the Interventional
Urology product portfolio over time, we do not anticipate the changes will have a significant impact on the financial
performance of our Interventional Urology product portfolio in 2022. We anticipate that this decision may cause our
provider community to migrate patients to the ambulatory surgical center or hospital outpatient setting. Going
forward, we plan to implement strategies to limit any negative impacts on patient access to safe and effective
clinical care in the office setting.
EMEA
EMEA net revenues for the year ended December 31, 2021 increased $21.9 million, or 3.8%, compared to the
prior year, which was primarily attributable to $25.9 million of favorable fluctuations in foreign currency exchange
rates partially offset by a $10.5 million decrease in sales volumes attributed to the Respiratory business divestiture.
EMEA operating profit for the year ended December 31, 2021 increased $13.6 million, or 16.6%, compared to
the prior year, which was primarily attributable to favorable fluctuations in foreign currency exchange rates and an
increase in gross profit resulting from favorable mix partially offset by an increase in EU MDR costs within research
and development.
Asia
Asia net revenues for the year ended December 31, 2021 increased $30.8 million, or 11.5%, compared to the
prior year, which was primarily attributable to a $13.1 million net increase in sales volumes of existing products
largely stemming from the impact that the COVID-19 pandemic had on the prior year, $12.4 million of favorable
fluctuations in foreign currency exchange rates and $9.3 million in new product sales. The increases in net revenues
were partially offset by a $9.0 million decrease in sales volumes attributed to the Respiratory business divestiture.
Asia operating profit for the year ended December 31, 2021 increased $33.4 million, or 65.2%, compared to the
prior year, which was primarily attributable to an increase in gross profit resulting from higher sales, favorable
fluctuations in foreign currency exchange rates and a benefit from the reversal of a contingent liability related to
tariffs imposed by Chinese authorities, which is described further in Note 17 to the consolidated financial
statements. The increases in operating profit were partially offset by an increase in selling expenses to support
higher sales.
OEM
OEM net revenues for the year ended December 31, 2021 increased $25.4 million, or 11.5% compared to the
prior year which was primarily attributable to a $13.7 million increase in sales volumes of existing products largely
stemming from the impact that the COVID-19 pandemic had on the prior year, a $5.8 million increase in new
product sales and net revenues generated by the HPC acquisition.
OEM operating profit for the year ended December 31, 2021 increased $11.3 million, or 25.3%, compared to the
prior year, which was primarily attributable to an increase in gross profit resulting from higher sales.
Liquidity and Capital Resources
We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing
37
activities. Our principal source of liquidity is our cash flows provided by operating activities. Our cash flows provided
by operating activities are reduced by cash used to, among other things, fulfill contractual obligations for minimum
lease payments under noncancellable operating leases, which often extend beyond one year; the weighted average
remaining lease term of our operating lease portfolio is 7.9 years. Our cash flows provided by operating activities
are also reduced by cash used for unconditional legally binding commitments to purchase goods or services (i.e.
purchase obligations), which primarily related to inventory expected to be purchased within one year. Our net cash
provided by operating activities was significantly in excess of amounts paid pursuant to these contractual obligations
for the years ended December 31, 2021, 2020 and 2019.
Other significant factors that affect our overall management of liquidity include contractual obligations such as
scheduled principal and interest payments with respect to outstanding indebtedness, tax on deemed repatriation of
non-U.S. earnings, which will be paid annually over the next four years, and annual pension funding. We may also
be obligated to make payments for contingent consideration due to past acquisitions, the timing and amount of
which may be uncertain, and the magnitude of which can vary from year to year. Other significant factors that affect
our liquidity include certain actions controlled by management such as capital expenditures, acquisitions, dividends
and incremental pension and post-retirement benefit payments. See Note 10, Note 12, Note 15 and Note 16 to the
consolidated financial statements included in this Annual Report on Form 10-K for additional information.
We believe our cash flow from operations, available cash and cash equivalents and borrowings under our
revolving credit facility (which is provided for under the Credit Agreement) and accounts receivable securitization
facility will enable us to fund our operating requirements, capital expenditures and debt obligations for the next 12
months and the foreseeable future.
Of our $445.1 million of cash and cash equivalents at December 31, 2021, $352.5 million was held at non-U.S.
subsidiaries. We manage our worldwide cash requirements by monitoring the funds available among our
subsidiaries and determining the extent to which we can access those funds on a cost effective basis.
In December 2021, we executed an intra-company transfer in which certain intellectual property rights held by
several of our subsidiaries were contributed to a non-U.S. subsidiary. The transfer accelerated certain taxable
income into the year ended December 31, 2021; however, the related current tax expense of $73.2 million, which is
payable in 2022, was substantially offset by the reversal of existing deferred tax liabilities.
We have entered into cross-currency swap agreements with 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 notionally exchanged in the aggregate $750 million for €653.1 million. The swap agreements,
which begin to expire in October 2023, are designated as net investment hedges and require an exchange of the
notional amounts upon expiration or the earlier termination of the agreements. We and the counterparties have
agreed to effect the exchange through a net settlement. As a result, we may be required to pay (or be entitled to
receive) an amount equal to the difference, on the expiration or earlier termination dates, between the U.S. dollar
equivalent of the €653.1 million notional amount and the $750 million notional amount. If, at the expiration or earlier
termination of the swap agreements, the U.S. dollar to euro exchange rate has increased or declined by 10% from
the rate in effect at the inception of these agreements, we would receive from or be required to pay to the
counterparties an aggregate of approximately $75.0 million in respect of the notional settlement. As of December
31, 2021, we had $21.7 million in current assets and $9.6 million in non-current assets related to the fair value of
our cross-currency swap agreements. The swap agreements entail risk that the counterparties will not fulfill their
obligations under the agreements. However, we believe the risk is reduced because we have entered into separate
agreements with different counterparties, all of which are large, well-established financial institutions.
We may at any time, from time to time, repurchase our outstanding debt securities in open market purchases,
via tender offers or in privately negotiated transactions, exchange transactions or otherwise, at such price or prices
as we deem appropriate. Such purchases or exchanges, if any, will depend on prevailing market conditions, our
liquidity requirements, contractual restrictions and other factors and may be commenced or suspended at any time.
Summarized Financial Information – Obligor Group
The 2027 Notes are issued by Teleflex Incorporated (the “Parent Company”), and payment of the Parent
Company's obligations under the 2027 Notes is guaranteed, jointly and severally, by an enumerated group of the
Parent Company’s subsidiaries (each, a “Guarantor Subsidiary” and collectively, the “Guarantor Subsidiaries”). The
guarantees are full and unconditional, subject to certain customary release provisions. Each Guarantor Subsidiary is
directly or indirectly 100% owned by the Parent Company. Summarized financial information for the Parent and
38
Guarantor Subsidiaries (collectively, the “Obligor Group”) as of and for the year ended December 31, 2021 as
follows:
Net revenue
Cost of goods sold
Gross profit
Income from continuing operations
Net income
Total current assets
Total assets
Total current liabilities
Total liabilities
Year Ended December 31, 2021
Obligor Group
Intercompany
Obligor Group
(excluding
intercompany)
$
1,975.5 $
1,037.4
938.1
208.9
209.1
206.1 $
145.4
60.7
203.0
203.0
1,769.4
892.0
877.4
5.9
6.1
December 31, 2021
Obligor Group
Intercompany
Obligor Group
(excluding
intercompany)
$
812.5 $
53.6 $
3,084.4
879.7
3,541.2
1,419.4
523.6
886.8
758.9
1,665.0
356.1
2,654.4
The same accounting policies as described in Note 1 to the consolidated financial statements included in our
Annual Report on Form 10-K for the year ended December 31, 2021 are used by the Parent Company and each of
its subsidiaries in connection with the summarized financial information presented above. The Intercompany column
in the table above represents transactions between and among the Obligor Group and non-guarantor subsidiaries
(i.e. those subsidiaries of the Parent Company that have not guaranteed payment of the 2027 Notes). Obligor
investments in non-guarantor subsidiaries and any related activity are excluded from the financial information
presented above. The summarized financial information presented above for the Obligor Group as of and for the
year ended December 31, 2021 gives effect to the 2028 Notes issued in a private offering in May 2020.
See "Financing Arrangements" below as well as Note 10 and Note 11 to the consolidated financial statements
included in this Annual Report on Form 10-K for further information related to our borrowings and financial
instruments.
Cash Flows
The following table provides a summary of our cash flows for the periods presented:
Cash flows from continuing operations provided by (used in):
Operating activities
Investing activities
Financing activities
Cash flows used in discontinued operations
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash Flow from Operating Activities
Year Ended December 31,
2021
2020
$
$
652.1 $
156.7
(715.8)
(0.7)
(23.1)
69.2 $
437.1
(837.8)
455.2
(0.7)
21.0
74.8
Net cash provided by operating activities from continuing operations was $652.1 million during 2021, and
$437.1 million during 2020. The $215.0 million increase was primarily attributable to favorable operating results and
lower contingent consideration payments. Net cash provided by operating activities from continuing operations also
reflects $33.8 million of proceeds received from the Respiratory business divestiture attributed to performance
obligations under the MSTA, which were largely offset by tax payments related to the Respiratory business
divestiture.
39
Cash Flow from Investing Activities
Net cash provided by investing activities from continuing operations was $156.7 million during 2021, primarily
consisted of $224.0 million in net proceeds from the Respiratory business divestiture and capital expenditures of
$71.6 million.
Cash Flow from Financing Activities
Net cash used in financing activities from continuing operations was $715.8 million during 2021, which primarily
consisted of a net reduction in borrowings of $634.5 million resulting from payments made against our Senior credit
facility using proceeds from the Respiratory business divestiture and operating cash flows. Our borrowings were
also impacted by the redemption of the $400 million 2026 Notes, which was funded using borrowings under the
revolving credit facility. We also made dividend payments of $63.6 million and contingent consideration payments of
$31.4 million.
For a discussion of our cash flow comparison for 2020 and 2019, refer to our Annual Report on Form 10-K for
the fiscal year ended December 31, 2020.
Free Cash Flow
Free cash flow is a non-GAAP financial measure and is calculated by subtracting capital expenditures from
cash provided by operating activities from continuing operations. This financial measure is used in addition to and in
conjunction with results presented in accordance with generally accepted accounting principles in the U.S., or
GAAP, and should not be considered a substitute for net cash provided by operating activities from continuing
operations, the most comparable GAAP financial measure. Management believes that free cash flow is a useful
measure to investors because it facilitates an assessment of funds available to satisfy current and future
obligations, pay dividends and fund acquisitions. We also use this financial measure for internal managerial
purposes and to evaluate period-to-period comparisons. Free cash flow is not a measure of cash available for
discretionary expenditures since we have certain non-discretionary obligations, such as debt service, that are not
deducted from the measure. We strongly encourage investors to review our financial statements and publicly-filed
reports in their entirety and not to rely on any single financial measure. The following is a reconciliation of free cash
flow to the most comparable GAAP measure.
Net cash provided by operating activities from continuing operations
Less: Capital expenditures
Free cash flow
Financing Arrangements
The following table provides our net debt to total capital ratio:
Net debt includes:
Current borrowings
Long-term borrowings
Unamortized debt issuance costs
Total debt
Less: Cash and cash equivalents
Net debt
Total capital includes:
Net debt
Shareholders’ equity
Total capital
Percent of net debt to total capital
2021
2020
$
$
652.1 $
71.6
580.5 $
437.1
90.7
346.4
2021
2020
$
110.0
$
100.5
1,740.1
13.4
1,863.5
445.1
1,418.4
1,418.4
3,754.7
2,377.9
19.6
2,498.0
375.9
2,122.1
2,122.1
3,336.5
$ 5,173.1
$ 5,458.6
27.4 %
38.9 %
Fixed rate debt comprised 53.7% and 56.0% of total debt at December 31, 2021 and 2020, respectively. The
slight decline in fixed rate borrowings as a percentage of total borrowings as of December 31, 2021 compared to the
prior year was due to the redemption of the 2026 Notes.
40
Senior credit facility
On April 5, 2019, we entered into a second amended and restated credit agreement (the "Credit Agreement"),
which provides for a $1.0 billion revolving credit facility and a $700 million term loan facility, each of which matures
on April 5, 2024. The Credit Agreement replaces a previous credit agreement under which we were provided a $1.0
billion credit facility and a $750 million term loan facility, due 2022 (the “prior term loan”). The $700 million term loan
facility under the Credit Agreement principally was applied against the remaining $675 million principal balance of
the prior term loan.
At our option, loans under the Credit Agreement will bear interest at a rate equal to adjusted LIBOR plus an
applicable margin ranging from 1.25% to 2.00% or at an alternate base rate, which is defined as the highest of (i)
the “Prime Rate” in the U.S. last quoted by The Wall Street Journal, (ii) 0.50% above the greater of the federal funds
rate and the rate comprised of both overnight federal funds and overnight eurodollar borrowings and (iii) 1.00%
above adjusted LIBOR for a one month interest period, plus in each case an applicable margin ranging from 0.125%
to 1.00%, in each case subject to adjustments based on our consolidated total net leverage ratio (generally,
Consolidated Total Funded Indebtedness (which is net of “Qualified Cash”), as defined in the Credit Agreement, on
the date of determination to Consolidated EBITDA, as defined in the Credit Agreement, for the four most recent
fiscal quarters ending on or preceding the date of determination). Overdue loans will bear interest at the rate
otherwise applicable to such loans plus 2.00%.
At December 31, 2021, we had $141.0 million in borrowings outstanding and $1.8 million in outstanding standby
letters of credit under our $1.0 billion revolving credit facility.
The Credit Agreement contains covenants that, among other things and subject to certain exceptions, place
limitations on our ability, and the ability of our subsidiaries, to incur additional indebtedness; create additional liens;
enter into a merger, consolidation or amalgamation or other defined "fundamental changes," dispose of certain
assets, make certain investments or acquisitions, pay dividends, or make other restricted payments, enter into swap
agreements or enter into transactions with our affiliates. Additionally, the Credit Agreement contains financial
covenants that, subject to specified exceptions, require us to maintain a consolidated total net leverage ratio of not
more than 4.50 to 1.00 and a consolidated interest coverage ratio (generally, Consolidated EBITDA for the four most
recent fiscal quarters ending on or preceding the date of determination to Consolidated Interest Expense, as defined
in the Credit Agreement, paid in cash for such period) of not less than 3.50 to 1.00. As of December 31, 2021, we
were in compliance with the covenants in the Credit Agreement.
Redemption of 2026 Senior Notes
On April 29, 2021, we issued a notice of redemption to holders of our outstanding $400 million aggregate
principal amount of the 2026 Notes. Pursuant to the notice of redemption, the 2026 Notes were redeemed on June
1, 2021 (the “Redemption Date”) using borrowings under the revolving credit facility and cash on hand at a
redemption price equal to 102.438% of the principal amount of the 2026 Notes plus accrued and unpaid interest up
to, but not including, the Redemption Date (the “Redemption Price”). We recognized a loss on extinguishment of
debt of $13.0 million as a result of the redemption of the 2026 Notes.
2027 and 2028 Senior Notes
As of December 31, 2021, the outstanding principal amount of our 2027 Notes and 2028 Notes (collectively the
"Senior Notes") was $500 million, respectively. The indenture governing the Senior Notes contains covenants that,
among other things among other things and subject to certain exceptions, limit or restrict our ability, and the ability
of our subsidiaries, to create liens; consolidate, merge or dispose of certain assets; and enter into sale leaseback
transactions. The obligations under the Senior Notes are fully and unconditionally guaranteed, jointly and severally,
by each of our existing and future 100% owned domestic subsidiaries that are a guarantor or other obligor under the
Credit Agreement and by certain of our other 100% owned domestic subsidiaries. As of December 31, 2021, we
were in compliance with all of the terms of our Senior Notes.
Accounts receivable securitization
We have an accounts receivable securitization facility under which we sell an undivided interest in domestic
accounts receivable for consideration of up to $75 million to a commercial paper conduit. As of December 31, 2021
and 2019, we borrowed the maximum amount available of $75 million under this facility. This facility is utilized to
provide increased flexibility in funding short term working capital requirements. The agreement governing the
accounts receivable securitization facility contains certain covenants and termination events. An occurrence of an
event of default or a termination event under this facility may give rise to the right of our counterparty to terminate
41
this facility. As of December 31, 2021, we were in compliance with the covenants and none of the termination events
had occurred.
For additional information regarding our indebtedness, see Note 10 to the consolidated financial statements
included in this Annual Report on Form 10-K.
Critical Accounting Policies and Estimates
The preparation of 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 and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ materially from the amounts derived from those estimates and
assumptions.
We have identified the following as critical accounting estimates, which are defined as those that are reflective
of significant judgments and uncertainties, are the most pervasive and important to the presentation of our financial
condition and results of operations and could potentially result in materially different results under different
assumptions and conditions. The following discussion should be considered in conjunction with the description of
our accounting policies in Note 1 to the consolidated financial statements in this Annual Report on Form 10-K.
Allowance for Credit Losses
In the ordinary course of business, we grant non-interest bearing trade credit to our customers on normal credit
terms. In an effort to reduce our credit risk, we (i) establish credit limits for all of our customer relationships, (ii)
perform ongoing credit evaluations of our customers’ financial condition, (iii) monitor the payment history and aging
of our customers’ receivables, and (iv) monitor open orders against an individual customer’s outstanding receivable
balance.
An allowance for credit losses is maintained for trade accounts receivable based on the expected collectability
of accounts receivable and the losses expected to be incurred over the life of our receivables. Considerations to
determine credit losses include our historical collection experience, the length of time an account is outstanding, the
financial position of the customer, information provided by credit rating services as well as the consideration of
events or circumstances indicating historic collection rates may not be indicative of future collectability. Our
allowance for credit losses was $10.8 million and $12.9 million at December 31, 2021 and 2020, respectively, which
constituted 2.6% and 3.0% of gross trade accounts receivable at December 31, 2021 and 2020, respectively. The
current portion of the allowance for credit losses, which was $6.0 million and $8.1 million as of December 31, 2021
and 2020, respectively, was recognized as a reduction of accounts receivable, net.
Although we maintain an allowance for credit losses to cover the estimated losses which may occur when
customers cannot make their required payments, we cannot be assured that the allowances will be sufficient to
cover future losses given the volatility in the worldwide economy and the possibility that other, unanticipated events
may adversely affect collectability of the accounts. If our allowance for credit losses is insufficient to address
receivables we ultimately determine are uncollectible, we would be required to incur additional charges, which could
materially adversely affect our results of operations. Moreover, our inability to collect outstanding receivables could
adversely affect our financial condition and cash flow from operations.
Distributor Rebates
We offer rebates to certain distributors and record a reserve with respect to the estimated amount of the rebates
as a reduction of revenues at the time of sale. In estimating rebates, we consider the lag time between the point of
sale and the payment of the distributor’s rebate claim, distributor-specific trend analyses, contractual commitments,
including stated rebate rates, historical experience and other relevant information. When necessary, we adjust the
reserves, with a corresponding adjustment to revenue, to reflect differences between estimated and actual
experience. Historical adjustments to recorded reserves have not been significant and we do not expect significant
revisions to the estimated rebates in the future. The reserve for estimated rebates was $26.4 million and $28.5
million at December 31, 2021 and 2020, respectively. We expect to pay amounts subject to the reserve as of
December 31, 2021 within 90 days subsequent to year-end.
42
Inventory Utilization
Inventories are valued at the lower of cost or net realizable value. Factors utilized in the determination of
estimated net realizable value and whether a reserve is required include (i) current sales data and historical return
rates, (ii) estimates of future demand, (iii) competitive pricing pressures, (iv) new product introductions, (v) product
expiration dates, and (vi) component and packaging obsolescence.
We review the net realizable value of inventory each reporting period and adjusted as necessary. We regularly
compare inventory quantities on hand against historical usage or forecasts related to specific items in order to
evaluate obsolescence and excessive quantities. In assessing historical usage, we also qualitatively assess
business trends to evaluate the reasonableness of using historical information in estimating future usage. Our
inventory reserve was $42.7 million and $42.9 million at December 31, 2021 and 2020, respectively.
