Jake Elguicze – Treasurer and Vice President-Investor Relations Benson Smith – Chairman, President and Chief Executive Officer Thomas Powell – Executive Vice President and Chief Financial Officer Liam Kelly – Executive Vice President and Chief Operating Officer.

Larry Keusch – Raymond James John Demchak - Morgan Stanley Yong Lee – Barclays Dave Turkaly – JMP Securities Matthew Mishan – KeyBanc Jason Wittes – Brean Anthony Petrone – Jefferies Ravi Misra – Leerink Partners.

Good day, ladies and gentlemen and welcome to the Quarter One 2015 Teleflex Incorporated Earnings Conference Call. My name is Emma, and I will be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference.

[Operator Instructions] As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Mr. Jake Elguicze, who is Treasurer and Vice President of Investor Relations. Please proceed, sir..

Thank you and good morning, everyone, and welcome to the Teleflex Incorporated first quarter 2015 earnings conference call. The press release and slides to accompany this call are available on our website at www.teleflex.com.

As a reminder, this call will be available on our website and a replay will be available by dialing 888-286-8010, or for international calls, 617-801-6888, pass code 72082025.

Participating on today’s call are Benson Smith, Chairman, President and Chief Executive Officer; Thomas Powell, Executive Vice President and Chief Financial Officer; and our newly appointed Executive Vice President and Chief Operating Officer, Liam Kelly.

Benson, Liam, and Tom will make some brief prepared remarks and then we’ll open up the call to Q&A. Before we begin, I’d like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in our slides.

We wish to caution you that such statements are, in fact, forward-looking in nature and are subject to risks and uncertainties, and actual events or results may differ materially.

The factors that could cause actual results or events to differ materially include, but are not limited to, factors made in our press release today, as well as our filing with the SEC including our Form 10-K, which can be accessed on our website.

I would like to point out that the format for this morning’s call will be slightly different than our past earnings conference calls. Benson will begin with a high-level overview of our quarterly results and provide an update on some key strategic initiatives, including our manufacturing footprint consolidation program.

Who’ll then turn the call over to our newly appointed Chief Operating Officer, Liam Kelly.

Liam, who has been in executive roles at Teleflex since 2009, will review our first quarter product line and geographic revenue results, provide updates with regards to recent GPO and IBN developments, new product introductions and regulatory approvals and highlight two small acquisitions that we completed.

Following Liam, will be our Chief Financial Officer, Tom Powell. Tom will review our first quarter financial results in more detail and also provide an update regarding our financial guidance for 2015. And finally, we will open up the call to Q&A. With that I’d like to now turn the call over to Benson..

Thanks, Jake and good morning, everyone. Let me start by saying that we are very pleased with our overall first quarter results and are off to a strong start to the year. From an operational standpoint, our execution against key priorities this quarter was excellent.

And for the third quarter in a row, we continue to see strengthening revenue growth in North America. And while FX continues to be a challenge, we’ve been successfully mitigating impact on our adjusted EPS line.

In light of the substantial volatility and currency, we have been encouraged by our investors to be transparent as to how FX is affecting us on our important financial metrics, and to provide easy visibility into our underlying business performance, as well as highlighting, the impact of currency having on those results.

During the course of our presentation, we’ll therefore be commenting on our results with and without the effects of currency throughout the P&L. First quarter 2015 revenue totaled $429.4 million, which represents an increase of 5.2% on a constant currency basis. Action the impact of currency or as reported revenue would have totaled $461 million.

Additionally, we had one less shipping day in the first quarter of 2015 as compared with the prior-year quarter. If you were to adjust for the shipping day impact, our constant currency revenue growth would have been approximately 6.2%.

And while Liam will discuss in greater detail our revenue breakdown by business segments, I want to point out that our constant currency revenue growth in North America was 6.7%, adding in for the shipping day we lost, our constant currency revenue growth in North America would have been over 8% and there is no impact from distributed to direct conversion on those numbers and a very modest impact from acquisitions.

As such, we attribute the majority of this growth to market share gains and the continued expansion of Vidacare.

On an operational basis, these results were better than our initial expectations, as we generated constant currency revenue growth within each of our reportable segments and this included several segments reported – reporting upper single digit constant currency revenue growth rates.

Turning to adjusted earnings per share, first quarter 2015 adjusted EPS was $1.30. That compares to the first quarter of 2014 adjusted EPS of $1.22 or an increase of 6.6%. Similar to our constant currency revenue growth performance in the quarter, adjusted EPS was also a slightly better than our initial expectations.

The improvement in year-over-year adjusted earnings resulted from higher volumes, continued improvement in average selling prices, favorable product mix and the impact of recently completed acquisitions.

In addition, we continue to generate increased leverage to the income statement from a lower adjusted tax rate when compared to the first quarter of 2014. These year-over-year increases were somewhat offset by the negative impact of foreign currency, which impacted our adjusted EPS.

But it not been for the unfavorable impact of foreign exchange, adjusted earnings per share in the first quarter of 2015 would have been $1.39 or an increase of approximately 13.9% versus the prior year period.

Next, I would like to provide you with an update on the status of the manufacturing footprint consolidation plan that we initiated approximately one year ago.

As a reminder, the facility restructuring plan was developed in response to pressures that companies like Teleflex is spaced in the healthcare industry and was designed to improve our competitive position.

The plan is focused on the consolidation of operations from three higher cost locations through existing lower cost Teleflex locations and results in reduction in work force. I am pleased to say that these key strategic initiative remains on track in terms of both the expected timetable to complete and the anticipated project synergies.

We continue to project that this program will be substantially completed by the end of 2017 and expect to generate annual savings of between $28 million and $35 million once the plan is fully implemented. From an operational standpoint, we are on track to hit our adjusted gross margin goal of 55% by the time we exit 2015.

