Teleflex Incorporated (TFX) Q3 2020 Earnings Report, Transcript and Summary

Thank you for standing by, and welcome to the Third Quarter 2020 Teleflex Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised, today's conference is being recorded. I would now like to hand the conference over to your speaker today Jake Elguicze, Treasurer and VP of Investor Relations. Thank you. Please go ahead, sir.

Good morning, everyone, and welcome to the Teleflex Incorporated third quarter 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 855-859-2056 or for international calls, 404-537-3406, passcode 4907865. Participating on today's call are Liam Kelly, Chairman, President and Chief Executive Officer; and Thomas Powell, Executive Vice President and Chief Financial Officer. 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 referenced in our press release today as well as our filings with the SEC, including our Form 10-K, which can be accessed on our website. Additionally, during this conference call, you will hear management make references to the estimated positive or negative impacts as a result of COVID-19 during the third quarter of 2020. You'll also hear management make statements regarding intra-quarter business performance during the month of October. Management is providing this commentary to provide the investment community with additional insights concerning trends, and these disclosures may not occur in subsequent quarters. With that, I'd like to now turn the call over to Liam.

Thank you, Jake, and good morning, everyone. It's a pleasure to speak with you today, and I hope you're all keeping safe and well. Overall, considering the environment we are operating in, we are pleased with our third quarter performance as it reflected the expected improvement in trends across many of our global product categories, led by a faster-than-expected recovery within our Interventional Urology business, and continued strength within our vascular access product sales. While from a regional perspective, we saw particular strength within the Americas as the pace of recovery in the United States during the third quarter was encouraging. Quarter three revenues was $628.3 million, which was down 4.1% as compared to the prior year period on a constant currency basis but far better than the 12% decline we experienced during the second quarter of the year. The decline in year-over-year revenue is due to the impact of COVID-19, which we estimate caused a net negative impact of approximately $78 million, or approximately 12%. If we were to normalize for the negative COVID impact, we estimate that our underlying business grew by approximately 8% on a constant currency basis, consistent with our quarter two revenue performance. We also saw a significant sequential improvement within our adjusted gross and operating margins from the levels achieved during the second quarter. With our adjusted earnings per share of $2.77 in the quarter meaningfully exceeded our internal expectations. This reflects the continued recovery we saw as we moved through the quarter, coupled with prudent operating expense management. Before I go into more detail on our quarterly financial performance, I am happy to announce that during the month of October, we signed a definitive agreement to acquire Z-Medica, a market leader in hemostatic products. We are pleased to be able to deploy capital for a differentiated product portfolio that leverages existing Teleflex call points and is immediately accretive to our revenue growth rates, adjusted growth and operating margin profile and to our adjusted earnings per share. Turning to a more detailed review of our third quarter results. As I just mentioned, quarter three revenue declined 4.1% on a constant currency basis and 3.1% on an as-reported basis. The decline in revenue was due to COVID-19, which we estimate had a negative impact of approximately $81 million across several global product categories. This was somewhat offset by approximately $3 million of additional revenue within our vascular access and other product categories, which experienced modestly higher-than-expected demand as a result of COVID-19. From a margin perspective, we generated adjusted gross and operating margins of 57.2% and 25.1%, respectively. This translated into a year-over-year decline of 140 basis points at the gross margin line and 190 basis points at the operating margin line. That said, we saw a sequential improvement of 330 basis points on both the adjusted gross and operating margin lines as compared to the levels we achieved in the second quarter. On a year-over-year basis, reduced sales volumes due to COVID was a headwind. However, it was partially offset by our cost containment efforts as we continue to tighten our belts where we deem appropriate in the current environment, balanced against continued investment to sustain our long-term growth aspirations. Adjusted earnings per share was $2.77, down 6.7% year-over-year but ahead of our internal expectations as the business continued to recover during the quarter. When excluding the negative impact of COVID-19 had on our third quarter results, we estimate that our adjusted earnings per share would have grown approximately 13% as compared to the prior year period. Overall, I am very pleased with our financial performance as it demonstrates the resiliency of our diversified global product portfolio. Let's turn to a discussion on our quarterly revenue trends, which will be on a constant currency basis. The Americas delivered revenues of $375 million in the third quarter, which represents an increase of 0.4%. Growth within the Americas was driven by vascular access and respiratory products, which both saw elevated demand driven by COVID. In addition, Interventional Urology was a strong contributor as UroLift continues to be one of the fastest recovering procedures. However, there were offsets with declines in other product categories. We estimate that the Americas would have grown approximately 9%, excluding the impact that COVID-19 had on the region. EMEA reported revenues of $135.7 million in the third quarter, representing a decline of 7%. During the quarter, declines occurred across most product categories as increasing COVID infection rates negatively impacted procedures and results. Adjusting for COVID, we estimate an approximately 3% underlying decline for the region. Turning to Asia; revenues totaled $68.2 million in the third quarter, which represents a decline of 14.2%. However, we estimate that we would have had positive constant currency revenue growth in the high single digits, if not for the impact of COVID-19. Additionally, during the third quarter, we began transitioning a distributor in Japan. When normalizing for both COVID and the distributor change, growth in the region would have been closer to the low double-digit range, consistent with our longer-term outlook. And lastly, our OEM business reported revenues of $49.4 million in the third quarter, which was down 11.8% on a constant currency basis. As we anticipated, during the third quarter, our OEM business saw a lagged impact related to COVID relative to our other businesses. Investors familiar with Teleflex will be aware that our OEM business supplies medical companies with complex catheters and surgical sutures, and the quarter three impact reflects reduced orders from these customers, whose business is tied to non-emergent procedures. Excluding the estimated COVID-19 impact, the business grew roughly 28%, which includes a benefit of approximately 11% from the acquisition of HPC. As it relates to HPC, I am pleased to report that we remain on track with our integration efforts. Let's now move to a discussion of our revenue by global product category. Starting with vascular access. Due to growth within both our PICC and EZ-IO products, third quarter revenue increased 6.8% to $160 million. We estimate that COVID-19 positively impacted the growth rates of our vascular products during the third quarter by approximately 1%. Moving to interventional access; third quarter revenue was $93.2 million, or down 13.5% as compared to the prior year period. The decrease was largely due to the delay in the recovery of certain non-emerging procedures because of COVID-19, along with the negative impact stemming from a catheter recall that occurred during the quarter. We estimate that the recall impacted our business negatively by approximately $4 million. The impact on the recall will continue to linger for the next several quarters as we do not expect to be back on the market with this product until September of 2021. When normalizing for the impact that COVID had on these product lines, we estimate that underlying growth was in the low single digits. Turning to Anesthesia; revenue was $75.7 million, which is lower than the prior year by 14.4%. The revenue decline was the result of lower sales of laryngeal masks, regional anesthesia and airway management products. We estimate that COVID had an approximately 10% negative impact in the quarter, implying mid-single-digit declines for the business on an underlying basis. Shifting to Surgical. Revenue declined by 12.3% to $82.2 million, driven by lower sales of our ligation and instrument product lines. We estimate a 13% headwind from COVID during quarter three, indicating recovery as compared to the estimated 30% COVID headwind in quarter two. Moving to Interventional Urology; quarter three revenue increased by 11% to $81.8 million. We estimate an approximate 29% COVID-19-related headwind during quarter three. Notwithstanding the significant headwind on our growth in quarter three, we are pleased with the path of recovery for this business unit and are also happy with the early impact of our national DTC campaign, which is exceeding our expectations. Additionally, we are encouraged that we trained 120 new urologists in quarter three, moving to a cadence that is consistent with our expectations prior to COVID. And finally, our other category, which consists of our respiratory and urology care products, grew 0.5%, totaling $86 million. In large part, we estimate that growth during the quarter was due to increased demand for certain humidification and breathing products resulting from COVID-19. From a monthly perspective, we note that September outperformed July and August when normalizing for the distributor termination and the product recall within our interventional business. Furthermore, as we have progressed through the first few weeks of October, we continue to see additional modest improvements as compared to last October. That said, due to the significant resurgence of COVID cases globally, and when normalizing for selling days, we expect to see a modest improvement in the constant currency revenue performance during quarter four as compared to the decline of 4% we achieved in quarter three. Tom will provide more details later. That completes my comments on quarter three revenue performance. Turning to some recent clinical and commercial updates. Starting with UroLift; the response to our national DTC campaign is exceeding our expectations. The strategic role of DTC is important as about half of the 12 million men being treated for BPH believe prescription medications are their only solution. Thus far, we are tracking well against the target to generate six times the number of impressions from the regional campaigns in the year ago period. Web traffic has increased over 150% since the launch and another encouraging metric is that multiple urologists are now motivated to get trained on UroLift as a result of patient requests due to the campaign. In addition, while there was likely a nominal impact on quarter three results, we expect the momentum for the campaign to continue building into quarter four and early next year as we turn down the advertising full strength starting in early September. Turning to UroLift 2; since the FDA clearance on July 31, we have begun a market acceptance test and received positive preliminary feedback, including the streamlining of the delivery device triggering mechanism and the reduction of waste. We are also increasing manufacturing levels for the product ahead of the full commercial launch slated for early in 2021. Lastly, regarding the UroLift ATC. We know that the market acceptance test is well underway, and we have received very positive feedback, which indicates that the device is delivering on the intended benefit of enhanced tissue controls when treating challenging anatomies such as obstructive median lobe. Taken together, we see these efforts as helping to build momentum as we seek to further expand our leadership position in BPH. Turning to the next slide on key commercial updates; we recently received an expanded indication for EZ-IO as the device can now be used for up to 48 hours when our alternate intravenous access is not available in both adults and pediatric patients, 12 years and older. While we do not expect a material sales uplift from this label expansion, we are always looking to improve our portfolio based on clinician feedback, and this is a prime example of those efforts. Lastly, I'd like to provide the investment community with a few more details of the Z-Medica acquisition we announced last night. In mid-October, we entered into a definitive agreement to acquire Z-Medica, an industry-leading manufacturer of hemostatic products. Under the terms of the agreement, Teleflex will acquire Z-Medica, for an upfront payments totaling $500 million and up to an additional $25 million upon the achievement of certain commercial milestones. As part of the transaction, Teleflex will also be acquiring certain tax attributes that are expected to result in future tax benefits. We value these tax attributes at approximately $40 million, which we considered when arriving at our purchase price. Z-Medica's hemostatic technologies are helping reinvent hemorrhagic control with cost-effective efficient bleeding control solutions being adopted by markets worldwide. The company offers three main brands: QuikClot, Combat Gauze and QuikClot Control+, which utilize the proprietary technology consisting of gauss impregnated with calin. The technology activates and accelerates the body's natural clotting ability. Z-Medica's products currently focus on the trauma surgery, EMS, military, emergency departments and interventional segments with opportunities to expand into additional indications overtime. Teleflex's strategy is to invest in innovative products and technologies that can meaningfully enhance clinical efficacy, patient safety and comfort, reduce complications and lower the overall cost of care. The acquisition of Z-Medica enables Teleflex to leverage strength in the hospital, EMS and military call points with the differentiated products that complement our EZ-IO and EZPlas product portfolio. We are excited to announce this acquisition given its above company average revenue growth capabilities as well as its above company average gross and operating margin profile. Pending the receipt of certain regulatory approvals, the transaction is expected to be completed during the fourth quarter of this year. As we look forward, the transaction is expected to contribute between $60 million and $70 million of revenue and between $0.07 and $0.15 of adjusted earnings per share in fiscal year 2021. Beyond 2021, we expect the acquisition to deliver a high single-digit revenue growth profile and further accretion to adjusted earnings per share. On EZPlas; after our recent meetings with the FDA, we determined to proceed with the BLA submission rather than an EUA. We continue to work closely with the agency in determining the timing of that submission. Overall, we continue to invest organically in clinical and commercial catalysts that will help to sustain our revenue growth aspirations in a normalized environment. We will also look to augment those internal efforts through the deployment of capital for inorganic growth opportunities, such as Z-Medica. That completes my prepared remarks. Now, I would like to turn the call over to Tom for a more detailed review of our third quarter financial results. Tom?