Long-Lived Assets
We assess the remaining useful life and recoverability of long-lived assets whenever events or circumstances
indicate the carrying value of an asset may not be recoverable. For example, such an assessment may be initiated
if, as a result of a change in expectations, we believe it is more likely than not that the asset will be sold or disposed
of significantly before the end of its useful life or if an adverse change occurs in the business employing the
asset. Significant judgments in this area involve determining whether such events or circumstances have occurred
and determining the appropriate asset group requiring evaluation. The recoverability evaluation is based on various
analyses, including undiscounted cash flow projections, which involve significant management judgment. Any
impairment loss, if indicated, equals the amount by which the carrying amount of the asset exceeds the estimated
fair value of the asset.
Goodwill and Other Intangible Assets
Intangible assets include indefinite-lived assets (such as goodwill, certain trade names and in-process research
and development ("IPR&D")), as well as finite-lived intangibles (such as trade names that do not have indefinite
lives, customer relationships, intellectual property, distribution rights and non-competition agreements) and are,
generally, obtained through acquisition. Intangible assets acquired in a business combination are measured at fair
value and we allocate any excess purchase price over the fair value of the net tangible and intangible assets
acquired in a business combination to goodwill. Considerable management judgment is necessary in making the
assumptions used in the estimated fair value of intangible assets acquired in a business combination.
The costs of finite-lived intangibles are amortized to expense over their estimated useful life. Determining the
useful life of an intangible asset requires considerable judgment as different types of intangible assets typically will
have different useful lives. Goodwill and other indefinite-lived intangible assets are not amortized; we test these
assets annually for impairment during the fourth quarter, using the first day of the quarter as the measurement date,
or earlier upon the occurrence of certain events or substantive changes in circumstances that indicate an
impairment may have occurred. Such conditions may include an economic downturn in a geographic market or a
change in the assessment of future operations.
Goodwill
Goodwill impairment assessments are performed at a reporting unit level. For purposes of this assessment, our
reporting units are our operating segments, or, in certain cases, a business one level below our operating segments.
As the fair values of our reporting units are more likely than not greater than the carrying values, no impairment was
recorded as a result of the annual goodwill impairment testing performed during the fourth quarter of 2021.
In applying the goodwill impairment test, we may assess qualitative factors to determine whether it is more likely
than not that the fair value of a reporting unit is less than its carrying value. Qualitative factors may include, but are
not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market
for our products and services, regulatory and political developments, and entity specific factors such as strategies
and financial performance. If, after completing the qualitative assessment, we determine it is more likely than not
that the fair value of a reporting unit is less than its carrying value, we proceed to a quantitative impairment test
described below. Alternatively, we may test goodwill for impairment through the quantitative impairment test without
conducting the qualitative analysis.
Under a quantitative impairment test we compare the fair value of a reporting unit to the carrying value. We
calculate the fair value of the reporting unit using a combination of two methods; one which estimates the
discounted cash flows of the reporting unit based on projected earnings in the future (the Income Approach) and
43
one which is based on revenue and EBITDA of similar businesses to those of the reporting unit in actual
transactions (the Market Approach). If the fair value of the reporting unit exceeds the carrying value, there is no
impairment. If the reporting unit carrying value exceeds the fair value, we recognize an impairment loss based on
the amount the carrying value of the reporting unit exceeds its fair value.
The more significant judgments and assumptions in determining fair value using in the Income Approach include
(1) the amount and timing of expected future cash flows, which are based primarily on our estimates of future sales,
operating income, industry trends and the regulatory environment of the individual reporting units, (2) the expected
long-term growth rates for each of our reporting units, which approximate the expected long-term growth rate of the
global economy and of the medical device industry, and (3) the discount rates that are used to estimate present
value of the future cash flows, which are based on an assessment of the risk inherent in the future cash flows of the
respective reporting units along with various market based inputs. The more significant judgments and assumptions
used in the Market Approach include (1) determination of appropriate revenue and EBITDA multiples used to
estimate a reporting unit’s fair value and (2) the selection of appropriate comparable companies to be used for
purposes of determining those multiples. There were no changes to the underlying methods used in 2021 as
compared to the valuations of our reporting units in the past several years.
Our expected future growth rates estimated for purposes of the goodwill impairment test are based on our
estimates of future sales, operating income and cash flow and are consistent with our internal budgets and business
plans, which reflect a modest amount of core revenue growth coupled with the successful launch of new products
each year; the effect of these growth indicators more than offset volume losses from products that are expected to
reach the end of their life cycle. Changes in assumptions underlying the Income Approach could cause a reporting
unit's carrying value to exceed its fair value. While we believe our assumed growth rates of sales and cash flows are
reasonable, the possibility remains that the revenue growth of a reporting unit may not be as high as expected, and,
as a result, the estimated fair value of that reporting unit may decline. In this regard, if our strategy and new
products are not successful and we do not achieve anticipated core revenue growth in the future with respect to a
reporting unit, the goodwill in the reporting unit may become impaired and, in such case, we may incur material
impairment charges. Moreover, changes in revenue and EBITDA multiples in actual transactions from those
historically present could result in an assessment that a reporting unit’s carrying value exceeds its fair value, in
which case we also may incur material impairment charges.
Other Intangible Assets
Intangible assets are assets acquired that lack physical substance and that meet the specified criteria for
recognition apart from goodwill. Management tests indefinite-lived intangible assets for impairment annually, and
more frequently if events or changes in circumstances indicate that an impairment may have occurred. Similar to
the goodwill impairment test process, we may assess qualitative factors to determine whether it is more likely than
not that the fair value of an indefinite-lived intangible asset is less than its carrying value. If, after completing the
qualitative assessment, we determine it is more likely than not that the fair value of the indefinite-lived intangible
asset is greater than its carrying amount, the asset is not impaired. If we conclude it is more likely than not that the
fair value of the indefinite-lived intangible asset is less than the carrying value, we then proceed to a quantitative
impairment test, which consists of a comparison of the fair value of the intangible asset to its carrying amount.
Alternatively, we may elect to forgo the qualitative analysis and test the indefinite-lived intangible asset for
impairment through the quantitative impairment test.
In connection with intangible assets acquired in a business combination and quantitative impairment tests, we
determine the estimated fair value using various methods under the Income Approach. The more significant
judgments and assumptions used in the valuation of intangible assets may include revenue growth rates, royalty
rate, discount rate, attrition rate, and EBITDA margin. Each of these factors and assumptions can significantly
impact the value of the intangible asset.
During the year ended December 31, 2021, we recorded impairment charges of $6.7 million related to our
decision to abandon intellectual property and other assets primarily associated with our respiratory product portfolio
that was not transferred to Medline as part of the Respiratory business divestiture. See "Restructuring and
impairment charges" within "Result of Operations" above as well as Note 4 to the consolidated financial statements
included in this Annual Report on Form 10-K for additional information on these charges.
Share-based Compensation
We estimate the fair value of share-based awards on the date of grant and recognize as expense the value of
the portion of the award that is ultimately expected to vest over the requisite service periods. Share-based
44
compensation expense related to stock options is measured using a Black-Scholes option pricing model that takes
into account subjective and complex assumptions with respect to the expected life of options, volatility, risk-free
interest rate and expected dividend yield. The expected life of options granted represents the period of time that
options are expected to be outstanding, which is derived from the vesting period of the award, as well as historical
exercise behavior. Expected volatility is based on a blend of historical volatility and implied volatility derived from
publicly traded options to purchase our common stock, which we believe is more reflective of market conditions and
a better indicator of expected volatility than solely using historical volatility. The risk-free interest rate is the implied
yield currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life of the
option. Share-based compensation expense related to non-vested restricted stock units is measured based on the
market price of the underlying stock on the grant date discounted for the risk free interest rate and the present value
of expected dividends over the vesting period. Share based compensation expense for 2021 and 2020 was $22.9
million and $20.7 million, respectively.
Contingent Consideration Liabilities
In connection with an acquisition, we may be required to pay future consideration that is contingent upon the
achievement of specified objectives, such as receipt of regulatory approval, commercialization of a product or
achievement of sales targets. As of the acquisition date, we record a contingent liability representing the estimated
fair value of the contingent consideration we expect to pay. We determined the fair value of the contingent
consideration liabilities using a discounted cash flow analysis. Significant judgment is required in determining the
assumptions used to calculate the fair value of the contingent consideration. Increases in projected revenues and
probabilities of payment may result in significantly higher fair value measurements; decreases in these items may
have the opposite effect. Increases in discount rates in the periods prior to payment may result in significantly lower
fair value measurements; decreases may have the opposite effect. See Note 12 to the consolidated financial
statements included in this Annual Report on Form 10-K for additional information.
We remeasure our contingent consideration liabilities each reporting period and recognize the change in the
liabilities' fair value within selling, general and administrative expenses in our consolidated statement of income. As
of December 31, 2021 and 2020, we accrued $9.8 million and $36.6 million of contingent consideration,
respectively.
Income Taxes
Our annual provision for income taxes and determination of the deferred tax assets and liabilities require
management to assess uncertainties, make judgments regarding outcomes and utilize estimates. The difficulties
inherent in such assessments, judgments and estimates are particularly challenging because we conduct a broad
range of operations around the world, subjecting us to complex tax regulations in numerous international
jurisdictions. As a result, we are at times subject to tax audits, disputes with tax authorities and potential litigation,
the outcome of which is uncertain. In connection with its estimates of our tax assets and liabilities, management
must, among other things, make judgments about the outcome of these uncertain matters.
Deferred tax assets and liabilities are measured and recorded using currently enacted tax rates that are
expected to apply to taxable income in the years in which differences between the financial statement carrying
amounts of existing assets and liabilities and their tax bases are recovered or settled. The likelihood of a material
change in our expected realization of these assets is dependent on future taxable income, our ability to use foreign
tax credit carryforwards and carrybacks, final U.S. and non-U.S. tax settlements, changes in tax law, and the
effectiveness of our tax planning strategies in the various relevant jurisdictions. While management believes that its
judgments and interpretations regarding income taxes are appropriate, significant differences in actual experience
may require future adjustments to our tax assets and liabilities, which could be material.
In assessing the realizability of our deferred tax assets, we evaluate positive and negative evidence and use
judgments regarding past and future events, including results of operations and available tax planning strategies
that could be implemented to realize the deferred tax assets. Based on this assessment, we determine when it is
more likely than not that all or some portion of our deferred tax assets may not be realized, in which case we apply
a valuation allowance to offset the amount of such deferred tax assets. To the extent facts and circumstances
change in the future, adjustments to the valuation allowances may be required. The valuation allowance for deferred
tax assets of $143.2 million and $155.0 million at December 31, 2021 and 2020, respectively, relates principally to
the uncertainty of the utilization of tax loss and credit carryforwards in various jurisdictions.
Significant judgment is required in determining income tax provisions and in evaluating tax positions. We
establish additional provisions for income taxes when, despite the belief that tax positions are supportable, there
45
remain certain positions that do not meet the minimum probability threshold, which is a tax position that is more
likely than not to be sustained upon examination by the applicable taxing authority. In the normal course of
business, we are examined by various federal, state and non-U.S. tax authorities. We regularly assess the potential
outcomes of these examinations and any future examinations for the current or prior years in determining the
adequacy of our provision for income taxes. We adjust the income tax provision, the current tax liability and deferred
taxes in any period in which we become aware of facts that necessitate an adjustment. We are currently under
examination in Ireland and Germany. The ultimate outcome of these examinations could result in increases or
decreases to our recorded tax liabilities, which would affect our financial results. See Note 15 to the consolidated
financial statements in this Annual Report on Form 10-K for additional information regarding our uncertain tax
positions.
New Accounting Standards
See Note 2 to the consolidated financial statements included in this Annual Report on Form 10-K for a
discussion of recently issued accounting standards, including estimated effects, if any, of the adoption of those
standards on our consolidated financial statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to certain financial risks, specifically fluctuations in market interest rates, foreign currency
exchange rates and, to a lesser extent, commodity prices. We address these risks through a risk management
program that includes the use of derivative financial instruments. We do not enter into derivative instruments for
trading or speculative purposes. We manage our exposure to counterparty risk on derivative instruments by
entering into contracts with a diversified group of major financial institutions and by actively monitoring outstanding
positions.
We also are exposed to changes in the market trading price of our common stock as it influences the valuation
of stock options and their effect on earnings.
Interest Rate Risk
We are exposed to changes in interest rates as a result of our borrowing activities and our cash balances. The
table below provides information regarding the interest rates by year of maturity for our fixed and variable rate debt
obligations. Variable interest rates on December 31, 2021 were determined using a base rate of the one-month
LIBOR rate plus the applicable spread.
Year of Maturity
2022
2023
2024
2025
2026
Thereafter
Total
Fixed rate debt
$
—
$
—
$
—
$
—
$
—
$ 1,000.0
$
1,000.0
Average interest rate
— %
— %
— %
— %
— %
4.438 %
4.438 %
Variable rate debt
$ 110.0
$
43.8
$ 709.7
$
—
$
—
$
—
$
863.5
Average interest rate
1.153 %
1.479 %
1.479 %
— %
— %
— %
1.438 %
A change of 1.0% in variable interest rates would increase or decrease annual interest expense by $8.6 million
based on our outstanding debt as of December 31, 2021.
Foreign Currency Risk
The global nature of our operations exposes us to foreign currency risks. These risks include exposure from the
effect of fluctuating exchange rates on payables and receivables as well as intercompany loans relating to
transactions that are denominated in currencies other than a location’s functional currency and exposure that arises
from translating the results of our worldwide operations to the U.S. dollar at exchange rates that have fluctuated
from the beginning of a reporting period. Our principal currency exposures relate to the Euro, Chinese Renminbi,
Canadian Dollar, Malaysian Ringgit, Mexican Peso, British Pound, and Czech Koruna. We utilize foreign currency
forward exchange contracts and cross-currency interest rate swap contracts to attempt to minimize our exposure to
these risks. Gains and losses on these contracts substantially offset losses and gains on the underlying hedged
transactions.
As of December 31, 2021, the total notional amount for the foreign currency forward exchange contracts and
cross-currency interest rates swap contracts, expressed in U.S. dollars, was $310.7 million and $750.0 million,
respectively. A sensitivity analysis of changes in fair value of these contracts outstanding as of December 31, 2021,
while not predictive in nature, indicated that a hypothetical 10% increase/decrease in the value of the U.S. dollar
46
against all currencies would increase/decrease the fair value of these contracts by $78.9 million, the majority of
which relates to the cross-currency interest rate swap contracts.
See Note 11 to the consolidated financial statements included in this Annual Report on Form 10-K for
information regarding the accounting treatment of our foreign currency forward exchange contracts and cross-
currency interest rates swap contracts.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data required by this Item are included herein, commencing on
page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the
effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on
that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and
procedures as of the end of the period covered by this report were functioning effectively to provide reasonable
assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of
1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and
forms and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide
absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if any, within a company have been
detected.
(b) Management’s Report on Internal Control Over Financial Reporting
Our management’s report on internal control over financial reporting is set forth on page F-2 of this Annual
Report on Form 10-K and is incorporated by reference herein.
(c) Change in Internal Control over Financial Reporting
At the beginning of October 2021, we integrated the enterprise resource planning, or ERP, system used by Z-
Medica business with our global ERP system. This conversion impacts certain interfaces with our customers and
suppliers, resulting in changes to the tools we use to take orders, procure materials, schedule production, remit
billings, make payments and perform other business functions. We believe that the expanded utilization of the ERP
system and related changes to processes and internal controls will enhance our internal control over financial
reporting by improving the efficiency of certain financial and related transaction processes while providing us with
the ability to scale our business.
Other than the ERP system upgrade discussed above, no change in our internal control over financial reporting
occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
47
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
For the information required by this Item 10 with respect to our Executive Officers, see Part I, Item 1. of this
report. For the other information required by this Item 10, see “Election Of Directors,” “Nominees for Election to the
Board of Directors,” “Corporate Governance” and “Section 16(a) Beneficial Ownership Reporting Compliance,” in
the Proxy Statement for our 2022 Annual Meeting, which information is incorporated herein by reference. The Proxy
Statement for our 2022 Annual Meeting will be filed within 120 days after the end of the fiscal year covered by this
Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
For the information required by this Item 11, see “Compensation Discussion and Analysis,” “Compensation
Committee Report,” and “Executive Compensation” in the Proxy Statement for our 2022 Annual Meeting, which
information is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
For the information required by this Item 12 with respect to beneficial ownership of our common stock, see
“Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement for our 2022 Annual
Meeting, which information is incorporated herein by reference.
The following table sets forth certain information as of December 31, 2021 regarding our equity plans:
Plan Category
Equity compensation plans
approved by security holders
Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants, and Rights (1)
(A)
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants, and Rights
Number of Securities Remaining
Available for Future Issuance
Under Equity Compensation
Plans (Excluding Securities
Reflected in Column (A))
(B)
(C)
1,107,999
$214.13
3,082,554
(1) The number of securities in column (A) exclude 42,272 shares of common stock underlying performance stock units if maximum
performance levels are achieved; the actual number of shares, if any, to be issued with respect to the performance stock units will be
based on performance with respect to specified financial and relative stock price measures.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
For the information required by this Item 13, see “Certain Transactions” and “Corporate Governance” in the
Proxy Statement for our 2022 Annual Meeting, which information is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
For the information required by this Item 14, see “Audit and Non-Audit Fees” and “Audit Committee Pre-
Approval Procedures” in the Proxy Statement for our 2022 Annual Meeting, which information is incorporated herein
by reference.
48
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)
Consolidated Financial Statements:
PART IV
The Index to Consolidated Financial Statements and Schedule is set forth on page F-1 of this Annual Report on
Form 10-K.
(b)
Exhibits:
The following exhibits are filed as part of, or incorporated by reference into, this report (unless otherwise
indicated, the file number with respect to each filed document is 1-5353):
Exhibit No.
Description
*3.1.1 — Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1.1 to
the Company’s Form 10-K filed on February 22, 2018).
*3.1.2 — Amendment to Article Thirteenth of the Company’s Certificate of Incorporation (incorporated by
reference to Exhibit 3.1.2 to the Company’s Form 10-K filed on February 22, 2018).
*3.1.3 — Amendment to the first paragraph of Article Fourth of the Company’s Certificate of Incorporation
(incorporated by reference to Proposal 2 of the Company’s Proxy Statement filed on March 29,
2007).
*3.2 — Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the
Company's Form 10-K filed on February 25, 2021).
*4.1.1 — Indenture, dated May 16, 2016, by and between the Company and Wells Fargo Bank, National
Association (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on
Form S-3 (File No 333-211276) filed on May 11, 2016).
*4.1.2 — Fourth Supplemental Indenture, dated November 20, 2017, by and among the Company, the
guarantors party thereto and Wells Fargo Bank, National Association (incorporated by reference to
Exhibit 4.2 to the Company’s Form 8-K filed on November 20, 2017).
4.1.3 — Sixth Supplemental Indenture, dated June 6, 2019, by and among Teleflex LLC, the Company and
Wells Fargo Bank, National Association.
4.1.4 — Eighth Supplemental Indenture, dated February 25, 2021, by and among Z-Medica, LLC, the
Company and Wells Fargo Bank, National Association.
*4.1.5 — Form of 4.625% Senior Note due 2027 (included in Exhibit 4.1.2).
*4.2.1 — Indenture, dated May 27, 2020, by and among the Company, the guarantors party thereto and
Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.1 to the Company’s
Form 8-K filed on May 27, 2020).
4.2.2 — First Supplemental Indenture, dated February 25, 2021, by and among Z-Medica, LLC, the
Company and Wells Fargo Bank, National Association.
*4.2.3 — Form of 4.25% Senior Note due 2028 (included in Exhibit 4.2.1).
*4.3 — Description of Company securities registered under Section 12 of the Securities Exchange Act of
1934 (incorporated by reference to Exhibit 4.3 to the Company's Form 10-K filed on February 21,
2020).
^*10.1 — Teleflex Incorporated Retirement Income Plan (formerly known as the Teleflex Incorporated
Salaried Employees’ Pension Plan), as amended and restated effective January 1, 2014
(incorporated by reference to Exhibit 10.1 to the Company’s Form 10-K filed on February 20, 2015).
