10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 27, 2022

OR

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

For the transition period from                      to                    .

Commission file number 1-5353

TELEFLEX INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware	23-1147939
(State or other jurisdiction of<br>incorporation or organization)	(I.R.S. employer<br>identification no.)

550 E. Swedesford Rd., Suite 400 Wayne, PA 19087

(Address of principal executive offices and zip code)

(610) 225-6800

(Registrant’s telephone number, including area code)

(None)

(Former Name, Former Address and Former Fiscal Year,

If Changed Since Last Report)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes   ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ☐    No  ☒

The registrant had 46,900,058 shares of common stock, par value $1.00 per share, outstanding as of April 26, 2022.

TELEFLEX INCORPORATED

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED MARCH 27, 2022

TABLE OF CONTENTS

		Page
PART I — FINANCIAL INFORMATION
Item 1:	Financial Statements (Unaudited):	2
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statements of Changes in Equity	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4:	Controls and Procedures	23
PART II — OTHER INFORMATION
Item 1:	Legal Proceedings	24
Item 1A:	Risk Factors	24
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3:	Defaults Upon Senior Securities	24
Item 4:	Mine Safety Disclosures	24
Item 5:	Other Information	24
Item 6:	Exhibits	25
SIGNATURES		26

Item 1. Financial Statements

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended
	March 27, 2022		March 28, 2021
	(Dollars and shares in thousands, except per share)
Net revenues	$	641,715	$	633,925
Cost of goods sold	295,482		289,398
Gross profit	346,233		344,527
Selling, general and administrative expenses	203,932		203,148
Research and development expenses	36,360		29,947
Restructuring and impairment charges	2,405		7,998
Income from continuing operations before interest and taxes	103,536		103,434
Interest expense	10,418		16,798
Interest income	(222)		(659)
Income from continuing operations before taxes	93,340		87,295
Taxes on income from continuing operations	15,973		12,428
Income from continuing operations	77,367		74,867
Operating loss from discontinued operations	(294)		(1)
Tax benefit on operating loss from discontinued operations	(68)		—
Loss from discontinued operations	(226)		(1)
Net income	$	77,141	$	74,866
Earnings per share:
Basic:
Income from continuing operations	$	1.65	$	1.60
Loss from discontinued operations	—		—
Net income	$	1.65	$	1.60
Diluted:
Income from continuing operations	$	1.63	$	1.58
Loss from discontinued operations	—		—
Net income	$	1.63	$	1.58
Weighted average common shares outstanding
Basic	46,876		46,698
Diluted	47,402		47,407

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

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended
	March 27, 2022		March 28, 2021
	(Dollars in thousands)
Net income	$	77,141	$	74,866
Other comprehensive (loss) income, net of tax:
Foreign currency translation, net of tax of $(1,136), and $(598) for the three months periods, respectively	(23,329)		(24,075)
Pension and other postretirement benefit plans adjustment, net of tax of $(499), and $(513) for the three months periods, respectively	1,586		1,611
Derivatives qualifying as hedges, net of tax of $(30), and $33 for the three months periods, respectively	457		27
Other comprehensive loss, net of tax:	(21,286)		(22,437)
Comprehensive income	$	55,855	$	52,429

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

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 27, 2022		December 31, 2021
	(Dollars in thousands)
ASSETS
Current assets
Cash and cash equivalents	$	466,656	$	445,084
Accounts receivable, net	407,159		383,569
Inventories	491,422		477,643
Prepaid expenses and other current assets	123,872		117,277
Prepaid taxes	5,092		5,545
Total current assets	1,494,201		1,429,118
Property, plant and equipment, net	436,021		443,758
Operating lease assets	124,390		129,653
Goodwill	2,492,726		2,504,202
Intangible assets, net	2,243,559		2,289,067
Deferred tax assets	6,791		6,820
Other assets	75,622		69,104
Total assets	$	6,873,310	$	6,871,722
LIABILITIES AND EQUITY
Current liabilities
Current borrowings	$	110,000	$	110,000
Accounts payable	117,464		118,236
Accrued expenses	158,945		163,441
Payroll and benefit-related liabilities	102,407		143,657
Accrued interest	16,808		5,209
Income taxes payable	88,451		83,943
Other current liabilities	62,125		55,633
Total current liabilities	656,200		680,119
Long-term borrowings	1,740,778		1,740,102
Deferred tax liabilities	369,739		370,124
Pension and postretirement benefit liabilities	43,427		45,185
Noncurrent liability for uncertain tax positions	8,614		8,646
Noncurrent operating lease liabilities	109,597		116,033
Other liabilities	149,421		156,765
Total liabilities	3,077,776		3,116,974
Commitments and contingencies
Total shareholders' equity	3,795,534		3,754,748
Total liabilities and shareholders' equity	$	6,873,310	$	6,871,722