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 $359.6 million versus $380 million in the prior-year quarter or a decrease of approximately 5%. Adjusted gross margin totaled 57.2% during the quarter, which is a decrease of 140 basis points versus the prior year period. The decline in gross margin was primarily due to COVID-19 related impacts, including lower sales volumes and higher manufacturing costs along with the foreign exchange headwind. The volume impact was significant for the quarter as the adverse revenue impact from COVID-19 tended to skew toward higher gross margin products including Interventional Urology, Interventional Access and Surgical. In total, we estimate that COVID-19 negatively impacted our adjusted gross profit by approximately $59 million in the quarter. We continue to tightly manage discretionary spending as a means to partially offset the reduced revenue and gross profit resulting from COVID-19 and as a result of the efforts, we estimate that operating expenses were reduced in the third quarter by approximately $22 million. While we expect the actions taken to continue to deliver OpEx savings through the remainder of the year, by far the largest quarterly OpEx reduction was realized in the second quarter. Adjusted operating profit during the third quarter of 2020 was $157.6 million and this compares to $175.3 million in the prior year or a decrease of approximately 10%. Third quarter operating margin was 25.1% or down 190 basis points year-over-year, driven primarily by the gross margin decline. And while our adjusted margins were down in the third quarter as compared to the year-ago period. We are pleased to see the sequential improvement in both gross and operating margins from the lows we experienced during the second quarter. Looking forward, we expect sequential margin improvement to continue during the fourth quarter. Net interest expense totaled $16.4 million, which is a decrease of approximately 14% versus the prior year. The decrease in interest expense primarily reflects reduced average interest rates associated with our variable rate debt, partially offset by higher average debt balances versus the prior-year period. Moving to taxes for the third quarter of 2020, our adjusted tax rate was 7% as compared to 10.3% in the prior-year period. The year-over-year decrease in our third quarter adjusted tax rate is primarily due to a favorable mix of taxable income versus the prior-year period, as well as a higher benefit from stock-based compensation as compared to the prior-year period. At the bottom line, third quarter adjusted earnings per share decreased 6.7% to $2.77. Included in this result is an estimated adverse impact from COVID-19 of approximately $0.60, as well as a foreign exchange headwind of approximately $0.09. Turning to select balance sheet and cash flow highlights, for the first nine months of 2020, cash flow from operations totaled $241.5 million as compared to $289.2 million in the prior-year period. The decrease is attributed to larger contingent consideration payments partially offset by favorable changes in other working driven by higher accounts receivable collections. Overall, the balance sheet remains in good shape. At the end of the third quarter, our cash balance was $347.5 million versus $553.5 million at the end of the second quarter. During the third quarter, we repaid nearly $285 million of our revolver borrowings and restored revolver availability to the full $1 billion. Net leverage at quarter end was approximately 2.6 times. The acquisition of Z-Medica is projected to increase net leverage by less than three quarters of one turn and net leverage pro forma the acquisition remains comfortably below our 4.5 times covenant. Our intention is to finance the purchase of Z-Medica to revolver availability, however, we may choose to permanently finance the acquisition through a future notes issuance. Lastly, we have no near-term debt maturities of material size. Given continued uncertainty surrounding the impact of COVID-19 pandemic on business operations, we are not reinstating financial guidance at this time. However, we will provide the following directional expectations for the fourth quarter. Looking ahead, we continue to expect further sequential improvement in our constant currency revenue performance as compared to what we achieved in the third quarter. However, due to the resurgence in global COVID-19 cases over the past seven to eight weeks, we expect our constant currency revenue growth to be only modestly better than what we achieved during the third quarter. This expectation of a modest fourth quarter improvement excludes the benefit of two additional selling days that occurred in the fourth quarter of 2020 which we estimate would add approximately 3% of additional revenue growth during the fourth quarter. And this expectation also excludes any benefit from the acquisition of Z-Medica as the closing date is not yet determined. And that concludes my prepared remarks, I would now like to turn the call back to Liam for closing commentary. Liam?

