Teleflex Incorporated
Q1 2019 Earnings Call Transcript

Published: 3 May 2019

[Operator:]

Good day, ladies and gentlemen, and welcome to the Teleflex Incorporated First Quarter 2019 Earnings Conference Call. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Jake Elguicze, Treasurer and Vice President of Investor Relations. Sir, you may begin.

[Jake Elguicze:]

Thank you, and good morning, everyone. And welcome to the Teleflex Incorporated First Quarter 2019 Earnings Conference Call. The press release and slides who 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 [phone], or for international calls, [phone], passcode 6798477.

[Liam Kelly:]

Thank you, Jake, and good morning, everyone. It's a pleasure to speak with you again. The first quarter of 2019 was an outstanding start to the year for Teleflex. First quarter revenues grew 4.5% on an as reported basis and 7.6% on a constant currency basis. This was above our initial expectation for quarter one revenue growth. We are particularly pleased with how broad-based the growth was during quarter one, both from a product and geographic perspective. Our strong top line performance was led by 41.5% growth in Interventional Urology, 17.1% growth in Interventional Access and 20.1% growth in OEM. Geographically, we achieved particularly strong growth within Asia and the Americas, where constant currency revenue growth was 11% and 6.7%, respectively. We believe our Q1 performance is an excellent example of the type of diverse, accelerated revenue growth that Teleflex can deliver. Turning to some other key metrics. We reported adjusted gross margins of 56.7%, adjusted operating margin of 23.7% and adjusted earnings per share of $2.24, which represents an increase of 4.2% over the first quarter of 2018. Our adjusted earnings per share performance in Q1 was slightly better than our initial expectations, despite a greater-than-expected headwind from FX as well as year-over-year increases in tariffs. In summary, our quarter one results give us increased confidence in our ability to achieve our previously provided full year 2019 financial guidance and in doing so, deliver on our commitments to shareholders, patients, customers and our 14,000 employees. This morning, we are reaffirming our annual guidance ranges for as reported and constant currency revenue growth, adjusted growth and operating margin and adjusted earnings per share.

[A - Thomas Powell:]

Thanks, Liam, and good morning, everyone. Given the previous discussion of the company's revenue performance, I'll begin at the gross profit line. For the quarter, adjusted gross profit was $347.8 million versus $332.6 million in the prior year quarter or an increase of approximately 4.6%. Adjusted gross margin increased 10 basis points versus the prior year period to 56.7%. The expansion in adjusted gross margin primarily reflects increased UroLift sales volumes as well as cost benefits from both of our restructuring programs and manufacturing continuous improvement programs. Offsetting these gains were negative impacts from foreign exchange, incremental tariffs and inflation. Adjusted operating profit was $145.6 million as compared to $141 million in the prior year. Adjusted operating margin in the first quarter was 23.7% or a decrease of 30 basis points over the prior year period. The negative impact from foreign exchange, incremental tariffs and inflation that adversely impacted gross margin also flowed through to impact operating margin. Additionally, as was planned, we increased commercial investment in UroLift and MANTA during the quarter. On a currency neutral basis, adjusted operating margin would have been approximately 24.6%.

[Operator:]

Thank you. Our first question comes from David Lewis with Morgan Stanley. Your line is now open.

[Mason Edward Oliva Austen:]

This is Mason on for David. I just wanted to start out with Interventional, a pretty strong quarter out of this segment. I was wondering if you could just parse out the drivers here and how sustainable do you see this growth in 2019? And then I just had one quick follow-up.

[Liam Kelly:]

Yes, it's Liam here. So we – our Interventional business performed very well in the quarter. We're very happy. What we're increasingly positive on is how broad-based the growth was. As I said in my prepared remarks, our legacy Interventional business performed well, in particular, our intra-aortic balloon pumps and catheters had a stellar quarter as did the microcatheters, the GuideLiners, the TrapLiners and the biologics from the old – or the VSI business that we acquired. We still expect that on a full year basis that the Interventional business will grow in the high singles, maybe even sneaking into the double digits with some better execution into the latter half of the year. So I think we're quite bullish on our Interventional Access. Again, what I'm particularly pleased about is it is one of the areas that we highlighted that would be a growth driver in the year and it has started off incredibly strong.