^*10.2.1 — Teleflex Incorporated Directors' Deferred Compensation Plan, dated November 22, 2019
(incorporated by reference to Exhibit 10.2.1 to the Company’s Form 10-K filed on February 21,
2020).
^*10.2.2 — Teleflex Incorporated Deferred Compensation Plan, dated November 22, 2019 (incorporated by
reference to Exhibit 10.2.2 to the Company’s Form 10-K filed on February 21, 2020).
^10.3.1 — Amended and Restated Teleflex 401(k) Savings Plan, effective as of January 1, 2019.
^10.3.2 — First Amendment to Teleflex 401(k) Savings Plan, dated April 1, 2021.
^*10.4.1 — 2000 Stock Compensation Plan (incorporated by reference to the Company’s Registration
Statement on Form S-8 (Registration No. 333-38224), filed on May 31, 2000).
^*10.4.2 — Amendment, dated March 28, 2012, to 2000 Stock Compensation Plan (incorporated by reference
to Exhibit 10.2 to the Company’s Form 10-Q filed on May 1, 2012).
49
Exhibit No.
Description
^*10.5.1 — 2008 Stock Incentive Plan (incorporated by reference to Appendix A to the Company’s definitive
Proxy Statement for the 2008 Annual Meeting of Stockholders filed on March 21, 2008).
^*10.5.2 — Amendment, dated March 28, 2012, to 2008 Stock Incentive Plan (incorporated by reference to
Exhibit 10.3 to the Company’s Form 10-Q filed on May 1, 2012).
*10.5.3 — Form of Stock Option Agreement for stock options granted on or after January 1, 2013 under the
Company’s 2008 Stock Incentive Plan (incorporated by reference to Exhibit 10.5.3 to the
Company's Form 10-K filed on February 24, 2014).
^*10.6 — Teleflex Incorporated 2016 Executive Incentive Plan (incorporated by reference to Appendix A to
the Company’s definitive Proxy Statement for the 2016 Annual Meeting of Stockholders filed on
March 24, 2016).
^*10.7 — Teleflex Incorporated 2014 Stock Incentive Plan (incorporated by reference to Appendix A to the
Company's definitive Proxy Statement for the 2014 Annual Meeting of Stockholders filed on March
28, 2014).
^*10.8 — Executive Change In Control Agreement, dated March 31, 2017, between the Company and Liam
Kelly (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q filed on May 4, 2017).
^*10.9 — Senior Executive Officer Severance Agreement, dated March 31, 2017, between the Company and
Liam Kelly (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed on May 4,
2017).
^*10.10 — Senior Executive Officer Severance Agreement, dated March 26, 2013, between the Company and
Thomas E. Powell (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed on
April 30, 2013).
^*10.11 — Executive Change In Control Agreement, dated March 26, 2013, between the Company and
Thomas E. Powell (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed on
April 30, 2013).
^*10.12 — Senior Executive Officer Severance Agreement, dated February 17, 2016, between the Company
and Cameron P. Hicks (incorporated by reference to Exhibit 10.20 to the Company’s Form 10-K
filed on February 25, 2016).
^*10.13 — Executive Change In Control Agreement, dated February 17, 2016, between the Company and
Cameron P. Hicks (incorporated by reference to Exhibit 10.21 to the Company’s Form 10-K filed on
February 25, 2016).
^*10.14 — Contract of Employment, dated March 24, 2020, by and between the Company and James Winters
(incorporated by reference to Exhibit 10.3 to the Company's Form 10-Q filed on April 30, 2020).
^*10.15 — Senior Executive Officer Severance Agreement, dated March 24, 2020, between the Company and
James Winters (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q filed on
April 30, 2020).
^*10.16 — Executive Change In Control Agreement, dated March 24, 2020, between the Company and James
Winters (incorporated by reference to Exhibit 10.5 to the Company’s Form 10-Q filed on April 30,
2020).
^*10.17 — Senior Executive Officer Severance Agreement, dated January 1, 2021, between the Company and
Daniel V. Logue (incorporated by reference to Exhibit 10.23 to the Company's Form 10-K filed on
February 25, 2021).
^*10.18 — Executive Change In Control Agreement, dated January 1, 2021, between the Company and Daniel
V. Logue (incorporated by reference to Exhibit 10.24 to the Company's Form 10-K filed on February
25, 2021).
^*10.19 — Senior Executive Officer Severance Agreement, dated February 25, 2021, between the Company
and Jay White (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on April
29, 2021).
^*10.20 — Executive Change In Control Agreement, dated February 25, 2021, between the Company and Jay
White (incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q filed on April 29,
2021).
^*10.21 — Second Amended and Restated Credit Agreement, dated April 5, 2019, among the Company,
JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A. and PNC Bank,
National Association, as co-syndication agents, the guarantors party thereto, the lenders party
thereto and each other party thereto (incorporated by reference to Exhibit 10.1 to the Company’s
Form 8-K filed on April 10, 2019).
^*10.22 — Form of Performance Stock Unit Agreement under the Company’s 2014 Stock Incentive Plan
(incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on June 28, 2018).
21 — Subsidiaries of the Company.
50
Exhibit No.
Description
22 — List of subsidiary guarantors and guaranteed securities
23 — Consent of Independent Registered Public Accounting Firm.
31.1 — Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Exchange Act.
31.2 — Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Exchange Act.
32.1 — Certification of Chief Executive Officer pursuant to Rule 13a-14(b) under the Exchange Act.
32.2 — Certification of Chief Financial Officer pursuant to Rule 13a-14(b) under the Exchange Act.
101.1 — The following materials from our Annual Report on Form 10-K for the year ended December 31,
2021, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated
Statements of Income for the years ended December 31, 2021, December 31, 2020 and
December 31, 2019; (ii) the Consolidated Statements of Comprehensive Income for the years
ended December 31, 2021, December 31, 2020 and December 31, 2019; (iii) the Consolidated
Balance Sheets as of December 31, 2021 and December 31, 2020; (iv) the Consolidated
Statements of Cash Flows for the years ended December 31, 2021, December 31, 2020 and
December 31, 2019; (v) the Consolidated Statements of Changes in Equity for the years ended
December 31, 2021, December 31, 2020 and December 31, 2019; and (vi) Notes to Consolidated
Financial Statements.
104.1 — The cover page of the Company’s Annual Report on Form 10-K for the year ended December 31,
2021, formatted in inline XBRL (included in Exhibit 101.1).
_____________________________________________________
*
^
Previously filed with the Securities and Exchange Commission as part of the filing indicated and incorporated herein by reference.
Indicates management contract or compensatory plan or arrangement required to be filed pursuant to Item 15(b) of this report.
ITEM 16. FORM 10-K SUMMARY
Registrants may voluntarily include a summary of information required by Form 10-K under this Item 16. We
have elected not to include such summary information.
51
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has
duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized as of the
date indicated below.
SIGNATURES
TELEFLEX INCORPORATED
By:
/s/ Liam J. Kelly
Liam J. Kelly
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and as of the date indicated below.
By:
/s/ Liam J. Kelly
Liam J. Kelly
By:
/s/ Thomas E. Powell
Thomas E. Powell
Chairman, President, Chief Executive Officer
and Director
(Principal Executive Officer)
Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)
By:
/s/ John R. Deren
John R. Deren
Corporate Vice President and Chief Accounting
Officer
(Principal Accounting Officer)
By:
By:
By:
By:
/s/ George Babich, Jr.
George Babich, Jr.
Director
/s/ Candace H. Duncan
Candace H. Duncan
Director
/s/ Gretchen R. Haggerty
Gretchen R. Haggerty
Director
/s/ John C. Heinmiller
John C. Heinmiller
Director
Dated: March 1, 2022
/s/ Dr. Stephen K. Klasko
Dr. Stephen K. Klasko
Director
/s/ Andrew A. Krakauer
Andrew A. Krakauer
Director
/s/ Richard A. Packer
Richard A. Packer
Director
/s/ Stuart A. Randle
Stuart A. Randle
Director
By:
By:
By:
By:
52
TELEFLEX INCORPORATED
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Management's Report on Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019
Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and
2019
Consolidated Balance Sheets as of December 31, 2021 and 2020
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019
Consolidated Statements of Changes in Shareholders' Equity as of and for the years ended
December 31, 2021, 2020 and 2019
Notes to Consolidated Financial Statements
FINANCIAL STATEMENT SCHEDULE
Schedule II Valuation and qualifying accounts as of and for the years ended December 31, 2021, 2020
and 2019
Page
F-2
F-3
F-6
F-7
F-8
F-9
F-10
F-11
Page
44
F-1
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of Teleflex Incorporated and its subsidiaries (the “Company”) is responsible for establishing
and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a
process designed by, or under the supervision of our Chief Executive Officer and Chief Financial Officer and
effected by the Company's board of directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2021. In making this assessment, management used the framework established in Internal
Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). As a result of this assessment and based on the criteria in the COSO framework,
management has concluded that, as of December 31, 2021, the Company’s internal control over financial reporting
was effective.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2021 has been
audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report
which appears herein.
/s/ Liam J. Kelly
Liam J. Kelly
/s/ Thomas E. Powell
Thomas E. Powell
Chairman, President and Chief Executive Officer
Executive Vice President and Chief Financial Officer
March 1, 2022
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Teleflex Incorporated
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the consolidated financial statements, including the related notes and financial statement
schedule, of Teleflex Incorporated and its subsidiaries (the “Company”) as listed in the accompanying index
(collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal
control over financial reporting as of December 31, 2021, based on criteria established in Internal Control -
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles
generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the COSO.
Change in Accounting Principle
As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it
accounts for leases in 2019.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our
responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's
internal control over financial reporting based on our audits. We are a public accounting firm registered with the
Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free
of material misstatement, whether due to error or fraud, and whether effective internal control over financial
reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audits also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
F-3
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that (i)
relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Gain on sale of the Respiratory business divestiture
As described in Note 4 to the consolidated financial statements, the Company entered into a definitive agreement to
sell certain product lines within its global respiratory product portfolio to Medline Industries, Inc. (the “Respiratory
business divestiture”). In connection with the Respiratory business divestiture, the Company also entered into
ancillary agreements with Medline to help facilitate the transfer of the business, including a manufacturing and
supply transition agreement (the “MSTA”). In June 2021, after completing the initial phase of the Respiratory
business divestiture, $33.8 million of the proceeds received were attributed to the Company’s performance
obligations pursuant to the MSTA. The resulting liability was measured as the excess of the estimated fair value of
the services to be performed over the estimated proceeds management expects to receive over the MSTA term.
The significant assumption used to estimate the fair value of the services to be performed is the selection of an
appropriate gross margin based on comparable companies. Additionally, management attributed $35.7 million of the
Company’s Americas, EMEA and Asia reportable operating segments’ goodwill to the divested respiratory business
based on the fair value of the divested respiratory business relative to the fair value of certain of the Company’s
reporting units. The fair values were estimated by management using a combination of the discounted cash flows
based on projected future earnings (Income Approach) and market multiples of publicly traded companies in similar
lines of business (Market Approach). The more significant judgments and assumptions used by management in
determining fair value using the Income Approach include the amount and timing of expected future cash flows, and
the discount rate that was used to estimate the present value of the future cash flows. The more significant
judgments and assumptions used by management in determining fair value using the Market Approach include the
determination of appropriate revenue and EBITDA market multiples based on the selection of appropriate
comparable companies.
The principal considerations for our determination that performing procedures relating to the gain on sale of the
Respiratory business divestiture is a critical audit matter are (i) the significant judgment by management in
developing the fair values of the MSTA liability and reporting units, (ii) a high degree of auditor judgment, subjectivity
and effort in performing procedures and evaluating management’s significant assumptions related to the selection of
appropriate gross margin based on comparable companies for the MSTA liability, and the discount rate in
determining the fair value using the Income Approach and the revenue and EBITDA market multiples in determining
the fair value using the Market Approach for the reporting units and (iii) the audit effort involved the use of
professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of
controls relating to the accounting for the divestiture, including controls over management’s valuation of the MSTA
liability and the fair value of the divested respiratory business relative to the fair value of certain of the Company’s
reporting units. These procedures also included, among others, (i) reading the divestiture agreement, (ii) testing
management’s process for developing the fair value estimates, (iii) evaluating the appropriateness of the income
and market approaches, (iv) testing the completeness and accuracy of underlying data used in the approaches; and
(v) evaluating the reasonableness of significant assumptions related to the gross margin for the MSTA liability, and
the discount rate in determining the fair value using the Income Approach and the revenue and EBITDA market
multiples in determining the fair value using the Market Approach for the reporting units. Evaluating these
assumptions involved evaluating whether the assumptions used were reasonable considering past performance of
F-4
the business and consistency with external market and industry data. Professionals with specialized skill and
knowledge were used to assist in the evaluation of the Company’s Income and Market approaches and the gross
margin, discount rate and revenue and EBITDA market multiples assumptions.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
March 1, 2022
We have served as the Company’s auditor since 1962.
F-5
TELEFLEX INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
Net revenues
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Research and development expenses
Restructuring and impairment charges
Gain on sale of business and assets
Income from continuing operations before interest, loss on
extinguishment of debt and taxes
Interest expense
Interest income
Loss on extinguishment of debt
Income from continuing operations before taxes
Taxes (benefit) on income from continuing operations
Income from continuing operations
Income (loss) from discontinued operations
Taxes (benefit) on operating loss from discontinued operations
Income (loss) from discontinued operations
Net income
Earnings per share:
Basic:
Income from continuing operations
Income (loss) from discontinued operations
Net income
Diluted:
Income from continuing operations
Income (loss) from discontinued operations
Net income
Weighted average shares outstanding:
Basic
Diluted
Year Ended December 31,
2021
2020
2019
(Dollars and shares in thousands, except
per share)
$ 2,809,563 $ 2,537,156 $ 2,595,362
1,186,357
1,212,282
1,259,961
1,409,005
1,324,874
1,549,602
851,766
743,568
860,085
113,857
119,747
130,841
22,205
38,491
21,738
(6,077)
—
(91,157)
423,068
66,494
(1,158)
—
357,732
21,931
335,801
628,095
56,969
(1,328)
12,986
559,468
74,349
485,119
331
76
255
427,254
80,270
(1,741)
8,822
339,903
(122,078)
461,981
(828)
(313)
(515)
$ 485,374 $ 335,324 $ 461,466
(621)
(144)
(477)
$
$
$
$
10.37 $
0.01
10.38 $
10.23 $
—
10.23 $
7.22 $
(0.01)
7.21 $
7.10 $
(0.01)
7.09 $
10.00
(0.01)
9.99
9.81
(0.01)
9.80
46,774
47,427
46,488
47,287
46,200
47,090
The accompanying notes are an integral part of the consolidated financial statements.
F-6
TELEFLEX INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income
Other comprehensive income, net of tax:
Foreign currency:
Foreign currency translation adjustments, net of tax of
$(5,563), $6,442 and $(6,270), respectively
Foreign currency translation, net of tax
Pension and other postretirement benefits plans:
Prior service cost recognized in net periodic cost, net of tax of
$232, $(7) and $(20), respectively
Unamortized (loss) gain arising during the period, net of tax of
$(1,671), $6,101 and $3,817, respectively
Plan amendments, curtailments, and settlements, net of tax of
$—, $(1,067) and $—, respectively
Net loss recognized in net periodic cost, net of tax of $(1,988),
$(1,694) and $(1,611), respectively
Foreign currency translation, net of tax of $(238), $243 and
$15, respectively
Pension and other postretirement benefits plans adjustment, net of
tax
Derivatives qualifying as hedges:
Unrealized (loss) gain on derivatives arising during the period,
net of tax $(27), $234 and $(85), respectively
Reclassification adjustment on derivatives included in net
income, net of tax of $62, $(240) and $150, respectively
Derivatives qualifying as hedges, net of tax
Other comprehensive (loss) income, net of tax
Comprehensive income
Year Ended December 31,
2021
2020
2019
(Dollars in thousands)
$ 485,374 $ 335,324 $ 461,466
(63,191)
(63,191)
59,758
59,758
4,195
4,195
(780)
26
62
5,582
(19,966)
(12,767)
—
3,544
—
6,555
5,559
5,319
610
(610)
(44)
11,967
(11,447)
(7,430)
351
(3,331)
1,062
1,212
1,563
2,114
(1,217)
(49,661)
47,094
(1,134)
(72)
(3,307)
$ 435,713 $ 382,418 $ 458,159
The accompanying notes are an integral part of the consolidated financial statements.
F-7
TELEFLEX INCORPORATED
CONSOLIDATED BALANCE SHEETS
December 31,
2021
2020
(Dollars and shares in
thousands, except per share)
ASSETS
Current assets
Cash and cash equivalents
Accounts receivable, net
Inventories
Prepaid expenses and other current assets
Prepaid taxes
Total current assets
Property, plant and equipment, net
Operating lease assets
Goodwill
Intangibles assets, net
Deferred tax assets
Other assets
Total assets
LIABILITIES AND EQUITY
Current liabilities
Current borrowings
Accounts payable
Accrued expenses
Payroll and benefit-related liabilities
Accrued interest
Income taxes payable
Other current liabilities
Total current liabilities
Long-term borrowings
Deferred tax liabilities
Pension and postretirement benefit liabilities
Noncurrent liability for uncertain tax positions
Noncurrent operating lease liabilities
Other liabilities
Total liabilities
Commitments and contingencies
Shareholders’ equity
Common shares, $1 par value Issued: 2021 — 47,929 shares; 2020 — 47,812
shares
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Less: Treasury stock, at cost
Total shareholders' equity
$
445,084 $
383,569
477,643
117,277
5,545
1,429,118
443,758
129,653
2,504,202
2,289,067
6,820
69,104
375,880
395,071
513,196
115,436
22,842
1,422,425
473,912
100,635
2,585,966
2,519,746
8,073
41,802
$ 6,871,722 $ 7,152,559
$
110,000 $
118,236
163,441
143,657
5,209
83,943
55,633
680,119
1,740,102
370,124
45,185
8,646
116,033
156,765
3,116,974
100,500
102,520
136,276
122,366
7,135
17,361
53,869
540,027
2,377,888
484,678
74,499
10,127
86,097
242,786
3,816,102
47,929
693,090
3,517,954
(346,959)
3,912,014
157,266
3,754,748
47,812
652,305
3,096,228
(297,298)
3,499,047
162,590
3,336,457
Total liabilities and shareholders' equity
$ 6,871,722 $ 7,152,559
The accompanying notes are an integral part of the consolidated financial statements.
