Good morning ladies and gentlemen, and welcome to the Teleflex Q4 2016 Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this call will be recorded. I would now like to introduce your host for today's conference, Mr. Jake Elguicze, Treasurer and Vice President of Investor Relations. You may begin.

Thank you, operator and good morning, everyone and welcome to the Teleflex Inc. fourth quarter 2016 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 855-859-2056, or for international calls, 404-537-3406, passcode, 65576607. Participating on today's call are Benson Smith, Chairman and Chief Executive Officer; Liam Kelly, President and Chief Operating Officer; and Thomas Powell, Executive Vice President and Chief Financial Officer. Benson, Liam and Tom will provide 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. With that said, I'd like to now turn the call over to Benson.

Thank you, Jake and good morning, everyone. To begin, I'd like to start the call by saying that we are quite pleased with our financial performance during the fourth quarter as our business rebounded nicely from Q3 and we achieved results that exceeded the high-end of our most recently provided constant currency revenue growth and cash flow from operations guidance ranges, while achieving adjusted earnings per share at the top of our most recently provided guidance range. In fact, during the fourth quarter, we saw a stabilization in our end markets and at 6.9% generated our highest constant currency revenue growth since the fourth quarter of last year. And this was no small feat as the fourth quarter of 2015 was a huge quarter for Teleflex and presented us with a very difficult comparable. Strong constant currency revenue growth rates were achieved within each of our product areas and geographies, and that even includes Latin America, which has faced significant headwinds leading up to this most recent quarter. As we exit the year, thanks in part to the investments we have been making in our product portfolio, I feel confident about the state of our base business and believe that we are well-positioned to build upon our base business constant currency revenue performance in 2017. Turning to profitability, during the fourth quarter we generated adjusted operating margin of 25%, which was up 130 basis points versus Q4 2015, at an all-time high, and adjusted earnings per share reaching $2.13. While from a full year perspective, we were able to leverage as reported revenue growth of 3.2% into adjusted earnings per share of $7.34, an increase of 16% as compared to 2015. And similar to my comments regarding revenue, we see 2017 as yet another year in which Teleflex can leverage…

Thank you, Benson and good morning, everyone. I greatly appreciate the confidence that you and the Board have in me and I look forward to continuing to execute upon our strategy in the years to come. Turning now to a review of the quarter. As we have been saying for the past several months, we expected distributor ordering patterns to normalize as we moved through 2016, and I'm pleased to report that this occurred as we exited the year. In fact, we saw robust distributor orders in conjunction with an uptick in a flu season whose severity was ahead of 2015 levels and represents a more normalized flu season. This, combined with stronger new product sales and share gains led to our fourth quarter 2016 constant currency revenue growth of 6.9%. This was also aided in part by the one additional selling day we had in quarter four, which we estimate contributed approximately 1%. The primary driver of revenue growth this quarter came from increased sales volume of existing products, which contributed approximately 4.5%. We experienced positive constant currency existing product growth across all our product areas. However, it was largest within our OEM, EMEA, vascular, and anesthesia franchises. Moving to new products. The positive revenue contribution trend we have seen for the past several quarters once again continued in quarter four, this time contributing approximately 1.6% of constant currency growth. This represents the highest constant currency revenue growth contribution stemming from new products yet; acquisitions as well for 2017, as many products which were launched during 2016 are gaining traction. From a geographic perspective, new product revenue growth was again led by our North American businesses. While from a product line standpoint, new product sales were particularly strong within our surgical, vascular, and anesthesia product lines. Surgical new product…