[David Lewis:]

Great. Liam, it's David Lewis. Sorry about that. I just want to kind of jump in here with the second question. So, Liam, when I think about the back half of the year comps get a little harder, but the pipeline improves. You have some selling day dynamics. How should we think about first half versus second half growth at this point? And then related to that, just thinking about NeoTract, you talked about 30% outlook for that business this year. That business well above trend here in the first quarter. How are you thinking about NeoTract into the back half of the year as we think about back-half growth?

[Liam Kelly:]

Yes. So for our overall business, I think, David, we're very happy with the start. I'm not too sure that we should focus too much on the comps because if you look back to last year, our toughest comp was Q3 last year, and we had a very solid Q3 in that year. So addressing your NeoTract and what I expect, I guess, your question is really around headwinds and tailwinds for a large extent. So from a headwind perspective, we got the catheter reprocessing business that we exited during the year. OEM is not going to grow at 20%. We don't expect OEM to grow at 20% in the year. So it should set us down to higher single digits on a full year basis. And then from a tailwind perspective of where we continue to see growth, we had some destockings of distributors in Vascular, Anesthesia and the Other category. As I said, Interventional Access will do the high singles, maybe sneak into doubles. APAC to the high singles and Surgical, I'm really happy to see Surgical recover and it should be in that mid-single-digit range on a full-year basis. Regarding NeoTract, it obviously started really, really strong and posted 41.5% growth. Now the 30% is a full year number, David, and we're very encouraged by the start. Obviously, as we get into later in the year, we will look at sharpening our pencils on some of our guidance ranges, but I got to tell you I couldn't be happier with the start. And I think we've got a great setup for the full year. First half will – we don't have the tougher comps in the second half, but it's a great start and it's a great setup from where I look at it, David.

[David Lewis:]

Great. Thanks so much, Liam.

[Operator:]

Thank you. And our next question comes from Lawrence Keusch with Raymond James. Your line is now open.

[John Hsu:]

This is John Hsu on for Larry. If we could start just on the incremental $15 million spend that you had talked about UroLift and MANTA, how much was realized in the 1Q? And just how do we think about gating for the remainder of the year?

[Thomas Powell:]

So as we think about that $15 million spend, we certainly continue to expect to spend the full amount for the year. I'd say that in the first quarter, we didn't spend 1/4 of that total amount, it's a little more than $1 million overall in the quarter. As we think about how that plays out in the year, you should expect to see the majority of that really going forward in Q2 and Q3.

[John Hsu:]

Okay. Great. And then I guess a specific on UroLift. Do you see a scenario where there is – where there – you could get reimbursement process in Japan a little bit faster than I think your mid-2020 expectation? And then just the second one on UroLift. With UroLift 2, it sounds like it's still tracking for a launch later this year. So how long do you think it will take to realize the higher 70% plus or the high-70s GM for the second UroLift product?

[Liam Kelly:]

Yes, so I will deal with the conversion of UroLift 2. As I said in my prepared remarks, we will have the conversion completed by 2021 and at that stage you will see the full benefit of the gross margin pickup. Obviously, as we ramp up in later 2019 and in particular, in 2020, you'll see the pickup of that gross margin benefiting in 2020. But it will be fully realized when we have the total U.S market converted by 2021. From the Japan perspective, as I said in my prepared remarks, we expect to get reimbursement in mid-to late 2020. And then, we'll start to roll out – we're already ceding the markets right here today, and we're aiming for that midyear approval. But as we said, we expect that in mid- to late 2020. Now in our LRP, I got to tell you that we had very little revenue in – for Japan in 2021, practically none. So if anything, this is a positive for us.

[John Hsu:]

Okay. Great. And if I could sneak in one more? Can you just remind us about the items that are masking the free cash flow generation this year? And then how you see those progressing through the remainder of the LRP?

[Thomas Powell:]

Well, really, when you look at the first quarter results, the impact of cash flow from ops is coming from increased contingents consideration. So as a result of change in estimates in the quarter, that's actually reduced our cash flow from ops by about $30 million. And so as we look at the full year, we still expect to be on our full year plan. But again, compared versus a year ago, it's a contingent consideration change.

[John Hsu:]

Okay. Great. Thank you so much.

[Operator:]

And our next question comes from Richard Newitter from SVB Leerink. Your line is now open.