Given the volatility of the dollar a year ago, it is hard to predict what the exchange rate will be in the fourth quarter. So there is some potential that the combination of mix and FX could bring us slightly below this target. However, we continue to pursue mitigation opportunities to reduce any potential impact.

As [indiscernible] we expect it to be minimal and would still show a very significant improvement in our adjusted gross margin on a year-over-year basis. Furthermore, it would have little impact on our 2016 gross margin or our longer term gross margin outlook.

We will continue to keep you informed of our operational progress and as a reminder, we will be sharing more details about our longer gross margin expansion plans at are upcoming analyst meeting.

For now though, I’d like to remind everyone that our current gross margin improvement initiatives do not represent the total opportunity we have to improve our gross and operating margins and we’re continuing to evaluate additional future opportunities for margin expansion.

In fact, right in the first quarter, we took additional steps to reduce our operating expense cost basis, which include the realignment of certain of our businesses and a consolidation of certain additional facilities in North America.

As we said in our last earnings conference call in February during 2015, we expect to accelerate operating margin gains through aggressive SG&A cost control.

These productivity initiatives, which were contemplated in our original 2015 adjusted EPS guidance range, will provide meaningful flow through to operating margin, while providing us with an ability to fund strategic investments such as Vidacare marketing efforts or operating infrastructure required to execute our distributor to direct strategy.

As a result of these new initiatives, the company estimates that we’ll incur pre-tax charges of between $6 million to $7 million relating to these programs, which primarily consist of employee termination benefits and contract termination costs.

These latest initiatives are expected to achieve an annualized savings of approximately $12 million to $14 million once they have been fully implemented. We currently anticipate that we’ll begin to see some savings towards the later part of 2015 related to these plans with the majority of the savings being generated in 2016.

Finally, I would like to close my prepared remarks by saying that we are reaffirming our previously provided financial guidance for 2015, which called for constant currency revenue growth of between 4% and 6% and adjusted earnings per share between $6.10 and $6.35 per share.

As you probably remember, when we gave our initial guidance for 2015, we were concerned about the potential volatility around currency. We were intentionally conservative around our constant currency revenue guidance, anticipating that an upside in revenue could minimize some of the downside from currency.

This is precisely what we saw in the first quarter and although the currency decline was greater than our initial expectations, we are in part able to compensate for that fall off with better than expected constant currency revenue growth. That completes my prepared remarks, and I would like to now introduce and turn the call over to Liam.

Liam, who has been with the company for six years is an ideal leader for the newly created position of Chief Operating Officer. He’s been instrumental in much of the success that Teleflex has had over the past several years.

And prior to his latest appointment, he previously held positions at Teleflex which included Executive Vice President and President of the Americas, as well as Executive Vice President and President of the International Operations.

In his new role, Liam will be responsible for the global commercial strategy of the company as Head of the Americas, Asia Pacific, Europe, Middle East and Africa regions.

And his primary focus will be managing the company’s sales, marketing and research and development functions and identifying opportunities for cross business investments and collaboration in these other areas. Liam, congratulations on the significant and very well-deserved promotion..

Thank you, Benson, and good morning, everyone. It is my pleasure to be speaking with you this morning. Like Benson, I too am encouraged by Teleflex’s first quarter results, as well as the multi-year opportunity that lies ahead of us to drive consistent, above-market constant currency revenue growth.

We have the opportunity to leverage our business to expect significant operating margin expansion and adjusted earnings per share. With that said, let’s turn to a more detailed review of our first quarter product and geographic revenue results. For the consolidated company, first quarter 2015 constant currency revenue grew 5.2%.

This revenue growth was broad-based both in terms of product lines and geographic regions. Sales volumes improved and contributed approximately 256 basis points of revenue growth. This growth was driven by core growth of 124 basis points and Vidacare growth of 132 basis points.

And while it may appear at [indiscernible] plants as a percentage of revenue growth attributed to core product volume may have been lower than what we expected when we provided our initial financial outlook for 2015, it is important to understand that the company had one less shipping day in the first quarter of 2015 as compared to the first quarter of 2014.

This impacted our constant currency revenue growth by approximately 1% and particularly impacted the sales growth we attributed to core products.

If you were to normalize our first quarter results for the impact of one less shipping day, the revenue growth stemming from core products would have been above the upper end of our original full-year revenue growth guidance expectations. Turning to Vidacare.

During the first quarter, the performance of these product lines exceeded our expectations and contributed approximately 132 basis points towards our overall revenue growth rates. From a regional perspective, Vidacare growth was strongest in North American hospital market with sales increasing approximately 31%.

Recent investments we have made in international markets are starting to payoff. And during the first quarter, Vidacare generated approximately 25% of its overall revenue from overseas markets. It is our belief that we’ve a significant opportunity to further penetrate both the U.S.

and the international markets with the Vidacare product line and we intended to continue to invest behind this high growth, high margin opportunity. Moving to new product introductions, during the first quarter new products contributed approximately 126 basis points of revenue growth.

This represents the highest level of revenue growth attributed to new product introductions since the third quarter of 2013 and further supports our belief that our R&D product development efforts are paying dividends.

New product growth this quarter was led by sales of our European EASK CVC kits, surgical product introduction stemming from our partnership with a large robotics provider and sales of our Rusch Disposable LED Laryngoscope.

Turning to pricing, during the first quarter the average selling price of our core products were within our full year guidance range assumption and contributed approximately 19 basis points of growth. These price increases resulted from improvements we were able to generate in our North American surgical business.

And this takes me to the last component of quarterly revenue growth are the contribution we received from distributor to direct conversions and the acquisition of Mini-Lap Technologies. Revenue growth form these items totaled approximately 118 basis points almost primarily due to the impact of distributor conversion.