F-8
TELEFLEX INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
2021
2020
2019
(Dollars in thousands)
$ 485,374 $ 335,324 $ 461,466
515
64,088
149,974
4,307
8,822
—
53,915
6,966
26,940
(6,077)
(168,594)
(26,092)
(18,866)
(5,800)
(59,793)
(53,170)
(31,023)
36,021
(6,531)
437,068
(102,695)
(3,462)
14,345
18,331
—
—
(73,481)
275,000
(528,500)
(11,635)
21,206
(112,079)
(62,828)
—
(418,836)
Cash flows from operating activities of continuing operations:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
(Income) loss from discontinued operations
Depreciation expense
Intangible asset amortization expense
Deferred financing costs and debt discount amortization expense
Loss on extinguishment of debt
Fair value step up of acquired inventory sold
Changes in contingent consideration
Impairment of long-lived assets
Stock-based compensation
Net gain on sales of business and assets
Deferred income taxes, net
Payments for contingent consideration
Interest benefit on swaps designated as net investment hedges
Other
Changes in operating assets and liabilities, net of effects of acquisitions and disposals:
Accounts receivable
Inventories
Prepaid expenses and other current assets
Accounts payable, accrued expenses and other liabilities
Income taxes receivable and payable, net
Cash flows from investing activities of continuing operations:
Net cash provided by operating activities from continuing operations
Expenditures for property, plant and equipment
Payments for businesses and intangibles acquired, net of cash acquired
Proceeds from sales of business and assets
Net interest proceeds on swaps designated as net investment hedges
Proceeds from sales of investments
Purchase of investments
Cash flows from financing activities of continuing operations:
Net cash provided by (used in) investing activities from continuing operations
(255)
71,758
165,604
4,493
12,986
3,993
8,475
6,739
22,937
(91,157)
(110,239)
(230)
(19,296)
(36,388)
(600)
(11,138)
(28,410)
94,020
73,473
652,139
(71,618)
(4,590)
224,909
19,154
7,300
(18,418)
156,737
477
68,567
158,685
4,430
—
1,707
(38,164)
21,388
20,739
—
(32,675)
(79,801)
(19,178)
(26,636)
44,748
(5,497)
(4,323)
646
(13,294)
437,143
(90,694)
(767,830)
1,400
19,341
—
—
(837,783)
Proceeds from new borrowings
Reduction in borrowings
Debt extinguishment, issuance and amendment fees
Net proceeds from share based compensation plans and the related tax impacts
Payments for contingent consideration
Dividends paid
Proceeds from sale of treasury stock
Net cash (used in) provided by financing activities from continuing operations
400,000
(1,034,500)
(9,774)
12,451
(31,448)
(63,648)
11,097
(715,822)
1,513,807
(938,807)
(8,440)
18,994
(67,170)
(63,221)
—
455,163
Cash flows from discontinued operations:
Net cash (used in) provided by operating activities
Net cash (used in) provided by discontinued operations
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
(720)
(720)
(23,130)
69,204
375,880
2,457
2,457
(3,286)
(56,078)
357,161
$ 445,084 $ 375,880 $ 301,083
(737)
(737)
21,011
74,797
301,083
The accompanying notes are an integral part of the consolidated financial statements.
F-9
TELEFLEX INCORPORATED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Common Stock
Shares
Dollars
Additional
Paid in
Capital
Retained
Earnings
Accumulated
Other Comprehensive
Income (loss)
Treasury Stock
Shares
Dollars
Total
Shareholders'
Equity
(Dollars and shares in thousands, except per share amounts)
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
Net income
Cash dividends ($1.36 per share)
Other comprehensive loss
Shares issued under compensation
plans
Deferred compensation
(1,321)
461,466
(62,828)
(3,307)
(46)
(4)
2,572
253
(1,321)
461,466
(62,828)
(3,307)
44,952
380
288
288
42,092
127
Balance at December 31, 2019
47,536
47,536
616,980
2,824,916
(344,392)
1,182
(165,720)
2,979,320
Cumulative effect adjustment
resulting from the adoption of new
accounting standards
Net income
Cash dividends ($1.36 per share)
Other comprehensive income
Shares issued under compensation
plans
276
276
35,223
Deferred compensation
102
(791)
335,324
(63,221)
47,094
(44)
(6)
2,233
897
(791)
335,324
(63,221)
47,094
37,732
999
Balance at December 31, 2020
47,812
47,812
652,305
3,096,228
(297,298)
1,132
(162,590)
3,336,457
Net income
Cash dividends ($1.36 per share)
Other comprehensive loss
Shares issued under compensation
plans
Treasury stock reissued
Deferred compensation
117
—
117
—
33,989
6,349
447
485,374
(63,648)
(49,661)
485,374
(63,648)
(49,661)
34,453
11,097
676
(31)
(28)
(4)
347
4,748
229
Balance at December 31, 2021
47,929 $ 47,929 $ 693,090 $ 3,517,954 $
(346,959)
1,069 $ (157,266) $ 3,754,748
The accompanying notes are an integral part of the consolidated financial statements.
F-10
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(all tabular amounts in thousands unless otherwise noted)
Note 1 — Summary of significant accounting policies
Consolidation: The consolidated financial statements include the accounts of Teleflex Incorporated and its
subsidiaries (referred to herein as “we,” “us,” “our” and “Teleflex"). Intercompany transactions are eliminated in
consolidation. These consolidated financial statements have been prepared in conformity with accounting principles
generally accepted in the United States of America ("GAAP") and reflect management’s estimates and assumptions
that affect the recorded amounts.
Use of estimates: The preparation of 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 and the reported amounts of net revenues
and expenses during the reporting period. Our estimates have considered the potential impacts stemming from the
COVID-19 pandemic, which include increased uncertainty due to the difficulty in predicting the extent and duration
of the pandemic. Accordingly, actual results could differ from those estimates.
Cash and cash equivalents: All highly liquid debt instruments with an original maturity of three months or less
are classified as cash equivalents. The carrying value of cash equivalents approximates the current market value.
Accounts receivable: Accounts receivable represent amounts due from customers related to the sale of
products and provision of services. Our allowance for credit losses is maintained for trade accounts receivable
based on the expected collectability of accounts receivable and losses expected to be incurred over the life of our
receivables. Considerations to determine credit losses include our historical collection experience, the length of time
an account is outstanding, the financial position of the customer, information provided by credit rating services, as
well as the consideration of events or circumstances indicating historic collection rates may not be indicative of
future collectability. The allowance for credit losses as of December 31, 2021 and December 31, 2020 was
$10.8 million and $12.9 million, respectively. The current portion of the allowance for credit losses, which was
$6.0 million and $8.1 million as of December 31, 2021 and December 31, 2020, respectively, was recognized as a
reduction of accounts receivable, net.
Inventories: Inventories are valued at the lower of cost or net realizable value. The cost of our inventories is
determined using the average cost method. Elements of cost in inventory include raw materials, direct labor, and
manufacturing overhead. In estimating net realizable value, we evaluate inventory for excess and obsolete
quantities based on estimated usage and sales, among other factors.
Property, plant and equipment: Property, plant and equipment are stated at cost, net of accumulated
depreciation. Costs incurred to develop internal-use computer software during the application development stage
generally are capitalized. Costs of enhancements to internal-use computer software are capitalized, provided that
these enhancements result in additional functionality. Other additions and those improvements which increase the
capacity or lengthen the useful lives of the assets are also capitalized. Composite useful lives for categories of
property, plant and equipment, which are depreciated on a straight-line basis, are as follows: buildings — 30 years;
machinery and equipment — 3 to 15 years; computer equipment and software — 3 to 10 years. Leasehold
improvements are depreciated over the lesser of the useful lives of the leasehold improvements or the remaining
lease term. Repairs and maintenance costs are expensed as incurred.
Goodwill and other intangible assets: Goodwill and other indefinite-lived intangible assets are not amortized but
are tested for impairment annually during the fourth quarter or more frequently if events or changes in
circumstances indicate that an impairment may exist. Impairment losses, if any, are included in income from
operations. The goodwill impairment test is applied to each of our reporting units. For purposes of this assessment,
a reporting unit is an operating segment, or a business one level below an operating segment (also known as a
component) if discrete financial information is prepared for that business and regularly reviewed by segment
management. However, separate components are aggregated as a single reporting unit if they have similar
economic characteristics.
In performing the goodwill impairment test, we may assess qualitative factors to determine whether it is more
likely than not that the fair value of a reporting unit is less than its carrying value. Qualitative factors may include, but
are not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the
market for our products and services, regulatory and political developments, and entity specific factors such as
F-11
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
strategies and financial performance. If, after completing the qualitative assessment, we determine it is more likely
than not that the fair value of a reporting unit is less than its carrying value, we proceed to a quantitative impairment
test, described below. Alternatively, we may elect to bypass the qualitative assessment and perform the quantitative
impairment test. Under a quantitative impairment test, we compare the fair value of a reporting unit to its carrying
value. If the reporting unit fair value exceeds the carrying value, there is no impairment. If the reporting unit carrying
value exceeds the fair value, we recognize an impairment loss based on the amount the carrying value of the
reporting unit exceeds its fair value. We did not record a goodwill impairment charge for the year ended
December 31, 2021.
Our intangible assets consist of customer relationships, intellectual property, distribution rights, in-process
research and development ("IPR&D"), trade names and non-competition agreements. We define IPR&D as the
value of technology acquired for which the related projects have substance and are incomplete. IPR&D acquired in
a business acquisition is recognized at fair value and is required be capitalized as an indefinite-lived intangible asset
until completion of the IPR&D project or upon abandonment. Upon completion of the development project (generally
when regulatory approval to market the product that utilizes the technology is obtained), an impairment assessment
is performed prior to amortizing the asset over its estimated useful life. If the IPR&D projects are abandoned, the
related IPR&D assets would be written off.
We test our indefinite-lived intangible assets for impairment annually, or more frequently if events or changes in
circumstances indicate that an impairment may have occurred. Similar to the goodwill impairment test process, we
may elect to perform a qualitative assessment. If, after completing the qualitative assessment, we determine it is
more likely than not that the fair value of the indefinite-lived intangible asset is greater than its carrying amount, the
asset is not impaired. If we conclude it is more likely than not that the fair value of the indefinite-lived intangible
asset is less than the carrying value, we then proceed to a quantitative impairment test, which consists of a
comparison of the fair value of the intangible asset to its carrying amount.
Intangible assets that do not have indefinite lives, consisting of intellectual property, customer relationships,
distribution rights, certain trade names and non-competition agreements, are amortized over their estimated useful
lives, which are as follows: intellectual property, 5 to 20 years; customer relationships, 8 to 27 years; distribution
rights, 10 years; trade names, 5 to 30 years; non-competition agreements, 5 to 6 years. The weighted average
remaining amortization period with respect to our intangible assets is approximately 15 years. We periodically
evaluate the reasonableness of the useful lives of these assets.
Long-lived assets: We assess the remaining useful life and recoverability of long-lived assets whenever events
or changes in circumstances indicate the carrying value of an asset may not be recoverable. The assessment is
based on various analyses, including undiscounted cash flow and profitability projections that incorporate, as
applicable, the impact of the asset on the existing business. Therefore, the evaluation involves significant
management judgment. Any impairment loss, if indicated, is measured as the amount by which the carrying amount
of the asset exceeds the estimated fair value of the asset.
Foreign currency translation: Assets and liabilities of subsidiaries with non-United States dollar denominated
functional currencies are translated into United States dollars at the rates of exchange at the balance sheet date;
income and expenses are translated at the average rates of exchange prevailing during the year. The translation
adjustments are reported as a component of accumulated other comprehensive loss.
Derivative financial instruments: We use derivative financial instruments primarily for purposes of hedging
exposures to fluctuations in foreign currency exchange rates. All instruments are entered into for other than trading
purposes. All derivatives are recognized on the balance sheet at fair value. Changes in the fair value of derivatives
are recorded in the consolidated statement of comprehensive income as other comprehensive income (loss), if the
instrument is designated as part of a hedge transaction. Gains or losses on derivative instruments reported in other
comprehensive income (loss) are reclassified to the consolidated statement of income in the period in which
earnings are affected by the underlying hedged item. Gains or losses on derivative instruments representing hedge
ineffectiveness or hedge components excluded from the assessment of effectiveness, if any, are recognized in the
consolidated statement of income for the period in which such gains and losses occur. If the hedging relationship
ceases to be highly effective or it becomes probable that an expected transaction will no longer occur, gains or
losses on the derivative instrument are recorded in the consolidated statement of income for the period in which
either such event occurs. For non-designated derivatives, gains and losses are reported as selling, general and
administrative expenses in the consolidated statement of income. Cash flows from derivatives are recognized in the
consolidated statements of cash flows in a manner consistent with recognition of the underlying transactions.
F-12
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Share-based compensation: We estimate the fair value of share-based awards on the date of grant using an
option pricing model. The value of the portion of the award that is ultimately expected to vest, which is derived, in
part, following consideration of estimated forfeitures, is recognized as expense over the requisite service periods.
Share-based compensation expense related to stock options is measured using a Black-Scholes option pricing
model that takes into account subjective and complex assumptions with respect to the expected life of the options,
volatility, risk-free interest rate and expected dividend yield. The expected life of options granted is derived from the
vesting period of the award, as well as historical exercise behavior, and represents the period of time that options
granted are expected to be outstanding. Expected volatility is based on a blend of historical volatility and implied
volatility derived from publicly traded options to purchase our common stock, which we believe is more reflective of
market conditions and a better indicator of expected volatility than would be the case if we only used historical
volatility. The risk-free interest rate is the implied yield currently available on United States (or "U.S.") Treasury zero-
coupon issues with a remaining term equal to the expected life of the option. Forfeitures are estimated at the time of
grant based on management’s expectations regarding the extent to which awards ultimately will vest and are
adjusted for actual forfeitures when they occur.
Income taxes: The provision for income taxes is determined using the asset and liability approach of accounting
for income taxes. Under this approach, deferred tax assets and liabilities are recognized to reflect the future tax
consequences attributable to the differences between the financial statement carrying amounts of existing assets
and liabilities and their tax bases, and to reflect operating loss and tax credit carryforwards. The provision for
income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during
the year. Provision has been made for income taxes on unremitted earnings of subsidiaries and affiliates, except to
the extent that such earnings are deemed to be permanently reinvested.
Significant judgment is required in determining income tax provisions and in evaluating tax positions. We
establish additional provisions for income taxes when, despite the belief that tax positions are supportable, there
remain certain positions that do not meet the minimum probability threshold, which is a tax position that is more
likely than not to be sustained upon examination by the applicable taxing authority. In the normal course of
business, we are examined by various federal, state and non-U.S. tax authorities. We regularly assess the potential
outcomes of these examinations and any future examinations for the current or prior years in determining the
adequacy of our provision for income taxes. Interest accrued with respect to unrecognized tax benefits and income
tax related penalties are both included in taxes on income from continuing operations. We periodically assess the
likelihood and amount of potential adjustments and adjust the income tax provision, the current tax liability and
deferred taxes in the period in which the facts that give rise to an adjustment become known.
Pensions and other postretirement benefits: We provide a range of benefits to eligible employees and retired
employees, including benefits available pursuant to pension and postretirement healthcare benefits plans. We
record annual amounts relating to these plans based on calculations which include various actuarial assumptions
such as discount rates, expected rates of return on plan assets, compensation increases, turnover rates and
healthcare cost trend rates. We review our actuarial assumptions on an annual basis and make modifications to the
assumptions based on current rates and trends when appropriate. The effect of the modifications is generally
amortized over future periods.
Restructuring costs: We primarily recognize employee termination benefits when payment becomes probable
and reasonably estimable because they are provided under an ongoing benefit arrangement and are based on
existing plans, historical experience and negotiated settlements of prior plans. Termination benefits provided under
one-time termination benefits arrangements, if any, are recognized upon communication to the employee. We
recognize charges ratably over the future service period if the employee is required to render service until
termination. Other restructuring costs may include facility closure, employee relocation, equipment relocation and
outplacement costs and are recognized in the period they are incurred.
Contingent consideration related to business acquisitions: In connection with business acquisitions, we may be
required to pay future consideration that is contingent upon the achievement of specified objectives such as receipt
of regulatory approval, commercialization of a product or achievement of sales targets. As of the acquisition date,
we record a contingent liability representing the estimated fair value of the contingent consideration that we expect
to pay. We remeasure the fair value of our contingent consideration arrangements each reporting period and,
based on new developments, record changes in fair value until either the contingent consideration obligation is
satisfied through payment upon the achievement of, or the obligation no longer exists due to the failure to achieve,
the specified objectives. The change in the fair value is recorded in selling, general and administrative expenses in
the consolidated statement of income. A contingent consideration payment is classified as a financing activity in the
consolidated statement of cash flows to the extent it was recorded as a liability as of the acquisition date. Any
F-13
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
additional amount paid in excess of the amount initially accrued is classified as an operating activity in the
consolidated statement of cash flows.
Revenue recognition: 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 the 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 represented 89%, 9% and 2% of our consolidated net revenues, respectively, for the year ended
December 31, 2021. 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.
We have made the following revenue accounting policy elections and elected to use certain practical
expedients: (1) we account for amounts collected from customers for sales and other taxes, net of related amounts
remitted to tax authorities; (2) we do not adjust the promised amount of consideration for the effects of a significant
financing component because, at contract inception, we expect the period between the time when we transfer a
promised good or service to the customer and the time when the customer pays for that good or service will be one
year or less; (3) we expense costs to obtain a contract as they are incurred if the expected period of benefit, and
therefore the amortization period, is one year or less; (4) we account for shipping and handling activities that occur
after control transfers to the customer as a fulfillment cost rather than an additional promised service; (5) we classify
shipping and handling costs within cost of goods sold; and (6) with respect to the OEM segment, we have applied
the practical expedient to exclude disclosure of remaining performance obligations as the contracts typically have a
term of one year or less.
The amount of consideration we receive and revenue we recognize varies as a result of changes in customer
sales incentives, including discounts and rebates, and returns offered to customers. The estimate of revenue is
adjusted upon the earlier of the following events: (i) the most likely amount of consideration expected to be received
changes or (ii) the consideration becomes fixed. Our policy is to accept returns only in cases in which the product is
defective and covered under our standard warranty provisions. When we give customers the right to return
products, we estimate the expected returns based on an analysis of historical experience. The liability for returns
and allowances was $15.2 million and $14.6 million as of December 31, 2021 and 2020, respectively. In estimating
customer rebates, we consider the lag time between the point of sale and the payment of the customer’s rebate
claim, customer-specific trend analyses, contractual commitments, including stated rebate rates, historical
experience with respect to specific customers (as we have a history of providing similar rebates on similar products
to similar customers) and other relevant information. The reserve for customer incentive programs, including
customer rebates, was $26.4 million and $28.5 million at December 31, 2021 and 2020, respectively. We expect
the amounts subject to the reserve as of December 31, 2021 to be paid within 90 days subsequent to period-end.
Leases: On January 1, 2019 we adopted an amendment to the guidance on leases using a modified
retrospective transition approach. We have made an accounting policy election not to apply the lease accounting
recognition provisions 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, we will recognize
the lease payments for short term leases on a straight-line basis over the lease term. We have 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.
Note 2 — Recently issued accounting standards
In December 2019, the FASB issued new guidance that simplifies various aspects of accounting for income
taxes including those related to the step-up in the tax basis of goodwill, intraperiod tax allocations and the interim
period effects of changes in tax laws or rates. The modifications under the new guidance were applied on a
prospective basis effective January 1, 2021. The adoption of the new guidance did not have a material effect on the
condensed consolidated financial statements.
F-14
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
From time to time, new accounting guidance issued by the FASB or other standard setting bodies is adopted as
of the specified effective date or, when permitted by the guidance and as determined by us, as of an earlier date.
We have assessed recently issued guidance that is not yet effective, except as noted above, and believe the new
guidance that we have assessed will not have a material impact on our results of operations, cash flows or financial
position.
Note 3 - Net revenues
The following table disaggregates revenue by global product category for the year ended December 31, 2021,
2020 and 2019.
Vascular access
Anesthesia
Interventional
Surgical
Interventional urology
OEM
Other (1)
Net revenues (2)
Year Ended December 31
2021
2020
2019
$
700,240 $
657,703 $
380,140
427,500
377,756
341,661
245,681
336,585
302,293
382,435
317,200
290,022
220,246
367,257
600,874
338,413
427,563
370,074
290,449
220,717
347,272
$
2,809,563 $
2,537,156 $
2,595,362
(1) Includes revenues generated from sales of our respiratory and urology products (other than interventional urology products). Certain
product lines within the respiratory product category were sold during 2021. See Note 4 for additional information related to the
Respiratory business divestiture.
(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 include net revenues from each of the non-OEM product categories listed
above.
Note 4 — Acquisitions and Divestitures
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. We attributed $33.8 million of
the proceeds to our performance obligations pursuant to the MSTA. The resulting liability was measured as the
excess of the estimated fair value of the services to be performed over the estimated proceeds we expect to receive
over the MSTA term. The significant assumption used to estimate the fair value of the services to be performed is
the selection of an appropriate gross margin based on comparable companies. The MSTA liability was recorded
within Other current liabilities and Other liabilities in the condensed consolidated balance sheet and the related
proceeds will be recognized in net revenues as the services are performed.
The second phase of the Respiratory business divestiture will occur once we transfer certain additional
manufacturing assets to Medline. Our receipt of $15.0 million in additional cash proceeds is contingent upon the
transfer of these manufacturing assets and is expected to occur prior to the end of 2023. We plan to recognize the
contingent consideration, and any gain on sale resulting from the completion of the second phase of the divestiture,
when it becomes realizable.
