Teleflex(TFX) - 2024 Q4 - Annual Report

Financial Performance - As of December 31, 2024, the company accrued $49.3 million of contingent consideration related to completed business combinations, primarily associated with Palette[122]. - The company recognized an impairment charge of$ 240 million in the goodwill impairment line in the Consolidated Statements of Income due to intensifying competition and sustained revenue shortfalls[135]. - The company had total consolidated indebtedness of $1.7 billion as of December 31, 2024[160]. - The company may incur significant expenses related to the proposed separation, which may exceed current estimates[158]. - The company may not pay dividends in the future, as the declaration and payment depend on various factors including financial condition and covenants[169]. Revenue Sources - For the years ended December 31, 2024, 2023, and 2022, 38%, 37%, and 36% of the company's net revenues were derived from operations outside the U.S.[127]. - The company has significant manufacturing and distribution facilities outside the U.S., with 73% of full-time employees located in other countries[127]. Risks and Challenges - The company is exposed to fluctuations in foreign currency exchange rates, commodity prices, and interest rates, which may adversely affect its results[136]. - Increases in commodity prices, such as plastic resin, aluminum, and steel, could increase the costs of the company's products and services[137]. - The company faces risks associated with public health epidemics, which could significantly impact economic activity and its operations[123]. - The company may experience adverse effects from tariffs and trade disputes, particularly those imposed by the U.S. government[133]. - An interruption in manufacturing or distribution operations could have a material adverse effect on the company's business and financial condition[140]. - The company is exposed to risks related to environmental and health and safety liabilities due to complex regulations[150]. - Cyber-attacks and disruptions to information systems pose risks that could adversely affect business operations and customer relationships[149]. Employee and Labor Relations - 6% of the company's employees were covered by union contracts or collective bargaining arrangements as of December 31, 2024[153]. - The company’s ability to attract, train, and retain key employees is vital for its success and may be impacted by industry competition[142]. Corporate Strategy and Governance - The proposed separation of Urology, Acute Care, and OEM businesses may face challenges and could delay completion[154]. - The company relies on strong relationships with healthcare professionals for product development, which is critical for business success[144]. - The company has significant restrictions on its business due to debt agreements, which may limit its ability to pursue certain opportunities[163]. - Provisions in the company's governing documents could discourage or delay potential mergers or acquisitions, potentially affecting stockholder interests[170]. Financial Instruments and Currency Exposure - A 10% decline in the U.S. dollar to euro exchange rate could require the company to pay approximately$ 75 million to counterparties under cross-currency swap agreements[165]. - The average interest rate on fixed-rate debt is 4.438%, while the average interest rate on variable-rate debt is 5.648%[311]. - A 1.0% change in variable interest rates would increase or decrease annual interest expense by $6.6 million based on outstanding debt as of December 31, 2024[311]. - The total notional amount for foreign currency forward exchange contracts is$ 439.5 million, and for cross-currency interest rate swap contracts, it is $1.0 billion[313]. - A hypothetical 10% increase in the value of the U.S. dollar against all currencies would increase the fair value of contracts by$ 71.0 million, while a 10% decrease would decrease the fair value by $92.8 million[313]. - The company is subject to financial covenants that require maintenance of a consolidated leverage ratio, secured leverage ratio, and consolidated interest coverage ratio[164]. Intellectual Property and Legal Risks - The company’s inability to protect its intellectual property rights could lead to competitive disadvantages[145]. - The company may face unexpected litigation costs or damages due to potential infringement of third-party intellectual property rights[146]. Stock and Shareholder Information - The company has approximately 46.3 million shares of common stock outstanding as of December 31, 2024, with 3.6 million shares available for future issuance under the 2023 Stock Incentive Plan[166].