Good day, ladies and gentlemen, and welcome to the Quarter Four 2014 Teleflex Incorporated Earnings Conference Call. My name is Summer, 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 the conference. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Jake Elguicze. Please proceed, sir. Jake Elguicze - Treasurer & Vice President-Investor Relations: Good morning, everyone, and welcome to the Teleflex Incorporated fourth quarter 2014 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 82954645. Participating on today's call are Benson Smith, Chairman, President and Chief Executive Officer and Thomas Powell, Executive Vice President and Chief Financial Officer. Benson and Tom will make brief prepared remarks and then we'll open up the call to questions. 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 on slide four. 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. With that, I'd like to now turn the call over to Benson. Benson F.…

Thank you. Please stand by for your first question. Your first question comes from Larry Keusch, Raymond James. Lawrence S. Keusch - Raymond James & Associates, Inc.: Hi. Good morning. Benson F. Smith - Chairman, President & Chief Executive Officer: Good morning, Larry. Lawrence S. Keusch - Raymond James & Associates, Inc.: So I just wanted to touch on the gross margin expansion and perhaps, Tom, you can kind of help us go through this a little bit. But as we dissect that improvement that you've outlined, one of the things I think I've been picking up from you guys is that the actual restructuring is a reasonably small portion of the gains that you get there. So again, I just want to make sure I'm understanding the components and how should we be thinking about the impact of the actual restructuring program in 2015. Thomas E. Powell - Chief Financial Officer & Executive Vice President: Okay. Well, you're right. So, as we think about 2015, we have a number of drivers queued up that are going to move us towards where we want to be. Restructuring, certainly is one part or the footprint consolidation as we also referred to it as one part, but not everything. So, as we think about it, we talked about the combination of the footprint restructuring in operating efficiency programs delivering about 130 basis points of growth on a full-year basis. The majority of that is actually coming from operating efficiency. And there's really two components to that. One is a number of programs that we kicked off in 2014 and realized some of the benefit and as we closed out the year, we're going to pick up more of that benefit as we go into 2015. And also, we have another slate of…

Your next question comes from the line of David Lewis, Morgan Stanley. Please proceed. David R. Lewis - Morgan Stanley & Co. LLC: Good morning. Benson F. Smith - Chairman, President & Chief Executive Officer: Good morning. Thomas E. Powell - Chief Financial Officer & Executive Vice President: Good morning, David. David R. Lewis - Morgan Stanley & Co. LLC: Tom, I wonder if we could just may a little game of reconciliation for 2015. I think obviously the key element of this call is a great ability to offset this FX pressure. So relative to our model, it's about $0.40 of incremental FX pressure. It looks to me that a third to a half of that may be coming from better than expected tax. The other half of that, can you sort of walk us through what piece of shares, what piece is oil and perhaps what piece, or what is the impact of the Korea distributorship? Thomas E. Powell - Chief Financial Officer & Executive Vice President: So, in terms – just so we're clear. When you say half of it is coming from tax, you mean going into 2015 relative to 2014? David R. Lewis - Morgan Stanley & Co. LLC: That's right. So the tailwind from tax looks like it's maybe $0.10, $0.15, perhaps $0.20. I don't want to put words in your mouth. Just looking to get the pieces. Thomas E. Powell - Chief Financial Officer & Executive Vice President: Yeah. So let me just clarify what I talked about on the tax line. We had actually achieved a tax rate for the full year of about 19.9%, I think was the adjusted tax rate. And included in that were a number of one-time or non-recurring benefits. And so, once you strip those out, we…

Your next question comes from the line of David Turkaly, JMP Securities. Please go ahead.

Thanks. Just to kind of rehash some of your comments that European markets look stable and the U.S. looks slightly positive, sounds like you're gaining some share in the U.S. and raising prices as well. I guess, as you look at 2015, where you're sitting today, versus how you felt kind of at the beginning of the last two years, would it be fair to say that you feel that the core business is improving and maybe even the end markets kind of globally are showing signs of improvement? Benson F. Smith - Chairman, President & Chief Executive Officer: So, I think the answer to that is, yes. Even in the area of China, where we had some slowdown. It was again, primarily in the pump business, not in our disposable business. I had dinner earlier this week with the head of one of the largest hospital systems in Philadelphia and while they're not seeing necessarily an uptick in in-patient procedure rates, they are seeing an uptick in acuity and that seems to be working in our favor. But also, we're making some significant in-roads in share gains. So, that's I think as much as anything responsible for our increasing growth change in our core products.