Thanks, Tom. In closing, we delivered solid third quarter results as our diversified portfolio showed continued expected improvement relative to our quarter two results on both the top and bottom line. Excluding the impact of COVID, we see our underlying business performance is encouraging and very much in line with our initial expectations. We continue to view the resurgence of COVID globally combined with the willingness of the more vulnerable population to get procedures done as a primary wildcards impacting recovery. While the next several quarters will have elements of uncertainty, we remain confident in our ability to execute as we head into 2021 and are optimistic in our long-term prospects. We, as an organization, will continue to focus on serving our hospital customers and working with our key stakeholders. We will manage the business prudently while staying focused to capitalize on the long-term potential of our global product portfolio. In closing, I want to thank all of our employees who continue to manufacture, distribute and support products that are required in the fight of COVID19, focusing on meeting our commitments to patients, clinicians, communities and shareholders. That concludes my prepared remarks. Now I would like to turn the call back to the operator for Q&A.

Thank you. [Operator Instructions] We have our first question from David Lewis of Morgan Stanley. Please go ahead.

Well, good morning and thanks for taking the question. Liam, it's pretty clear that the business visibility has declined a bit since sort of our conference in September. And I sort of, if you can, want to isolate what you think those factors are, because it sounds like this happened several weeks ago not just the last 48 hours. So, would you say this is just the lack of improvement in hospital census in the US. Is it international markets, specific international markets that are weaker or the OEM business that perhaps had early benefits that didn't have follow through. But I think, given these issues probably have gone on for several weeks versus several days, I want to sort of isolate what particularly you think is the business weakness. And then Tom, I just to be clear on the guidance, we should be thinking sort of low single-digit organic declines in the fourth quarter. And then I had just one quick follow-up.

