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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 28, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                    .
Commission file number 1-5353
TELEFLEX INCORPORATED
(Exact name of registrant as specified in its charter)

Delaware 23-1147939
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. employer
identification no.)
550 E. Swedesford Rd., Suite 400 Wayne, PA 19087
(Address of principal executive offices and zip code)
(610) 225-6800
(Registrant’s telephone number, including area code)
(None)
(Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $1.00 per shareTFXNew 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 filerAccelerated filer
    
Non-accelerated filerSmaller 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 46,732,674 shares of common stock, par value $1.00 per share, outstanding as of April 27, 2021.



TELEFLEX INCORPORATED
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 28, 2021
TABLE OF CONTENTS
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Item 3:   
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Item 1:   
Item 1A:   
Item 2:   
Item 3:   
Item 4:
Item 5:   
Item 6:   
   
  

1


PART I FINANCIAL INFORMATION
Item 1. Financial Statements
TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 Three Months Ended
 March 28, 2021March 29, 2020
 (Dollars and shares in thousands, except per share)
Net revenues$633,925 $630,642 
Cost of goods sold289,398 297,018 
Gross profit344,527 333,624 
Selling, general and administrative expenses203,148 147,796 
Research and development expenses29,947 27,396 
Restructuring and impairment charges7,998 1,346 
Income from continuing operations before interest and taxes103,434 157,086 
Interest expense16,798 15,439 
Interest income(659)(579)
Income from continuing operations before taxes87,295 142,226 
Taxes on income from continuing operations12,428 11,074 
Income from continuing operations74,867 131,152 
Operating loss from discontinued operations(1)(4)
Tax benefit on operating loss from discontinued operations (2)
Loss from discontinued operations(1)(2)
Net income$74,866 $131,150 
Earnings per share:  
Basic:  
Income from continuing operations$1.60 $2.83 
Loss from discontinued operations  
Net income $1.60 $2.83 
Diluted:  
Income from continuing operations$1.58 $2.78 
Loss from discontinued operations  
Net income$1.58 $2.78 
Weighted average common shares outstanding  
Basic46,698 46,382 
Diluted47,407 47,231 
The accompanying notes are an integral part of the condensed consolidated financial statements.
2


TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
 Three Months Ended
 March 28, 2021March 29, 2020
(Dollars in thousands)
Net income$74,866 $131,150 
Other comprehensive income (loss), net of tax:  
Foreign currency translation, net of tax of $(598) and $(7,581)
(24,075)(18,199)
Pension and other postretirement benefit plans adjustment, net of tax of $(513) and $(522)
1,611 1,689 
Derivatives qualifying as hedges, net of tax of $33 and $372
27 (3,817)
Other comprehensive loss, net of tax:(22,437)(20,327)
Comprehensive income$52,429 $110,823 
The accompanying notes are an integral part of the condensed consolidated financial statements.
3


TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 March 28, 2021December 31, 2020
 (Dollars in thousands)
ASSETS  
Current assets  
Cash and cash equivalents$324,631 $375,880 
Accounts receivable, net401,112 395,071 
Inventories512,284 513,196 
Prepaid expenses and other current assets121,877 115,436 
Prepaid taxes18,879 22,842 
Total current assets1,378,783 1,422,425 
Property, plant and equipment, net467,648 473,912 
Operating lease assets94,554 100,635 
Goodwill2,565,874 2,585,966 
Intangible assets, net2,470,244 2,519,746 
Deferred tax assets8,045 8,073 
Other assets42,875 41,802 
Total assets$7,028,023 $7,152,559 
LIABILITIES AND EQUITY  
Current liabilities  
Current borrowings$83,750 $100,500 
Accounts payable101,340 102,520 
Accrued expenses134,311 136,276 
Payroll and benefit-related liabilities100,380 122,366 
Accrued interest23,401 7,135 
Income taxes payable14,831 17,361 
Other current liabilities50,040 53,869 
Total current liabilities508,053 540,027 
Long-term borrowings2,295,436 2,377,888 
Deferred tax liabilities482,484 484,678 
Pension and postretirement benefit liabilities57,118 74,499 
Noncurrent liability for uncertain tax positions9,987 10,127 
Noncurrent operating lease liabilities79,403 86,097 
Other liabilities219,751 242,786 
Total liabilities3,652,232 3,816,102 
Commitments and contingencies
Total shareholders' equity3,375,791 3,336,457 
Total liabilities and shareholders' equity$7,028,023 $7,152,559 
The accompanying notes are an integral part of the condensed consolidated financial statements.