[Jaime Lynn:]

Hi, this is Jaime on for Rich. I guess the first question I have you guys had mentioned that you guys have experienced some decreases due to distributor order timings. So I was wondering if you can just give us a little bit of a greater sense of kind of what happened with that in the quarter? And then is that something that you expect to make up throughout the remainder of the year?

[Liam Kelly:]

Well, I think, that's – what we've been saying about Teleflex is as we roll all of the businesses into organic, what you'd expect to see is let the cord with the distributors. So in the past, about half of our business went through these distributors and moving forward now in this quarter, about one-third. And I think a great thing from a Teleflex perspective is that we're able to cushion ourselves against these distributor movements. So what we saw in the quarter was definitely some destocking even more than we had anticipated. We would expect that to come back during the year in 2019, but we were able to offset that with excellent performance within the remainder of our businesses that are not exposed to distributors, and thereby overcoming that and to post a – the number that we did from a growth perspective, I think we're very encouraged by.

[Jaime Lynn:]

Okay. Great. And then just a housekeeping thing, I'm sorry if I missed it, but did you give what the actual dollar amount was for UroLift in the quarter?

[Liam Kelly:]

Yes, we did. We said that...

[Thomas Powell:]

$59.7 million.

[Liam Kelly:]

We said that the Interventional Urology business posted $59.7 million in the quarter.

[Jaime Lynn:]

Okay. Thank you.

[Operator:]

Thank you. And our next question comes from Matthew Mishan with KeyBanc. Your line is now open.

[Matthew Mishan:]

Liam, just a follow-up to that previous question. Kind of why are you seeing distributors destocking? Is this – has it been persistent where they're taking their inventory levels even lower than you would think?

[Liam Kelly:]

So I don't think it's a question of them taking their inventory levels much lower. You see a different dynamic with some distributors. Some hold more stock than others. Some hold 30 days, but some have confidence with their customers whether they will hold 45 or 60 days depending on the contract with their customers. They can't go below that stocking level. What you see – and it's not as organized, Matt, as you and I might think, as some of these distributors will have 40 centers throughout America. And they will place their orders on a Tuesday night and it all rolls up and comes to us by – overnight on Tuesday night. It just ebbs and flows. On a full year basis, Matt, it always balances out. And with less of our business exposed to it, I'm not as concerned about that in 2019. It's not going to be as big an impact to Teleflex quarter-over-quarter in 2019 as it may have been in 2018 than previous years.

[Matthew Mishan:]

Okay. And then how sustainable is the growth, the double-digit growth you're seeing in Asia moving forward? Is that something you can count on given some of the investments you've made? And then, obviously, with UroLift coming on stronger in Japan by 2020?

[Liam Kelly:]

Yes. With our NRP for Asia, that is growing in the high single, maybe sneaking into the double digits. And that's still our expectation. Obviously, we would have some of those levers that would accelerate it in the outer years. So this year, our expectation is high singles. Asia-Pacific is off to a great start. Again, Matt, we're very encouraged. And again, it was pretty broad-based coming from the Vascular Access products, Surgical products and Interventional products. So again, like all of our business and that's what most encouraging is that we've been ramping, Matt, since the second half. And we've been building momentum since the second half of 2018. And now we see a 7.6% posted in Q1 as broad-based geographically and from a product perspective.

[Matthew Mishan:]

Right, thank you.

[Operator:]

Thank you. And our next question comes from Matt Taylor with UBS. Your line is now open.

[Matt Taylor:]

Hi, thank you for takng the question. So the first question I wanted to ask was just about the guidance. I mean given your really strong start here, I totally get that you have more confidence in the year. Can you just talk about, philosophically, would you ever raise guidance in Q1 or you're just being a little bit conservative on the overall picture and on UroLift because to start out here, you're well ahead of the annual forecast?

[Liam Kelly:]

Thanks, Matt. Yes, so look, we feel really great about the business. As you see from the performance in Q1, again, as I said, it's broad-based. We think that this continues the remainder of the year. As we think about our 2019 guidance, I think we've put ourselves in a very strong position to meet or exceed our revenue projection. And we intend to work on delivering on our commitments to our shareholders. As we go through the year, Matt, we'll take an opportunity to have another look and sharpen our pencils, but we won't water down an excellent quarter. We're very bullish as we have been all year for our revenue growth. Regarding UroLift, I think that looking at UroLift, it's a great start, again, great first quarter tucked under the belt. The 30% approximately growth is a full year number. It's a great – it's a good start. We have a weaker comp actually in UroLift in Q3, which encourages us also because of the voluntary recall we did in Q3. And if you recall last year, we actually addressed the UroLift revenue growth as we went through the year. And hopefully, we'll be in a position to do that again this year. It's a very promising start, Matt.