Okay, David. So, first of all, I think that our underlying business is actually performing very well. If you look at the third quarter, we grew by 8% with a couple of headwinds in there beyond COVID and that 8% excludes COVID. So, if you were to look at our underlying business performance, we're closer to the 9% excluding the Langston recall and excluding the go direct in Japan, which will have longer-term benefits for us. My thinking over the last number of months hasn't changed to be totally frank with you although I am seeing COVID getting worse. When I attended your conference, I think that I was pretty clear that although some of our peer companies were expecting a recovery in quarter four that we did not expect that recovery until early in 2021 and nothing has changed in my thinking around that. Before Tom actually comments on quarter four, I think, it's important that I share with you and the investment community our thinking for revenue growth in the fourth quarter. Many of you familiar with Teleflex will know that we've been seeing, as I said, for the past couple of months that we expect the recovery to be early 2021 rather than the fourth quarter and we continue to believe that to be the case. And as I said, David, nothing has changed in my thinking. But however, because of the significant rise in infection rates globally, we are more cautious now on the pace of the recovery as even compared to a few months ago. In formulating what we believe would happen in the fourth quarter we projected for the modest year-over-year constant currency revenue growth improvements we saw in October for the entire quarter. What we did not factor in was an increase in elective procedures, increased volumes of patients as a result of DTC nor did we factor in the second shift down in relation to COVID, which we think is highly unlikely. We did take into consideration the difficult comparable against quarter four last year where we had a pretty good quarter and we believe this to be a balanced position. And therefore concluded that we would see modest improvement in Q4 constant currency revenue growth as compared to Q3 excluding the billing days. And of course then the billing days will add approximately 3%. So it's really, David, I think what we're seeing in the end markets globally the uptick in COVID that we're seeing in places like France, Spain, Italy, Australia and Southeast Asia and in the key market of the United States. And I have to say I was really encouraged by the performance of our US business in the third quarter where we've turned in North America to a positive growth of 0.4% and that would have been even better if you were to exclude those that one-time Langston call. But I'll let Tom comment on the fourth quarter.

Yes. So, I think, Liam, you touched on the key points, in the third quarter, we - our currency growth was down 4.1%. As mentioned, if you were to exclude the benefit of the extra shipping days and Z-Medica acquisition, we expect the fourth quarter, constant currency growth to be only modestly better than that. So, not to cite a specific number, but we're not thinking there's going to be a significant improvement on the constant currency growth from Q4 - from Q3 to Q4.

Okay. It's very, very helpful. And just two quick ones from me and I'll jump back in queue. Just, Liam, UroLift that business continues to improve. Can you help to isolate the impact of DTC is having on the underlying business, just given the COVID headwinds, it's kind of hard to see, but do you feel like we're getting DTC momentum from third to fourth. And then just Z-Medica, look, interesting market, very profitable asset, help us understand how you were thinking about valuation and returns. Thanks so much.

Yes, absolutely. So, on UroLift to start with, obviously great seed return to growth. It grew by 11% in quarter three. As I said earlier, we have not, in our quarter four, thinking built in an uplift from DTC. Are we happy with the way the DTC is going? Absolutely. It's going really, really well. Patient response above-expectation, 150% increase in our web traffic. We're actually getting now urologists coming to us looking to be trained on the UroLift because patients are turning up to their practice asking about it. This isn't market research, David, but in this quarter just gone I had conversations with 28 urologists, 27 out of 28 told me that they had patients come into their practice and ask them about UroLift in direct response to what they had seen on either a TV or a web campaign. So, we're very encouraged by that. Regarding the Z-Medica acquisition, let's start with the strategic element that we always look for, does it fit within Teleflex? Yes. The call point is right where we want it to be EMS and trauma. Does it have IP? Yes, very strong IP that runs out to 2033. Are there synergies available because we're putting it into our portfolio? Absolutely. Has it got excellent clinical efficacy? Yes, 150 clinical papers written about it and it's a very sticky product growing into a market that's a $600 million market globally with an opportunity to expand overseas. With regard to the valuation, the few of the key metrics that we looked at, obviously, the multiple on revenues it's in the mid-7s based on forward revenues. But if you exclude the tax attributes, it's just around 7 times. And then more importantly, from an EBITDA perspective in the high teens of 2021 EBITDA and in the lower teens if you go into 2022. We would consider this a scale acquisition similar to Vidacare. We really like the accretion and this is accretive to our top line growth, it's accretive to our gross margins and immediately and creative to our longer-term op margin goals. And it exceeds our internal cost of capital by year four - by the end of year four. And again, a good benchmark for us as you know that's what we try and set ourselves up to is to get to that above our internal cost of capital by year four and our internal cost of capital is in the very high singles, just to be clear.