And then, just to clarify the earlier question. Obviously, the gross margin expansion this year, the impact of the facilities – the three that you moved – are really going to be more felt in 2016 and 2017, the operating efficiency and manufacturing productivity you're talking about, in 2015, is kind of incremental, exclusive of those impacts. Is that fair? Benson F. Smith - Chairman, President & Chief Executive Officer: That is correct. And I would say as you know, for some period of time, we've been talking about the fact that our gross margin improvement goals don't terminate in 2015 that we see some very good continuing runway in 2016, 2017 and 2018, and the particular restructuring program that's in place now really starts to kick in for us in a much bigger way in 2015 and 2017. So that's absolutely correct. As we had been able to generate other improvements in our gross margins from acquisitions and from some other things, I would say that allowed us to foot the relocation plans on a more conservative footing, and we have taken advantage of that. And that's another reason why their biggest gains will come in 2016 and 2017.

Thanks a lot.

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

Hi. Good morning. Thanks for taking the question. Benson F. Smith - Chairman, President & Chief Executive Officer: Good morning, Matt. Thomas E. Powell - Chief Financial Officer & Executive Vice President: Good morning, Matt.

My first question is, you've been getting some benefit here and doing some additional distributor-to-direct conversions. I was wondering if you could just characterize the runway that you see there beyond 2015, and if we could see more kind of bigger transactions like this in 2015 and beyond. Benson F. Smith - Chairman, President & Chief Executive Officer: Yeah. I would say Mayo last year was probably a little bit bigger than what we would do normally. I think 2015 is going to be largely representative of what you could expect to see in that arena for the next couple of years. And again, every time we do a new acquisition like a Vidacare, it usually opens up the door for additional opportunities. But even setting that aside for a second, I think you're going to see the same sort of continuation over the next couple of years as we continue to consolidate distributors.

Great. And then, organically, you've been making some investments in surgery and specifically micro-surgery and kind of have made another vet there. So I was curious as to how you see those products rolling out this year and what kind of contribution we could see, realizing this is kind of a new area for you. Thomas E. Powell - Chief Financial Officer & Executive Vice President: Yeah. So, we have very conservative numbers in our plan for the rollout of the microlaparoscopic line. We certainly didn't want to put a budget together that had a lot of risk in what's an unknown product. We will be, again, having a soft product launch beginning first quarter, I think actually when we get to the Analyst Day, we'll have a much better insight in terms of what the adoption rate is going to look like and that will also determine the sales investment we put behind the product as well. So, it's a relatively conservative expectation this year. We're delighted that we're going to be able to put this rollout into place faster than we thought initially going into the year, but I think we'll have just a lot more information in our plans to spend some time on this certainly at the analyst meeting later in the spring.

Great. Thanks a lot.

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

Great. Thank you for taking my questions. Benson F. Smith - Chairman, President & Chief Executive Officer: Thank you. Thomas E. Powell - Chief Financial Officer & Executive Vice President: You bet.

First question is Vidacare. I believe you previously said that you thought it could do about 100 basis points of organic growth alone next year. It looks like in your guidance it's kind of 50 basis points. Has anything changed in regards to your expectations there? Benson F. Smith - Chairman, President & Chief Executive Officer: Not really I think again as we were putting together the overall revenue budget this year, we wanted to make sure that there were some conservatism built into most of the individual line items. We didn't want to end up with the unpleasant surprise of missing on the revenue and therefore be under even greater cost pressure. So, it's -- I would say that it's more a matter of some conservatism. In fact, if anything I think I'm personally more bullish on the opportunity that Vidacare has for us over the next couple of years than I was even a couple of months ago.

Great. And you mentioned share gains a couple of times in the presentation. Where specifically are you guys gaining share? Thomas E. Powell - Chief Financial Officer & Executive Vice President: So, our CVC business is taking an uptick. I think we've seen some improvements in our respiratory therapy marketplace. In fact for the most part, almost across the board in our U.S. based businesses, we've seen some improvements and again that's been helped enormously by 11 new GPO and IDN contracts that we closed just in the fourth quarter alone.

Okay. And then last question from me is that it's been I think 50 months since you've closed on Vidacare. What does the pipeline look like for like a Vidacare LMA type acquisition? Benson F. Smith - Chairman, President & Chief Executive Officer: I think the pipeline is good. We are seeing, I would say that we are seeing continued pressure and difficulties on companies that are in that size range. It's hard for them to go global. It's hard for them to penetrate into GPOs and we expect that to be a pretty good marketplace for us really over the next several years. So, we're picky about the things that we're looking at, but we certainly have a – I would characterize it as a robust target list.

Okay. Thank you and great quarter. Benson F. Smith - Chairman, President & Chief Executive Officer: Thanks.