[Matt Taylor:]

And I was hoping maybe you could just unpack the Interventional Access growth? Can you talk about the growth of some of those different pieces that you highlighted that are doing well?

[Liam Kelly:]

So as I said, the Interventional business was, again, broad-based. I think we saw some – I'll cover a couple of them. I don't want to get into the too many of the weeds here, Matt. But if you look at the OnControl, that grew nearly 20%. If you look at the catheter extensions, it grew around 15%. If you look at microcatheters, that was up above 30% and biologics too was well up in those numbers. If you look at our intra-aortic business, that had a very solid start, well up in the double digits, over – up around 30%. So broad-based, Matt.

[Matt Taylor:]

Thank you very much.

[Operator:]

Thank you. And our next question comes from Matt O'Brien with Piper Jaffray. Your line is now open.

[Kevin Farshchi:]

This is Kevin Farshchi on for Matt today. Congrats on the nice quarter. I wanted to start, going back to NeoTract growth, again, exceptional off of those tough comps. I just wanted to put a finer point on that outperformance. Was there something different this quarter than previous ones from a trend perspective, specifically as you're looking at utilization in existing accounts? And second, if you could talk a little bit about the additional resources you're putting behind the program from the DTC perspective, and how do you think about that expanding for the rest of the year? Any kind of metrics you can provide on those two fronts that contributed to the momentum. And I have one follow-up.

[Liam Kelly:]

Yes. So I think the most important metric that we look at is the number of urologists that we've trained. So we've trained just over 2,000 urologists within the United States. There are 12,000 urologists within the United States. We've generated almost $60 million in revenue with only 1/6 of urologists trained in United States. Regarding your question on where the revenue is coming from, from an account perspective, we continue to see 60% of the revenue coming outside of the hospital environment either the ASC or in the office. So we continue to see momentum building in that area. So no change in the size of service. No change in where we see the revenue coming from, and we continue to be very positive on the metric of the training of urologists getting over 2,000 out of 12,000. I think the same-store sales, we continue to see an increase in same-store sales quarter-over-quarter. And that's what we've seen for the lastthreeyears within this product category.

[Kevin Farshchi:]

Thank you. That's super helpful. I just had a follow-up on that business as well. You mentioned on the call that you're increasing that 100 group of RePlas associates to kind of meet the demand. Could you remind us a little bit on the rep productivity numbers as they stand today? How are they trending versus last year? And then if you could provide any color on the expectations for that to increase with UroLift 2 in the product bag and those additional reps? Thanks.

[Liam Kelly:]

So I'll answer the last part of it first. You wouldn't expect any rep productivity just by launching UroLift 2. The UroLift 2 will reduce clinical waste for the urologists, which is a positive. It will reduce their costs of disposing of that waste than it will improve our margins. But there isn't a pricing play to go there. The productivity per rep annualizes in or around $3 million per rep, which is at the higher end one would expect from a sales representative, but obviously, this is a very fast-growing product. The continued investment that you asked about, obviously, we're doing DTC or doubling the number of DTCs that we did during the year. And we will continue to add reps during the year. Our normal cadence that we've said that we expect is to add around 15 sales heads every year. Now we've gone above that for the last two years since we've owned this asset just because we're – as we said, not all growth is equal in Teleflex, and we're investing behind the areas where our margins are better. And this is definitely one of them, so is Interventional Access, so is Asia. So that – you can expect that continued investment from Teleflex in areas where our margins are better and therefore getting some leverage in our income statement.

[Kevin Farshchi:]

Okay, perfect. Thanks again. And congrats on the quarter. Thanks.

[Liam Kelly:]

Thank you very much.

[Operator:]

And our next question comes from Brian Weinstein with William Blair. Your line is now open.

[Brian Weinstein:]

Hi guys, thanks for taking my questions. Starting with maybe just PICCs and CVCs, just a little bit more commentary maybe on what's going on there, just in general. Haven't heard a whole lot of update from you guys in the last couple of quarters on those products, so just what do you see in there? And what type of share do you guys think that you guys have now within the PICC category? I know you're continuing to gain it at a pretty healthy clip.