4


TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months Ended
March 28, 2021March 29, 2020
(Dollars in thousands)
Cash flows from operating activities of continuing operations:  
Net income$74,866 $131,150 
Adjustments to reconcile net income to net cash provided by operating activities:  
Loss from discontinued operations1 2 
Depreciation expense17,513 16,842 
Intangible asset amortization expense41,922 38,911 
Deferred financing costs and debt discount amortization expense1,210 945 
Fair value step up of acquired inventory sold3,993 1,707 
Changes in contingent consideration6,354 (46,502)
Stock-based compensation5,344 3,522 
Deferred income taxes, net425 679 
Payments for contingent consideration (79,771)
Interest benefit on swaps designated as net investment hedges(4,647)(4,874)
Other(14,384)(18,143)
Changes in assets and liabilities, net of effects of acquisitions and disposals:  
Accounts receivable(12,298)(23,145)
Inventories(10,074)(12,346)
Prepaid expenses and other assets3,342 6,403 
Accounts payable, accrued expenses and other liabilities(4,438)(31,488)
Income taxes receivable and payable, net1,665 4,651 
   Net cash provided by (used in) operating activities from continuing operations110,794 (11,457)
Cash flows from investing activities of continuing operations:  
Expenditures for property, plant and equipment(19,276)(19,684)
Proceeds from sale of assets161 400 
Payments for businesses and intangibles acquired, net of cash acquired(1,762)(265,160)
Net cash used in investing activities from continuing operations(20,877)(284,444)
Cash flows from financing activities of continuing operations:  
Proceeds from new borrowings 485,000 
Reduction in borrowings(100,000) 
Debt extinguishment, issuance and amendment fees(22) 
Net proceeds from share based compensation plans and the related tax impacts(2,510)(3,022)
Payments for contingent consideration(13,071)(60,881)
Dividends paid(15,893)(15,767)
Net cash (used in) provided by financing activities from continuing operations(131,496)405,330 
Cash flows from discontinued operations:  
Net cash used in operating activities(243)(193)
Net cash used in discontinued operations(243)(193)
Effect of exchange rate changes on cash and cash equivalents(9,427)(3,842)
Net (decrease) increase in cash and cash equivalents(51,249)105,394 
Cash and cash equivalents at the beginning of the period375,880 301,083 
Cash and cash equivalents at the end of the period$324,631 $406,477 
The accompanying notes are an integral part of the condensed consolidated financial statements.
5


TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)

Common StockAdditional
Paid In
Capital
Retained
Earnings
Accumulated Other Comprehensive LossTreasury StockTotal
SharesDollarsSharesDollars
(Dollars and shares in thousands, except per share)
Balance at December 31, 202047,812 $47,812 $652,305 $3,096,228 $(297,298)1,132 $(162,590)$3,336,457 
Net income74,866 74,866 
Cash dividends ($0.34 per share)
(15,893)(15,893)
Other comprehensive loss(22,437)(22,437)
Shares issued under compensation plans18 18 1,993 (28)99 2,110 
Deferred compensation447 (4)241 688 
Balance at March 28, 202147,830 $47,830 $654,745 $3,155,201 $(319,735)1,100 $(162,250)$3,375,791 
Common StockAdditional
Paid In
Capital
Retained
Earnings
Accumulated Other Comprehensive LossTreasury StockTotal
SharesDollarsSharesDollars
(Dollars and shares in thousands, except per share)
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(791)(791)
Net income
131,150 131,150 
Cash dividends ($0.34 per share)
(15,767)(15,767)
Other comprehensive loss
(20,327)(20,327)
Shares issued under compensation plans
24 24 (3,074)(37)1,748 (1,302)
Deferred compensation
383 (5)358 741 
Balance at March 29, 2020
47,560 $47,560 $614,289 $2,939,508 $(364,719)1,140 $(163,614)$3,073,024 