The performance in these areas were in line with our initial expectations for the first quarter. It is important to understand that as we progress through the year, we expect the contribution of these items to accelerate.

Next I would like to provide some additional color surrounding our segment and product related constant currency revenue growth drivers. Vascular, North America first quarter revenue increased 9.2% to $67.9 million. The increase in vascular revenue was largely due to higher sales of Vidacare and Central Venous Catheters.

Anesthesia/Respiratory North America first quarter revenue increased 1.6% to $55.4 million. The growth of this quarter was largely the result of increased sales of our LMA MAD Nasal atomization product.

The LMA MAD Nasal device is a needle free intranasal drug delivery product that provides an alternative drug delivery method for use with drugs approved for Nasal delivery. This product is one that we plan to highlight at our upcoming Analyst Day meeting on May 21.

Turning to our surgical North America business, its revenue increased 9.4% to $38.1 million. The increase in surgical revenue was due to higher sales of ligation clips and access boards. We continue to see a favorable environment for our surgical business with future sales volume from our [indiscernible].

This is as a result of a consent decree on a major competitor in this segment. [Indiscernible] is one of our lower margin products, but there is a patient and customer need that must be addressed by Teleflex. We anticipate increased sales volume for the remainder of the year.

EMEA exceeded our expectations in the first quarter with revenues up 2.2%, totaling $129.3 million. We continue to see the European market has been stable, with the increase in revenue this quarter, primarily due to higher sales of Vascular Access products including Vidacare. Moving to Asia, our first quarter revenue increased 7% to $48.5 million.

This was lower than we expected, driven mainly by timing issues with dealer contracts and ordering pattern.

The quarterly increase in Asia revenue was primarily due to go-direct in Japan and the acquisitions of Mayo Healthcare and Human Medics, and as we expected and we provided our original 2015 outlook growth in this part of the world was somewhat offset by lower sales volumes of the existing products in China.

We expect this volume to regain momentum towards the latter half of the year. Turning to OEM. Revenue for the first quarter increased 8.2% to $34.7 million. The increase in the OEM revenue was due to the higher sales of existing products in particular catheters. And lastly, our other product revenues for the quarter was up 6%, totaling $55.5 million.

The increase in other revenues was largely due to Vidacare sales in EMS and oncology, and the improvement in volumes in our right heart catheter product line. The continued growth of Vidacare and EMS is driven by increased utilization, resulting from investments made in quarter four last year cadaver labs and training.

We see the more rapid growth in the hospital sector, due to increased convergence as a very positive sign. Shifting gears for a moment, the first quarter of 2015 saw a continuation of the company’s track record and expanding contractual agreements with our GPO and IDN partners. And during this past quarter, Teleflex won a total of 10 agreements.

These awards were wide ranging, including CVC and Laryngoscope awards with HPG, endomechanical suture and trocars awards with Premier, and fluid management respiratory therapy and endotracheal tube awards with [indiscernible].

We continue to view our ability to simultaneously gain share and modestly raise prices in the United States as a very good sign. Next, I would like to update you on some recent new product introductions and regulatory approvals. The first of which is our Triple-Lumen Arrow PICC with Chlorag+ard technology.

The cornerstone of our overall vascular access strategy surrounds, how we can improve upon vascular complications and has lower cost per hospital. And in the late February, we announced the launch of a device that will help us achieve that goal.

These pressure injectable PICCs are the world’s first FDA-cleared central venous catheters to significantly reduce the risk of central line-associated bloodstream infections and PICC-related vessel thrombosis, compared to traditional uncoated catheters.

And with this product launch, it completes our portfolio of single, double and triple-lumen catheters and related kits.

We’re excited about this product launch as it is an example of how Teleflex is not simply introducing individual products, but instead, building strategic business units designed to reduce complications and costs for healthcare providers. The next product I would like to draw your attention to is the Rusch Airtraq Video Laryngoscope System.

Similar to the strategy we are taking in our vascular business, the strategy in our anesthesia business is to transform from an individual product-centric approach to an outcome driven business model. The launch of the Rusch Airtraq Video Laryngoscope System is another example of Teleflex, executing upon this strategy.

We’re already a market leader in the laryngoscope space and the addition of that video rounds out our portfolio offering to this key customer base. This device provides improved visibility for intubating patients, where overcoming challenging patient positioning and difficult airways is vital.

This system revised an affordable per use option with single use disposal blades. The additional of a snap-on video camera provides a rotating screen, recording capability and multiple display options. And lastly, before I touch on two small acquisitions, that we recently closed, I would like to you about our Percuvance Percutaneous Surgical System.

The Percuvance System is intended to manipulate tissue by introducing a variety of instrument configurations into the abdominal cavity. Percuvance requires a smaller incision site than traditional laparoscopic surgery.

It offers a reusable handle that is compatible with interchangeable instrument tips, and unlike other laparoscopic devices, the Percuvance System affords a percutaneous insertion into the patient without the use of a trocar.

This recently cleared FDA device was percutaneously inserted into a human for the first time in a procedure at the Cleveland Clinic in mid-March.

These first human procedures are a major milestone in our strategy of developing platform technologies that will broaden our portfolio with products that provide clinical efficacy, enhance patient experience and lower the overall cost of care.

We believe that this system has the potential to transform the standard of care from traditional laparoscopic surgery to percutaneous surgery and will be another product that we will highlight at our upcoming Analyst Day. Next, I would like to briefly discuss two small acquisitions that were recently completed.

The first was the acquisition of 00:22:44 [indiscernible] , a private company established in 1993, [indiscernible] offers a broad range of disposable and reusable laryngoscope devices. Teleflex had been [indiscernible] primary laryngoscope distributor in the United States.

