Teleflex(TFX) - 2023 Q4 - Annual Report

Financial Performance - Net revenues for 2023 were $2,974.5 million, up from$2,791.0 million in 2022[340] - Gross profit increased to $1,646.9 million in 2023 from$1,531.1 million in 2022[340] - Net income for 2023 was $356.3 million, compared to$363.1 million in 2022 and $485.4 million in 2021[343] - Comprehensive income for 2023 was$445.4 million, up from $306.6 million in 2022 and$435.7 million in 2021[343] - Net cash provided by operating activities from continuing operations increased to $511.7 million in 2023, up from$342.8 million in 2022[242] - Free cash flow rose to $420.2 million in 2023, compared to$263.6 million in 2022[242] - Net cash provided by financing activities from continuing operations was $38.5 million in 2023, primarily due to$101.3 million in net proceeds from borrowings for the acquisition of Palette[239] - Net revenues for the year ended December 31, 2023, were $2,974.5 million, compared to$2,791.0 million in 2022 and $2,809.6 million in 2021[386] International Operations - 72$40.6 million (13.2%), driven by a $25.5 million increase in sales volume of existing products and an$18.8 million increase in sales of new products[220] - Asia operating profit for 2023 increased by $7.3 million (8.8$222.8 million, with $196.7 million held at non-U.S. subsidiaries[227] Acquisitions and Contingent Liabilities - Contingent consideration liabilities as of December 31, 2023, amounted to$39.5 million, primarily related to acquisitions of Standard Bariatrics Inc. and Palette[121] - The company completed the acquisition of Palette on October 10, 2023, with a fair value of consideration transferred of $621.9 million[335] - Identifiable intangible assets acquired in the Palette acquisition included$264.0 million in intellectual property and $40.5 million in trade names intangible assets[335] - The company completed the acquisition of Palette Life Sciences AB for$621.9 million, including $594.9 million in net cash payments and$27.0 million in contingent consideration[388] - The Palette acquisition added $333.5 million in intangible assets and$357.0 million in goodwill[390] - The fair value of contingent consideration liabilities was $39.5 million as of December 31, 2023[461] - Contingent consideration liabilities decreased from$44.0 million at the beginning of 2023 to $39.5 million by the end of 2023, primarily due to revaluations and adjustments[472] - The maximum potential payment under contingent consideration arrangements related to acquisitions is$177.0 million[468] - Revenue volatility for contingent consideration liabilities ranges from 15.1% to 20.3%, with a weighted average of 18.8%[470] Segment Performance - OEM net revenues for 2023 increased by $53.4 million (19.6$28.3 million increase in sales volume of existing products and price increases[222] - OEM operating profit for 2023 increased by $20.8 million (31.9$326.0 million in 2023 from $272.6 million in 2022[386] - The Vascular Access product category generated$708.0 million in revenue for 2023, up from $683.6 million in 2022[386] Balance Sheet and Cash Flow - Total assets increased to$7.53 billion in 2023 from $6.93 billion in 2022, driven by growth in goodwill and intangible assets[346] - Goodwill increased to$2.91 billion in 2023 from $2.54 billion in 2022, reflecting acquisitions and business combinations[346] - Retained earnings grew to$4.11 billion in 2023 from $3.82 billion in 2022, supported by net income generation[349] - Cash and cash equivalents decreased to$222.8 million in 2023 from $292.0 million in 2022, reflecting cash usage for operations and investments[346] - Total liabilities increased to$3.09 billion in 2023 from $2.91 billion in 2022, primarily due to higher long-term borrowings[346] - The company had$262.0 million in borrowings outstanding and $0.9 million in outstanding standby letters of credit under its$1.0 billion revolving credit facility as of December 31, 2023[245] - The company borrowed the maximum amount available of $75 million under its accounts receivable securitization facility as of December 31, 2023[248] Risk Management and Derivatives - The company entered into a zero-cost foreign exchange collar contract in December 2023 to manage foreign exchange risk related to$500 million notional cross-currency swaps[229] - A 1.0% change in variable interest rates would impact annual interest expense by $8.2 million based on outstanding debt as of December 31, 2023[279] - Derivative assets valued at$63.6 million and derivative liabilities at $1.5 million, both classified under Level 2 of the fair value hierarchy[463] Shareholder Equity and Shares - Basic weighted average shares outstanding for 2023 were 46.98 million, with a dilutive effect of 0.32 million shares from share-based awards, resulting in diluted shares of 47.30 million[474] - The company has 200 million authorized common shares and 500,000 preference shares, with no preference shares outstanding in the last three years[473] Reserves and Allowances - The liability for returns and allowances was$22.2 million as of December 31, 2023, up from $17.9 million in 2022[379] - The reserve for customer incentive programs, including rebates, was$26.7 million as of December 31, 2023, down from $29.0 million in 2022[379] Investments and Fair Value - Investments in marketable securities valued at$10.1 million as of December 31, 2022, classified under Level 1 of the fair value hierarchy[463] - Contingent consideration liabilities valued at $44.0 million as of December 31, 2022, classified under Level 3 of the fair value hierarchy[463] Transaction Expenses - The company incurred$10.6 million in transaction expenses related to the Palette acquisition[391] Goodwill and Impairment - The company did not record any goodwill impairment charges for the year ended December 31, 2023[360] Revenue Sources - The company's revenue from hospitals and healthcare providers represented 87% of consolidated net revenues for the year ended December 31, 2023[377] Obligor Group Performance - Obligor Group net revenue for 2023 was $2,128.2 million, with gross profit of$764.9 million and net income of $259.5 million[233]