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

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended
	March 27, 2022		March 28, 2021
	(Dollars in thousands)
Cash flows from operating activities of continuing operations:
Net income	$	77,141	$	74,866
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations	226		1
Depreciation expense	17,317		17,513
Intangible asset amortization expense	40,597		41,922
Deferred financing costs and debt discount amortization expense	1,048		1,210
Fair value step up of acquired inventory sold	—		3,993
Changes in contingent consideration	(30)		6,354
Asset impairment charges	1,497		—
Stock-based compensation	5,302		5,344
Deferred income taxes, net	409		425
Interest benefit on swaps designated as net investment hedges	(4,848)		(4,647)
Other	(2,093)		(14,384)
Changes in assets and liabilities, net of effects of acquisitions and disposals:
Accounts receivable	(27,805)		(12,298)
Inventories	(19,852)		(10,074)
Prepaid expenses and other assets	4,830		3,342
Accounts payable, accrued expenses and other liabilities	(36,978)		(4,438)
Income taxes receivable and payable, net	5,341		1,665
Net cash provided by operating activities from continuing operations	62,102		110,794
Cash flows from investing activities of continuing operations:
Expenditures for property, plant and equipment	(13,078)		(19,276)
Proceeds from sale of business and assets	262		161
Payments for businesses and intangibles acquired, net of cash acquired	—		(1,762)
Net cash used in investing activities from continuing operations	(12,816)		(20,877)
Cash flows from financing activities of continuing operations:
Reduction in borrowings	—		(100,000)
Debt extinguishment, issuance and amendment fees	—		(22)
Net payments from share based compensation plans and the related tax impacts	(4,941)		(2,510)
Payments for contingent consideration	(73)		(13,071)
Dividends paid	(15,946)		(15,893)
Net cash used in financing activities from continuing operations	(20,960)		(131,496)
Cash flows from discontinued operations:
Net cash used in operating activities	(119)		(243)
Net cash used in discontinued operations	(119)		(243)
Effect of exchange rate changes on cash and cash equivalents	(6,635)		(9,427)
Net increase (decrease) in cash and cash equivalents	21,572		(51,249)
Cash and cash equivalents at the beginning of the period	445,084		375,880
Cash and cash equivalents at the end of the period	$	466,656	$	324,631

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

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

			Additional<br>Paid In<br>Capital		Retained<br>Earnings			Accumulated Other Comprehensive Loss		Treasury Stock			Total
	Dollars						Shares			Dollars
Balance at December 31, 2021	$	47,929	$	693,090	$	3,517,954		$	(346,959)	1,069	$	(157,266)	$	3,754,748
Net income					77,141								77,141
Cash dividends (0.34 per share)					(15,946)								(15,946)
Other comprehensive loss								(21,286)					(21,286)
Shares issued under compensation plans	5		(950)							(27)	894		(51)
Deferred compensation	—		100							(5)	828		928
Balance at March 27, 2022	$	47,934	$	692,240	$	3,579,149		$	(368,245)	1,037	$	(155,544)	$	3,795,534

All values are in US Dollars.

			Additional<br>Paid In<br>Capital		Retained<br>Earnings			Accumulated Other Comprehensive Loss		Treasury Stock			Total
	Dollars						Shares			Dollars
Balance at December 31, 2020	$	47,812	$	652,305	$	3,096,228		$	(297,298)	1,132	$	(162,590)	$	3,336,457
Net income					74,866								74,866
Cash dividends (0.34 per share)					(15,893)								(15,893)
Other comprehensive loss								(22,437)					(22,437)
Shares issued under compensation plans	18		1,993							(28)	99		2,110
Deferred compensation	—		447							(4)	241		688
Balance at March 28, 2021	$	47,830	$	654,745	$	3,155,201		$	(319,735)	1,100	$	(162,250)	$	3,375,791

All values are in US Dollars.

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

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(all tabular amounts in thousands unless otherwise noted)

Note 1 — Basis of presentation

The accompanying unaudited condensed consolidated financial statements of Teleflex Incorporated and its subsidiaries (“we,” “us,” “our" and “Teleflex”) are prepared on the same basis as its annual consolidated financial statements.

In the opinion of management, the financial statements reflect all adjustments, which are of a normal recurring nature, necessary for the fair statement of the financial statements for interim periods in accordance with accounting principles generally accepted in the United States of America ("GAAP") and Rule 10-01 of Securities and Exchange Commission ("SEC") Regulation S-X, which sets forth the instructions for the form and content of presentation of financial statements included in Form 10-Q. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The results of operations for the periods reported are not necessarily indicative of those that may be expected for a full year.

In accordance with applicable accounting standards and as permitted by Rule 10-01 of Regulation S-X, the accompanying condensed consolidated financial statements do not include all of the information and footnote disclosures that are required to be included in our annual consolidated financial statements. Therefore, our quarterly condensed consolidated financial statements should be read in conjunction with our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.

Note 2 — Recently issued accounting standards

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

Note 3 — Net revenues

We primarily generate revenue from the sale of medical devices including single use disposable devices and, to a lesser extent, reusable devices, instruments and capital equipment. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; this occurs upon the transfer of control of the products. Generally, transfer of control to the customer occurs at the point in time when our products are shipped from the manufacturing or distribution facility. For our Original Equipment and Development Services ("OEM") segment, most revenue is recognized over time because the OEM segment generates revenue from the sale of custom products that have no alternative use and we have an enforceable right to payment to the extent that performance has been completed. We market and sell products through our direct sales force and distributors to customers within the following end markets: (1) hospitals and healthcare providers; (2) other medical device manufacturers; and (3) home care providers, which constituted 89%, 9% and 2% of consolidated net revenues, respectively, for the three months ended March 27, 2022. 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.

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The following table disaggregates revenue by global product category for the three months ended March 27, 2022 and March 28, 2021.

	Three Months Ended
		March 27, 2022		March 28, 2021
Vascular access		$	166,134	$	163,973
Anesthesia		86,957		84,857
Interventional		96,859		96,173
Surgical		89,702		80,386
Interventional urology		74,895		73,364
OEM		57,656		53,489
Other (1)		69,512		81,683
Net revenues (2)		$	641,715	$	633,925

(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 — Divestiture

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

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

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 $31.1 million for the three months ended March 28, 2021. For the three months ended March 27, 2022, we recognized $21.1 million in net revenues attributed to services provided to Medline in accordance with the MSTA, which are presented within our Americas reporting segment.