Thanks, Liam and good morning, everyone. Given the previous discussion of the company's revenue growth drivers, I'll begin my prepared remarks with gross profit. But before I do, I'd like to reinforce the point that Teleflex delivered very solid 2016 financial result despite softer than expected revenue growth. For the year, we grew adjusted net income by over 18% and cash flow from operations increased by 35%. We also achieved or exceeded each of the non-revenue financial metrics outlined at the beginning of the year. The combination of manufacturing productivity programs, mix management and pricing increased the gross margin by 140 basis points to 54.1%. Tight control over OpEx spending and the deferral of the medical device tax provided for an increase to the operating margin of 260 basis points to 24.1%. We attribute approximately 70 basis points of the increase to the deferral of the medical device tax. Strong financial results allowed us to raise adjusted EPS guidance on three occasions throughout the year with full-year EPS of $7.34 coming in at the upper end of our most recently provided guidance range. Finally, during 2016 we announced two additional restructuring programs that will yield further savings beginning in 2017. Turning now to fourth quarter results. For the quarter, adjusted gross profit was $276.7 million versus $262.2 million in the prior year quarter. Adjusted gross margin was 53.8%, representing a 30 basis point decrease when compared to the prior year period. For the quarter, we realized benefits from new products, pricing and manufacturing productivity initiatives. However, unfavorable foreign exchange rates reduced gross margin by approximately 70 basis points. Adjusted operating margin improved by 130 basis points to 25%. The year-over-year improvement was largely the outcome of continued tight control of discretionary overhead spending and the deferral of the medical device…

Thank you. And our first question comes from Larry Keusch with Raymond James. Your line is open. Lawrence Keusch - Raymond James & Associates, Inc.: Okay. Thanks. Good morning, everyone.

Good morning, Larry.

Good morning, Larry. Lawrence Keusch - Raymond James & Associates, Inc.: So, I just – two questions for you. I'm just wondering if you can come back a little bit to the 4% to 5% organic growth. And again, just help us think through what kind of are the drivers of that growth rate, just given some of the challenges that you had in 2016 achieving your initial outlook?

Okay, Larry. Liam here. I'll take that one. So, as we outlined in the call, from a volume perspective 1.8% to 2.4%. We're accelerating new products from the 1.3% that we finished 2016 to a 1.4% to 1.6% range. And as we said during the call, we see that being somewhat conservative, but we are contemplating that we will get through these value analysis committees, in particular with products that we launch during 2016. We have accretion on our pricing from 0.4% in 2016 to the range of 0.5% to 0.6%. That's being driven by a positive base pricing, but also with the action that we're taking with our China distributor adding some pricing there. And of course, CarTika adds 30 basis points to 40 basis points. A few macro impacts – and of course Vascular Solutions then on top of that to go from 4% to 5% to 12.5% to 14% on a constant currency basis. Then there are a few macro factors. So the headwinds that we saw as we said previously within Latin America, we expected that to be behind us as we entered quarter four. And I am happy to report, Larry, that Latin America had a robust quarter four, growing in the region of about 8%. We also anticipate a recovery in EMEA in – next year. On a full-year basis this year, EMEA grew by about 1.1%, Larry, and in the latter half of the year in quarter three, EMEA grew by over 2% and with an extra billing day in Q4 grew by 3%. So, we've a reasonable trajectory within EMEA to get us there. And of course, our key North American market, Larry, we expect to see robust growth as we have seen, aided by those new products that I mentioned earlier. Lawrence Keusch - Raymond James & Associates, Inc.: Okay. That's perfect. And then, just one other one for Tom. I think I caught this correctly in the release, but it looks like there was an impairment charge for Semprus, I believe which was in the fourth quarter. So, is that correct, and if it is, if you could just take me through what the deal was there?

Okay. So, that is correct. So, the financial impact is an impairment charge offset by a deferred tax liability. Those two net to about $26 million. We also then reduced contingent consideration payment as well. Kind of the background there is, Teleflex as a company is always working on a number of products. In this case, looking for coatings that will reduce antithrombogenic and have antimicrobial properties. What we found, Larry, is that – we've got other technologies in our portfolio that are showing a lot of promise on both of those fronts. Semprus was more focused on the antithrombogenic. And so we made the decision to focus our resources on that – another coating technology that we think shows more promise. And so, that's kind of the background on the decision.

And I'll just add to that a little bit Larry that hospitals are now being penalized for the last 18 months on their infection scores on PICCs, and we believe that as Tom said, an antithrombogenic and an antimicrobial solution is really where the market is moving. And we have some better solutions that we're working on internally that addresses both. Semprus was clearly an anti-adherence technology, so therefore had an impact on thrombus, but not on infection rate colonization. Lawrence Keusch - Raymond James & Associates, Inc.: And when – just lastly, when could we potentially see any new product introductions with the newer technology that you are referencing?