Your next question comes from the line of Jason Wittes, Brean Capital. Please proceed.

Hi. Thanks for taking the question. So, I wanted to ask about the Anesthesia/Respiratory business in North America. I think you've kind of mentioned that the performance has been a little bit under expectations; it's kind of running at flat to 1%. I guess I'd like to get your sense on what you think the normalized growth rate should be for that business. And secondly, as part of that, you had also mentioned that you'd made some changes. I know that you've made some sales force changes. But also, from what I spoke with you last, you talked about some clinical trial initiatives that you're going to take, which also could help this business. Could you kind of just walk through that business for us? Benson F. Smith - Chairman, President & Chief Executive Officer: I'll separate those two businesses out and because we have, in fact, now separated those selling organizations and assigned separate management groups, our respiratory therapy business really is concentrated almost entirely in locations where we have group GPO or IDN contracts. And we felt we could manage that with actually a very small targeted sales force. Usually, those conversions tend to be quite large in size. And we're only going to actually have a few of them each year. So, we're approaching that with a much more targeted sales force. We do have some improved products out. In that product line, we've got a new humidifier that's very competitive. As I said, we've made some good in-roads in some additional group contracts and we've been making some effort to improve the gross margins in that area. Anesthesia this year is going to be principally driven, I think, by some improvements in our LMA product line where we'll be launching the third-generation LMA device called the Protector during the course of 2015 and we will be capitalizing on an acquisition we made a couple years ago with their version of an all-silicone low-end LMA device with a pressure cuff indicator and we've been marketing this product in Europe for the last couple years and have really been pleased with their results of it, and we'll be rolling that out into the United States. We're also quite active in the disposable laryngoscope market, which is an emerging area that is really starting to take off for us, and we've seen some pretty good growth in our pain pump business as we go into 2015. So, we're looking at 2015 as being certainly pretty optimistic about both of those product lines compared to the last couple years.

And where do you think normalized growth should be for those businesses? Benson F. Smith - Chairman, President & Chief Executive Officer: I couldn't quite hear your question, I'm sorry.

I just wanted to get a sense of where you think normalized and/or market growth should be for those two businesses right now. Benson F. Smith - Chairman, President & Chief Executive Officer: Yeah. I would say that they're probably a little lower than average and I would place it at 3% to 5% versus our 4% to 6% range for the rest of our product line. But, I would say, again, we may be being more cautious than we need to be. We're very interested in seeing how the Protector is received in the U.S. The folks we've had trying it in non-U.S. markets have been very, very enthusiastic about the product. So, I think we've got some conservatism built in there.

Okay. And if I look at your Vascular North American business, again if I strip out Vidacare, there is definitely growth there. I'm not sure how to take out for the extra month from Vidacare, but roughly, it looks like something like around 2%, 3% for the remaining business. Again, my math could be slightly off. But could you give us a sense of how fast your PICC line and your CVC lines are growing right now? Benson F. Smith - Chairman, President & Chief Executive Officer: So, PICC lines are growing faster than the CVC line obviously because we have more share. Jake, I'll turn this over to you. Jake Elguicze - Treasurer & Vice President-Investor Relations: Yeah. So our PICC business, this past quarter, was up about 11% on a constant currency basis.

Okay. And CVCs, roughly? Jake Elguicze - Treasurer & Vice President-Investor Relations: CVCs were also up mid single-digits.

Okay. Great. And then, one final question. I think it was asked in a couple ways earlier, but in terms of the gross margin progression, how should we be thinking about it? I know that you – I know a big component of that is a plant closure, but my understanding was that wouldn't really come into effect until largely the fourth quarter. Is that the right way to think about it? And can you give us a little bit more color in terms of how the gross margin progresses in 2015? Benson F. Smith - Chairman, President & Chief Executive Officer: So, I would say that in quarter one and quarter two, there's not a lot of big movement. We start to see many of these issues or opportunities start to kick in really in Q3. And then, we're very close to where we need to be by Q3, and then some additional improvements in Q4. So, it is modest improvements during the first half of the year and some significant improvements starting to kick in in beginning of the third quarter. Thomas E. Powell - Chief Financial Officer & Executive Vice President: So you should expect to see a building gross margin as the year progresses. As a lot of these cost improvement programs are put into place and we start to realize those benefits. But to Benson's point, on the footprint per se, you're going to get an added bump in the fourth quarter as we start to realize some of those benefits from that action. So, it's kind of two different things happening. The cost improvements are ratable throughout the year and then at the close, a bump from the footprint.

Very helpful. Thank you.