Note 5 — Restructuring and impairment charges

We have ongoing restructuring initiatives consisting of a plan, initiated in connection with the Respiratory business divestiture described in Note 4, designed to separate the manufacturing operations to be transferred to Medline from those that will remain with Teleflex (the “Respiratory divestiture plan”), and plans related to the relocation of manufacturing operations to existing lower-cost locations and related workforce reductions (referred to as the 2019 and 2018 Footprint realignment plans). The following tables provide a summary of our cost estimates and other information associated with these plans:

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

	Respiratory divestiture plan	2019 Footprint realignment plan	2018 Footprint realignment plan
Plan expense estimates:	(Dollars in millions)
Termination benefits	$5 to $8	$14 to $15	$60 to $65
Other costs (1)	— to —	2 to 2	3 to 4
Restructuring charges	5 to 8	16 to 17	63 to 69
Restructuring related charges (2)	19 to 22	38 to 43	47 to 59
Total restructuring and restructuring related charges	$24 to $30	$54 to $60	$110 to $128
Other plan estimates:
Expected cash outlays	$24 to $30	$48 to $54	$99 to $122
Expected capital expenditures	$22 to $28	$31 to $33	$15 to $16
Other plan information:
Period initiated	May 2021	February 2019	May 2018
Estimated period of substantial completion	2023	2022	2022
Aggregate restructuring charges	$2.8	$14.9	$62.7
Restructuring reserve:
Balance as of March 27, 2022	$2.7	$2.2	$42.9
Restructuring related charges incurred:
Three Months Ended March 27, 2022	$2.0	$1.1	$2.3
Aggregate restructuring related charges	$5.3	$35.3	$29.7

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

(2)Restructuring related charges represent costs that are directly related to the plans 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 the restructuring related charges are expected to be recognized within cost of goods sold.

In 2014, we initiated a restructuring plan involving the consolidation of operations and a related reduction in workforce at certain facilities, in addition to the relocation of manufacturing operations from certain higher-cost locations to existing lower-cost locations (the "2014 Footprint realignment plan”). The plan is substantially complete and as a result, we expect future restructuring expenses associated with the plan, if any, to be immaterial.

Restructuring and impairment charges recognized for the three months ended March 27, 2022 and March 28, 2021 consisted of the following:

Three Months Ended March 27, 2022
	Termination benefits		Other costs (1)		Total
Respiratory divestiture plan	$	106	$	14	$	120
2019 Footprint realignment plan	(670)		24		(646)
2018 Footprint realignment plan	158		62		220
Other restructuring plans (2)	1,132		82		1,214
Restructuring charges	726		182		908
Asset impairment charges	—		1,497		1,497
Restructuring and impairment charges	$	726	$	1,679	$	2,405

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Three Months Ended March 28, 2021
	Termination benefits		Other costs (1)		Total
2021 Restructuring plan	$	6,760	$	—	$	6,760
2019 Footprint realignment plan	341		105		446
2018 Footprint realignment plan	267		45		312
Other restructuring plans (3)	(166)		646		480
Restructuring charges	$	7,202	$	796	$	7,998

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

(2) Includes activity primarily related to a restructuring plan initiated in the first quarter of 2022 that is designed to relocate manufacturing operations at certain of our facilities, the 2021 Restructuring plan and the 2014 Footprint realignment plan.

(3) Includes the plan initiated during the third quarter of 2019 as well as the 2016 and 2014 Footprint realignment plans.

Note 6 — Inventories

Inventories as of March 27, 2022 and December 31, 2021 consisted of the following:

	March 27, 2022		December 31, 2021
Raw materials	$	149,603	$	146,433
Work-in-process	89,017		81,503
Finished goods	252,802		249,707
Inventories	$	491,422	$	477,643

Note 7 — Goodwill and other intangible assets

The following table provides information relating to changes in the carrying amount of goodwill by reportable operating segment for the three months ended March 27, 2022:

	Americas		EMEA		Asia		OEM		Total
December 31, 2021	$	1,676,224	$	492,149	$	223,819	$	112,010	$	2,504,202
Currency translation adjustment	513		(10,458)		(1,531)		—		(11,476)
March 27, 2022	$	1,676,737	$	481,691	$	222,288	$	112,010	$	2,492,726

The gross carrying amount of, and accumulated amortization relating to, intangible assets as of March 27, 2022 and December 31, 2021 were as follows:

	Gross Carrying Amount				Accumulated Amortization
	March 27, 2022		December 31, 2021		March 27, 2022		December 31, 2021
Customer relationships	$	1,325,969	$	1,328,611	$	(455,183)	$	(441,059)
In-process research and development	27,670		28,158		—		—
Intellectual property	1,438,935		1,440,643		(581,414)		(560,740)
Distribution rights	23,290		23,434		(20,682)		(20,630)
Trade names	546,522		549,269		(62,073)		(59,249)
Non-compete agreements	22,188		22,783		(21,663)		(22,153)
	$	3,384,574	$	3,392,898	$	(1,141,015)	$	(1,103,831)

Note 8 — Financial instruments

Foreign currency forward contracts

We use derivative instruments for risk management purposes. Foreign currency forward contracts designated as cash flow hedges are used to manage foreign currency transaction exposure. Foreign currency forward contracts

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

not designated as hedges for accounting purposes are used to manage exposure related to near term foreign currency denominated monetary assets and liabilities. We enter into the non-designated foreign currency forward contracts for periods consistent with our currency translation exposures, which generally approximate one month. For the three months ended March 27, 2022 and March 28, 2021, we recognized losses of $3.3 million and $3.2 million, respectively, related to non-designated foreign currency forward contracts.