And this acquisition positions Teleflex to [ph] de-layered supply chain in the U.S. market and strengthens our international competitive position. This all cash acquisition is expected to be modestly accretive to revenue and earnings in 2015.

And lastly, I would like to touch on another acquisition that was completed shortly after quarter end that being TrinTris Medical. Another private company, TrinTris Medical was acquired in late March. TrinTris is an original equipment manufacturer of balloon and catheter products.

The rationale behind this acquisition was that its balloon forming and attaching capability complements our existing catheter business and fill the product gaps that we had within our portfolio. This too was an all cash acquisition and it is also expected to be modestly accretive to revenue and earnings in 2015. That completes my prepared remarks.

I would like to thank everyone for the opportunity to speak with you this morning, and I look forward to meeting and speaking with members of the investment community in the months and years to come. With that, I would now like to turn the call over to Tom.

Tom?.

Thanks, Liam and good morning, everyone. Given Liam’s discussion of the company’s revenue growth drivers, I will begin my prepared remarks at a gross profit line. For the first quarter, adjusted gross profit was $224.8 million versus $221.2 million in the prior year quarter. Adjusted gross margin increased 190 basis points to 52.3%.

The increase in adjusted gross margin was primarily due to improvements in operational efficiency, distributor conversions, modest level of net product pricing and favorable product mix, including robust sales of Vidacare.

These improvements were partially offset by the unfavorable impact of foreign currency exchange rates that reduced gross margin by approximately 30 basis points. For the first quarter, adjusted operating profit was $87.8 million, an increase of 6.2% versus the prior year quarter.

Adjusted operating margin increased 160 basis points to 20.5% with the increase being largely attributed to the improvement in gross margin. During the quarter, we held adjusted SG&A and R&D spending to below 2014 levels.

However, this spending level did not materialize into additional operating margin leverage, as further gains were inhibited by the fact that foreign currency impacts also reduced reported revenue growth to minus 2.1%. Moving next to our adjusted tax rate.

For the first quarter of 2015, the adjusted tax rate was 22.3%, a reduction of 220 basis points as compared to the prior year period. The year-over-year reduction is primarily due to tax planning actions that were executed mid-last year. On the bottom line first quarter adjusted earnings per share totaled $1.30 or an increase of 6.6%.

For the quarter we estimate that foreign currency reduced adjusted earnings per share by $0.09. If we exclude the currency impact earnings per share growth would have been 13.9%. Turning to the balance sheet in cash flow highlights. During the quarter, cash provided by operations was approximately $42 million or an increase of 1% versus the prior year.

The first quarter growth in cash flow lagged adjusted earnings growth largely due to a tough prior year comparable stemming from a large receivable collection from the Spanish Government in the first quarter of 2014.

We continue to project full-year 2015 cash flow from operations to both remain on target to exceed $300 million and to achieve growth in the level consistent with adjusted earnings growth. From a balance sheet perspective, cash on hand totaled $309 million with $29 million in the United States.

Leverage at for our credit facility definition stood at approximately 2.66 times. And finally before I move on to discuss our 2015 outlook, I will address actions being taken to further optimize our capital structure.

This morning we issued a notice of redemption to holders of our 2019 senior subordinated notes at their interest at a rate of 6% and 7.8%. The date of the redemption is set to coincide with the first call date of the notes or June 1, and the redemption price equals 103.438% of the principal amount was accrued in on paid interest.

We intend to fund the redemption that notes who borrowing under our revolving credit facility. This transaction is net present value positive and as adjusted earnings per share accretive. Leverage for credit facility definitions will be not be effective.

Our objective in executing this transaction is to take advantage of lower cost financing options, while maintaining a balance of fixed versus floating rate debt. Our pro forma mix of debt post transaction is expected to be approximately 57% fix and 43% floating rate.

Following the transaction, we’ll have an excess of $400 million of undrawn capacity on a revolving credit facility. During our year-end call, we had discussed that foreign currency headwinds had intensified, but that we were pursuing a number of actions to mitigate the currency impact.

This refinancing was one of the potential actions, and we’re pleased to be able to report that this plan is now being realized. Next, I’ll provide an update to 2015 financial guidance. Today, we’re affirming our previously provided 2015 financial outlook. For 2015, we continue to expect constant currency revenue growth of between 4% and 6%.

Additionally, we expect 2015, adjusted gross margin to increase 150 basis points to 250 basis points and to be in a range between 53% and 54% for the year. And as previously discussed, we anticipate that we will exit 2015 with an adjusted gross margin of 55%.

From an operation standpoint, we’re executing well against the planned actions required to achieve that 55% fourth quarter goal, but could be challenged, should currency headwinds cause additional margin pressures.

The projected gross margin increase is largely due to manufacturing cost improvement and productivity initiatives, positive mix including continued mix benefits from Vidacare plus pricing and margin gains stemming from distributor to direct conversions and recently completed acquisitions.

Headwinds from currency rates have increased since we originally provided 2015, financial guidance back in February. We initially expected that FX would create a 50 basis point headwind to full year gross margins, we now project the impact to be approximately 65 basis points. Moving on to adjusted operating margin and earnings per share.

For full year 2015, we continue to expect adjusted operating margin to increase by approximately 200 basis points to 250 basis points to a range of 22% to 22.5%.

We have made operating margin flow through, a 2015 priority, and have taken steps to drive SG&A productivity while at the same time, making certain to also maintain funding for strategic investments and high margin, high growth opportunities.

In addition to the recent restructuring initiatives, discussed earlier on the call, operating margins will also benefit from operating and expense efficiencies came through December 2014 reorganization of our North American anesthesia and respiratory sale forces, plus the 2014 restructuring of our European finance and marketing organizations.