So, we are working on some technologies that will be slated for a 2019-2020 release at this stage, Larry. Lawrence Keusch - Raymond James & Associates, Inc.: Okay. Perfect. Thanks, guys. Appreciate it.

Thank you. And our next question comes from Dave Turkaly with JMP Securities. Your line is open.

Thanks. And congrats, Liam. And Benson, I know you are staying around, but I think we knew this was eventually going to occur. I guess just at a high level, I'd love to just kind of get your thoughts on sort of the margin expansion story that we've seen over the last several years. And obviously, we see the guidance for 2017, but should we still anticipate that you might be able to do 100 basis points to 200 basis points moving forward. And sort of any color you could give us on sort of long-term gross or operating margin levels, now that you have Vascular Solutions in the portfolio as well.

So we have consistently presented that 350 basis points to 400 basis points as a conservative goal for the end of 2018. As you know, we did not include the potential margin improvement from acquisitions such as Vascular Solutions in that total, now did we include our China Go-Direct program in that. So I would say that of the view we would give it to (41:05) that is, is that those two events would be additive to that 350 basis points to 400 basis points goal. Our current thinking at this point, given the fact that that 350 basis points to 400 basis points contains a number of different programs is to have an Analyst Meeting sometime during the course of this year. I think September now is looking like the most likely date where we can go into more details and I think give you a much more definitive viewpoint in terms of what 2018 is really going to look like. But at this point the assumption you should be making is that those two elements are additive. And at that point also I think we want to go beyond what 2018 is going to look like and give you a couple years forward moving picture as well, because just including the various programs we have, many of them won't have been completed by 2018. But I would say, our margin expansion remains a very, very strong opportunity for us for the next three years to four years.

Great. And then just one quick follow-up. I know the Penn medical deal was not a large one, but just curious as to how that kind of fits in with Vidacare. I know it grew well in the quarter. But is it similar, is it complementary, or how exactly will those two – how would you sell those two in the market?

So it's quite complementary and it actually brings a broader range of portfolio of products as well. So Penn commercializes trauma and resuscitation products as well as frontline (42:41) products. They are the I think Enteropathy's (42:46) product of choice predominantly with the military. We also have a strong relationship with the military, but this just adds an additional portfolio to Teleflex. We don't expect it to have a significant impact on revenue or earnings during 2017, but it also brings some valuable IP that will help to support the EZ-IO product into the future. And I would say, David, is it still needs shareholder approval before it closes, so just bear that in mind.

Great. Thanks a lot.

Thank you. And our next question comes from Brooks West with Piper Jaffray. Your line is open. Brooks E. West - Piper Jaffray & Co.: Hi, can you hear me?

We can, Brooks. Good morning. Brooks E. West - Piper Jaffray & Co.: Great. Good morning, and congratulations to you Benson and Liam, both. I wanted to start with China if I could. You gave some good detail on the earnings impact. And I'm wondering if you could quantify any revenue impact with that transition that we should expect in 2017? And then, is this something that you can do in a year or is this something that is going to linger on for some time? And I guess, last question there is, just if can you give us a sense of the scale of your China business?

Okay. So there is a lot in there, Brooks. It's Liam here, so I'll try and grab them one at a time. So the distributor will sell through what inventory did they have during the year. It will have an impact on our revenue line. At the moment, we estimate that to about 30 basis points, which is included within our volume guidance that we gave. The impact thereafter, it becomes accretive in 2018, 2019 and 2020. During 2017, you will also see that we have additional pricing as a result of this. So we lose volume, we lose earnings, but we do pick up some modest pricing in the region of about, let's call it at 30 basis point or 40 basis points of additional pricing as a result of this. So we anticipate that as the distributor sells through their inventory, we will put in our sales organization into the Chinese market. Our overall business in Asia is – or in China is in the region of about $85 million, Brooks, and this represents at (45:23) between $26 million and $30 million for Teleflex in 2016. Brooks E. West - Piper Jaffray & Co.: Okay. So, thanks for that, Liam. And it sounds like you can execute this in one year and you're confident that this move becomes an accretive in 2018. Is that the way to think about it?