The total notional amount for all open foreign currency forward contracts designated as cash flow hedges as of March 27, 2022 and December 31, 2021 was $158.7 million and $149.5 million, respectively. The total notional amount for all open non-designated foreign currency forward contracts as of March 27, 2022 and December 31, 2021 was $134.6 million and $161.2 million, respectively. All open foreign currency forward contracts as of March 27, 2022 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 4.875% 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 designed 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"). The following table summarizes the foreign exchange gains and losses recognized within AOCI and the interest benefit recognized within interest expense related to cross currency swap for the three months ended March 27, 2022 and March 28, 2021:

	Three Months Ended
		March 27, 2022		March 28, 2021
Foreign exchange gains		$	3,840	$	17,614
Interest benefit		4,848		4,647

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Balance sheet presentation

The following table presents the locations in the condensed consolidated balance sheet and fair value of derivative financial instruments as of March 27, 2022 and December 31, 2021:

	March 27, 2022		December 31, 2021
	Fair Value
Asset derivatives:
Designated foreign currency forward contracts	$	3,500	$	1,957
Non-designated foreign currency forward contracts	86		56
Cross-currency interest rate swaps	26,653		21,718
Prepaid expenses and other current assets	30,239		23,731
Cross-currency interest rate swaps	14,448		9,560
Other assets	14,448		9,560
Total asset derivatives	$	44,687	$	33,291
Liability derivatives:
Designated foreign currency forward contracts	$	2,708	$	993
Non-designated foreign currency forward contracts	110		147
Other current liabilities	2,818		1,140
Total liability derivatives	$	2,818	$	1,140

See Note 10 for information on the location and amount of gains and losses attributable to derivatives that were reclassified from AOCI to expense (income), net of tax.

There was no ineffectiveness related to our cash flow hedges during the three months ended March 27, 2022 and March 28, 2021.

Trade receivables

The allowance for credit losses as of March 27, 2022 and December 31, 2021 was $10.2 million and $10.8 million, respectively. The current portion of the allowance for credit losses, which was $5.6 million and $6.0 million as of March 27, 2022 and December 31, 2021, respectively, was recognized as a reduction of accounts receivable, net.

Note 9 — Fair value measurement

The following tables provide information regarding our financial assets and liabilities measured at fair value on a recurring basis as of March 27, 2022 and December 31, 2021:

	Total carrying<br><br>value at<br><br>March 27, 2022		Quoted prices in active <br>markets (Level 1)		Significant other<br>observable<br>Inputs (Level 2)		Significant<br>unobservable<br>Inputs (Level 3)
Investments in marketable securities	$	18,437	$	18,437	$	—	$	—
Derivative assets	44,687		—		44,687		—
Derivative liabilities	2,818		—		2,818		—
Contingent consideration liabilities	9,709		—		—		9,709

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

	Total carrying<br>value at December 31, 2021		Quoted prices in active <br>markets (Level 1)		Significant other<br>observable<br>Inputs (Level 2)		Significant<br>unobservable<br>Inputs (Level 3)
Investments in marketable securities	$	19,186	$	19,186	$	—	$	—
Derivative assets	33,291		—		33,291		—
Derivative liabilities	1,140		—		1,140		—
Contingent consideration liabilities	9,814		—		—		9,814

Valuation Techniques

Our financial assets valued based upon Level 1 inputs are comprised of investments in marketable securities held in trust, which are available to satisfy benefit obligations under our benefit plans and other arrangements. The investment assets of the trust are valued using quoted market prices.

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

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

Note 10 — Shareholders' equity

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed in the same manner except that the weighted average number of shares is increased to include dilutive securities. The following table provides a reconciliation of basic to diluted weighted average number of common shares outstanding:

	Three Months Ended
		March 27, 2022	March 28, 2021
Basic		46,876	46,698
Dilutive effect of share-based awards		526	709
Diluted		47,402	47,407

The weighted average number of shares that were antidilutive and therefore excluded from the calculation of earnings per share were 0.3 million and 0.1 million for the three months ended March 27, 2022 and March 28, 2021, respectively.

The following tables provide information relating to the changes in accumulated other comprehensive loss, net of tax, for the three months ended March 27, 2022 and March 28, 2021:

	Cash Flow Hedges		Pension and Other Postretirement Benefit Plans		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive (Loss) Income
Balance as of December 31, 2021	$	1,081	$	(138,290)	$	(209,750)	$	(346,959)
Other comprehensive income (loss) before reclassifications	57		246		(23,329)		(23,026)
Amounts reclassified from accumulated other comprehensive income	400		1,340		—		1,740
Net current-period other comprehensive income (loss)	457		1,586		(23,329)		(21,286)
Balance as of March 27, 2022	$	1,538	$	(136,704)	$	(233,079)	$	(368,245)

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

	Cash Flow Hedges		Pension and Other Postretirement Benefit Plans		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive (Loss) Income
Balance as of December 31, 2020	$	(482)	$	(150,257)	$	(146,559)	$	(297,298)
Other comprehensive (loss) income before reclassifications	(811)		161		(24,075)		(24,725)
Amounts reclassified from accumulated other comprehensive income (loss)	838		1,450		—		2,288
Net current-period other comprehensive income (loss)	27		1,611		(24,075)		(22,437)
Balance as of March 28, 2021	$	(455)	$	(148,646)	$	(170,634)	$	(319,735)

The following table provides information relating to the location in the statements of operations and amount of reclassifications of losses/(gains) in accumulated other comprehensive (loss) income into expense/(income), net of tax, for the three months ended March 27, 2022 and March 28, 2021:

	Three Months Ended
		March 27, 2022		March 28, 2021
Losses (gains) on foreign exchange contracts:
Cost of goods sold		$	398	$	846
Total before tax		398		846
Taxes (benefit)		2		(8)
Net of tax		400		838
Amortization of pension and other postretirement benefit items (1):
Actuarial losses		2,000		2,143
Prior-service costs		(252)		(251)
Total before tax		1,748		1,892
Tax benefit		(408)		(442)
Net of tax		1,340		1,450
Total reclassifications, net of tax		$	1,740	$	2,288

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

Note 11 — Taxes on income from continuing operations

	Three Months Ended
		March 27, 2022	March 28, 2021
Effective income tax rate		17.1%	14.2%

The effective income tax rates for the three months ended March 27, 2022 and March 28, 2021 were 17.1% and 14.2%, respectively. The effective income tax rate for the three months ended March 27, 2022 includes higher tax expense resulting from a U.S. law effective in 2022 requiring capitalization of certain research and development expenditures. The effective income tax rate for the three months ended March 28, 2021 reflects tax benefits associated with the Z-Medica acquisition and the 2021 Restructuring Plan. The effective income tax rates for both periods reflect a net tax benefit related to share-based compensation and a tax benefit from research and development tax credits.