[Liam Kelly:]

Brian, thanks for the question. Yes, look, I'll start with PICCs. Our PICC growth was almost 13% within the quarter. We continue to take share, in particular, within the key North American markets. We now believe we are number two behind Bard, and we believe that we're growing and continuing to take share and we'll continue to become a strong number two. Our PICC business or – pardon me, our CVC business had a nice solid quarter even with the destocking. And we grew around 4.5% in the quarter on our CVC business. And again, these are all areas that are accretive to our margins and therefore help state the leverage within our income statement that I mentioned earlier. I can't reiterate enough the philosophy within Teleflex is not all growth is equal, and we're trying to drive growth in areas and we are succeeding in driving growth in areas that allow us to, again, expand our margins on top of the restructuring programs that we have in place.

[Brian Weinstein:]

Great. Thank you for that. And then the obligatory M&A question here. You guys clearly have the capacity to be doing something. Can you just give us an update on how you're thinking about M&A, and maybe talk about the funnel and kind of pace of things that you guys are thinking about internally? Thank you.

[Liam Kelly:]

Thanks, Brian. Yes, I think our leverage ratio is 2.75 times net at the end, so we're down below 3 times. It obviously gives us the ability and the capacity. We are acutely aware that we want to get credit for the good M&A, and we've got an excellent track record of doing excellent deals, and we would envision that continuing. We have patients, we continue to be active in this space. We continue to look at assets. And, obviously, we will continue to make progress in that area. The great thing I think from a Teleflex perspective is that where a patient and we also don't see any need to do an acquisition. We feel very comfortable with the performance of our business with or without M&A, but obviously, as an accelerator, we would like to continue – don't take that comment to mean we're not going to continue to do M&A. We are a serial acquisition company. It's a core competence of ours. And I think there's few better than Teleflex of identifying these assets and bringing them into our organization.

[Brian Weinstein:]

Thank you.

[Liam Kelly:]

Thanks Brian.

[Operator:]

And our next question comes from Anthony Petrone with Jefferies. Your line is now open.

[Anthony Petrone:]

Thanks. Congrats on a good start to the year here. I have one on UroLift and one on MANTA. First one on UroLift. I know there was a reimbursement shift earlier in the year for a competitor. The numbers were ahead of our expectations for UroLift in the first quarter here. Just wondering if the shift in reimbursement is having any impact in the landscape out there? And I'll come back with the follow-up.

[Liam Kelly:]

So I think the reimbursement for the competitor, from our understanding is least, made the procedure for the competitor really an office-based procedure. I actually don't think it has had any material impact on our growth. We're very focused on going deep rather than going wide and building this business in the right way. And as you can see from our growth in the first quarter, the numbers speak for themselves. We don't see that competitor having a significant impact or any impact on our growth. I still believe and I've always believed clinical outcomes will win seven days a week and twice on Sundays. And our clinical outcomes are just better. It's that simple. And we're fastly becoming the standard of care for the treatment of BPH.

[Anthony Petrone:]

And then just the follow-up on MANTA, maybe just an update, I know that I think your comments suggest that there is only minimal benefit from that product. This year we're coming off of a pretty heavy data cycle with low risk data in TAVR showing benefits there. The numbers in TAVR are still very healthy. So I'm just kind of wondering, what kind of contribution this year from MANTA? But as you look outward, as the TAVR market continues to expand, do you have any updated thoughts on what that can contribute? Thanks again.

[Liam Kelly:]

Yes. Thanks, Anthony. Look, we're very excited about MANTA. I think in time this will be seen as one of those another very nice acquisitions that Teleflex did. And as I mentioned in my prepared marks, we're just commencing the U.S. limited market release in Q2. We are testing some pricing we're making sure that we get our training to the right level so that the product becomes very sticky within the TAVR centers. The great thing also is it's a very focused market. You've got less than 600 TAVR centers within the United States. And the TAVR market, as we know, is growing around 17%. Again, I'll go back to the clinical data, it's very compelling, 70% reduction in major vascular complications which should save a hospital five additional days in the hospital for those major complications and 18,000. And that's why we're testing some pricing scenarios in the limited market release. But we don't expect significant revenue in the U.S. in 2019 as we roll out that limited market release, Anthony. And we'll give more guidance as we get into 2020 as to what we expect from MANTA.