That's the way to think about it. It will be accretive in 2018 and 2019, Brooks. Brooks E. West - Piper Jaffray & Co.: Okay. Perfect. And then Tom, I have one for you, follow up, just on gross margins this quarter. You mentioned FX was a headwind, but given – I think backing that out, you're a little bit light of our model. I'm just curious: is that product mix or can you currently help us understand Q4 and kind of, I guess bridging that into the improvement we should see in 2017? Thanks.

Sure. So, the fourth quarter margin was on the lower side of what we've put up there. I think the biggest impact is we saw about a 70 basis point negative impact coming from FX throughout the – or I should say through the first three quarters of the year. We had seen some very moderate positive impacts on gross margin from currency, but the fourth quarter impact erased all those gains. So that was a big shift in the trend line. And then you also recall our decision to delay the transfer of the wet kits. We discussed this earlier in the year. That would have had an impact in the fourth quarter as well. And then in addition, there was some mix. We had unusually strong growth in our OEM respiratory business units as well as the Latin America region, and these collectively are our lowest margin region and business units. So, that was a mix impact as well. As we think about this going forward, obviously we thought about our longer term mix and have modeled that into 2017. In any quarter you can have peaks and valleys in product lines. We don't expect that these three product lines will necessarily cause a mix issue going forward for us. We'll have to see on the impact from currency. As mentioned in our guidance, we have anticipated there will be an FX impact, and that's in our assumptions. And we expect to be able to work through the wet kit transfer issue in the coming quarters and put that behind us. So I don't see this as really having a long-term impact for us as a result of these three items. Brooks E. West - Piper Jaffray & Co.: Great. Thank you.

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

Hi. This is actually Ian (48:02) in for Matt. Can you hear me okay?

Yes.

Hi, Ian, (48:07) we got you.

Okay; great. I want to ask, on the acquisition of Vascular Solutions, what is the blue sky scenario? In other words, what are the things that could go better than expected that could lead to upside from the scenario you laid out?

So it's Liam here, Ian (48:25). So Vascular Solutions have traditionally been quite aggressive with product launches. You will see that they just launched the TrapLiner which is an extension of their core GuideLiner product. So of their, call it, $170 million a year, about $50 million comes from this GuideLiner product. The TrackLiner was initially thought to cannibalize a larger portion of the GuideLiner. Having done some of the clinical work in Canada and in Europe, the feedback from the clinicians is that it will be used more in conjunction with the GuideLiner, so the cannibalization rates will be slightly lower. So that's the potential for upside. In the longer term, if I stick with the new products theme, freeze-dried plasma could be a significant opportunity in the future. We have a strong military call point. This is a product that will be sold through that call point. The proposed deal we have with Ping (49:37) strengthens that call point into the military. So we think that will be accretive. And their top-line sales growth will be reinforced by our international channel, and we think that's the potential for some further upside perhaps in the future.

Okay. That's helpful. I want to follow up with another question on the launch of Percuvance. Do you have a little bit more detail there just in terms of – at this stage, what the feedback has been like and how it is progressing through the value analysis committees?

So, again, the feedback is resoundingly positive. We have put the product portfolio of Percutaneous Solutions, which is Percuvance and MiniLap, into the hands of our full sales force now and put more resources behind this. In the U.S., we have 24 hospitals using it of 36 that have been through the VAC through quarter four, which is a 68% hit rate, which is consistent with our success rate going through VAC. We have 35 trials ongoing in North America and 60 ongoing globally. We're still very enthusiastic about the product. Feedback from the customers and surgeons continues to be resoundingly positive, and we're just working through the Value Analysis Committees through this year and what we expect to see as we get through those is the revenue to ramp through the year and to have more of an impact in 2018.

Great. Thank you.

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

Thanks and good morning. Congratulations also – Liam and Benson, congratulations to you both. Just a couple questions on Vascular Solutions and then a follow-up maybe on tax. The $0.20 to $0.25 for 2017, I am just wondering with the margin profile on those revenues are considered in that guidance and what percentage of the $40 million to $45 million target by 2019 in cost synergies is baked into that number?

So, I'll cover the margin side of it first. So, it's accretive to our overall margins. Now, there will be some adjustments as we walk through Vascular Solutions. They count certain expenses below the line that we would account in gross margin. But their gross margins have been in the 66% range as they have reported them. From the point of view of synergies, clearly we just closed this a week ago. We're working through that. Clearly, we have a plan there, but we don't anticipate significant synergies in 2017, but obviously that will ramp as we get through 2018 and 2019 and I think we are pretty consistent by 2019, we will generate between $40 million and $45 million in synergies from this transaction.