Note 12 — 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.

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

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. 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 March 27, 2022, we have recorded $2.0 million and $4.2 million in accrued liabilities and other liabilities, respectively, relating to these matters. Considerable uncertainty exists with respect to these liabilities and, if adverse changes in circumstances occur, the potential liability may exceed the amount accrued as of March 27, 2022. The time frame over which the accrued amounts may be paid out, based on past history, is estimated to be 10-15 years.

Legal matters: We are a party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims include actions involving product liability, product warranty, commercial disputes, intellectual property, contract, employment, environmental and other matters. As of March 27, 2022, we have recorded accrued liabilities of $0.2 million in connection with such contingencies, representing our best estimate of the cost within the range of estimated possible losses that will be incurred to resolve these matters.

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, Inc. (“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: 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. In addition to the tariffs and related interest, the Chinese authorities may impose a penalty for the unpaid tariffs.

To date, we have remitted payment for the requested amounts of the increased tariffs and we believe this to be the final action required to close the case. 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.

Tax audits and examinations: We are routinely subject to tax examinations by various tax authorities. As of March 27, 2022, the most significant tax examinations in process were in Ireland and Germany. We may establish

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

reserves with respect to our uncertain tax positions, after we adjust the reserves to address developments with respect to our uncertain tax positions, including developments in these tax examinations. Accordingly, developments in tax audits and examinations, including resolution of uncertain tax positions, could result in increases or decreases to our recorded tax liabilities, which could impact our financial results.

Note 13 — Segment information

The following tables present our segment results for the three months ended March 27, 2022 and March 28, 2021:

	Three Months Ended
		March 27, 2022		March 28, 2021
Americas		$	377,961	$	375,493
EMEA		136,908		141,253
Asia		69,190		63,690
OEM		57,656		53,489
Net revenues		$	641,715	$	633,925
	Three Months Ended
---	---	---	---
		March 27, 2022		March 28, 2021
Americas		$	96,901	$	83,602
EMEA		9,094		22,995
Asia		17,417		14,916
OEM		10,923		12,562
Total segment operating profit (1)		134,335		134,075
Unallocated expenses (2)		(30,799)		(30,641)
Income from continuing operations before interest and taxes		$	103,536	$	103,434

(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. Commencing on January 1, 2022, all corporate expenses are allocated amongst the segments in proportion to the respective amounts of net revenues. The change in the measure of segment operating profit does not impact period over period comparability because the change was immaterial. For the three months ended March 28, 2021, 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.

(2)Unallocated expenses primarily include manufacturing variances other than fixed manufacturing cost absorption variances, restructuring and impairment charges and gain on sale of business.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Teleflex Incorporated (“we,” “us,” “our" and “Teleflex”) is 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 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 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 identify opportunities to divest businesses and product lines that do not meet our objectives. In addition, we may seek to optimize utilization of our facilities through restructuring initiatives designed to further improve our cost structure and enhance our competitive position. We also may continue to explore opportunities to expand the size of our business and improve operating 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 or through new distributors). 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.

COVID-19 pandemic

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 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 an increased level of 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.

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 and/or divested businesses or assets (except as noted below with respect to acquired distributors) generally reflects the impact of the acquisitions and/or divestitures within the first 12 months following the date of the acquisition and/or divestiture. 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 the elimination of the distributor, either through acquisition or termination of the distributor, from the sales channel. All of the dollar amounts in the tables are presented in millions unless otherwise noted.

Certain financial information is presented on a rounded basis, which may cause minor differences.

Net revenues

	Three Months Ended
		March 27, 2022		March 28, 2021
Net revenues		$	641.7	$	633.9

Net revenues for the three months ended March 27, 2022 increased $7.8 million, or 1.2%, compared to the prior year period, primarily due to an $18.5 million increase in sales of new products and price increases of $8.5 million partially offset by $12.2 million of unfavorable fluctuations in foreign currency exchange rates and a $9.5 million net decrease in sales volumes attributed to the Respiratory business divestiture.

Gross profit

	Three Months Ended
		March 27, 2022			March 28, 2021
Gross profit		$	346.2		$	344.5
Percentage of sales		54.0		%	54.3		%

Gross margin for the three months ended March 27, 2022 decreased 30 basis points, or 0.6%, compared to the prior year period, primarily due to an increase in logistics and distribution, raw material and labor costs, largely stemming from the enduring inflationary impacts of the COVID-19 pandemic and general supply chain disruption, partially offset by price increases. Moreover, gross margin for the three months ended March, 28 2021 reflected the adverse impact of the step-up in carrying value of inventory recognized in connection with the Z-Medica acquisition.

Selling, general and administrative

	Three Months Ended
		March 27, 2022			March 28, 2021
Selling, general and administrative		$	203.9		$	203.1
Percentage of sales		31.8		%	32.0		%

Selling, general and administrative expenses for the three months ended March 27, 2022 increased $0.8 million compared to the prior year period primarily due to higher sales and marketing expense to support higher sales, partially offset by a decrease in contingent consideration expense and favorable fluctuations in foreign currency exchange rates.