Your next question comes from the line of Richard Newitter, Leerink Partners. Please proceed.

Hi. Thanks for squeezing me in. Just wanted to ask on the – you might have said this earlier, on the interest expense, that's an incremental kind of bad guy for 2015 relative to 2014 and on the shares. Can you just go over what exactly that was again? Thomas E. Powell - Chief Financial Officer & Executive Vice President: So, on the interest expense, I think our average interest rate is right around 5.1% is our assumption. And I think a good way to think about that is if you take the third and the fourth quarter kind of spend rate, that's what you should expect to continue into 2015 because that will reflect the capital structure in place. And then in terms of our shares, we're expecting about a 600,000 share increase, in part due to normal equity grants and whatnot and in part due to the dilution associated with the converts. We're expecting that to be around $44 million, maybe $44.5 million is kind of the general range you should be thinking.

Okay. So, that's related to the convert. And then on the Mini-Lap, I think initially you said you're factoring in basically what the sales were from the prior distributor, but you also mentioned that there was something in the Mini-Lap pipeline that you found attractive. I was just wondering, is the pipeline just kind of more product line extensions to the existing portfolio or is there something in there that's maybe something that could be potentially more needle moving or category expanding, maybe elaborate on that? Benson F. Smith - Chairman, President & Chief Executive Officer: So, I would say in our financial modeling of the acquisition, we tend not to put a lot of expectations around new product releases. I think that from what we have seen in terms of the product pipeline, it has the potential to have very, very significant growth compared to the base of business that they have now. I'm not sure that it amounts to something that would in and of itself move the needle a whole lot for Teleflex. I think the biggest contribution from the line comes – again, is really having a dedicated product line in this whole mini-laparoscopic area with Percuvance and with Mini-Lap and it's part of the overall product rollout strategy in that product line over the next year or two.

Okay. That's helpful commentary. And then just lastly, just with respect to restructuring, you announced one last year, and I know that you kind of left the door open for the potential for there to be restructuring 2.0 at some point, we're approaching them the mid-year mark, where you'll have your Analyst Day. Is that something that could potentially be in the cards in 2015 and does currency and the volatility we've seen in exchange rates in anyway impact the timing or kind of rationale or reasoning behind announcing something like that? Thanks. Benson F. Smith - Chairman, President & Chief Executive Officer: So the answer to the last question is not at all. These are moves that make sense regardless of what happens to currency one way or the other. I certainly think it's our expectation at our April meeting to be able to talk, I think, in some more detail about what our gross margin expansion programs should look like from a number perspective between 2016, 2017 and 2018. It's a natural restructuring plan. We're somewhat limited on commenting until we get board approval. So, I think our goal at the April meeting or at the May meeting has more to do with simply outlining the general areas where that improvement can come from and what we think or where we think we're going to be by the end of 2018. And I would say to add to that we continue to be quite bullish about our opportunity for gross margin expansion through that period.

Thank you.

Your next question comes from the line of Anthony Petrone from Jefferies Group. Please proceed.

Thanks a lot. Good morning. Maybe a couple just... Benson F. Smith - Chairman, President & Chief Executive Officer: Good morning, Anthony.

Good morning. Maybe on Mini-Lap, a follow-up there would just be to maybe give us a sense of the margin profile of that business versus the corporate average and what you're expecting for 2015? Benson F. Smith - Chairman, President & Chief Executive Officer: So, I think it's a safe assumption that every acquired product we have has a considerably better profile than what we've been selling, and we are reluctant to do things that don't have a seven in front of them at least.

And maybe just to follow-up there. I mean it seems that these are lab instruments and you have the alliance with da Vinci. I don't think these wouldn't be compatible on the da Vinci system. But maybe just some comments on your broader outlook on minimally invasive surgeries where you seem to have two angles here; one is robotics, one is lab instruments. Maybe just to give us an idea of where you're seeing Teleflex's position as it relates to minimally invasive surgery broadly? Benson F. Smith - Chairman, President & Chief Executive Officer: So, we continue to work, I think, very well and have an excellent relationship with robotics company. We view that kind of as a specialty opportunity for us which we wouldn't venture into on our own without that relationship. The mini-laparoscopic instrument is entirely different. That really is a Teleflex pure play. As I mentioned earlier in the call, we are really looking forward to understanding the reaction and adoption rate that we can plan on. I want to be careful at this point in making sure we have enough initial customer experience before we start quantifying what that is. But at its very minimal level, it would more than meet our expectations from the modeling we did in the acquisition model. I would say we characterize this as one of those product areas that could be a lot bigger than what we thought just a year ago.

