Teleflex (TFX) Piper Sandler 36th Annual Healthcare Conference summary

OEM business performance and outlook

• Q3 saw a $7 million OEM revenue shortfall, mainly due to a customer vertically integrating a legacy product.

• Another $7 million impact is expected in Q4, with the total $14 million headwind likely to persist through the first half of next year.

• The majority of OEM products are complex and difficult for customers to bring in-house, making this disruption transitory.

• The $14 million headwind represents about a 50 basis point impact on the top line for next year.

UroLift and office-based headwinds

• UroLift's office-based business faces a $40 million revenue decline in 2024, mainly due to reimbursement changes.

• The reimbursement change, phased in over four years, will conclude in 2025, after which no further negative changes are expected.

• Profitability of office-based procedures varies by region, with some areas severely impacted.

• Multiple strategies have been implemented to support UroLift, including rebates, pre-authorization, and management changes.

• Growth continues in ASC and hospital settings, with the decline isolated to the office site of service.

Balloon pump market opportunity

• The intra-aortic balloon pump market is a duopoly, with a competitor's product off the market until at least July next year.

• U.S. market opportunity is $80 million, with $40 million in the replacement cycle.

• Q4 revenue from this segment is expected to be $10–12 million, with similar performance anticipated in Q1 and Q2 next year.

• High catheter attachment rates drive recurring revenue, with catheter margins above the corporate average.

• European market impact is expected to be limited unless the competitor's absence extends beyond July.