Research and development

	Three Months Ended
		March 27, 2022			March 28, 2021
Research and development		$	36.4		$	29.9
Percentage of sales		5.7		%	4.7		%

The increase in research and development expenses for the three months ended March 27, 2022 compared to the prior year period 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

	Three Months Ended
		March 27, 2022		March 28, 2021
Restructuring and impairment charges		$	2.4	$	8.0

Restructuring and impairment charges for the three months ended March 27, 2022 primarily consisted of an impairment charge related to our decision to abandon certain assets.

Ongoing restructuring plans

We have an ongoing restructuring plan, initiated in connection with the Respiratory business divestiture, designed to separate the manufacturing operations to be transferred to Medline from those that will remain with Teleflex (the “Respiratory divestiture plan”). 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.

We also have ongoing restructuring plans consisting of the relocation of manufacturing operations to existing lower-cost locations and related workforce reductions (referred to as the 2019 and 2018 Footprint realignment plans). We estimate that we will incur aggregate pre-tax restructuring and restructuring related charges in connection with the 2019 and 2018 Footprint realignment plans of $54 million to $60 million and $110 million to $128 million, respectively, and expect to achieve annual pre-tax savings of $20 million to $22 million and $25 million to $30 million, respectively, once the plans are fully implemented.

In 2014, we initiated a restructuring plan involving the consolidation of operations and a related reduction in workforce at certain facilities, in addition to the relocation of manufacturing operations from certain higher-cost locations to existing lower-cost locations (the "2014 Footprint realignment plan”). The plan is substantially complete and as a result, we expect future restructuring expenses associated with the plan, if any, to be immaterial.

For additional information regarding our restructuring plans, refer to Note 5 within the condensed consolidated financial statements included in this report.

Interest expense

	Three Months Ended
		March 27, 2022			March 28, 2021
Interest expense		$	10.4		$	16.8
Average interest rate on debt		2.0		%	2.5		%

The decrease in interest expense for the three months ended March 27, 2022 compared to the prior year period were primarily due to the redemption of the 4.875% Senior Notes due 2026 in the second quarter of 2021 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 in 2021.

Taxes on income from continuing operations

	Three Months Ended
		March 27, 2022		March 28, 2021
Effective income tax rate		17.1	%	14.2	%

The effective income tax rate for the three months ended March 27, 2022 includes higher tax expense resulting from a U.S. law effective in 2022 requiring capitalization of certain research and development expenditures. The effective income tax rate for the three months ended March 28, 2021 reflects tax benefits associated with the Z-Medica acquisition and the 2021 Restructuring Plan. The effective income tax rates for the three months ended March 27, 2022 and March 28, 2021 both reflect a net tax benefit related to share-based compensation and a tax benefit from research and development tax credits.

Segment Financial Information

Segment net revenues
	Three Months Ended
		March 27, 2022		March 28, 2021		% Increase/(Decrease)
Americas		$	378.0	$	375.5	0.7
EMEA		136.9		141.2		(3.1)
Asia		69.2		63.7		8.6
OEM		57.6		53.5		7.8
Segment net revenues		$	641.7	$	633.9	1.2
Segment operating profit
	Three Months Ended
		March 27, 2022		March 28, 2021		% Increase/(Decrease)
Americas		$	96.9	$	83.6	15.9
EMEA		9.1		23.0		(60.5)
Asia		17.4		14.9		16.8
OEM		10.9		12.6		(13.0)
Segment operating profit (1)		$	134.3	$	134.1	0.2

(1)See Note 13 to our condensed consolidated financial statements included in this report for a reconciliation of segment operating profit to our condensed consolidated income from continuing operations before interest and taxes.

Comparison of the three months ended March 27, 2022 and March 28, 2021

Americas

Americas net revenues for the three months ended March 27, 2022 increased $2.5 million, or 0.7%, compared to the prior year period, which was primarily attributable to a $19.4 million increase in sales of new products and price increases of $6.5 million partially offset by a $22.0 million decrease in sales volumes of existing products and a net decrease in sales volumes attributed to the Respiratory business divestiture.

Americas operating profit for the three months ended March 27, 2022 increased $13.3 million, or 15.9%, compared to the prior year period, which was primarily attributable to an increase in gross profit resulting from price increases and a decrease in contingent consideration expense. Moreover, gross profit for the three months ended March, 28 2021 reflected the adverse impact of the step-up in carrying value of inventory recognized in connection with the Z-Medica acquisition.

EMEA

EMEA net revenues for the three months ended March 27, 2022 decreased $4.3 million, or 3.1%, compared to the prior year period, which was primarily attributable to $8.8 million of unfavorable fluctuations in foreign currency exchange rates and a $4.8 million decrease in sales volumes attributed to the Respiratory business divestiture, partially offset by an $8.2 million increase in sales volumes of existing products.

EMEA operating profit for the three months ended March 27, 2022 decreased $13.9 million, or 60.5%, compared to the prior year period, which was primarily attributable to an increase in EU MDR costs within research and development and unfavorable fluctuations in foreign currency exchange rates.

Asia

Asia net revenues for the three months ended March 27, 2022 increased $5.5 million, or 8.6%, compared to the prior year period, which was primarily attributable to a $12.2 million increase in sales volumes of existing products, partially offset by a $3.7 million decrease in sales volumes attributed to the Respiratory business divestiture and $2.2 million of unfavorable fluctuations in foreign currency exchange rates.

Asia operating profit for the three months ended March 27, 2022 increased $2.5 million, or 16.8%, compared to the prior year period, which was primarily attributable to an increase in gross profit resulting from higher sales, partially offset by an increase in selling expenses to support higher sales.