Similar to gross margin, the gains we expect to generate at the operating margin line will be negatively impacted by foreign exchange. We estimate that the full year 2015 operating margin could be approximately 100 basis points higher, if we’re not for foreign exchange headwinds. Moving on to taxes and interest expense.

We continue to expect our full year adjusted tax rate to fall within the range of 20% to 21%, and adjusted net interest expense is now projected to be approximately $51 million for the full year of 2015. Turning to shares outstanding and FX rate assumptions.

Given the first quarter appreciation in Teleflex’s stock price, we’re now assuming an additional dilution from the warrants. This additional dilution is projected to reduce full-year adjusted earnings per share by approximately $0.07 more than we initially planned.

The adjusted weighted average share count for full-year 2015 is now projected to be approximately 45 million shares. Given the recent trends and expectations for currency, we’ve adjusted the euro to U.S. dollar exchange rate to be a $1.08 for the balance of 2015 versus our previous assumption of $1.13.

The euro represents our largest single currency exposure with approximately one third of Teleflex’s revenue being transacted in this currency. As covered in our prior earnings call, we estimate that each $0.05 move in U.S. dollar, euro exchange rate will have a translation impact on adjusted earnings per share of approximately $0.20.

Recognizing the significance of the euro exchange rate for our business, we have taken actions to counter the recent move in the euro and we’ll continue to look for additional counterbalancing actions. However, we’re also striking appropriate balance with the need to continue to invest for the future.

So far, we have been able to offset one for one, the greater headwinds from both currency exchange rates and higher than anticipated warrant dilution, with an equivalent level of positive earning benefit for both Q1 results and projected operating performance, in order to maintain our 2015 adjusted earnings per share guidance range of $6.10 per share to $6.35 per share.

In closing, from an operating standpoint, we have started the year on sound footing. First quarter volume trends are encouraging especially in North America. Revenue from new products exceeded expectations and the early read on new – and on a new surgical platform Percuvance is quite encouraging.

Vidacare continues to perform very well and recent distributor conversions in Asia are driving volume and margin gains. Our footprint consolidation initiative is on track and we have now completed to move up to smaller California sites to their Mexico and check receiving locations.

We’ve also briefly initiated a restructuring of select operating segments back when completed [indiscernible] 70-basis point improvement to operating margin. For the quarter, we achieved 190-basis point improvement in adjusted gross margins and 160-basis point improvement in adjusted operating margin.

Cash flow generation is on track and our leverage levels have been reduced to under 2.7 times. Of an operating standpoint, we’re encouraged by the strength of our 2015 results to-date and our ability to offset the additional Q1 currency headwinds. That concludes my prepared remarks and I’ll now turn the call back to the operator for questions.

Operator?.

[Operator Instructions] First question comes from the line of Larry Keusch of Raymond James. Please proceed..

Hi, good morning everyone..

Good morning, Larry..

Good morning, Larry..

Two questions for you guys, first Benson maybe you can expand a little bit on what you’re seeing relative to the comments that have been made on the firming of the environment in North America.

I’m just curious, so where you’re seeing the strength, sort of what product lines seem to be experiencing the improvements, et cetera?.

So our – we certainly saw a considerable strength in our surgical business in North America that was up 9%. We did not see the same kind of strength in the respiratory therapy business for example, which was very low in the single digits, vascular was up 9.1% I think also. So it’s targeted improvement.

I think our estimate would be it has more to do with increasing levels of acuity as opposed to just outright admissions given the strength in some of those particular product lines, but not in respiratory therapy which is much more associated with general admissions and that’s the general sense we’re getting from the providers that we talk to..

Okay, perfect. And then Tom for you, just, I want to just come back to the gross margin outlook for the end of the year and the 55% exiting.

First I want to just make sure I understand is the comment around the potential to miss that solely due to FX?.

Well, the way we look at it Larry is that we have a number of planned actions that are against to that target. And as we discussed in the prepared remarks, we’re executing very well against that. And we had a good first quarter performance.

So as we look to the fourth quarter, we are still tracking towards those plans that we put in place and we feel good about those. We are raising the spectra that FX continues to be something that’s a bit uncertain and unpredictable and it will have a margin impact for us. And so we’re just raising that as a potential issue now.

From an operating standpoint, we feel good about how we’re moving against that plan and look forward to executing the rest of the initiatives as the year progresses..

There is certainly operational items yet to be achieved and as Tom said, where we feel quite good about where we are in the process, it’s just really hard right now Larry to predict what the dollar-euro exchange rate is going to be in the fourth quarter it could be parity, it could be $1.5 and there is an impact on what our fourth quarter gross margin is going to be that is one of those items that’s largely out of our control..

There are some other issues with mix that could have some balance, we have mentioned the fact that the single biggest competitor in the chest drainage area has some regulatory issues, we are doing our best to provide an alternative product to our customers here in the U.S.

and actually we’re going to be selling every single one of those that we can make from a responsibility standpoint to our customers, it’s going to be good for revenue, it’s going to be good for EPS, it’s one of our lower gross margin products, so it can have a small drag on our gross margins.

But I think from an operational standpoint of view, we’re quite satisfied that we’re right on track to where we need to be..

Okay. And then last one on this, and then I’ll drop.

You guys did mention that if you were to miss that target, it would be a small miss, but would you care to put some brackets around that just to help us?.

Yeah, I think the best thing we can do Larry is, is on a quarter-by-quarter basis, keep you up – keep you informed in terms of how we’re doing operationally, what our current currency expectations are where at $1.08, we expect we’re going to hit that 55% number..

Okay, great. Thanks very much..

The next question comes from the line of David Lewis of Morgan Stanley. Please proceed..

Hi, good morning, this is actually, John Demchak in for David..

Good morning, John..

Good morning, John..