F-15
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following assets and liabilities were sold as part of the initial phase of the Respiratory business divestiture:
Assets
Inventories
Current assets
Property, plant and equipment, net
Intangible assets, net
Goodwill
Operating lease assets
Other assets
Noncurrent assets
Total assets
Liabilities
Other current liabilities
Noncurrent operating lease liabilities
Liabilities
$
$
$
$
26,830
26,830
17,006
41,583
35,745
1,053
94
95,481
122,311
535
568
1,103
As disclosed in Note 8, $35.7 million of goodwill of our Americas, EMEA and Asia reportable operating
segments’ goodwill was attributed to the divested respiratory business based on the fair value of the divested
respiratory business relative to the fair value of certain of our reporting units. The fair values were estimated using a
combination of the discounted cash flows based on projected future earnings (Income Approach) and market
multiples of publicly traded companies in similar lines of business (Market Approach). The more significant
judgments and assumptions in determining fair value using the Income Approach include the amount and timing of
expected future cash flows and the discount rate that was used to estimate the present value of the future cash
flows. The more significant judgments and assumptions in determining fair value using the Market Approach include
the determination of appropriate revenue and EBITDA multiples based on the selection of appropriate comparable
companies.
Net revenues attributable to our divested respiratory business recognized prior to the Respiratory business
divestiture are included within each of our geographic segments and were $60.7 million during the year ended
December 31, 2021 and $138.5 million for the year ended December 31, 2020. For the year ended December 31,
2021, we recognized $51.1 million in net revenues attributed to services provided to Medline in accordance with the
MSTA, which are presented within our Americas reporting segment and our Other global product category.
Acquisitions
On February 18, 2020, we acquired IWG High Performance Conductors, Inc. (HPC), a privately-held original
equipment manufacturer of minimally invasive medical products and high performance conductors, for an initial
purchase price of $260.0 million. The purchase price was allocated based on the fair values of the assets and
liabilities, including goodwill of $107.1 million, intangible assets of $179.0 million and deferred tax liabilities of
$43.4 million. The acquisition complements our OEM product portfolio. For the years ended December 31, 2021
and 2020, we recorded post acquisition revenue of $38.6 million and $27.1 million, respectively, related to HPC
within our OEM operating segment.
On December 28, 2020, we acquired Z-Medica, LLC ("Z-Medica"), a privately held medical device company that
manufactures and sells hemostatic (hemorrhage control) products to complement our anesthesia product portfolio.
The acquisition included an initial cash purchase price of $500.0 million, with the potential to make an additional
payment up to $25 million upon the achievement of certain commercial milestones. The purchase price was
allocated based on the fair values of the assets and liabilities, including goodwill of $186.0 million, intangibles assets
of $332.0 million and deferred tax liabilities of $32.2 million. For the year ended December 31, 2021, we recorded
post acquisition revenue and operating profit of $66.4 million and $21.8 million, respectively, related to Z-Medica
across our geographic segments.
F-16
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 5 — Restructuring and impairment charges
Respiratory divestiture plan
During the second quarter of 2021, in connection with the Respiratory business divestiture described in Note 4,
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:
Program expense estimates:
Restructuring charges (1)
Restructuring related charges (2)
Total restructuring and restructuring related charges
Total estimated amount expected to be incurred
(Dollars in millions)
$5 million to $8 million
$19 million to $22 million
$24 million to $30 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, the majority of which will be made in 2022 and 2023. Additionally, we expect to incur $22 million to
$28 million in aggregate capital expenditures under the plan, which are expected to be incurred mostly in 2022 and
2023.
For the year ended December 31, 2021, we incurred $3.3 million in pre-tax restructuring related charges, all of
which were recognized in cost of goods sold.
2021 Restructuring plan
During the first quarter of 2021, we committed to a restructuring plan designed to streamline various business
functions across our segments. The plan was substantially completed by the end of 2021 and we expect future
restructuring expenses associated with the program, if any, to be nominal.
Footprint realignment plans
We have ongoing restructuring programs related to the relocation of manufacturing operations to existing lower-
cost locations and related workforce reductions (referred to as our 2019, 2018 and 2014 Footprint realignment
plans). The following tables provide a summary of our cost estimates and other information associated with these
ongoing Footprint realignment plans:
F-17
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Program expense estimates:
Termination benefits
Other costs (1)
Restructuring charges
Restructuring related charges (2)
Total restructuring and restructuring
related charges
Other program estimates:
Expected cash outlays
Expected capital expenditures
Other program information:
Period initiated
2019 Footprint
realignment plan
2018 Footprint
realignment plan
2014 Footprint
realignment plan
$14 to $15
2 to 2
16 to 17
38 to 43
(Dollars in millions)
$60 to $65
3 to 4
63 to 69
47 to 59
$13 to $13
1 to 2
14 to 15
39 to 40
$54 to $60
$110 to $128
$53 to $55
$48 to $54
$31 to $33
$99 to $122
$15 to $16
$43 to $46
$26 to $27
February 2019
May 2018
April 2014
Estimated period of substantial completion
Aggregate restructuring charges
Restructuring related charges incurred:
For year ended December 31, 2021
Aggregate restructuring related charges
2022
$15.6
$13.0
$34.1
2022
$62.5
$10.7
$27.4
2022
$13.8
$2.6
$38.6
Includes facility closure, employee relocation, equipment relocation and outplacement costs.
(1)
(2) Restructuring related charges represent costs that are directly related to the programs and principally constitute costs to transfer
manufacturing operations to the existing lower-cost locations, project management costs and accelerated depreciation. The 2018
Footprint realignment plan also includes a charge associated with our exit from the facilities that is expected to be imposed by the
taxing authority in the affected jurisdiction. Excluding this tax charge, substantially all of these charges are expected to be recognized
within cost of goods sold.
The following table summarizes the restructuring reserve activity related to our Respiratory divestiture plan, as
well as the 2019, 2018 and 2014 Footprint realignment plans:
Respiratory
divestiture plan
2019 Footprint
realignment plan
2018 Footprint
realignment plan
2014 Footprint
realignment plan
Balance at December 31, 2019 (1)
$
— $
11,870 $
44,274 $
3,669
Subsequent accruals
Cash payments
Foreign currency translation and other
Balance at December 31, 2020 (1)
Subsequent accruals
Cash payments
Foreign currency translation and other
—
—
—
—
2,694
(7)
(86)
1,542
(5,532)
174
8,054
253
(4,982)
(19)
5,948
(4,281)
4,140
50,081
2,476
(4,813)
(3,679)
606
(682)
—
3,593
262
(947)
—
Balance at December 31, 2021 (1)
$
2,601 $
3,306 $
44,065 $
2,908
(1) The restructuring reserves as of December 31, 2021 , 2020 and 2019 consisted mainly of accruals related to termination benefits.
Other costs (facility closure, employee relocation, equipment relocation and outplacement costs) were expensed and paid in the same
period.
F-18
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The restructuring and impairment charges recognized for the years ended December 31, 2021, 2020, and 2019
consisted of the following:
Respiratory divestiture plan
2021 Restructuring plan
2019 Footprint realignment plan
2018 Footprint realignment plan
Other restructuring programs (2)
Total restructuring charges
Asset impairment charges
Termination benefits
Other Costs (1)
Total
2021
$
2,687 $
7,280
(111)
2,335
(429)
11,762
—
7 $
77
364
141
2,648
3,237
6,739
Total restructuring and impairment charges
$
11,762 $
9,976 $
2020 Workforce reduction plan
2019 Footprint realignment plan
2018 Footprint realignment plan
Other restructuring programs (3)
Total restructuring charges
Asset impairment charges
Termination benefits
Other Costs (1)
Total
2020
$
8,494 $
647
5,565
(72)
14,634
—
353 $
895
383
838
2,469
21,388
Total restructuring and impairment charges
$
14,634 $
23,857 $
Termination benefits
Other Costs (1)
Total
2019
2019 Footprint realignment plan
$
2018 Footprint realignment plan
Other restructuring programs (4)
Total restructuring charges
Asset impairment charges
13,683 $
(1,787)
787
12,683
—
70 $
848
1,638
2,556
6,966
Total restructuring and impairment charges $
12,683 $
9,522 $
2,694
7,357
253
2,476
2,219
14,999
6,739
21,738
8,847
1,542
5,948
766
17,103
21,388
38,491
13,753
(939)
2,425
15,239
6,966
22,205
(1)
(2)
(3)
(4)
Includes facility closure, contract termination and other exit costs.
Includes the 2020 Workforce reduction plan, a program initiated in the third quarter of 2019 and the 2014 Footprint realignment plan.
Includes activity primarily related to the 2016 and 2014 Footprint realignment plans.
Includes the 2020 Workforce reduction plan, the 2017 Vascular Solutions integration program as well as the 2016 and 2014 Footprint
realignment plans.
Impairment Charges
For the year ended December 31, 2021, we recorded impairment charges of $6.7 million related to our decision
to abandon intellectual property and other assets primarily associated with our respiratory product portfolio that
were not transferred to Medline as part of the Respiratory business divestiture described in Note 4. For the years
ended December 31, 2020 and 2019, we recorded impairment charges of $21.4 million and $7.0 million,
respectively, related to our decision to abandon certain intellectual property and other assets associated with our
surgical and interventional product portfolio.
F-19
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 6 — Inventories
Inventories at December 31, 2021 and 2020 consist of the following:
Raw materials
Work-in-process
Finished goods
Inventories
2021
2020
$
146,433 $
132,370
81,503
249,707
75,874
304,952
$
477,643 $
513,196
Note 7 — Property, plant and equipment
The major classes of property, plant and equipment, at cost, at December 31, 2021 and 2020 were as follows:
Land, buildings and leasehold improvements
Machinery and equipment
Computer equipment and software
Construction in progress
Less: Accumulated depreciation
Property, plant and equipment, net
Note 8 — Goodwill and other intangible assets
2021
2020
$
285,305 $
272,637
475,040
191,605
49,782
1,001,732
496,664
172,913
84,336
1,026,550
(557,974)
(552,638)
$
443,758 $
473,912
Changes in the carrying amount of goodwill, by reportable operating segment, for the years ended
December 31, 2021 and 2020 were as follows:
Americas
EMEA
Asia
OEM
Total
Balance as of December 31, 2019
Goodwill
Accumulated impairment losses
Goodwill related to acquisitions
Translation and other adjustments
Balance as of December 31, 2020
Goodwill disposed
Goodwill related to acquisitions
Translation and other adjustments
Balance as of December 31, 2021
$
1,883,053 $ 475,772 $
213,725 $
(332,128)
1,550,925
149,877
(520)
1,700,282
(21,802)
(1,560)
(696)
—
475,772
22,364
38,092
536,228
(7,537)
(232)
(36,310)
$
1,676,224 $ 492,149 $
—
213,725
15,698
8,023
237,446
(6,406)
(163)
(7,058)
223,819 $
4,883 $ 2,577,433
(332,128)
2,245,305
295,066
45,595
2,585,966
(35,745)
(1,955)
(44,064)
112,010 $ 2,504,202
—
4,883
107,127
—
112,010
—
—
—
Intangible assets at December 31, 2021 and 2020 consisted of the following:
Customer relationships
$ 1,328,611 $ 1,377,943 $
(441,059) $
(425,692)
In-process research and development
28,158
29,627
—
—
Gross Carrying Amount
Accumulated Amortization
2021
2020
2021
2020
Intellectual property
Distribution rights
Trade names
Non-compete agreements
1,440,643
1,458,924
(560,740)
(479,612)
23,434
549,269
22,783
23,866
619,847
24,592
(20,630)
(59,249)
(20,280)
(65,955)
(22,153)
(23,514)
$ 3,392,898 $ 3,534,799 $ (1,103,831) $ (1,015,053)
As of December 31, 2021, trade names having a carrying value of $234.7 million are considered indefinite-lived.
Acquired IPR&D is indefinite-lived until the completion of the related development project, at which point
amortization of the carrying value of the technology will commence.
F-20
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Amortization expense related to intangible assets was $165.6 million, $158.7 million, and $150.0 million for the
years ended December 31, 2021, 2020 and 2019, respectively. The estimated annual amortization expense for
each of the five succeeding years is as follows:
2022
2023
2024
2025
2026
Note 9 — Leases
$
160,600
154,800
153,000
151,800
148,800
We have operating leases for various types of properties, consisting of manufacturing plants, engineering and
research centers, distribution warehouses, offices and other facilities, and equipment used in operations. Some
leases provide us with an option, exercisable at our sole discretion, to terminate the lease or extend the lease term
for one or more years. When measuring assets and liabilities arising from a lease that provides us with an option to
extend the lease term, we take into account payments to be made in the optional extension period when it is
reasonably certain that we will exercise the option. Total lease cost (all of which related to operating leases) was
$32.6 million, $30.7 million and $30.2 million for the years ended December 31, 2021, 2020 and 2019, respectively.
Maturities of lease liabilities
2022
2023
2024
2025
2026
2027 and thereafter
Total lease payments
Less: interest
Present value of lease liabilities
Supplemental information
December 31, 2021
26,682
22,790
19,279
14,789
15,307
61,950
160,797
(22,634)
138,163
$
$
Total lease liabilities (1)
Cash paid for amounts included in the measurement of lease liabilities within
operating cash flows
Right of use assets obtained in exchange for operating lease obligations
Weighted average remaining lease term
Weighted average discount rate
(1) The current portion of the operating lease liability is included in other current liabilities.
December 31, 2021 December 31, 2020
$
$
$
$
$
$
138,163
29,199
55,290
7.9 years
3.7 %
108,743
28,276
8,904
6.7 years
4.0 %
F-21
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 10 — Borrowings
Our borrowings at December 31, 2021 and 2020 were as follows:
Senior Credit Facility:
Revolving credit facility, at a rate of 1.48% at December 31, 2021, and 1.66% at
December 31, 2020, due 2024
Term loan facility, at a rate of 1.48% at December 31, 2021 and 1.65% at
December 31 2020, due 2024
4.875% Senior Notes due 2026
4.625% Senior Notes due 2027
4.25% Senior Notes due 2028
Securitization program, at a rate of 1.00% at December 31, 2021 and 1.24% at
December 31, 2020
Less: Unamortized debt issuance costs
Current portion of borrowings
Long-term borrowings
Redemption of 4.875% Senior Notes due 2026
2021
2020
$
141,000 $
350,000
647,500
—
500,000
500,000
673,000
400,000
500,000
500,000
75,000
75,000
1,863,500
2,498,000
(13,398)
(19,612)
1,850,102
2,478,388
(110,000)
(100,500)
$ 1,740,102 $ 2,377,888
On April 29, 2021, we issued a notice of redemption to holders of our outstanding $400 million aggregate
principal amount of 4.875% Senior Notes due 2026 (the “2026 Notes”). Pursuant to the notice of redemption, the
2026 Notes were redeemed on June 1, 2021 (the “Redemption Date”) at a redemption price equal to 102.438% of
the principal amount of the 2026 Notes plus accrued and unpaid interest up to, but not including, the Redemption
Date (the “Redemption Price”). We recognized a loss on extinguishment of debt of $13.0 million as a result of the
redemption of the 2026 Notes.
Senior credit facility
In 2019, we amended and restated our existing credit agreement by entering into a Second Amended and
Restated Credit Agreement (the "Credit Agreement"), which provides for a five-year revolving credit facility of
$1.0 billion and a term loan facility of $700.0 million (the "Credit Agreement"). Our obligations under the Credit
Agreement are guaranteed (subject to certain exceptions and limitations) by substantially all of our material
domestic subsidiaries. The obligations under the Credit Agreement are secured, subject to certain exceptions and
limitations, by a lien on substantially all of the assets owned by us and each guarantor. The maturity date of the
revolving credit facility and the term loan facility under the Credit Agreement is April 5, 2024.
At our option, loans under the Credit Agreement will bear interest at a rate equal to adjusted LIBOR plus an
applicable margin ranging from 1.25% to 2.00% or at an alternate base rate, which generally is defined as the
highest of (i) the “Prime Rate” in the U.S. last quoted by The Wall Street Journal, (ii) 0.5% above the greater of the
federal funds rate and the rate comprised of both overnight federal funds and overnight eurodollar borrowings and
(iii) 1% above adjusted LIBOR for a one month interest period, plus in each case an applicable margin ranging from
0.125% to 1.00%, in each case subject to adjustments based on our consolidated total net leverage ratio. Overdue
loans will bear interest at the rate otherwise applicable to such loans plus 2.00%.
The Credit Agreement contains customary representations and warranties and covenants that, in each case,
subject to certain exceptions, qualifications and thresholds, (a) place limitations on us regarding the incurrence of
additional indebtedness, additional liens, fundamental changes, dispositions of property, investments and
acquisitions, dividends and other restricted payments, transactions with affiliates, restrictive agreements, changes in
lines of business and swap agreements, and (b) require us to comply with sanction laws and other laws and
agreements, to deliver financial information and certain other information and give notice of certain events, to
maintain their existence and good standing, to pay their other obligations, to permit the administrative agent and the
lenders to inspect their books and property, to use the proceeds of the Credit Agreement only for certain permitted
purposes and to provide collateral in the future. Subject to certain exceptions, we are required to maintain a
maximum consolidated total net leverage ratio of 4.50 to 1.00. We are further required to maintain a minimum
consolidated interest coverage ratio of 3.50 to 1.00.
F-22
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
4.625% Senior notes due 2027
In 2017, we issued $500.0 million of 4.625% Senior Notes due 2027 (the "2027 Notes"). We pay interest on the
2027 Notes semi-annually on May 15 and November 15, commencing on May 15, 2018, at a rate of 4.625% per
year. The 2027 Notes mature on November 15, 2027 unless earlier redeemed by us at our option, as described
below, or purchased by us at the holder’s option under specified circumstances following a Change of Control or
Asset Sale (each as defined in the indenture related to the 2027 Notes), coupled with a downgrade in the ratings of
the 2027 Notes, or upon our election to exercise our optional redemption rights, as described below. We incurred
transaction fees of $7.9 million, including underwriters’ discounts and commissions, in connection with the offering
of the 2027 Notes, which were recorded on the consolidated balance sheet as a reduction to long-term borrowings
and are being amortized over the term of the 2027 Notes. We used the net proceeds from the offering to repay
borrowings under our revolving credit facility.
Our obligations under the 2027 Notes are fully and unconditionally guaranteed, jointly and severally, by each of
our existing and future 100% owned domestic subsidiaries that is a guarantor or other obligor under the Credit
Agreement and by certain of our other 100% owned domestic subsidiaries.
At any time on or after November 15, 2022, we may, on one or more occasions, redeem some or all of the 2027
Notes at a redemption price of 102.313% of the principal amount of the 2027 Notes subject to redemption,
declining, in annual increments of 0.771%, to 100% of the principal amount on November 15, 2025, plus accrued
and unpaid interest. In addition, at any time prior to November 15, 2022, we may, on one or more occasions,
redeem some or all of the 2027 Notes at a redemption price equal to 100% of the principal amount of the 2027
Notes redeemed, plus a “make-whole” premium and any accrued and unpaid interest. The “make-whole” premium
is the greater of (a) 1.0% of the principal amount of the 2027 Notes subject to redemption or (b) the excess, if any,
over the principal amount of the 2027 Notes of the present value, on the redemption date of the sum of (i) the
November 15, 2022 optional redemption price plus (ii) all required interest payments on the 2027 Notes through
November 15, 2022 (other than accrued and unpaid interest to the redemption date), generally computed using a
discount rate equal to the yield to maturity of U.S. Treasury securities with a constant maturity for the period most
nearly equal to the period from the redemption date to November 15, 2022 (unless the period is less than one year,
in which case the weekly average yield on traded U.S. Treasury securities adjusted to a constant maturity of one
year will be used), plus 50 basis points.
In addition, at any time prior to November 15, 2020, we may, on one or more occasions, redeem up to 40% of
the aggregate principal amount of the 2027 Notes, using the proceeds of specified types of Company equity
offerings and subject to specified conditions, at a redemption price equal to 104.625% of the principal amount of the
Notes redeemed, plus accrued and unpaid interest.