OEM

OEM net revenues for the three months ended March 27, 2022 increased $4.1 million, or 7.8%, compared to the prior year period, which was primarily attributable to an increase in sales volumes of existing products.

OEM operating profit for the three months ended March 27, 2022 decreased $1.7 million, or 13.0%, compared to the prior year period, which was primarily attributable to an increase in manufacturing and operating expenses.

Liquidity and Capital Resources

We believe our cash flow from operations, available cash and cash equivalents and borrowings under our revolving credit facility will enable us to fund our operating requirements, capital expenditures and debt obligations for the next 12 months and the foreseeable future. We have net cash provided by United States based operating activities as well as non-United States sources of cash available to help fund our debt service requirements in the United States. 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.

Cash Flows

Net cash provided by operating activities from continuing operations was $62.1 million for the three months ended March 27, 2022 as compared to net cash provided by operating activities of $110.8 million for the three months ended March 28, 2021. The $48.7 million decrease was primarily attributable to unfavorable changes in working capital driven by higher payroll and benefit related payments and an increase in accounts receivable resulting from higher sales compared to the prior period.

Net cash used in investing activities from continuing operations was $12.8 million for the three months ended March 27, 2022, primarily consisted of capital expenditures.

Net cash used in financing activities from continuing operations was $21.0 million for the three months ended March 27, 2022, primarily consisted of dividend payments of $15.9 million and net payments from share based compensation plans and related tax benefits of $4.9 million.

Borrowings

The indenture governing our 4.625% Senior Notes due 2027 (the “2027 Notes”) and 4.25% Senior Notes due 2028 (the "2028 Notes") contain covenants that, 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.

As of March 27, 2022, we were in compliance with these requirements. The obligations under the Credit Agreement, the 2027 Notes and 2028 Notes are guaranteed (subject to certain exceptions) by substantially all of our material domestic subsidiaries, and the obligations under the Credit Agreement are (subject to certain exceptions and limitations) secured by a lien on substantially all of the assets owned by us and each guarantor.

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 Senior 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 Guarantor Subsidiaries (collectively, the “Obligor Group”) as of March 27, 2022 and December 31, 2021 and for the three months ended March 27, 2022 is as follows:

	Three Months Ended
	March 27, 2022
	Obligor Group		Intercompany		Obligor Group (excluding Intercompany)
Net revenue	$	460.3	$	53.0	$	407.3
Cost of goods sold	279.5		60.3		219.2
Gross profit	180.8		(7.3)		188.1
Income from continuing operations	49.0		32.1		16.9
Net income	48.7		32.1		16.6
	March 27, 2022						December 31, 2021
---	---	---	---	---	---	---	---	---	---	---	---	---
	Obligor Group		Intercompany		Obligor Group<br> (excluding Intercompany)		Obligor Group		Intercompany		Obligor Group<br> (excluding Intercompany)
Total current assets	$	824.7	$	51.2	$	773.5	$	812.5	$	53.6	$	758.9
Total assets	3,094.8		1,426.2		1,668.6		3,084.4		1,419.4		1,665.0
Total current liabilities	853.2		523.9		329.3		879.7		523.6		356.1
Total liabilities	3,480.2		863.6		2,616.6		3,541.2		886.8		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 Senior Notes). Obligor investments in non-guarantor subsidiaries and any related activity are excluded from the financial information presented above.

Critical Accounting 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 from those estimates and assumptions.

In our Annual Report on Form 10-K for the year ended December 31, 2021, we provided disclosure regarding our critical accounting estimates, which are reflective of significant judgments and uncertainties, are 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.

New Accounting Standards

See Note 2 to the condensed consolidated financial statements included in this report for a discussion of recently issued accounting guidance, including estimated effects, if any, of adoption of the guidance on our financial statements.

Forward-Looking Statements

All statements made in this Quarterly Report on Form 10-Q, 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 the adverse economic conditions associated with the COVID-19 global health pandemic, stay-at-home and other orders, which could cause material delays and cancellations of elective procedures, curtailed or delayed spending by customers and result in disruptions to our supply chain, closure of our facilities, delays in product launches or diversion of management and other resources to respond to the COVID-19 pandemic; the impact of global and regional economic and credit market conditions on healthcare spending; the risk that the COVID-19 pandemic disrupts local economies and causes economies to enter prolonged recessions; 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 plans; our inability to realize anticipated savings resulting from restructuring plans; 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; difficulties in entering new markets; and general economic conditions. For a further discussion of the risks relating to our business, see Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2021. 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the information set forth in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 4. 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 are 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 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) Change in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 1. 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, commercial disputes, intellectual property, contract, employment, environmental and other matters. As of March 27, 2022 and December 31, 2021, we had accrued liabilities of approximately $0.2 million 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 the outcome of any outstanding lawsuits or 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.

Item 1A. Risk Factors

See the information set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021. There have been no significant changes in risk factors for the quarter ended March 27, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this report:

Exhibit No.		Description
3.1	—	Certificate of Elimination of the Series SRP Junior Participating Preference Stock of the Company.
22	—	List of subsidiary guarantors and guaranteed securities (incorporated by reference to Exhibit 22 to the Company’s Form 10-K filed on March 1, 2022).
31.1	—	Certification of Chief Executive Officer, pursuant to Rule 13a–14(a) under the Securities Exchange Act of 1934.
31.2	—	Certification of Chief Financial Officer, pursuant to Rule 13a–14(a) under the Securities Exchange Act of 1934.
32.1	—	Certification of Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	—	Certification of Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1	—	The following materials from our Quarterly Report on Form 10-Q for the quarter ended March 27, 2022, formatted in inline XBRL (eXtensible Business Reporting Language): (i) Cover Page; (ii) the Condensed Consolidated Statements of Income for the three months ended March 27, 2022; (iii) the Condensed Consolidated Statements of Comprehensive Income for the three months ended March 27, 2022 and March 28, 2021; (iv) the Condensed Consolidated Balance Sheets as of March 27, 2022 and December 31, 2021; (v) the Condensed Consolidated Statements of Cash Flows for the three months ended March 27, 2022 and March 28, 2021; (vi) the Condensed Consolidated Statements of Changes in Equity for the three months ended March 27, 2022 and March 28, 2021; and (vii) Notes to Condensed Consolidated Financial Statements.
104.1	—	The cover page of the Company's Quarterly Report on Form 10-Q for the quarter ended March 27, 2022, formatted in inline XBRL (included in Exhibit 101.1).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TELEFLEX INCORPORATED
By:	/s/ Liam J. Kelly
	Liam J. Kelly<br><br>President and Chief Executive Officer<br><br>(Principal Executive Officer)
By:	/s/ Thomas E. Powell
	Thomas E. Powell<br><br>Executive Vice President and Chief Financial Officer<br><br>(Principal Financial Officer)

Dated: April 28, 2022

26

Document

Exhibit 3.1

CERTIFICATE OF ELIMINATION OF THE SERIES SRP JUNIOR PARTICIPATING PREFERENCE STOCK OF TELEFLEX INCORPORATED

Pursuant to Section 151(g) of the General Corporation Law of the State of Delaware

Teleflex Incorporated, a corporation organized and existing under the laws of the State of Delaware (the “Company”), in accordance with the provisions of Section 151(g) of the General Corporation Law of the State of Delaware, hereby certifies as follows:

1.That, pursuant to Section 151 of the General Corporation Law of the State of Delaware and authority granted in the Certificate of Incorporation of the Company (the “Current Charter”), as theretofore amended and/or restated, the Board of Directors of the Company, by resolution duly adopted, authorized the issuance of a series of one hundred thousand (100,000) shares of Series SRP Junior Participating Preference Stock, par value $1 per share (the “Preferred Stock”), and established the voting powers, designations, preferences and relative, participating and other rights, and the qualifications, limitations or restrictions thereof, and, on December 10, 1998, filed a Certificate of Designation with respect to such Preferred Stock in the office of the Secretary of State of the State of Delaware.

2.That no shares of said Preferred Stock are outstanding and no shares thereof will be issued subject to said Certificate of Designation.

3.That the Board of Directors of the Company has adopted the following resolutions:

WHEREAS, by resolution of the Board of Directors of the Company and by a Certificate of Designation (the “Certificate of Designation”) filed in the office of the Secretary of State of the State of Delaware on December 10, 1998, the Company authorized the issuance of a series of one hundred thousand (100,000) shares of Series SRP Junior Participating Preference Stock, par value $1 per share, of the Company (the “Preferred Stock”) and established the voting powers, designations, preferences and relative, participating and other rights, and the qualifications, limitations or restrictions thereof;

WHEREAS, as of the date hereof, no shares of such Preferred Stock are outstanding and no shares of such Preferred Stock will be issued subject to said Certificate of Designation; and

WHEREAS, it is desirable that all matters set forth in the Certificate of Designation with respect to such Preferred Stock be eliminated from the Certificate of Incorporation, as heretofore amended and/or restated, of the Company.

NOW, THEREFORE, BE IT AND IT HEREBY IS

RESOLVED, that all matters set forth in the Certificate of Designation with respect to such Preferred Stock be eliminated

from the Current Charter, as heretofore amended and/or restated, of the Company; and it is further

RESOLVED, that the officers of the Company be, and hereby are, authorized and directed to file a certificate with the office of the Secretary of State of the State of Delaware setting forth a copy of these resolutions whereupon all matters set forth in the Certificate of Designation with respect to such Preferred Stock shall be eliminated from the Current Charter, as heretofore amended, of the Company.

4.That, accordingly, all matters set forth in the Certificate of Designation with respect to the Preferred Stock be, and hereby are, eliminated from the Certificate of Incorporation, as heretofore amended and/or restated, of the Company.

IN WITNESS WHEREOF, the Company has caused this Certificate to be executed by its duly authorized officer this 9th day of March, 2022.

TELEFLEX INCORPORATED

By: /s/ Daniel V. Logue

Name:    Daniel V. Logue

Title:    Corporate Vice President, General Counsel

and Secretary

2

Document

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Liam J. Kelly, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Teleflex Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 28, 2022	/s/ Liam J. Kelly
	Liam J. Kelly
	President and Chief Executive Officer

Document

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Thomas E. Powell, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Teleflex Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 28, 2022	/s/ Thomas E. Powell
	Thomas E. Powell
	Executive Vice President and Chief Financial Officer

Document

Exhibit 32.1

CERTIFICATION PURSUANT TO

RULE 13a-14(b) UNDER THE

SECURITIES EXCHANGE ACT OF 1934

In connection with the Quarterly Report of Teleflex Incorporated (the “Company”) on Form 10-Q for the period ending March 27, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Liam J. Kelly, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial position and results of operations of the Company.

Date: April 28, 2022	/s/ Liam J. Kelly
	Liam J. Kelly<br>President and Chief Executive Officer

Document

Exhibit 32.2

CERTIFICATION PURSUANT TO

RULE 13a-14(b) UNDER THE

SECURITIES EXCHANGE ACT OF 1934

In connection with the Quarterly Report of Teleflex Incorporated (the “Company”) on Form 10-Q for the period ending March 27, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas E. Powell, Executive Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial position and results of operations of the Company.

Date: April 28, 2022	/s/ Thomas E. Powell
	Thomas E. Powell<br>Executive Vice President and Chief Financial Officer