So first off, I wanted to say congratulations to Liam on his new role. And I had a kind of a question about that, because I think that a lot of investors may look. This is kind of a start of a possible leadership transition. So Benson, I was wondering if you can maybe comment on this and if there is any truth to that thought.

And then also like why is now the right time to be adding the COO role for the company?.

Yeah, so. I appreciate the question despite my useful appearance and balance energy. I do get asked about my potential retirement plans from time-to-time. I just think it’s important for every company to have a some kind of a transition plan. It takes a while to get familiar with all the issues that the CEO might have to grab away.

So it’s not an overnight plan at all. We’re – I would say I’m quite pleased with the general level of promotable candidates we have within our senior leadership team. And from a structure standpoint of view, really for the last couple of years, I’ve been doing the CEO role and a good part of the Chief Operating Officer role.

So it’s I think we’ve reached a point in our organization development, where quite frankly we need some more attention on [indiscernible] services. This is certainly mainly factored at or move that we’re trying to make here. But I’m quite Liam Kelly asked me when I’m leaving also and I won’t give him a definite timetable..

Thank you for that. And just a quick follow up for Tom on EPS guidance holding constant.

So it looks like organic trends in the business may actually be going a little better as given the reaffirmed guidance following a couple of headwinds from I guess share dilution and also additional FX pressure, which I guess combined seem to total somewhere about – sorry seem to total somewhere about $0.10.

And I was I guess a little less clear on the offset, some of that clearly looks like it’s coming from better Vidacare performance, I think that you guys said that it was over a 100 basis points to revenue growth versus about 50 basis points that were estimated for the year, I think originally.

So I was just wondering if you could may be cross walk me to kind of how EPS state constant given those headwinds..

Sure, sure. Well, we – just to kind of make sure that we clarify the headwinds as we updated our guidance on foreign exchange and share dilution. We come up with $0.12 more I guess headwinds then we initially had expected $0.05 from foreign exchange, $0.07 from share dilution.

And then we look to what’s going to offset that we have a number of factors that we’re looking at. One is, first of all, Q1 came in a little bit stronger on our earnings and we had expected so there is a couple of pennies there. We also have added couple of smaller acquisitions, which collectively contribute a little bit less than $0.05.

And then we also have the refinancing debt, which contributes $0.08 to $0.10 for the year. So collectively those benefits are in the $0.15 perhaps $0.17 range offsetting the $0.12 of additional headwinds. So we feel pretty good that we’re at $0.03 to $0.05 on the positive side from where we started given the offsets..

Thank you very much..

The next question comes from the line of Matt Taylor of Barclays. Please proceed..

Hi guys. This is Yong Lee for Matt Taylor. Thanks for taking our questions.

I guess, just to start off, I’m wondering if you can just provide some additional details on the weakness in Asia more specifically in China and what are you seeing in the market that gives you confidence that volumes can prove in the back half of the year?.

So towards the – well, last year we also saw some weakness in China, that was largely due to the sale of our intra-aortic balloon pumps which is a capital equipment of sale. We are seeing that recover. And so that’s certainly a move in the positive direction.

During the first quarter of every year, we go through a process where we essentially do renegotiations with actually relatively a large number of distributors and that process is a little slower than what we thought.

So we are – we did not see the order pattern from those distributors come in the first quarter, our belief is that that is simply a timing issue and as those agreements are being executed, we’re getting filling orders. So I’m not sure that’s the case with other peoples experience in China right now.

In our case, it’s somewhat idiosyncratic situation and we think we’ve got pretty darn good insight into it. And therefore, have a – I would say a pretty good level of confidence that we’re going to see that rebound..

All right. Great. And also you made two acquisitions in the quarter.

Can you just remind us about your capital allocation priorities and also how is the M&A pipeline working for you?.

So we continued to be – we continued to remain committed to our essential acquisition strategy which includes we call them Vidacare LMA size acquisitions late-stage technology acquisitions, dealer direct acquisitions, and I would add to that these [indiscernible] acquisition is really is an example of a vertical integration opportunity, where we had been buying a product from them and it is more of a gross margin enhancement opportunity than necessarily a direct revenue enhancement.

We continue to remain committed to that and believe that under the current circumstances that’s where the priority is. I would say just turning to our attention to the Vidacare LMA side of the acquisition, we continue to believe that there is a good pipeline availability of companies out there for us.

Bear in mind we have the financial flexibility to do one of these about every 18 months. So there doesn’t need to be – there doesn’t need to be a large number of them out there for us to be able to meet our goal. That being said, we’re pretty darn picky about what makes a good acquisition for us.

And our general sense is we get rewarded to doing acquisitions as we get rewarded to doing really good acquisitions. So we are – we continue to maintain a – I would say a lot of discipline around what we’re willing to buy..

Okay. Great. Thank you..

The next question comes from the line of Dave Turkaly of JMP Securities. Please proceed..

Thanks. And just a follow-up on the comments the North American strength. I know you had some issues last year.

I was just curious form a head count level of the sales forces particularly in Vascular and Surgical, did they increase? And then this new restructuring initiatives, I think you talked about some termination benefits and maybe some productivity increases.

And I was just wondering if you could give us an example of exactly what you’re doing to kind of increase the productivity if it is on loaded head count..

So we – there were some modest head count increases in our Vascular business as a result of the Vidacare acquisition. Surgery, really has remained largely constant at this point, although it’s a targeted area for some modest expansion, as we roll out the Percuvance product line.

The adjustments that we’ve made in terms of cost control really come more at the expense that eliminating some smaller divisional and managerial head count versus sales head count. So we haven’t really change the head count we’ve just reapportioned it.

And we think that is actually better to have a smaller sales force exclusively focusing in on respiratory the therapy business that’s a very GPO oriented IDN oriented sale. And have that remaining sales force in the anesthesia product lines really just focused on – on their products and their co-point.