Great. And then a follow up just on Vascular Solutions would be, if we look at the growth profile prior to the deal being announced, the Turnpike catheters within their portfolio were really experiencing hyper growth. And I am just wondering where that product cycle is, how long do you expect that to sort of maintain at that level? And then the follow up for Tom on tax guidance would be, what is sort of baked in there for potential reform later this year, just given the proposals that we're seeing? And I guess, as of this morning they are expecting that to be presented before the August recess. So anything on tax guidance would be helpful.

So, I'll address the Turnpike first (53:36) that's okay. So, the Turnpike product, we're very excited by it, we love the growth profile of it, we love the margin profile of the Turnpike product. The growth of the Turnpike in quarter four was almost 200%, albeit on a relatively small pace. We see this as an additional opportunity in the hands of Teleflex, because a lot of their distribution channel overseas – or some of their distribution channel overseas at least does not to sell the Turnpike, they sell the competitive product that they had taken onboard as a distributor would, prior to the launch of Turnpike. So we actually see the lifecycle of that in the early stages of lifecycle for the Turnpike with many years of accretive growth to come for Teleflex and accelerate this by what we can do with our channel overseas.

And then on the tax rate, our approach and planning for 2017 was to develop our plan based on the prevailing or current tax builds (54:42) out there for the U.S. and abroad. We have not yet factored in any potential revisions, and so what we'll wait to do is, see what's actually coming out in terms of legislation. And once that becomes clear, we'll make an assessment of the impact and provide updates. But we thought it's premature right now to incorporate any conceptual proposals into the financial plans.

This is Benson. I spent a good bit of time in Washington two weeks ago, and I would say while there is a lot of enthusiasm to get something out there relative to tax reforms, there is still a lot of disagreement under the surface in terms of what that really looks like. So, I think the approach of wait and see is important. There can be a lot of negotiation between now and some final proposal.

That's helpful. Thank you.

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

Hey. Good morning, everyone.

Hi.

Just a follow up on the tax discussion. Tom, like in 2014, you were able to repatriate some cash following Vidacare. Do you think you still have the same opportunity to do that following Vascular Solutions? And then, how are you kind of balancing the need to issue high yield with potential tax reform?

Well, that's something that we're obviously watching very closely. As we talked about, the whole Vascular Solutions acquisition, we initially funded that on a revolver and bank term loan, and we are going to opportunistically look to see if there is an opportunity to turn that out with high yield. Now, to the extent that either the current administration creates a repatriation opportunity or we are able to create one ourselves internally, would cause us to reassess that financing strategy, because obviously we have over $500 million of cash sitting O.U.S., and that could help us to delever and perhaps take an alternative path. But we're working through the whole question on repatriation I guess by ourselves, and we want to wait and see what happens with the current administration's plans on that. So, we are watching it closely obviously.

Okay, perfect. And then I'm just trying to understand the sustainability of the North American surgical results. I think you have an expectation for a ramp in Percuvance. Are we talking like single-digit millions in 2017, or are we getting up to double-digit millions? And then could you remind us your exposure to the Intuitive robotics platform?

Okay, so it's Liam here again. So within percutaneous, you have Percuvance and MiniLap. So they both address that category of percutaneous solution. We don't normally give specific guidance for individual product categories, but as I said earlier, we expect it to ramp and to be accretive to our new product revenues that we will ramp-up during 2017. On the Intuitive side, we do sell a range of products to Intuitive that – our trocars predominantly that are sold as part of their platform and that generates approximately 30 basis points to 40 basis points of growth – of revenue globally.

We don't see that, that growth would compromise the Percuvance opportunity in any significant way.

Correct.

All right. Thank you very much guys.

Sure.

Thank you. And I am showing no further questions at this time. I would like to turn the call back to Mr. Jake Elguicze for any closing remarks.

Thanks, operator. And thanks everyone that joined us on the call today. This concludes the Teleflex Inc. fourth quarter 2016 earnings conference call.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.