That's helpful. Maybe to shift over to the APAC business, that was 13% of revenue through 2014 and I'm just wondering what percent of that is South Korea and sort of what tailwind you get from the distributor acquisition in that region? Thomas E. Powell - Chief Financial Officer & Executive Vice President: Just give us a second. We're just trying to dig up the data. I think it's about, call it, maybe about 4% give or take, $4 million. $4 million.

Okay. And the last one for me is just on, on control of the Vidacare, the label extension for pediatrics, how large is that potential market for that indication? Thanks again. Benson F. Smith - Chairman, President & Chief Executive Officer: Yeah. So, again, for most pediatric indications, the market per se is not really big. It served as a really great entrée, though, because there's not a good alternative solution for those pediatric patients. And I would sort of describe it as a great backdoor to get into the hospital and get clinicians familiar with it. So it's probably going to show up more in terms of our ability to accelerate the growth of the rest of the on control line and necessarily as a discrete item.

All right. Thanks a lot.

Your next question comes from the line of Chris Cooley, Stephens Incorporated. Please proceed.

Thank you. I appreciate you working me in here towards the end. Just two quick ones at this point for me, one maybe for Tom. Could you talk to us a little bit about the cash position there? Or maybe Tom and Benson there, when you think about it, most of that cash is domiciled OUS as you provided. Should we think about future M&A predominantly being international in its focus or any restrictions there that we should keep in mind? And then, I have just one quick follow-up. Thanks. Benson F. Smith - Chairman, President & Chief Executive Officer: So I would say that it's always – there's an obvious advantage if the acquisition happens to be domiciled outside the U.S. and we can use that cash for it. However, the bigger driver around our acquisition selection is, is it provide a clear clinical benefit? Does it help the hospital with the cost profile? Is it protectable? Is it going to be a product that really has a almost competitor-less opportunity in the marketplace. And the reason behind that strategy is we think those are going to be the most protected kind of enclaves in increasingly cost-concerned healthcare environment. So, we certainly wouldn't walk away from an acquisition that was U.S. based that met those other criteria. All things being equal, absolutely, we'd rather put our cash to work overseas. Thomas E. Powell - Chief Financial Officer & Executive Vice President: And we have been using that overseas cash for a number of these distributor conversions. So aside from something larger on the M&A front, as we look at these distributor conversions, there's a supply of cash to facilitate those.

Super. And I realize the call's kind of long. I just had one other quick one here. Just when you look at the constant currency revenue guidance for the year, 4% to 6%, which is down year-over-year versus the 8.8% in the prior year, and I realize in 2014 you benefited significantly from Vidacare. Help me think though just about – I just want to make sure I got the math right here for 2015, what you're expecting in terms of just volume growth when we think about the components of that 4% to 6% for this year? How much of that is volume? Thanks. Thomas E. Powell - Chief Financial Officer & Executive Vice President: Yeah. So, if we think about it, this year, we've got in our assumptions base volume growth of 135 basis points to 165 basis points. Now, we're also taking Vidacare kind of out of the M&A world, which was last year, and that effectively will roll into our base volume, but we're calling it out separately just so you can compare this year versus past. So, if I think about that base volume growth of 135 basis points to 165 basis points, that continues a nice trend that we saw in base volumes so we closed out 2014. We had been seeing volumes that were fairly negative across Europe and soft in North America in the early part of the year. As the second half came together, we saw a really nice strengthening of those base volumes in both North America and in Europe. And as a result, we closed out the year with 190 basis points of volume growth in the third quarter and 185 basis points in the fourth. So, as we look at 2015, we're assuming 135 basis points to 165 basis points, certainly our hope is that those trends of Q3 and Q4 continue at that level or higher. But we think what we've got is in line with what we've been seeing in the marketplace. And despite the softness in Asia, we still achieve those levels in Q3 and Q4.

Okay. So, if I can just maybe push on that a little bit more. So, still the 135 basis points to 165 basis points down versus the rate we saw in the second half, even though we have a number of incremental drivers coming in now here into 2015. So, I'm assuming that's a bit of conservatism much like we saw you guys provide us at the start of 2014 as well. Is that the best way to think about that? Benson F. Smith - Chairman, President & Chief Executive Officer: That's the best way to think about it. Thomas E. Powell - Chief Financial Officer & Executive Vice President: Yeah.

Fair enough. Thanks so much.

You have no further questions at this time. Thank you. Jake Elguicze - Treasurer & Vice President-Investor Relations: Operator, I guess, if there's no further questions, I'll wrap up the call. Thanks for everyone to – for joining us today. This concludes the Teleflex Incorporated fourth quarter 2014 earnings conference call. Have a good day.