And so far I think the responsive has been quite favorable. So we have not other than the – other than small addition that came from Vidacare changed our head count. I think David it’s as much due to having kind of a more exciting product lines to sell.

And we’re – that helps sales commissions, that helps attract a better group accounted sales people to the organization and all those things are paying off. And I would say for the last several years, we’ve been focusing a lot on sales force effecting this..

Great. And then on the distributed direct opportunities, you’ve done several.

I was just wondering if you could just give us a ballpark figure of how many sort of sizable ones are out there for you, there are still 10 of these are out there are there just ballpark, how many of these things could we possible see kind of come internal over the next couple of years?.

And so it’s probably, so they’re are very different size and very different numbers. I think the best answer I can give to that question. We’ve generated around 100 basis points of improvement in terms of our numbers and over the past couple of years as an average. And we certainly have a free clear line of site over the next couple of years.

And I think what you’ve seen in the past couple of years as an average is what you’re going to see over the next couple of years..

Thanks a lot..

The next question comes from the line of Matt Mishan of KeyBanc. Please proceed..

Great. Thanks for taking my question..

Hi, good morning..

I’m not sure – yeah I’m not sure if I missed it or not, what was surgical Mini-Lap?.

Mini-Lap, was about 30 basis points of surgery. So with the very small contributions to their....

700,000..

700,000, so 30 basis points of that 9% increase..

All right, great.

And on Europe, it came in at like 2.2%, do you think you had some pull-forward in the fourth quarter from this quarter?.

No..

Okay. And lastly, on Percuvance, and I don’t want to steal anyone’s thunders from the Analyst Day.

But have you guys thought about what this product can do not necessarily this year, but in 2016, 2017 as far as revenue growth goes?.

So the short answer is yes, we thought about it a lot, there is a wide range in terms of what the performance of this product line can be.

Right now, we’re in fairly intensive clinical used opportunities in leading institutions around the United States and in Europe and getting an understanding from the early highly experienced laparoscopic surgeons where they see this most applicable and to try and understand what percentage of the traditional laparoscopic procedure rate it’s going to be able to I think be able to encroach into.

At this point, the feedback we’re getting from the physicians that are using this is quite positive. And again, we’ll have more information to be able to share with you at the Analyst Day. We’ll have one of the leading surgeons in the U.S. that’s working with us on this to give you his view points..

All right. Thank you, Benson..

The next question comes from the line of Jason Wittes of Brean. Please proceed..

Hi. Thanks for taking the question. Wanted to focus a little bit more on Vidacare.

First off, is it helping with pull through with your PICC and CVC business as well? And as part of that question, could you just give us the growth of vascular ex-Vidacare?.

Yeah. So just answering the question about Vidacare as a pull through item. So I think the short answer is yes, I mean it’s an exciting product to sell. We made really good inroads into the hospital segment in the first quarter. The growth within that unit was right at 31%.

It was one of the key reasons that we purchased Vidacare was we felt we could do a really good job with that in hospital customer and beyond the emergency room in the hospital getting right down into their crash car situation. I don’t know that we have a completely exact number.

But I would say it’s somewhere between 6.5% and 7% of Vascular growth without Vidacare. So it’s still pretty strong growth even with that accepted. But I will tell you that this growth isn’t happening by accident, it’s taking sales time and sales energy to be able to move it into that – into that segment.

And every time we sell a Vidacare unit, it’s the highest gross margin product we have. So we’re certainly not discouraging them from spending a lot of time on it..

Yeah, Jason. Benson is right. It was – for the first quarter Vascular North America revenue grew 6.9% excluding Vidacare sales..

Okay.

And do you have a sense of where CVCs and PICC lines? If you give us kind of a sense of where those are growing is about that rate or?.

Yeah. So CVCs grew around that rate – around that 6.6% constant currency rate for Vascular North America and PICCs were a little bit lower than that in the Vascular North America area although I would say globally they grew about 18%..

Okay. That’s fair. And the consent decree issue with your competitor, obviously you probably have much visibility on how long that might last although it’s usually pretty prolonged.

Do you guys sense is that – I assume that’s boosting your surgical numbers, is that part of the reason why you’re...?.

Not yet. Not yet. Those agreements are really didn’t have any significant impact on our first quarter results where is – what – because we’re in a position to supply from a demand standpoint, we have been quite aggressively ramping up those and we are – just doing our best as we really to respond to a critical situation here.

But we are certainly leaning in favor of those institutions and groups that are willing to give us a long-term contract with the product. Particularly given the uncertainty of when the issue may be resolved..

Okay. That’s helpful. And then you mentioned, I think you have about $400 million of borrowing capacity, I may have misheard that..

Correct, $400 million..

Yeah..

And so is that about the size, the potential size, could you probably see we use that all for acquisitions or is that – or if I think about you generally have a pretty tight constrains in terms of what the range is in terms of how much leverage you’re willing to take on for an acquisition.

Can you give us a sense of where that stand at the moment?.

Yeah. So we could go up to that size of borrowing and still be within our comfort range in terms of total leverage. So that’s what readily available on our revolver, we’ve got opportunities to be able to expand the revolver as well by another $250 million if we were to choose that option, that would take some time to get in place, but not too long..

Okay. That’s helpful. I’ll jump back in queue. Thanks a lot..

The next question comes from the line of Anthony Petrone of Jefferies. Please go ahead..

Thanks, good morning. And then congratulations, Liam. Maybe a question on foreign currency, we’re seeing this for some of our other companies. If I look at the EMEA performance and APAC performance even on a constant currency basis it seems to have slowed sequentially. So I guess my question is, do you see a slowdown in demand for your U.S.

manufactured goods and products from overseas customers just as their purchasing power has eroded? And then a couple of follow-ups..