[Anthony Petrone:]

Thanks again.

[Operator:]

Thank you. And our next question comes from Kristen Stewart with Barclays. Your line is now open.

[Kristen Stewart:]

Hey, good morning guys. I was just wondering, just in terms of – I had a clarification for Tom. I think he had mentioned that the GAAP EPS number was going lower just because of an intangible impairment. What was impaired, I guess, or will be impaired?

[Thomas Powell:]

It's a minor impairment, $3 million in size. So in connection with the QT Vascular acquisition, an option for a future product was included in that transaction, and we've decided not to pursue that future product. And as a result, we've written off the option.

[Liam Kelly:]

Yes. It was an auction coatings, and just with the recent announcement, we don't believe we'll be exercising that into the future. So that’s a fairly modest impairment.

[Kristen Stewart:]

Got you. Okay. And then just as you're, I guess, looking out for the balance of the year, I guess, just to point out you do have one less selling day in 2Q, correct? So that will be about 100 basis points to growth. Is that right?

[Liam Kelly:]

Yes. It's about – it's normally about 100 basis points, and we pick that day back up in Q4, just to be clear. And again if I am ever going to have a billing day and if I'm going to pick a quarter, the quarter I want to be in is Q4.

[Kristen Stewart:]

Okay. That sounds good. And then last kind of question, just another kind of follow-up from one of the other questions. On UroLift 2, why does it take so long to roll it out in the U.S.? And if you're kind of starting later this year, why would it take a full year to roll out? Is it something that you could possibly do on a more expedited basis that could help drive a little bit more margin expansion?

[Thomas Powell:]

So we're – again, we're trying to be thoughtful on this. And the reason that we are being – taking our time, if I can put it that way, is we want to be methodical. We do not, under any circumstances, want to impact the growth of this product because of training divisions on a new product. So we want to keep the growth accelerating at a level that it can do over the next number of years while converting those physicians. And also as a reminder to what I said previously, we are also going back to some of the urologists who are only doing a smaller number of cases every month to retrain them on the new technology to develop those clinicians as champions. Now that they have seen the rapid adoption of the UroLift product, I think they'll be more encouraged to become champions and not get behind the growing trends to use UroLift for the treatment of BPH as it becomes the standard of care.

[Kristen Stewart:]

Okay. Thanks so much guys.

[Thomas Powell:]

Thank you.

[Operator:]

Our next question comes from Mike Matson with Needham & Company. Your line is now open.

[Mike Matson:]

Good morning, thanks for taking my question. Just have another one on UroLift. So in Japan, are you selling the product through a direct sales force or a distributor? And do you expect the pricing to be higher or kind of in line with the U.S. or lower?

[Liam Kelly:]

So in answer to your first question, Mike, our intention is to build out a sales force within Japan. In this year, 2019, we will be putting some feet on the street in Japan to do some market development work with key opinion leaders as I said in my prepared remarks. With regards to reimbursement, we would envision and we don't know what the reimbursement rate is going to be until we get it. We feel that the Japanese authorities, given that there is such a close alignment between the Japanese Urology Association and the American Urology Association, we would envision that it would be reasonably close to that level of reimbursement in Japan that we have in the United States, which is a – we would be happy with that result, let me put it that way.

[Mike Matson:]

Okay. Thanks. And then, Tom, just wondering if you could quantify the tariff impact, and if we do have a trade agreement here and the tariffs go away, how much would that add to your margins for the remainder of the year?

[Thomas Powell:]

Sure. As we look at the tariffs for 2019, we're currently estimating the impact to be about $9 million on a full year basis. So if those tariffs were to go away in future quarters, we'd estimate potentially a $6 million benefit for quarters two, three, and four. And again, that's assuming you'd get all of quarter two.

[Mike Matson:]

Great. Thanks.

[Operator:]

Thank you. I am not showing any further questions at this time. I would now like to turn the call back over to Jake Elguicze for any closing remarks.

[Jake Elguicze:]

Thank you, operator, and thanks to everyone for joining us on the call today. This concludes the Teleflex Incorporated First Quarter 2019 Earnings Conference Call.

[Operator:]

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program, and you may all disconnect. Everyone, have a wonderful day.