The indenture relating to the 2027 Notes contains covenants that, among other things and subject to certain
exceptions, limit or restrict our ability to create liens; merge, consolidate, sell or otherwise dispose of all or
substantially all of our assets; or enter into sale leaseback transactions.
4.25% Senior Notes due 2028
In 2020, we issued $500.0 million of 4.25% Senior Notes due 2028 (the "2028 Notes"). We pay interest on the
2028 Notes semi-annually on June 1 and December 1, commencing on December 1, 2020, at a rate of 4.25% per
year. The 2028 Notes mature on June 1, 2028 unless earlier redeemed at our option, as described below, or
purchased at the holder’s option under specified circumstances following a Change of Control or Event of Default
(each as defined in the indenture related to the 2028 Notes), coupled with a downgrade in the ratings of the 2028
Notes, or upon our election to exercise its optional redemption rights, as described below. We incurred transaction
fees of $8.5 million, including underwriters’ discounts and commissions, in connection with the offering of the 2028
Notes, which were recorded on the consolidated balance sheet as a reduction to long-term borrowings and are
being amortized over the term of the 2028 Notes. We used the net proceeds from the offering to repay borrowings
under our revolving credit facility.
Our obligations under the 2028 Notes are fully and unconditionally guaranteed, jointly and severally, by each of
our existing and future 100% owned domestic subsidiaries that is a guarantor or other obligor under the Credit
Agreement and by certain of our other 100% owned domestic subsidiaries.
At any time on or after June 1, 2023, we may, on one or more occasions, redeem some or all of the 2028 Notes
at a redemption price of 102.125% of the principal amount of the 2028 Notes subject to redemption, declining, in
annual increments of 1.0625%, to 100% of the principal amount on June 1, 2025, plus accrued and unpaid interest.
F-23
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
In addition, at any time prior to June 1, 2023, we may, on one or more occasions, redeem some or all of the 2028
Notes at a redemption price equal to 100% of the principal amount of the 2028 Notes redeemed, plus a “make-
whole” premium and any accrued and unpaid interest. The “make-whole” premium is the greater of (a) 1.0% of the
principal amount of the 2028 Notes subject to redemption or (b) the excess, if any, over the principal amount of the
2028 Notes, of the present value, on the redemption date, of the sum of (i) the June 1, 2023, optional redemption
price plus (ii) all required interest payments on the 2028 Notes through June 1, 2023, (other than accrued and
unpaid interest to the redemption date), generally computed using a discount rate equal to the yield to maturity of
U.S. Treasury securities with a constant maturity for the period most nearly equal to the period from the redemption
date to June 1, 2023 (unless the period is less than one year, in which case the weekly average yield on traded U.S.
Treasury securities adjusted to a constant maturity of one year will be used), plus 50 basis points.
In addition, at any time prior to June 1, 2023, we may, on one or more occasions, redeem up to 40% of the
aggregate principal amount of the 2028 Notes, using the proceeds of specified types of our equity offerings and
subject to specified conditions, at a redemption price equal to 104.25% of the principal amount of the Notes
redeemed, plus accrued and unpaid interest.
The indenture relating to the 2028 Notes contains covenants that, among other things, limit or restrict our ability,
and the ability of our subsidiaries, to create liens; merge, consolidate, sell or otherwise dispose of all or substantially
all of our assets; and enter into sale leaseback transactions.
Securitization program
We have an accounts receivable securitization facility under which accounts receivable of certain domestic
subsidiaries are sold on a non-recourse basis to a special purpose entity (“SPE”), which is a bankruptcy-remote,
consolidated subsidiary of Teleflex. Accordingly, the assets of the SPE are not available to satisfy the obligations of
Teleflex or any of its subsidiaries. The SPE sells undivided interests in those receivables to an asset backed
commercial paper conduit for consideration of up to the maximum available capacity. On March 30, 2020, we
amended our accounts receivable securitization facility to increase the maximum available capacity from $50 million
to $75 million. This facility is utilized from time to time to provide increased flexibility in funding short term working
capital requirements. The agreement governing the accounts receivable securitization facility contains certain
covenants and termination events. An occurrence of an event of default or a termination event under this facility
may give rise to the right of its counterparty to terminate this facility. As of December 31, 2021, we were in
compliance with the covenants, and none of the termination events had occurred. As of December 31, 2021 and
2020, we had $75.0 million (the maximum amount available) of outstanding borrowings under our accounts
receivable securitization facility.
Fair value of long-term debt
To determine the fair value of our debt for which quoted prices are not available, we use a discounted cash flow
technique that incorporates a market interest yield curve with adjustments for duration, optionality and risk profile.
Our implied credit rating is a factor in determining the market interest yield curve. The following table provides the
fair value of our debt as of December 31, 2021 and 2020, which is valued based on Level 2 inputs within the
hierarchy used to measure fair value (see Note 12 to the consolidated financial statements for further information):
Fair value of debt
Debt Maturities
December 31, 2021
December 31, 2020
$
1,893,518 $
2,586,058
As of December 31, 2021, the aggregate amounts of long-term debt, demand loans and debt under our
securitization program that will mature during each of the next four years and thereafter were as follows:
2022
2023
2024
2025
2026 and thereafter
$
110,000
43,750
709,750
—
1,000,000
F-24
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Supplemental cash flow information
Cash interest paid
$
73,598 $
79,533 $
95,954
Year Ended December 31,
2021
2020
2019
Note 11 — Financial instruments
Foreign currency forward contracts
We use derivative instruments for risk management purposes. Foreign currency forward contracts designated
as cash flows 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 the currency exposures, which generally approximate one month. For
the years ended December 31, 2021 and 2020, we recognized losses related to non-designated foreign currency
forward contracts of $8.9 million and $1.8 million, respectively.
The total notional amount for all open foreign currency forward contracts designated as cash flow hedges as of
December 31, 2021 and 2020 was $149.5 million and $129.5 million, respectively. The total notional amount for all
open non-designated foreign currency forward contracts as of December 31, 2021 and 2020 was $161.2 million and
$163.5 million, respectively. All open foreign currency forward contracts as of December 31, 2021 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
4.8750% for €219.2 million at an annual interest rate of 2.4595%. 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. Under the terms of
the cross-currency swap agreements, we have notionally exchanged $500 million at an annual interest rate of
4.625% for €433.9 million at an annual interest rate of 1.942%. The swap agreements are designated as net
investment hedges and expire on October 4, 2023.
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.
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") while the accrued interest
is recognized in interest expense in the statement of operations. 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 year ended December 31, 2021 and December 31, 2020:
Foreign exchange gains
Interest benefit
Balance sheet presentation
December 31, 2021 December 31, 2020
$
34,849 $
19,296
37,312
14,488
The following table presents the locations in the consolidated balance sheets and fair value of derivative
instruments as of December 31, 2021 and 2020:
F-25
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
December 31, 2021
December 31, 2020
Asset derivatives:
Designated foreign currency forward contracts
$
1,957 $
Non-designated foreign currency forward contracts
Cross-currency interest rate swap
Prepaid expenses and other current assets
Cross-currency interest rate swap
Other assets
Total asset derivatives
Liability derivatives:
Designated foreign currency forward contracts
Non-designated foreign currency forward contracts
Other current liabilities
Cross-currency interest rate swap
Other liabilities
Total liability derivatives
56
21,718
23,731
9,560
9,560
993 $
147
1,140
—
—
$
1,140 $
33,291 $
21,858
$
$
1,691
61
20,106
21,858
—
—
1,504
366
1,870
34,125
34,125
35,995
See Note 13 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.
For the years ended December 31, 2021, 2020 and 2019, there was no ineffectiveness related to our hedging
derivatives.
Note 12 — Fair value measurement
Fair value is the price that would be received from the sale of an asset or paid to transfer a liability, using
assumptions that market participants would use in pricing an asset or liability. Under GAAP, there is a three-level
hierarchy of the inputs (i.e., assumptions that market participants would use in pricing an asset or liability) used to
measure fair value. The categorization within the valuation hierarchy is based on the lowest level of input that is
significant to the entire fair value measurement.
The levels of inputs within the hierarchy used to measure fair value are as follows:
Level 1 — inputs to the fair value measurement that are quoted prices (unadjusted) in active markets for
identical assets or liabilities.
Level 2 — inputs to the fair value measurement that include quoted prices for similar assets or liabilities in
active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other
than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or
corroborated by observable market data by correlation or other means.
Level 3 — inputs to the fair value measurement that are unobservable inputs for the asset or liability.
The following tables provide information regarding our financial assets and liabilities measured at fair value on a
recurring basis as of December 31, 2021 and 2020:
December 31, 2021
(Level 1)
(Level 2)
(Level 3)
Basis of fair value measurement
Investments in marketable securities
$
19,186 $
19,186 $
— $
Derivative assets
Derivative liabilities
Contingent consideration liabilities
33,291
1,140
9,814
—
—
—
33,291
1,140
—
—
—
—
9,814
F-26
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Investments in marketable securities
Derivative assets
Derivative liabilities
Contingent consideration liabilities
December 31, 2020
$
12,617 $
21,858
35,995
36,633
Basis of fair value measurement
(Level 1)
(Level 2)
(Level 3)
12,617 $
—
—
—
— $
21,858
35,995
—
—
—
—
36,633
There were no transfers of financial assets or liabilities into or out of Level 3 within the fair value hierarchy
during the years ended December 31, 2021 or 2020.
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 Company 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 forward contracts and cross-
currency interest rate swap agreements 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
forward and cross-currency swap agreements 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 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.
The table below provides additional information regarding the valuation technique and inputs used in
determining the fair value of contingent consideration.
Contingent Consideration Liability
Valuation Technique
Unobservable Input
Range (Weighted average)
Milestone-based payment
Revenue-based
Discounted cash flow
Discount rate
1.9% - 2.2% (2.0%)
Projected year of payment
2022 - 2023
Discounted cash flow
Discount rate
1.7% - 10.0% (6.1%)
Projected year of payment
2022 - 2029
The following table provides information regarding changes in our contingent consideration liabilities for the
years ended December 31, 2021 and 2020:
Beginning balance – January 1
Payments (1)
Revaluations and other adjustments
Translation adjustment
Ending balance – December 31
2021
2020
$
36,633 $
219,908
(31,678)
(146,971)
4,895
(36)
(36,714)
410
$
9,814 $
36,633
(1) Includes $17.4 million payment associated with a settlement reached with the shareholders from whom we acquired Essential Medical,
Inc. See Note 17 for additional information related to the settlement.
F-27
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 13 — Shareholders' equity
Our authorized capital is comprised of 200 million common shares, $1 par value, and 500,000 preference
shares. No preference shares have been outstanding during the last three years.
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 shares outstanding:
Basic
Dilutive effect of share based awards
Diluted
2021
2020
2019
46,774
46,488
46,200
653
799
890
47,427
47,287
47,090
Weighted average shares that were antidilutive and therefore excluded from the calculation of diluted earnings
per share were 0.1 million for the years ended December 31, 2021, 2020 and 2019.
The following tables provides information relating to the changes in accumulated other comprehensive income
(loss), net of tax, for each of the years ended December 31, 2021 and 2020:
Balance at December 31, 2019
$
735 $
(138,810) $ (206,317) $
(344,392)
Cash Flow
Hedges
Pension and
Other
Postretirement
Benefit Plans
Foreign
Currency
Translation
Adjustment
Accumulated
Other
Comprehensive
Income (Loss)
(3,331)
(17,032)
59,758
39,395
Other comprehensive (loss) income before reclassifications
Amounts reclassified from accumulated other
comprehensive income
Net current-year other comprehensive (loss) income
(1,217)
(11,447)
59,758
2,114
5,585
—
7,699
47,094
Balance at December 31, 2020
Other comprehensive income (loss) before reclassifications
Amounts reclassified from accumulated other
comprehensive income
Net current-year other comprehensive (loss) income
(482)
(150,257) (146,559)
(297,298)
351
6,192
(63,191)
(56,648)
1,212
1,563
5,775
—
6,987
11,967
(63,191)
(49,661)
Balance at December 31, 2021
$ 1,081 $
(138,290) $ (209,750) $
(346,959)
The following table provides information relating to the losses (gains) recognized in the statements of income
including the reclassifications of losses (gains) in accumulated other comprehensive (loss) income into expense/
(income), net of tax, for the years ended December 31, 2021, 2020 and 2019:
Losses (gains) on designated foreign exchange forward contracts:
Cost of goods sold
Total before tax
Taxes expense (benefit)
Net of tax
Amortization of pension and other postretirement benefits items:
Actuarial losses (1)
Prior-service credits (1)
Total before tax
Tax benefit
Net of tax
Impact on income from continuing operations, net of tax
Year Ended December 31,
2021
2020
2019
$
1,150 $
2,354 $
1,150
62
2,354
(240)
(1,284)
(1,284)
150
$
$
$
$
1,212 $
2,114 $
(1,134)
8,543 $
7,253 $
6,930
(1,012)
7,531
(1,756)
5,775 $
6,987 $
33
7,286
(1,701)
5,585 $
7,699 $
82
7,012
(1,631)
5,381
4,247
(1) These accumulated other comprehensive (loss) income components are included in the computation of net benefit cost of pension and
other postretirement benefit plans (see Note 16 for additional information).
F-28
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 14 — Stock compensation plans
In May of 2014, our stockholders approved the Teleflex Incorporated 2014 Stock Incentive Plan (the "Plan").
The Plan provides for several different kinds of awards, including stock options, stock appreciation rights, stock
awards and other stock-based awards to directors, officers and key employees. Under the Plan, we are authorized
to issue up to 5.3 million shares of common stock, subject to adjustment in accordance with special share counting
rules in the Plan. Options granted under the Plan have an exercise price equal to the closing price of the common
stock on the date of the grant. In 2021, we granted, under the Plan, non-qualified options to purchase 108,686
shares of common stock and granted restricted stock units relating to 59,210 shares of common stock under the
Plan. We also granted performance share units (“PSUs”), as described in the following paragraph.
In 2018, we began granting PSUs to specified senior managers. The PSUs are designed to provide further
incentive to our senior management with respect to the achievement of our long term financial objectives. The PSU
component of the equity incentive program is designed to provide shares of our common stock to the holder based
upon our achievement of certain financial performance criteria during a designated performance period of three
years. The number of shares to be awarded under the PSUs granted are subject to modification based upon our
total stockholder return relative to a designated group of public companies. Assuming target performance is
achieved, a total of 16,903 shares of common stock would be issuable in respect of the PSUs granted and a
maximum of 42,272 shares would be issuable in respect of such PSUs upon achievement of maximum performance
levels.
The following table summarizes the share-based compensation activity:
Share-based compensation expense
Total income tax benefit recognized for share-based compensation
arrangements
Net excess tax benefit
2021
2020
2019
$
22,937 $
20,739 $
26,940
10,912
6,355
21,958
17,549
21,121
15,380
The unrecognized compensation expense for all awards granted in 2021 as of the grant date was $37.8 million,
which will be recognized over the vesting period of the awards. As of December 31, 2021, 3,082,554 shares were
available for future grants under the Plan.
Option Awards
The fair value of options granted in 2021, 2020 and 2019 was estimated at the date of grant using a Black-
Scholes option pricing model. The following weighted-average assumptions were used:
Risk-free interest rate
Expected life of option
Expected dividend yield
Expected volatility
2021
2020
2019
0.67 %
1.16 %
2.44 %
5.01 years
5.00 years
4.99 years
0.34 %
30.03 %
0.39 %
23.98 %
0.47 %
23.92 %
The following table summarizes the option activity during 2021:
Shares Subject to
Options
Weighted Average
Exercise Price
Weighted Average
Remaining
Contractual
Life In Years
Aggregate
Intrinsic
Value
Outstanding, beginning of the year
1,157,315 $
Granted
Exercised
Forfeited or expired
Outstanding, end of the year
Exercisable, end of the year
108,686
(125,143)
(32,859)
1,107,999
908,854 $
195.57
403.99
175.90
334.14
214.13
181.31
5.11 $
4.37 $
136,520
135,036
The weighted average grant date fair value for options granted during 2021, 2020 and 2019 was $103.87,
$74.60 and $68.22, respectively. The total intrinsic value of options exercised during 2021, 2020 and 2019 was
$27.4 million, $77.9 million and $64.3 million, respectively.
F-29
TELEFLEX INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
We recorded $8.8 million of expense related to options during 2021, which is included in cost of goods sold or
selling, general and administrative expenses. As of December 31, 2021, the unamortized share-based
compensation cost related to non-vested stock options, net of expected forfeitures, was $9.4 million, which is
expected to be recognized over a weighted-average period of 1.47 years. Authorized but unissued shares of our
common stock are issued upon exercises of options.
Stock Awards
The fair value of PSUs granted were determined using a Monte Carlo simulation valuation model. The grant
date fair value for the 2021 awards was $419.25.
The fair value for restricted stock units granted in 2021, 2020 and 2019 was estimated at the date of grant
based on the market price for the underlying stock on the grant date discounted for the risk free interest rate and the
present value of expected dividends over the vesting period. The following weighted-average assumptions were
used:
Risk-free interest rate
Expected dividend yield
2021
2020
2019
0.28 %
0.34 %
1.07 %
0.38 %
2.41 %
0.46 %
The following table summarizes the non-vested restricted stock unit activity during 2021:
Number of
Non-Vested
Shares
Weighted
Average
Grant-Date
Fair Value
Weighted
Average
Remaining
Contractual
Life
Aggregate
Intrinsic
Value
Outstanding, beginning of the year
150,812 $
Granted
Vested
Forfeited
59,210
(50,098)
(24,546)
Outstanding, end of the year
135,378 $
293.10
398.59
260.32
334.38
343.89
1.2
$
44,469
We issued 59,210, 52,464 and 69,799 of non-vested restricted stock units in 2021, 2020 and 2019,
respectively, the majority of which provide for vesting as to all underlying shares on the third anniversary of the grant
date. The weighted average grant-date fair value for non-vested restricted stock units granted during 2021, 2020
and 2019 was $398.59, $344.70 and $286.51, respectively.
We recorded $13.5 million of expense related to stock awards during 2021, which is included in cost of goods
sold or selling, general and administrative expenses. As of December 31, 2021, the unamortized share-based
compensation cost related to non-vested restricted stock units, net of estimated forfeitures, was $17.7 million, which
is expected to be recognized over a weighted-average period of 1.2 years. We use treasury stock to provide shares
of common stock in connection with vesting of the stock awards.
Note 15 — Income taxes
The following table summarizes the components of the provision for income taxes from continuing operations:
Current:
Federal
State
Non-U.S.
Deferred:
Federal
State
Non-U.S.
2021
2020
2019
$
134,336 $
11,148 $
19,374
16,970
35,399
9,644
35,042
8,220
23,690
(85,272)
(9,475)
(2,041)
(16,933)
(13,734)
(28,277)
(10,151)
(10,694)
(143,044)
$
74,349 $
21,931 $
(122,078)
F-30
At December 31, 2021, the cumulative unremitted earnings of subsidiaries outside the U.S. that are
considered non-permanently reinvested and for which taxes have been provided approximated $1.3 billion. At
December 31, 2021, the cumulative unremitted earnings of subsidiaries outside the U.S. that are considered
permanently reinvested approximated $1.0 billion. Earnings considered permanently reinvested are expected to be
reinvested indefinitely and, as a result, no additional deferred tax liability has been recognized with regard to these
earnings. It is not practical to determine the deferred income tax liability on these earnings if, in the future, they are
remitted to the U.S. because the income tax liability to be incurred, if any, is dependent on circumstances existing
when remittance occurs.
The following table summarizes the U.S. and non-U.S. components of income from continuing operations
before taxes:
U.S.
Non-U.S.