Yes. So the short answer to that is, no, we don’t change our pricing in OUS markets based on currency for the most part if we take the hit as opposed to our goods becoming more expensive over there. Europe actually exceeded our expectations, I think that there continues to be a fair amount of economic uncertainty in Europe.

So we look at the stability as being good. Our revenue in Japan was really quite good for the quarter, Australia is now since our Mayo acquisition it’s a bigger part of our Asia business and they’re – they tend to be a slower growing developed market.

I think for us, our slower performance in Asia was quite limited to China and quite limited to a timing issue I think. So I don’t know that we’re represented of both what’s going on with other countries..

It’s helpful. And then one for Tom, just housekeeping here. Can you just run through the annual savings in interest expense following the senior subordinated tender ones that’s completed, where that will trend.

And then we’ll ask follow-up on Percuvance?.

Okay. So on the interest expense, we’re assuming that we’re going to save about $0.08 to $0.10 from an adjusted EPS impact. Interest expense will go down to about $51 million for the year. And that’s....

That basis....

Got it..

On an adjusted basis..

Yeah, on a adjusted basis..

On an adjusted basis over 12 months, right.

So they’re not – you won’t?.

It will go down $251 million for the year, on an adjusted basis..

Got it..

So….

Yeah..

Got it. And then on the last one from me on Percuvance, maybe just a recap in the early days here how that stacks up from a pricing standpoint versus traditional lab instruments.

And then you mentioned in the release a few weeks ago, that you’re really looking at a wider launch in 2016, why the time between now and the wider launch and just an update there that would be helpful? Thanks..

So the – the, so we’re still obviously trying to get the best deal on where they should be priced. There is an inherent savings just from one to another from a hospital because they don’t have to use trocars in the procedure. The time it takes to finish up the procedure is shortened, so in a busy overall, that’s another issue.

The potential for our complications is reduced which is also a cost savings to the hospital. Why are we doing a gradual launch? This is kind of a – I would characterize it as a major opportunity for Teleflex.

My past experience is, is that you learn a lot in the first couple of months in terms of actual user experience, in terms of what the benefits are to highlight, what the training, actual training might be to be able to get this introduced. You also have a better understanding in terms of the best initial procedures to target.

And all that in my past experience leads to a much better to launch when you have a little bit of that ground work behind you. So this is a big opportunity. Our sense is we want to do this right and make sure we’re deploying those resources in the best way possible..

Okay. This is the operator. As our communication link has gone down between [indiscernible] and other speakers.

There is one more question, would you like to take that?.

Yes, we would..

Certainly. So the final question comes from Richard Newitter of Leerink Partners. Your line is open. Please go ahead..

Hi, good morning. It’s Ravi in for Rich.

Can you hear me?.

Yeah. Go ahead..

Yeah..

Great, thanks. So, a couple of questions and one housekeeping question..

How many on the gross margin, just curious in terms of some of these new PICC introductions, how they affect gross margins versus the corporate average? And then on the Truphatek acquisition, trying to figure out how do these types of vertical integration plays – play into your gross margin expansion strategy.

I mean are they necessary or are they sort of a nice to have things as you move towards 55%? And then maybe the last housekeeping question was, Mayo, was that included in the 120 bps of acquisition, because I think there was a month, extra month there?.

So yes, you’re absolutely correct. It was in January’s numbers, so there was a month there. In terms of your question about are they nice to have or need to have them, they generally came to make small overall contributions to our overall gross margin picture.

However, it really changes the profile of some of those products from one that’s not particularly worth of sales person spending a lot of time to, to one that is worth spending a lot of time to, so they are quite helpful from that standpoint.

And there is often other benefits associated with that as we were able to take over the manufacturing of the product and some of the benefits take several years actually to get integrated into our system.

But it means that as we look forward to the future, this is a product we really want in both the resources and selling time again as opposed to being kind of a marginal product for us. And I forgot you had another question, I forgot what it was..

Yeah, just really quickly. Just curious in terms of the new product introductions like for example the PICC, how is that coming in compared to the corporate average. Is it sort of in line or lower, you expect to trend higher.

Any color on that will be appreciated?.

So most of our footprint consolidation moves affect our vascular product lines. And so the real opportunity for improving any of those product lines really is going to come from the completion of this footprint consolidation. So once completed, yes those would be – those would be an attractive product for us to sell..

Thank you..

And then just a little more color on the impact of distributor M&A et cetera on gross margin. So as we think about the 2015 gross margin expansion, there is only three key areas that are driving that expansion.

The first is operations efficiency, I’ll include the footprint consolidation in that that accounts for about half of the gain we’re looking for this year.

We also then have collectively a number of acquisitions, smaller M&A, as well as go to [indiscernible] and that includes M&A, Mini Lap [indiscernible] Korea distributor, Japanese distributor, those collectively account for another quarter. And then finally, if we look at mix that’s the third kind of the leg of this stool.

Now that’s the final quarter and that would be driven largely from things like Vidacare growth. We’re also looking at winding down our surgical repair business. We got to focus in Latin America and mixed improvements and I think anesthesia/respiratory, whether focusing on some higher margin atomization as well as just go product.

So as we think about it, our gross margin drivers are largely being driven out of operations efficiency footprint. But M&A go directs are help and mix help. So it’s coming from a variety of different angles and then the rest it’s kind of a number of pluses and minuses that collectively aren’t that significant, if that helps..

Well, very much. So thanks..

I would now like to turn the call over to Jake Elguicze for closing remarks..

Thanks, Operator, and thanks to everyone that joined us on the call today. This concludes the Teleflex Incorporated, first quarter 2015 earnings conference call..

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Good day..