Okay. Thanks so much.

Thanks, David.

Your next question comes from Larry Keusch of Raymond James. Please go ahead.

Thanks. Good morning, everyone. Liam, I'm wondering if you can, just coming back to UroLift, I guess, two questions on this. How are the trends in procedures progressing when you think about those that are done outside of the hospital versus inside of the hospital? I'm curious if that's continuing to creep upwards. And then how are you thinking about the fourth quarter in terms of the underlying growth for UroLift when you sort of exclude the two selling days. Are you thinking that you will still continue to get sequential improvement in your growth, particularly as the DTC kicks in? And then I've got a couple of quick questions on Z-Medica.

Okay, Larry. So, in regarding to the UroLift in your first question about site of service, we have continued to see a shift from the hospital to outside of the hospital in particular to the office settings. That has moved by around 4 percentage points that have moved from the office to - pardon me, from the hospital to the office. In relation to the recovery that also striking difference to the recovery within the office setting and in the hospital setting. We see the office setting being quite positive in the third quarter compared to pre-COVID levels and the hospital setting is still under the pre-COVID levels from UroLift procedure. So, that's obviously been compounded by the fact that procedures are being moved to the office environment. Regarding moving to the fourth quarter and looking at UroLift in the fourth quarter, as you would be aware, Larry, UroLift has got a significant - had a significant achievement last year. It grew 64.4% last year. So, they've got a really tough comp as they head into the fourth quarter. Notwithstanding that, if I look at it sequentially from an absolute dollar perspective as we go from Q3 to Q4, we would definitely - our expectation will be to see an increased dollar value going from Q3 to Q4. And as I said in my earlier comments, Larry, it's very hard to forecast the absolute impact of DTC in the COVID environment. So, we haven't really built in an expected impact of DTC into the fourth quarter just given the uncertainty around COVID. Now having said that the DTC campaign is going exceptionally well. We will definitely on track to get 6 times - multiple of 60 impressions that we got last year when we did our 18 regional DTCs. As I said, our web traffic is up 150%. The number of patients that are actually going to our doc finder and coming to our call center, I'm not going to tell you the number, Larry, for competitive reasons, but I can tell you it's very encouraging what we're seeing happening out there with the DTC.

Okay. Terrific. And then on Z-Medica, I mean, obviously the valuation is what it was and probably commensurate for a company with that sort of high single-digit growth. But what - how are you thinking about the durability of that growth and sort of why is it durable, I assume up in that high-single digit range. And then the other component of the question is just how are you thinking about sales and cost synergies for the asset and what's built into the deal model? Thanks.

Yes, Larry. Great question. So, from a growth perspective, first of all, these end markets are really in the 4-ish-percent range, 4% to 5%. So, for just turning up, you're actually getting some nice growth, which also helps. The size of the markets are also encouraging. The overall market is about $600 million market globally, $150 million in the EMS, over $300 million in trauma and $125 million in the Interventional. We also have an opportunity and built into our model to do some further clinical work to expand it into cardiac in the future, which will actually expand that market even more. Also right now, the revenue is predominantly generated within North America, in that 80% to 85% of the revenues in North America. So, we believe that expansion overseas is a significant opportunity for us in utilizing our channel, which as you know is a key part of our strategy. The active, we'll do about $50 or $60 million last year, it will do $60 to $70 million this year. And I think a point that shouldn't get lost on the investment community is that the gross margins of this asset are in the low-80s. So, it's a nice opportunity for us to continue our margin expansion and also it shouldn't be lost that the op margins without synergies are accretive to our longer range goals for op margins. And we should be able to generate about approximately $10 million of synergies by year three with this asset which will also help to expand the op margin. And that combined with the growth makes it a very exciting acquisition for us. And I would really look at this, Larry, as another Vidacare. Faster growth, great margins and also us being able to take synergies and continue to expand that overseas and into different areas.