2021
2020
2019
$
209,231 $
233,034 $
89,021
350,237
124,698
250,882
$
559,468 $
357,732 $
339,903
Reconciliations between the statutory federal income tax rate and the effective income tax rate are as follows:
2021
2020
2019
Federal statutory rate
Tax effect of international items
Foreign merger - deferred taxes (1)
Excess tax benefits related to share-based compensation
State taxes, net of federal benefit
Uncertain tax contingencies
Contingent consideration
Intellectual property impairment charge
Research and development tax credit
Other, net
21.0 %
(6.0)
21.0 %
(5.3)
—
(1.1)
0.1
(0.1)
0.2
—
(0.8)
—
—
(4.9)
(0.3)
(0.5)
(2.2)
(1.2)
(1.1)
0.6
21.0 %
(11.3)
(38.0)
(4.5)
(4.9)
—
3.4
—
(1.1)
(0.5)
13.3 %
6.1 %
(35.9) %
(1) During 2019, we recognized a discrete tax benefit of $129.0 million resulting from a non-U.S. legal entity restructuring that eliminated
the requirement to provide for withholding taxes on the future repatriation of certain non-permanently reinvested earnings.
The effective income tax rate for 2021 was 13.3% compared to 6.1% for 2020. The effective income tax rate for
2021 reflects tax expense associated with the Respiratory business divestiture. The effective tax rate for 2020
reflects non-taxable contingent consideration adjustments, recognized in connection with a decrease in the fair
value of our contingent consideration liabilities. Additionally, the effective tax rates for both 2021 and 2020 reflect a
net excess tax benefit related to share-based compensation and a tax benefit relating to the revaluation of state
deferred tax assets and liabilities due to business integrations and other changes.
We are routinely subject to examinations by various taxing authorities. In conjunction with these examinations
and as a regular practice, we establish and adjust reserves with respect to its uncertain tax positions to address
developments related to those positions. We realized a net benefit of $0.8 million, $1.7 million and $0.1 million in
2021, 2020 and 2019 respectively, as a result of reducing our reserves with respect to uncertain tax positions,
principally due to the expiration of a number of applicable statutes of limitations.
F-31
The following table summarizes significant components of our deferred tax assets and liabilities at
December 31, 2021 and 2020:
Deferred tax assets:
2021
2020
Tax loss and credit carryforwards
$
168,113 $
180,782
Lease Liabilities
Pension
Reserves and accruals
Other
Less: valuation allowances
Total deferred tax assets
Deferred tax liabilities:
Property, plant and equipment
Intangibles — stock acquisitions (1)
Unremitted non-U.S. earnings
Lease Assets
Other
Total deferred tax liabilities
Net deferred tax liability
32,127
350
64,421
4,379
25,429
12,237
72,931
7,996
(143,177)
(155,008)
126,213
144,367
24,479
352,139
73,385
32,127
7,387
25,633
476,150
91,539
25,429
2,221
489,517
620,972
$
(363,304) $
(476,605)
(1)
In December of 2021, we executed an intra-company transfer in which certain intellectual property rights held by several of our
subsidiaries were contributed to a non-U.S. subsidiary. The transfer accelerated certain taxable income into the year ended December
31, 2021; however, the related current tax expense of $73.2 million, which is payable in 2022, was substantially offset by the reversal
of existing deferred tax liabilities.
Under the tax laws of various jurisdictions in which we operate, deductions or credits that cannot be fully utilized
for tax purposes during the current year may be carried forward, subject to statutory limitations, to reduce taxable
income or taxes payable in a future tax year. At December 31, 2021, the tax effect of such carryforwards
approximated $168.1 million. Of this amount, $15.7 million has no expiration date, $19.2 million expires after 2021
but before the end of 2026 and $133.2 million expires after 2026. A portion of these carryforwards consists of tax
losses and credits obtained by us as a result of acquisitions; the utilization of these carryforwards are subject to an
annual limitation imposed by Section 382 of the Internal Revenue Code, which limits a company’s ability to deduct
prior net operating losses following a more than 50 percent change in ownership. It is not expected that the
Section 382 limitation will prevent us ultimately from utilizing the applicable loss carryforwards. The determination of
state net operating loss carryforwards is dependent upon the U.S. subsidiaries’ taxable income or loss, the state’s
proportion of each subsidiary's taxable net income and the application of state laws, which can change from year to
year and impact the amount of such carryforward.
The valuation allowance for deferred tax assets of $143.2 million and $155.0 million at December 31, 2021
and 2020, respectively, relates principally to the uncertainty of our ability to utilize certain deferred tax assets,
primarily tax loss and credit carryforwards in various jurisdictions. The valuation allowance was calculated in
accordance with applicable accounting standards, which require that a valuation allowance be established and
maintained when it is “more likely than not” that all or a portion of deferred tax assets will not be realized.
F-32
Uncertain Tax Positions: The following table is a reconciliation of the beginning and ending balances for
liabilities associated with unrecognized tax benefits for the years ended December 31, 2021, 2020 and 2019:
Balance at January 1
Increase in unrecognized tax benefits related to prior years
Decrease in unrecognized tax benefits related to prior years
Unrecognized tax benefits related to the current year
Reductions in unrecognized tax benefits due to lapse of applicable
statute of limitations
Increase (decrease) in unrecognized tax benefits due to foreign
currency translation
Balance at December 31
2021
2020
2019
$
7,230 $
7,561 $
8,106
—
—
—
1,286
—
—
351
(201)
1,237
(956)
(1,864)
(1,881)
(169)
247
(51)
$
6,105 $
7,230 $
7,561
The total liabilities associated with the unrecognized tax benefits that, if recognized, would impact the effective
tax rate for continuing operations, were $3.8 million at December 31, 2021.
We accrue interest and penalties associated with unrecognized tax benefits in income tax expense in the
consolidated statements of income, and the corresponding liability is included in the consolidated balance sheets.
The net interest expense (benefit) and penalties reflected in income from continuing operations for the year ended
December 31, 2021 was $0.2 million and $(0.3) million, respectively; for the year ended December 31, 2020 was
$0.2 million and $(0.5) million, respectively; and for the year ended December 31, 2019 was $0.2 million and $(0.1)
million, respectively. The liabilities in the consolidated balance sheets for interest and penalties at December 31,
2021 were $0.8 million and $1.8 million, respectively, and at December 31, 2020 were $0.7 million and $2.1 million,
respectively.
The taxable years for which the applicable statute of limitations remains open by major tax jurisdictions are as
follows:
U.S.
Canada
China
Czech Republic
France
Germany
India
Ireland
Italy
Malaysia
Singapore
Beginning
Ending
2018
2017
2016
2018
2019
2011
2002
2017
2016
2017
2017
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
2021
We are routinely subject to income tax examinations by various taxing authorities. As of December 31, 2021,
the most significant tax examinations in process were in Ireland and Germany. The date at which these
examinations may be concluded and the ultimate outcome of the examinations are uncertain. As a result of the
uncertain outcome of this ongoing examinations, future examinations or the expiration of statutes of limitation, it is
reasonably possible that the related unrecognized tax benefits for tax positions taken could materially change from
those recorded as liabilities at December 31, 2021. Due to the potential for resolution of certain examinations, and
the expiration of various statutes of limitations, it is reasonably possible that our unrecognized tax benefits may
change within the next year by a range of zero to $1.1 million.
Supplemental cash flow information
Income taxes paid, net of refunds
$
108,609 $
77,163 $
73,632
Year Ended December 31,
2021
2020
2019
F-33
Note 16 — Pension and other postretirement benefits
We have a number of defined benefit pension and postretirement plans covering eligible U.S. and non-U.S.
employees. The defined benefit pension plans are noncontributory. The benefits under these plans are based
primarily on years of service and employees’ pay near retirement. Our funding policy for U.S. plans is to contribute
annually, at a minimum, amounts required by applicable laws and regulations. Obligations under non-U.S. plans are
systematically provided for by depositing funds with trustees or by book reserves. As of December 31, 2021, no
further benefits are being accrued under the U.S. defined benefit pension plans and the other postretirement benefit
plans, other than certain postretirement benefit plans covering employees subject to a collective bargaining
agreement.
Teleflex and certain of our subsidiaries provide medical, dental and life insurance benefits to pensioners or their
survivors. The associated plans are unfunded and approved claims are paid from our funds.
The following table provides information regarding the components of the net benefit (income) expense of the
pension and postretirement benefit plans for the years ended December 31, 2021, 2020 and 2019:
Service cost
$ 1,467 $ 1,416 $ 2,768 $
— $
— $
9
2021
Pension
2020
2019
2021
2020
2019
Other Benefits
Interest cost
Expected return on plan assets
Net amortization and deferral
9,272
(30,726)
12,827
16,000
(31,650)
(27,426)
418
—
902
—
1,391
—
8,589
7,447
7,013
(1,058)
(161)
(1)
Net benefit (income) expense
$ (11,398) $
(9,960) $
(1,645) $
(640) $
741 $ 1,399
Net benefit (income) expense is primarily included in selling, general and administrative expenses within the
consolidated statements of income.
The following table provides the weighted average assumptions for U.S. and foreign plans used in determining
net benefit cost:
Discount rate
Rate of return
Initial healthcare trend rate
Ultimate healthcare trend rate
2021
2.5 %
6.7 %
Pension
2020
2019
2021
2020
2019
Other Benefits
3.2 %
7.5 %
4.3 %
7.7 %
2.3 %
3.1 %
4.2 %
6.8 %
4.5 %
7.0 %
5.0 %
7.4 %
5.0 %
F-34
The following table provides summarized information with respect to the pension and postretirement benefit
plans, measured as of December 31, 2021 and 2020:
Benefit obligation, beginning of year
$ 501,347 $ 470,236 $
31,921 $
40,042
Pension
Other Benefits
2021
2020
2021
2020
Service cost
Interest cost
Actuarial (gain) loss
Currency translation
Benefits paid
Medicare Part D reimbursement
Plan amendments
Administrative costs
Projected benefit obligation, end of year
Fair value of plan assets, beginning of year
Actual return on plan assets
Contributions
Benefits paid
Administrative costs
Currency translation
Fair value of plan assets, end of year
Funded status, end of year
1,467
9,272
(13,567)
(1,726)
1,416
12,827
36,726
2,273
—
418
(2,288)
—
—
902
964
—
(21,138)
(21,092)
(3,303)
(5,448)
56
—
—
119
(4,658)
—
26,804
31,921
—
—
—
47
(981)
(1,086)
474,674
457,626
22,124
12,159
501,347
423,300
43,276
12,490
(21,138)
(21,092)
(981)
(1,086)
3
738
469,793
457,626
$
(4,881) $
(43,721) $
(26,804) $
(31,921)
The actuarial gain for pension for the year ended December 31, 2021 was primarily due to an increase in the
discount rate used to measure the obligation, partially offset by a change in census data as well as the mortality
assumptions. The actuarial loss for pension for the year ended December 31, 2020 was primarily due to a decrease
in the discount rate used to measure the obligation, partially offset by a change in the mortality assumptions.
The accumulated benefit obligations (ABO) and the projected benefit obligations (PBO) for plans with ABO and
PBO in excess of plan assets were $456.0 million and $456.6 million, respectively, at December 31, 2021 and
$481.0 million and $481.8 million respectively, at December 31, 2020. The fair value of plan assets for plans with
PBO and ABO in excess of plan assets were $449.8 million and $434.3 million, respectively, at December 31, 2021
and December 31, 2020, respectively.
The following table sets forth the amounts recognized in the consolidated balance sheet with respect to the
pension and postretirement plans:
Other assets
Pension
Other Benefits
2021
2020
2021
2020
$
17,827 $
3,703 $
— $
—
Payroll and benefit-related liabilities
(1,602)
(1,721)
(2,725)
(3,125)
Pension and postretirement benefit liabilities
(21,106)
(45,703)
(24,079)
(28,796)
Accumulated other comprehensive loss (gain)
218,139
232,540
(2,847)
(1,617)
$ 213,258 $ 188,819 $
(29,651) $
(33,538)
F-35
The following tables set forth the amounts recognized in accumulated other comprehensive income with respect
to the plans:
Balance at December 31, 2019
Reclassification adjustments related to components of Net
Periodic Benefit Cost recognized during the period:
Net amortization and deferral
Amounts arising during the period:
Actuarial changes in benefit obligation
Plan amendments
Impact of currency translation
Balance at December 31, 2020
Reclassification adjustments related to components of Net
Periodic Benefit Cost recognized during the period:
Net amortization and deferral
Amounts arising during the period:
Actuarial changes in benefit obligation
Impact of currency translation
Balance at December 31, 2021
Pension
Prior Service
Cost
Net (Gain)
or Loss
Deferred
Taxes
Accumulated Other
Comprehensive
Loss, Net of Tax
$
173 $ 213,816 $ (76,270) $
137,719
(15)
(7,432)
1,738
(5,709)
—
47
—
25,100
(5,875)
19,225
—
851
(9)
(241)
38
610
205
232,335
(80,657)
151,883
(5)
(8,584)
1,999
(6,590)
—
—
(4,965)
1,148
(847)
237
(3,817)
(610)
$
200 $ 217,939 $ (77,273) $
140,866
Other Benefits
Prior Service
Cost
Net (Gain) or
Loss
Deferred
Taxes
Accumulated Other
Comprehensive
Loss, Net of Tax
Balance at December 31, 2019
Reclassification adjustments related to components of Net
Periodic Benefit Cost recognized during the period:
$
Net amortization and deferral
Amounts arising during the period:
Actuarial changes in benefit obligation
Plan amendments
Balance at December 31, 2020
Reclassification adjustments related to components of Net
Periodic Benefit Cost recognized during the period:
Net amortization and deferral
Amounts arising during the period:
7 $
1,909 $
(825) $
1,091
(18)
179
(37)
124
—
(4,658)
964
—
(4,669)
3,052
(223)
1,076
(9)
741
(3,582)
(1,626)
1,017
41
(243)
815
Actuarial changes in benefit obligation
—
(2,288)
523
Balance at December 31, 2021
$
(3,652) $
805 $
271 $
(1,765)
(2,576)
The following table provides the weighted average assumptions for U.S. and foreign plans used in determining
benefit obligations:
Discount rate
Rate of compensation increase
Initial healthcare trend rate
Ultimate healthcare trend rate
Pension
Other Benefits
2021
2020
2021
2020
2.8 %
2.8 %
2.5 %
2.8 %
2.7 %
2.3 %
6.0 %
4.5 %
6.4 %
4.5 %
The discount rate represents the interest rate used to determine the present value of future cash flows currently
expected to be required to settle the pension and other benefit obligations. The weighted average discount rates for
F-36
U.S. pension plans and other benefit plans of 2.95% and 2.69%, respectively, were established by comparing the
projection of expected benefit payments to the AA Above Median yield curve as of December 31, 2021. The
expected benefit payments are discounted by each corresponding discount rate on the yield curve. For payments
beyond 30 years, we extend the curve assuming that the discount rate derived in year 30 is extended to the end of
the plan’s payment expectations. Once the present value of the string of benefit payments is established, we
determine the single rate on the yield curve that, when applied to all obligations of the plan, will exactly match the
previously determined present value.
As part of the evaluation of pension and other postretirement assumptions, we applied assumptions for mortality
and healthcare cost trends that incorporate generational white and blue collar mortality trends. In determining its
benefit obligations, we used generational tables that take into consideration increases in plan participant longevity.
Our assumption for the expected return on plan assets is primarily based on the determination of an expected
return for its current portfolio. This determination is made using assumptions for return and volatility of the
portfolio. Asset class assumptions are set using a combination of empirical and forward-looking analysis. To the
extent historical results have been affected by unsustainable trends or events, the effects of those trends are
quantified and removed. We apply a variety of models for filtering historical data and isolating the fundamental
characteristics of asset classes. These models provide empirical return estimates for each asset class, which are
then reviewed and combined with a qualitative assessment of long term relationships between asset classes before
a return estimate is finalized. The qualitative analysis is intended to provide an additional means for addressing the
effect of unrealistic or unsustainable short-term valuations or trends, resulting in return levels and behavior we
believe are more likely to prevail over long periods. Effective in 2022, we changed the expected return on plan
assets of the U.S. pension plans from 7.00% to 5.80% due to modifications to the investment strategy in order to
gradually reduce portfolio risk. The change had no impact on the results for the year ended December 31, 2021.
The accumulated benefit obligation for all U.S. and foreign defined benefit pension plans was $474.1 million and
$500.6 million for 2021 and 2020, respectively. All of the pension plans had accumulated benefit obligations in
excess of their respective plan assets as of December 31, 2021 and 2020, with the exception of one foreign plan
that had plan assets of $2.0 million and $3.7 million in excess of the accumulated benefit obligation as of
December 31, 2021 and 2020, respectively.
Our investment objective is to achieve an enhanced long-term rate of return on plan assets, subject to a prudent
level of portfolio risk, for the purpose of enhancing the availability of benefits for participants. These investments are
primarily comprised of equity and fixed income mutual funds. Our other investments are largely comprised of a
hedge fund of funds and a structured credit fund. The equity funds are diversified in terms of domestic and
international equity securities, as well as small, middle and large capitalization stocks. Our target allocation
percentage is as follows: equity securities (26%) and fixed-income securities (74%). Equity funds are held for their
expected return over inflation. Fixed-income funds are held for diversification relative to equities and as a partial
hedge of interest rate risk with respect to plan liabilities. The other investments are held to further diversify assets
within the plans and are designed to provide a mix of equity and bond like return with a bond like risk profile. The
plans may also hold cash to meet liquidity requirements. Actual performance may not be consistent with the
respective investment strategies. Investment risks and returns are measured and monitored on an ongoing basis
through annual liability measurements and investment portfolio reviews to determine whether the asset allocation
targets continue to represent an appropriate balance of expected risk and reward.
F-37
The following table provides the fair values of the pension plan assets at December 31, 2021 by asset category:
Asset Category (a)
Cash
Money market funds
Equity securities:
Managed volatility (b)
U.S. small/mid-cap equity (c)
World equity (excluding U.S.) (d)
Fixed income securities:
Intermediate duration fund (e)
Long duration bond fund (f)
Corporate bond fund (g)
Emerging markets debt fund (h)
Corporate, government and foreign bonds
Absolute return credit fund (i)
Asset backed – home loans
Other types of investments:
Contract with insurance company (j)
Other
Fair Value Measurements
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
$
923 $
6
923
6
57,252
7,532
34,287
101,363
171,919
7,607
7,605
50,599
671
208
19,130
3
57,252
7,532
34,287
101,363
171,919
7,607
7,605
50,599
— $
—
—
—
—
—
—
—
—
—
—
—
—
—
671
208
—
—
—
—
—
—
—
—
—
—
—
—
— $
19,130
—
3
Total investments at fair value
$ 459,105 $
439,093 $
879 $
19,133
Investments measured at net asset value (k)
Total
10,688
$ 469,793
F-38
The following table provides the fair values of the pension plan assets at December 31, 2020 by asset
category:
Asset Category (a)
Cash
Money market funds
Equity securities:
Managed volatility (b)
U.S. small/mid-cap equity (c)
World equity (excluding U.S.) (d)
Common equity securities – Teleflex Incorporated
29,592
Fixed income securities:
Intermediate duration fund (e)
Long duration bond fund (f)
Corporate bond fund (g)
Emerging markets debt fund (h)
Corporate, government and foreign bonds
Asset backed – home loans
Other types of investments:
Multi asset funds (l)
Contract with insurance company (j)
Other
63,376
98,996
13,469
11,412
35,582
261
8,890
10,485
4
Fair Value Measurements
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
$
582 $
12
85,974
11,780
59,467
582
12
85,974
11,780
59,467
29,592
63,376
98,996
13,469
11,412
35,582
—
—
—
—
—
—
—
—
—
—
—
— $
261
4,057
4,833
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— $
10,485
—
4
Total investments at fair value
$ 429,882 $
414,299 $ 5,094 $
10,489
Investments measured at Net asset value (k)
Total
27,744
$ 457,626
(a)
Information on asset categories described in notes (b)-(l) is derived from prospectuses and other material provided by
the respective funds comprising the respective asset categories.
(b) This category comprises mutual funds that invest in securities of U.S. and non-U.S. companies of all capitalization
ranges that exhibit relatively low volatility.
(c) This category comprises a mutual fund that invests at least 80% of its net assets in equity securities of small and mid-
sized companies. The fund invests in common stocks or exchange traded funds holding common stock of U.S.
companies with market capitalizations in the range of companies in the Russell 2500 Index.