The accompanying notes are an integral part of the condensed consolidated financial statements.
6


TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 (all tabular amounts in thousands unless otherwise noted)


Note 1 — Basis of presentation
The accompanying unaudited condensed consolidated financial statements of Teleflex Incorporated and its subsidiaries (“we,” “us,” “our" and “Teleflex”) are prepared on the same basis as its annual consolidated financial statements.
In the opinion of management, the financial statements reflect all adjustments, which are of a normal recurring nature, necessary for the fair statement of the financial statements for interim periods in accordance with accounting principles generally accepted in the United States of America ("GAAP") and Rule 10-01 of Securities and Exchange Commission ("SEC") Regulation S-X, which sets forth the instructions for the form and content of presentation of financial statements included in Form 10-Q. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The results of operations for the periods reported are not necessarily indicative of those that may be expected for a full year.
In accordance with applicable accounting standards and as permitted by Rule 10-01 of Regulation S-X, the accompanying condensed consolidated financial statements do not include all of the information and footnote disclosures that are required to be included in our annual consolidated financial statements. Therefore, our quarterly condensed consolidated financial statements should be read in conjunction with our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020.
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 new guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. 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 consolidated financial statements.
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, unless otherwise indicated above, believes 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 comprised 88%, 9% and 3% of consolidated net revenues, respectively, for the three months ended March 28, 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.
7


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 28, 2021 and March 29, 2020.
Three Months Ended
March 28, 2021March 29, 2020
Vascular access$163,973 $150,256 
Anesthesia84,857 75,702 
Interventional96,173 99,931 
Surgical80,386 75,432 
Interventional urology73,364 74,194 
OEM53,489 63,389 
Other (1)
81,683 91,738 
Net revenues (2)
$633,925 $630,642 
(1)Includes revenues generated from sales of our respiratory and urology products (other than interventional urology products).
(2)The product categories listed above are presented on a global basis, while each of our reportable segments other than the OEM reportable segment are defined based on the geographic location of its operations; the OEM reportable segment operates globally. Each of the geographically based reportable segments include net revenues from each of the non-OEM product categories listed above.
Note 4 — 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. The acquisition complements our OEM product portfolio.
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, marketed under the QuikClot, Combat Gauze and QuickClot Control+ brand names, 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.
Note 5 — Restructuring and impairment charges
2021 Restructuring plan
During the first quarter of 2021, we committed to a restructuring plan designed to streamline various business functions across our segments. We estimate that we will incur aggregate pre-tax restructuring charges of $7 million to $9 million, consisting primarily of termination benefits. In addition, we expect to incur $3 million to $4 million in restructuring related charges, most of which are expected to be recognized in cost of goods sold. We expect this program will be substantially completed by the end of 2021. As of March 28, 2021, we had a restructuring reserve of $6.4 million related to this plan, all of which related to termination benefits.
8


TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

Footprint realignment plans
We have ongoing restructuring programs primarily related to the relocation of manufacturing operations to existing lower-cost locations and related workforce reductions (referred to as the 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:
2019 Footprint realignment plan2018 Footprint realignment plan2014 Footprint realignment plan
Program expense estimates:(Dollars in millions)
Termination benefits
$16 to $18
$60 to $70
$13 to $13
Other costs (1)
2 to 2
3 to 4
1 to 2
Restructuring charges
18 to 20
63 to 74
14 to 15
Restructuring related charges (2)
38 to 43
40 to 59
38 to 40
Total restructuring and restructuring related charges
$56 to $63
$103 to $133
$52 to $55
Other program estimates:
Expected cash outlays
$50 to $57
$99 to $127
$42 to $46
Expected capital expenditures
$28 to $33
$19 to $23
$26 to $27
Other program information:
Period initiatedFebruary 2019May 2018April 2014
Estimated period of substantial completion202220222022
Aggregate restructuring charges$15.7$60.3$13.6
Restructuring reserve:
Balance as of March 28, 2021$7.0$46.0$3.3
Restructuring related charges incurred:
Three Months Ended March 28, 2021$3.6$2.0$0.7
Aggregate restructuring related charges$24.7$18.7$36.7
(1)Includes facility closure, employee relocation, equipment relocation and outplacement costs.
(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 the restructuring related charges are expected to be recognized within cost of goods sold.
Three Months Ended March 28, 2021
Termination benefits
Other costs (1)
Total
2021 Restructuring plan$6,760 $ $6,760 
2019 Footprint realignment plan341 105 446 
2018 Footprint realignment plan267 45 312 
Other restructuring programs (2)
(166)646 480 
Restructuring charges$7,202 $796 $7,998 
Three Months Ended March 29, 2020
Termination benefits
Other costs (1)
Total
2019 Footprint realignment plan$829 $9 $838 
2018 Footprint realignment plan314 81 395 
Other restructuring programs (2)
(107)220 113 
Restructuring charges$1,036 $310 $1,346 
(1) Other costs include facility closure, contract termination and other exit costs.
(2) Includes the program initiated during third quarter of 2019 as well as the 2016 and 2014 Footprint realignment plans.
9


TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

Note 6 — Inventories
Inventories as of March 28, 2021 and December 31, 2020 consisted of the following:
 March 28, 2021December 31, 2020
Raw materials$131,094 $132,370 
Work-in-process76,267 75,874 
Finished goods304,923 304,952 
Inventories$512,284 $513,196 

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 28, 2021:
 AmericasEMEAAsiaOEMTotal
December 31, 2020$1,700,282 $536,228 $237,446 $112,010 $2,585,966 
Currency translation adjustment(746)(15,442)(3,904) (20,092)
March 28, 2021$1,699,536 $520,786 $233,542 $112,010 $2,565,874 
The gross carrying amount of, and accumulated amortization relating to, intangible assets as of March 28, 2021 and December 31, 2020 were as follows:
 Gross Carrying AmountAccumulated Amortization
 March 28, 2021December 31, 2020March 28, 2021December 31, 2020
Customer relationships$1,373,922 $1,377,943 $(439,068)$(425,692)
In-process research and development28,969 29,627 — — 
Intellectual property1,456,085 1,458,924 (500,282)(479,612)
Distribution rights23,673 23,866 (20,284)(20,280)
Trade names615,816 619,847 (69,533)(65,955)
Non-compete agreements23,789 24,592 (22,843)(23,514)
 
$3,522,254 $3,534,799 $(1,052,010)$(1,015,053)

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 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 28, 2021 we recognized a loss of $3.2 million related to non-designated foreign currency forward contracts. For the three months ended March 29, 2020 we recognized a gain of $1.6 million 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 28, 2021 and December 31, 2020 was $131.2 million and $129.5 million, respectively. The total notional amount for all open non-designated foreign currency forward contracts as of March 28, 2021 and December 31, 2020 was $191.3 million and $163.5 million, respectively. All open foreign currency forward contracts as of March 28, 2021 have durations of 12 months or less.
10


TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

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"). For the three months ended March 28, 2021 and March 29, 2020, we recognized foreign exchange gains of $17.6 million and $25.0 million, respectively, within AOCI related to the cross-currency swaps. For the three months ended March 28, 2021 and March 29, 2020, we recognized $4.6 million and $4.9 million, respectively, in interest benefit related to the cross-currency swaps.
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 28, 2021 and December 31, 2020:
March 28, 2021December 31, 2020
Asset derivatives:  
Designated foreign currency forward contracts$1,098 $1,691 
Non-designated foreign currency forward contracts212 61 
Cross-currency interest rate swaps25,575 20,106 
Prepaid expenses and other current assets26,885 21,858 
Total asset derivatives$26,885 $21,858 
Liability derivatives:  
Designated foreign currency forward contracts$1,706 $1,504 
Non-designated foreign currency forward contracts216 366 
Other current liabilities1,922 1,870 
Cross-currency interest rate swaps12,054 34,125 
Other liabilities12,054 34,125 
Total liability derivatives$13,976 $35,995 
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 28, 2021 and March 29, 2020.
11


TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

Trade receivables
The allowance for credit losses as of March 28, 2021 and December 31, 2020 was $12.0 million and $12.9 million, respectively. The current portion of the allowance for credit losses, which was $7.4 million and $8.1 million as of March 28, 2021 and December 31, 2020, 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 28, 2021 and December 31, 2020:
 
Total carrying
 value at
 March 28, 2021
Quoted prices in active
markets (Level 1)
Significant other
observable
Inputs (Level 2)
Significant
unobservable
Inputs (Level 3)
Investments in marketable securities$13,357 $13,357 $ $ 
Derivative assets26,885  26,885  
Derivative liabilities13,976  13,976  
Contingent consideration liabilities29,763   29,763 

 Total carrying
value at December 31, 2020
Quoted prices in active
markets (Level 1)
Significant other
observable
Inputs (Level 2)
Significant
unobservable
Inputs (Level 3)
Investments in marketable securities$12,617 $12,617 $ $ 
Derivative assets21,858  21,858  
Derivative liabilities35,995  35,995  
Contingent consideration liabilities36,633   36,633 
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, which are discussed immediately below.
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.
12


TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

The table below provides additional information regarding the valuation technique and inputs used in determining the fair value of contingent consideration.
Contingent Consideration LiabilityValuation TechniqueUnobservable InputRange (Weighted average)
Milestone-based payments
Discounted cash flowDiscount rate
1.2% - 2.5% (1.5%)
Projected year of payment2021 - 2023
Revenue-based payments
Discounted cash flowDiscount rate
1.6% - 10.0% (3.2%)
Projected year of payment2021 - 2029
The following table provides information regarding changes in the contingent consideration liabilities during the three months ended March 28, 2021:
 Contingent consideration
Balance - December 31, 2020
$36,633 
Payments
(13,071)
Revaluations
6,354 
Translation adjustment
(153)
Balance - March 28, 2021
$29,763 

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 28, 2021March 29, 2020
Basic46,698 46,382 
Dilutive effect of share-based awards709 849 
Diluted47,407 47,231 
The weighted average number of shares that were antidilutive and therefore excluded from the calculation of earnings per share were 0.1 million the three months ended March 28, 2021 and March 29, 2020.
The following tables provide information relating to the changes in accumulated other comprehensive loss, net of tax, for the three months ended March 28, 2021 and March 29, 2020:
Cash Flow HedgesPension and Other Postretirement Benefit PlansForeign Currency Translation AdjustmentAccumulated 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 income838 1,450  2,288 
Net current-period other comprehensive (loss) income27 1,611 (24,075)(22,437)
Balance as of March 28, 2021$(455)$(148,646)$(170,634)$(319,735)
13


TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

 Cash Flow HedgesPension and Other Postretirement Benefit PlansForeign Currency Translation AdjustmentAccumulated Other Comprehensive (Loss) Income
Balance as of December 31, 2019$735 $(138,810)$(206,317)$(344,392)
Other comprehensive income (loss) before reclassifications(3,760)263 (18,199)(21,696)
Amounts reclassified from accumulated other comprehensive loss(57)1,426  1,369 
Net current-period other comprehensive income(3,817)1,689 (18,199)(20,327)
Balance as of March 29, 2020$(3,082)$(137,121)$(224,516)$(364,719)
  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 28, 2021 and March 29, 2020:
Three Months Ended
March 28, 2021March 29, 2020
Losses (gains) on foreign exchange contracts:
Cost of goods sold$846 $(66)
Total before tax846 (66)
(Benefit) tax(8)9 
Net of tax$838 $(57)
Amortization of pension and other postretirement benefit items (1):
Actuarial losses$2,143 $1,852 
Prior-service costs(251)8 
Total before tax1,892 1,860 
Tax benefit(442)(434)
Net of tax$1,450 $1,426 
Total reclassifications, net of tax$2,288 $1,369 
(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 28, 2021March 29, 2020
Effective income tax rate14.2%7.8%
The effective income tax rate for the three months ended March 28, 2021 and March 29, 2020 was 14.2% and 7.8%, respectively. The effective income tax rates for both the three months ended March 28, 2021 and March 29, 2020 reflect a significant net tax benefit related to share-based compensation. The effective income tax rate for the three months ended March 29, 2020 reflects a non-taxable contingent consideration adjustment recognized in connection with a decrease in the fair value of our contingent consideration liabilities.
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. Resource Conservation and Recovery Act and similar state laws. These laws require us to undertake certain
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TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

investigative and remedial activities at sites where we conduct or once conducted operations or at sites where Company-generated waste was disposed.
Remediation activities vary substantially in duration and cost from site to site. These activities, and their associated costs, depend on the mix of unique site characteristics, evolving remediation technologies, the regulatory agencies involved and their enforcement policies, as well as the presence or absence of other potentially responsible parties. At March 28, 2021, we have recorded $1.6 million and $5.0 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 28, 2021. 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 28, 2021, we have recorded accrued liabilities of $0.4 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.
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 seeks money damages in the amount of $66.9 million plus interest. We are assessing our response to this action, but believe that the claim lacks merit, and intend to defend ourselves vigorously.
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.
Tax audits and examinations: We are routinely subject to tax examinations by various tax authorities. As of March 28, 2021, the most significant tax examinations in process were in Ireland and Germany. We may establish reserves with respect to our uncertain tax positions, after we adjust the reserves to address developments with respect to our uncertain tax positions, including developments in these tax examinations. Accordingly, developments in tax audits and examinations, including resolution of uncertain tax positions, could result in increases or decreases to our recorded tax liabilities, which could impact our financial results.

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TELEFLEX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

Note 13 — Segment information
The following tables present our segment results for the three months ended March 28, 2021 and March 29, 2020:
 Three Months Ended
 March 28, 2021March 29, 2020
Americas$375,493 $358,002 
EMEA141,253 156,124 
Asia63,690 53,129 
OEM53,489 63,387 
Net revenues$633,925 $630,642 
Three Months Ended
March 28, 2021March 29, 2020
Americas$83,602 $140,969 
EMEA22,995 20,419 
Asia14,916 10,232 
OEM12,562 15,099 
Total segment operating profit (1)
134,075 186,719 
Unallocated expenses (2)
(30,641)(29,633)
Income from continuing operations before interest and taxes$103,434 $157,086 
(1)Segment operating profit includes segment net revenues from external customers reduced by the segment's 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. Corporate expenses are allocated among the segments in proportion to the respective amounts of one of several items (such as net revenues, 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 assets.

Note 14 — Subsequent event
Redemption of 4.875% Senior Notes due 2026

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 will be 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”). The notice of redemption provides that the redemption is subject to the condition that we are able to borrow funds under our revolving credit agreement on the Redemption Date in an amount sufficient to pay the aggregate Redemption Price. We anticipate recognizing a loss on extinguishment of debt of $13.0 million in the second quarter of 2021 as a result of the redemption of the 2026 Notes.

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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
We continue to experience the effects of the global COVID-19 pandemic. Among other things, the response to the COVID-19 pandemic has had the effect of reducing the number of elective procedures being carried out, which has impacted and continues to impact some of our product categories, including our interventional urology, surgical, interventional, anesthesia and OEM products, which have experienced and continue to experience decreased demand. We have also experienced and continue to experience increased dem