Okay. And just to be clear that $50 million to $60 million in revenues that you referenced and the $60 million to $70 million that's 2019 and 2020. Or is that, what's the right way to think about that?

That's 2020 level...

So, the numbers that Liam referenced our 2019 numbers for the $50 million to $60 million and the $60 million to $70 million is what our expectations are for 2021.

Okay, got it. Thank you for the clarification.

Thanks, Larry.

Your next question comes from Richard Newitter of SVB Leerink. Please go ahead.

Thanks for taking the questions. Maybe just to start off, looking ahead into next year some of the catalysts that you have, you mentioned EZPLAZ the BLA pathway now. Can you just maybe give us a sense as to what your anticipated timing is with that regulatory pathway? And then also if you could just touch on timing for UroLift Japan? And just what's going on with Manta underlying trends and specifically the fact that that's maybe in certain types of procedures that are getting done in a more emergent fashion. Can you give us any sense as to how do you think that trajectory might play out into the fourth quarter and into 2021 relative to some of the other parts of your business that you see a little more cautious on?

So, I think that with regard to UroLift Japan, nothing has changed since our last update. We believe that we will get the reimbursement in Q2 and we'll be generating revenue in Q2, Q3 of 2021. So, nothing has changed there in regard to UroLift in Japan. Regarding the BLA, we've made really good progress, Rich, with the FDA. At one stage we were considering an Emergency Use Authorization, I think, the military involvement and this was very helpful to us and now we believe we will have a BLA submission. Do we feel more confident now that we will generate some revenue in 2021? Yes, we do. The timing of the BLA is still to be ironed out with the FDA and once we get the BLA then we are on a fast track and it is very dependent on when they will approve that, but I feel quite encouraged that we will have the EZPLAZ on the market at some stage in 2021. With regard to your question on the Manta. The Manta performed really well in North America in the third quarter, returned to growth in around that 20% mark in the third quarter in North America, and we're very encouraged by that. We - it is a product that gets us access into the hospitals and clinicians are very keen to use the product because it reduces the time to hemostasis. And in today's environment when you're trying to get more TAVR cases through the cath lab, that is very, very helpful. So, we see Manta being one of our key drivers as we go into 2021. One of many I would like to point out, Rich. So, we've got the UroLift, we got Manta, we got UroLift Japan, we now have Z-Medica, we have EZPLAZ coming on stream. So, we've a lot of catalysts for growth as we go into 2021 and it's very encouraging. We just want to get out the other side of this COVID. And just on your comment that we're more cautious than we were. I would say, Rich, we're not, we're equally cautious as we were a couple of months ago. We just don't expect to see the recovery that - the recovery from COVID in Q4. We expect it to be nearly 2021 and nothing has changed in our thinking around that. But thank you for the questions.

Got it. And just on that last one, if I could follow up, Liam, in the last part on 4Q. So, I guess, what I'm hearing is, you have some things that could be incrementally positive relative to what's in your internal outlook like DTC benefit. But you're also being cognizant that surgeries are occurring in the US and then more formidably internationally. So, maybe we should just view that as you haven't necessarily seen that impact on elective procedures or hospital trends yet with October was trending better than the third quarter trend. But you're going to leave out any incremental benefit beyond October or actually you're dialing and the potential that things take a step back and that's why is the improvement has been bigger in 4Q.

So, I think, the way - it's a great question, Rich. I think, the way we look at it, look, September adjusted was minus 2% roughly. And we saw a sequential improvement in the first few weeks of October. And actually the first few weeks in October were pretty much flat year-over-year. But despite this positive trend in October and given the rise in cases in COVID and the tougher comps, we still expect modest improvement in Q4 versus Q3. We haven't built in, as you said, the DTC maybe we're being overly conservative. But this is as clearer picture as we have right now and if the recovery continues in Q4 as we haven't built in, Teleflex is going to benefit from that and we will accelerate. If we go into a second last time, which I don't expect it will be worse than we expect. But I think we're trying to, Rich, take a balanced and prudent approach to the fourth quarter. And what we see in front of us right now, as I said a few times, my crystal ball is cloudier than it's ever been with two months still left to go in a quarter. But I'm encouraged by what I saw in October, Rich, to be candid. We're up against a really tough comp in the last two months, and we have not built in a continued improvement in recovery, we basically taken what we've seen in October and prorated that in the last two months of the quarter. Now, if it continues to recover, it will be better, there is no doubt about it.

Got it. And just, Liam, just to be clear, the 4Q guidance that you provided that was all excluding any contribution from Z-Medica, correct?