(d) This category comprises a mutual fund that invests at least 80% of its net assets in equity securities of foreign
companies. These securities may include common stocks, preferred stocks, warrants, exchange traded funds based on
an international equity index, derivative instruments whose value is based on an international equity index and derivative
instruments whose value is based on an underlying equity security or a basket of equity securities. The fund invests in
securities of foreign issuers located in developed and emerging market countries. However, the fund will not invest more
than 35% of its assets in the common stocks or other equity securities of issuers located in emerging market countries.
(e) This category comprises a mutual fund that invests in instruments or derivatives having economic characteristics similar
to fixed income securities. The fund invests in investment grade fixed income instruments, including U.S. and foreign
corporate obligations, fixed income securities issued by sovereigns or agencies in both developed and emerging foreign
markets, debt obligations issued by governments or other municipalities, and securities issued or guaranteed by the U.S.
Government and its agencies. The fund will seek to maintain an effective average duration between three and ten years,
and uses derivative instruments, including interest rate swap agreements and credit default swaps, for the purpose of
managing the overall duration and yield curve exposure of the Fund’s portfolio of fixed income securities.
(f) This category comprises a mutual fund that invests in instruments or derivatives having economic characteristics similar
to fixed income securities. The fund invests in investment grade fixed income instruments, including securities issued or
guaranteed by the U.S. Government and its agencies and instrumentalities, corporate bonds, asset-backed securities,
exchange traded funds, mortgage-backed securities and collateralized mortgage-backed securities. The fund invests
primarily in long duration government and corporate fixed income securities, and uses derivative instruments, including
interest rate swap agreements and Treasury futures contracts, for the purpose of managing the overall duration and yield
curve exposure of the Fund’s portfolio of fixed income securities.
F-39
(g) This category comprises funds that invest primarily in higher-yielding fixed income securities, including corporate bonds
and debentures, convertible and preferred securities and zero coupon obligations.
(h) This category comprises a mutual fund that invests at least 80% of its net assets in fixed income securities of emerging
market issuers, primarily in U.S. dollar-denominated debt of foreign governments, government-related and corporate
issuers in emerging market countries and entities organized to restructure the debt of those issuers.
(i) This category comprises a mutual fund that invests primarily in investment grade bonds and similar fixed income and
floating rate securities.
(j) This category comprises the asset established out of an agreement to purchase a bulk-annuity policy from an insurer to
fully cover the liabilities for members of the pension plan. The asset value is based on the fair value of the contract as
determined by the insurance company using inputs that are not observable.
(k) This category comprises pooled institutional investments, primarily collective investment trusts. These funds are not
listed on an exchange or traded in an active market and these investments are valued using their net asset value, which
is generally based on the underlying asset values of the pooled investments held in the trusts. This category comprises
the following funds:
• a fund that invests primarily in collateralized debt obligations and other structured credit vehicles and may include
fixed income securities, loan participations, credit-linked notes, medium-term notes, pooled investment vehicles and
derivative instruments.
• a hedge fund that invests in various other hedge funds.
• funds that invest in underlying funds that acquire, manage, and dispose of real estate properties, with a focus on
properties in the U.S. and the UK markets.
(l) This category comprises funds that may invest in equities, bonds, or derivatives.
Our contributions to U.S. and foreign pension plans during 2022 are expected to be approximately $1.6 million.
Contributions to postretirement healthcare plans during 2022 are expected to be approximately $2.7 million.
The following table provides information about the expected benefit payments under its U.S. and foreign plans
for each of the five succeeding years and the aggregate of the five years thereafter, net of the annual average
Medicare Part D subsidy of approximately $0.1 million:
2022
2023
2024
2025
2026
Years 2027 — 2031
Pension
Other Benefits
$
22,732 $
22,859
23,583
23,976
24,622
127,007
2,723
2,630
2,432
2,348
2,073
7,388
We maintain a number of defined contribution savings plans covering eligible U.S. and non-U.S. employees. We
partially match employee contributions. Costs related to these plans were $23.2 million, $21.7 million and $17.5
million for 2021, 2020 and 2019, respectively.
Note 17 — 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
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. The nature of 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 December 31, 2021 and 2020, we have recorded $2.0 million and $1.6 million, respectively,
in accrued liabilities and $4.1 million and $5.2 million, respectively in other liabilities relating to these matters.
Considerable uncertainty exists with respect to these liabilities, and if adverse changes in circumstances occur,
potential liability may exceed the amount accrued as of December 31, 2021. The time frame over which the accrued
amounts may be paid out, based on past history, is estimated to be 10-15 years.
F-40
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, intellectual property, employment, environmental and
other matters. As of December 31, 2021 and 2020, we have recorded accrued liabilities of $0.2 million and $0.3
million, respectively, 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.
On February 17, 2021, representatives of the selling shareholders from whom we acquired Essential Medical,
Inc. filed suit on behalf of such shareholders in the Court of Chancery of the State of Delaware alleging, among
other things, that we breached the merger agreement relating to the acquisition in connection with activities relating
to the achievement of revenue-based milestone goals under the agreement. The suit sought money damages in the
amount of $66.9 million, plus interest. During the second quarter of 2021, the parties entered into a settlement
agreement, pursuant to which we paid $17.4 million to the selling shareholders, the selling shareholders released us
from the claims asserted in the lawsuit as well as any remaining obligations to make milestone payments and any
other obligations relating to the merger agreement, and the lawsuit was dismissed with prejudice. As a result, we
have no further potential liability related to this matter.
In June 2020, we began producing documents and information in response to a Civil Investigative Demand (a
“CID”) received in March 2020 by one of our subsidiaries, NeoTract, from the U.S. Department of Justice through
the United States Attorney’s Office for the Northern District of Georgia (collectively, the “DOJ”). The CID relates to
the DOJ’s investigation of a single NeoTract customer, requires the production of documents and information
pertaining to communications with, and certain rebate programs offered to, that customer and pertains to
communications and activities occurring both prior to our acquisition of NeoTract in October 2017 and thereafter. In
July 2020, the DOJ advised us that it had opened an investigation under the civil False Claims Act, 31 U.S.C.
§3729, with respect to NeoTract’s operations broadly in addition to the customer investigation.
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.
We maintain policies and procedures to promote compliance with the Anti-Kickback Statute, False Claims Acts
and other applicable laws and regulations and intend to provide information sought by the government. We cannot
at this time reasonably predict, however, the ultimate scope or outcome of this matter, including whether an
investigation may raise other compliance issues of interest, including those beyond the scope described above or
how any such issues might be resolved. We also cannot at this time reasonably estimate any potential liabilities or
penalty, if any, that may arise from this matter, which could have a material adverse effect on our results of
operations and financial condition.
Other: As previously disclosed, we have been subject to an investigation by Chinese authorities related to a
technical error regarding our country of origin designation for certain products we imported into China. Had the error
not been made, we would have been obligated to make increased tariff payments in late 2018 through the first
quarter of 2021. During the first quarter of 2021, we accrued the estimated increase in tariffs as well as related
interest expense for the periods in question. In addition to the tariffs and related interest, the Chinese authorities
may impose a penalty for the unpaid tariffs.
During the third quarter of 2021, after receiving requests for payment of the increased tariff amounts from the
Chinese authorities, we remitted payment for the increased tariffs and we believe this to be the final action required
to close the case. We no longer consider payment of penalties or interest to be probable, so we reversed the
$3.0 million of previously accrued penalties as well as the accrued interest.
However, we have not received confirmation from the Chinese authorities that the case is closed and as a
result, it remains possible that they may request payment for penalties and interest in the future. We believe the
range of penalties could be between 30% and 200% of the increased tariff amount or between $3 million and
$20 million.
F-41
Note 18 — Business segments and other information
An operating segment is a component (a) that engages in business activities from which it may earn revenues
and incur expenses, (b) whose operating results are regularly reviewed by the chief operating decision maker to
make decisions about resources to be allocated to the segment and to assess its performance, and (c) for which
discrete financial information is available. We do not evaluate our operating segments using discrete asset
information.
We have four reportable segments: Americas, EMEA (Europe, the Middle East and Africa), Asia (Asia Pacific)
and OEM (Original Equipment Manufacturer and Development Services).
Our reportable segments, other than the OEM segment, design, manufacture and distribute medical devices
primarily used in critical care and surgical applications and generally serve two end-markets: hospitals and
healthcare providers, and home health. The products of these segments are most widely used in the acute care
setting for a range of diagnostic and therapeutic procedures and in general and specialty surgical applications. The
OEM segment designs, manufactures and supplies devices and
for other medical device
manufacturers.
instruments
The following tables present our segment results for the years ended December 31, 2021, 2020 and 2019:
Americas
EMEA
Asia
OEM
Net revenues
Americas
EMEA
Asia
OEM
Total segment operating profit (1)
Unallocated expenses (2)
Year Ended December 31,
2021
2020
2019
$ 1,659,309 $ 1,465,035 $ 1,492,274
606,807
297,766
245,681
584,859
267,016
220,246
588,043
294,328
220,717
$ 2,809,563 $ 2,537,156 $ 2,595,362
Year Ended December 31,
2021
2020
2019
$
424,225 $
401,391 $
319,933
94,865
84,648
56,210
81,348
51,238
44,852
94,424
73,090
57,994
659,948
578,829
545,441
(31,853)
(155,761)
(118,187)
Income from continuing operations before interest, loss on
extinguishment of debt and taxes
$
628,095 $
423,068 $
427,254
(1) Segment operating profit includes segment net revenues from external customers reduced by its standard cost of goods sold, adjusted
for fixed manufacturing cost absorption variances, selling, general and administrative expenses, research and development expenses
and an allocation of corporate expenses. For the years ended December 31, 2021, 2020 and 2019, corporate expenses were allocated
among the segments in proportion to the respective amounts of one of several items (such as sales, numbers of employees, and
amount of time spent), depending on the category of expense involved. Commencing on January 1, 2022, all corporate expenses are
allocated amongst the segments in proportion to the respective amounts of net revenues. The revised methodology does not impact
period over period comparability because the change was immaterial.
(2) Unallocated expenses primarily include manufacturing variances, except for fixed manufacturing cost absorption variances,
restructuring and impairment charges and gain on sale of business and assets.
Americas
EMEA
Asia
OEM
Year Ended December 31,
2021
2020
2019
$
164,102 $
151,111 $
153,419
45,022
11,140
17,098
47,012
13,594
15,535
44,328
14,072
6,550
Consolidated depreciation and amortization
$
237,362 $
227,252 $
218,369
F-42
Geographic data
The following tables provide total net revenues and total net property, plant and equipment by geographic region
for the years ended December 31, 2021, 2020 and 2019 and as of December 31, 2021 and 2020, respectively.
Net revenues (based on selling location):
U.S.
Europe
Asia Pacific
All other
Net property, plant and equipment:
U.S.
Malaysia
Mexico
All other
Year Ended December 31,
2021
2020
2019
$ 1,769,488 $ 1,567,144 $ 1,606,248
665,000
263,022
112,053
646,577
230,267
93,168
652,069
241,278
95,767
$ 2,809,563 $ 2,537,156 $ 2,595,362
As of December 31,
2021
2020
$
206,876 $
234,186
72,541
69,471
94,870
71,760
69,330
98,636
$
443,758 $
473,912
F-43
TELEFLEX INCORPORATED
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS
(Dollars in thousands)
ALLOWANCE FOR DOUBTFUL ACCOUNTS
December 31, 2021
December 31, 2020
December 31, 2019
December 31, 2021
December 31, 2020
December 31, 2019
Balance at
Beginning of
Year
Additions
Charged to
Income
Accounts
Receivable
Write-offs
Translation
and Other
Balance at
End of
Year
$ 12,875 $
1,542 $
(3,001) $
(617) $ 10,799
$
$
9,055 $
3,798 $
(1,336) $
1,358 $ 12,875
9,348 $
1,680 $
(1,739) $
(234) $
9,055
DEFERRED TAX ASSET VALUATION ALLOWANCE
Balance at
Beginning of
Year
Additions
Charged to
Expense
Reductions
Credited to
Expense
Translation
and Other
Balance at
End of Year
$ 155,008 $
7,770 $ (15,384) $
(4,217) $ 143,177
$ 119,233 $ 30,640 $
(59) $
5,194 $ 155,008
$ 143,971 $ 31,564 $ (55,797) $
(505) $ 119,233
F-44
TELEFLEX INCORPORATED
NON-GAAP RECONCILIATIONS
ADJUSTED EARNINGS PER SHARE RECONCILIATION
(dollars in millions, except per share)
ADJUSTED INCOME RECONCILIATION
2018
2019
2020
2021
Amounts attributable to common shareholders:
Amounts attributable to common shareholders:
income (loss) from continuing operations, net of tax
income (loss) from continuing operations, net of tax
Restructuring, restructuring related and impairment items
Acquisition, integration and divestiture related items
Other items
MDR
Intangible amortization expense, net of tax
Tax Adjustment, net of tax
$
$
$
$
$
$
$
$
$
$
$
$
$
$
196.4
196.4
4.204.20
82.3
1.76
59.5
1.27
2.8
0.06
0.0
0.0
122.9
2.63
(0.6)
(0.01)
$
$
$
$
$
$
$
$
$
$
$
$
462.0
462.0
9.819.81
33.4
0.71
52.1
1.11
8.2
0.17
3.2
0.07
121.9
2.59
$
$
(155.8)
(3.31)
Adjusted income from continuing operations, net of tax
Adjusted income from continuing operations, net of tax
Adjusted earnings per share from continuing operations
Adjusted earnings per share from continuing operations
$
$
463.5
463.5
9.909.90
$
$
525.0
525.0
11.15
11.15
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
335.8
335.8
7.107.10
62.3
1.32
(28.0)
(0.59)
0.8
0.02
11.3
0.24
134.3
2.84
(12.0)
(0.25)
504.5
504.5
10.67
10.67
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
485.1
485.1
10.23
10.23
48.7
1.03
(61.1)
(1.29)
2.3
0.04
22.9
0.48
140.2
2.96
(5.9)
(0.12)
632.2
632.2
13.33
13.33
Note: GAAP results represent amounts per Form 10K for the year referenced.
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BOARD OF DIRECTORS
Listed in Order of Tenure
George Babich, Jr.*1
Retired President and
Chief Executive Officer
Checkpoint Systems, Inc.
Lead Director
Compensation Committee Chair
Stephen K. Klasko, M.D.*2
Retired President and Chief
Executive Officer
Thomas Jefferson University
and Jefferson Health
Stuart A. Randle*1, 2
Retired Chief Executive Officer
Ivenix, Inc.
Nominating and Governance
Commitee Chair
Candace H. Duncan*3
Retired Managing Partner
KPMG LLP
Audit Committee Chair
Gretchen R. Haggerty*3
Retired Executive Vice President
and Chief Financial Officer
United States Steel Corp.
Richard A. Packer*2
Primary Executive Director
Asahi Kasei
Andrew A. Krakauer*1
Retired Chief Executive Officer
Cantel Medical Corp.
Liam Kelly
Chairman, President and
Chief Executive Officer
Teleflex Incorporated
John C. Heinmiller*3
Retired Executive Vice President
and Chief Financial Officer
St. Jude Medical
*Board Committees
1 Compensation
2 Nominating and Governance
3 Audit
EXECUTIVE LEADERSHIP
Liam Kelly
Chairman, President and
Chief Executive Officer
Thomas E. Powell
Executive Vice President and
Chief Financial Officer
Petro Barchuk
Vice President,
Financial Planning and Analysis
Karen Boylan
Corporate Vice President,
Global Strategic Projects
John Deren
Corporate Vice President and
Chief Accounting Officer
Michael DiGiuseppe
President, Latin America
and Americas Commercial
Operations Group
Timothy Duffy
Vice President and
Chief Information Officer
James Ferguson
President and General
Manager, Surgical
Michelle Fox
Corporate Vice President and
Chief Medical Officer
Sunny Goh
President, APAC
Kevin Hardage
President and General Manager,
Interventional Urology
Marie Hendrixson
Vice President, Internal Audit
Cameron Hicks
Corporate Vice President
and Chief Human
Resources Officer
Scott Holstine
President and General Manager,
Interventional
Matthew James
President, EMEA
and Global Urology
Lawrence Keusch
Vice President of Investor
Relations and Strategy
Development
Michael Kryukov
Vice President, Global Tax
Lisa Kudlacz
President and General
Manager, Vascular
Bert Lane
Vice President,
Global Logistics and Distribution
Daniel V. Logue
Corporate Vice President,
General Counsel and Secretary
Justin McMurray
Vice President, Global Strategic
Research and Development
Jake Newman
President, The Americas
Daniel Price
Corporate Vice President,
Commercial Finance
Howard Cyr
Corporate Vice President and
Chief Compliance Officer
Dominik Reterski
Corporate Vice President, Quality
Assurance/Regulatory Affairs
Kevin Robinson
President and General
Manager, Anesthesia and
Emergency Medicine
Greg Stotts
President and
General Manager, OEM
Matt Tomkin
Vice President,
Corporate Development
Ed Weidner
Vice President, Customer
Experience and Commercial
Operations
Jay White
Corporate Vice President and
President, Global Commercial
James Winters
Corporate Vice President,
Manufacturing and Supply Chain
INVESTOR INFORMATION
Teleflex Incorporated
550 East Swedesford Road
Wayne, Pennsylvania 19087
Investor Information
Market and ownership
of common stock:
New York Stock Exchange
Trading symbol: TFX
Investor Relations
Investors, analysts, and others
seeking information about the
company should contact:
Lawrence Keusch
Teleflex Incorporated
lawrence.keusch@teleflex.com
www.teleflex.com
A copy of the Annual Report as filed
with the Securities and Exchange
Commission on Form 10-K, interim
reports on Form 10-Q, and current
reports on Form 8-K can be accessed
on the Investor page of the
company’s website or can be mailed
upon request.
Transfer Agent and Registrar
Questions concerning transfer
requirements, lost certificates,
dividends, duplicate mailings,
change of address, or other
stockholder matters should be
addressed to:
American Stock Transfer
& Trust Company
6201 15th Ave
Brooklyn, New York 11219
(800) 937-5449 (toll free)
Dividend Reinvestment
Teleflex Incorporated offers a
dividend reinvestment and direct
stock purchase and sale plan.
For enrollment information,
please contact American Stock
Transfer & Trust Company,
Dividend Reinvestment Department,
1-877-842-1572 (toll free).
Code of Ethics and
Business Guidelines
All Teleflex businesses around
the world share a common Code
of Ethics, which guides the way
we conduct business. The Code is
available on the Teleflex website
at www.teleflex.com.
Certifications
The certifications by the Chief
Executive Officer and the Chief
Financial Officer of Teleflex
Incorporated required under
Section 302 of the Sarbanes-Oxley
Act of 2002 have been filed as
exhibits to Teleflex Incorporated’s
2021 Annual Report on Form
10-K. In addition, in May 2021,
the Chief Executive Officer of
Teleflex Incorporated certified
to the New York Stock Exchange
(“NYSE”) that he is not aware
of any violation by the Company
of NYSE corporate governance
listing standards, as required by
Section 303A.12(a) of the NYSE
Corporate Governance Rules.
Independent Registered
Public Accounting Firm
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
Forward-Looking
Statements
In accordance with the safe
harbor provisions of the Private
Securities Litigation Reform Act of
1995, the company notes that certain
statements contained in this report
are forward-looking in nature. These
forward-looking statements include
matters such as business strategies,
market potential, product deployment,
future financial performance, and
other future-oriented matters. Such
matters inherently involve many risks
and uncertainties. For additional
information, please refer to the
company’s Securities and Exchange
Commission filings and the Form
10-K included in the Annual Report.
Teleflex, the Teleflex logo, Arrow, Deknatel, LMA, Pilling, QuikClot, Rüsch, UroLift, and Weck, are trademarks or registered trademarks of Teleflex
Incorporated or its affiliates, in the U.S. and/or other countries.
© 2022 Teleflex Incorporated. All rights reserved.
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CORPORATE HEADQUARTERS
550 E. Swedesford Road, Suite 400, Wayne, PA 19087
610.225.6800 | www.teleflex.com