Yes, I mean, there are things that will help us reach, so Z-Medica being one that you point out. FX should work in our favor that will help us if procedures start to come back a little bit better that will help us. So, yes, you're correct. And we did not include Z-Medica and also, we've got two additional billing days in the fourth quarter which should add about 3%. So, there are green shoots out there and nice opportunities, but we don't want - as we sit here right now, we want to be absolutely as candid as we can with the investment community.

Thank you.

Next question is from Shagun Singh of Wells Fargo. Please go ahead.

Thank you so much for taking the question. So, just a point of clarification there on Q4. So, should we expect you to be positive in Q4 with the addition of the two extra selling days? And then couple of questions on UroLift, I believe, you did start seeing the first set of patients come in in September and October. Are you willing to share with us what kind of volume lift you're seeing from this initiative? And then as we think about Q4, and thank you for all the color there, you do have a full quarter of national DTC initiative that you said you haven't dialed in 6 times the ad impressions year-over-year. And on an underlying basis year-to-date, you have been delivering about 40% year to date. So, is that a reasonable floor to expect for Q4? Thank you.

So, I think, Shagun, you're correct. We're very encouraged by the underlying performance of all of our businesses and UroLift is no exception. The underlying performance has been fairly consistent at 40%. We have not built in the DTC into the fourth quarter quite simply, Shagun, because it's very hard for us to determine where the patient came from when they go to the urology practice and because of the uncertainty in relation to the COVID - increase in COVID cases around the United States. With regard to the sharing on the DTC initiative, for competitive reasons, Shagun, I don't think it would be wise for us to share many of the specifics, but I can tell you that the number of patients that are actually clicking and calling our call center is very encouraging. If every one of them and that's - it's not going to happen, but if every one of them turned into a procedure that would be quite encouraging for us as an organization. And as we go into the fourth quarter, as we said earlier, we declined by 4% in the third. We expect a modest improvement over that and then we expect to pick up another 3% from billing days. FX should work in our favor if it stays where it is today. And that's where we see the fourth quarter landing.

I got it. That's helpful. And then if I could just ask a question on 2021, I think, you just mentioned that you expect next several quarters of uncertainty related to COVID. What does that mean for 2021, consensus is looking for about double-digit growth in 2021 versus 2019, I believe it's still below pre-COVID levels. So, what is your reaction to that? And then on the margin side, how should we think about it? And when do you expect to get to your LRP goals? Thank you for taking the questions.

Thanks, Shagun. Well, we would have - to answer the most part of that question, we would have to get out the other side of COVID. There's so much uncertainty out there with COVID. Are we encouraged by the underlying performance of our business? Absolutely, we are encouraged by the underlying performance of our business. Do we think we have a number of catalysts for growth? Yes. Have we just add another one today? Yes, we've added Z-Medica. Do we believe that once we get back out the other side of COVID that Teleflex will be in a strong position? Yes. With regard to our longer-term goals, are there right goals for Teleflex? Absolutely, they are. And nothing has changed in my thinking on that either. They are the right goals for Teleflex. And it's not a question of if we get to them, it's a question of when. But in order to give the investment community clarity on that, we need to come out the other side of COVID. We need to have a vaccine or a fall-off in the level of the condition to a certain level that consumer confidence is high and hospitals are able to get a higher throughput of patients. Even though everyone was expecting at the beginning of this COVID crisis that there would be almost like a super boom in Q4 where hospitals will put on extra capacity, we haven't seen that in October. And I don't think we're going to see it in November and December. And I don't want to predicate the fourth quarter on a super boom procedures coming back into hospitals because quite frankly, I can't see it happening.

Thank you so much.

Next question is from Anthony Petrone of Jefferies. Please go ahead.

Hi. Good morning, everyone. I hope everyone's doing well, staying healthy. Two questions for you, Liam. And then I have a follow-up for Tom. The first two questions are in UroLift and I'm wondering if you could just give us an update on total urologists trained to date? By our math, it's about 2,800 or so, maybe a touch higher than that. And then ultimately, when you look at the pool of 12,000 urologists in the US, maybe just the refresh on what the peak target penetration in there is. A quick one also on UroLift would be anything on the DOJ investigation. And then I'll ask the follow-ups. Thanks.

All right, Anthony. So, on DOJ, absolutely no update on that and I would advise the investment community not to expect an update for a number of quarters as they're still focused on that single practice. With regard to the number of urologists, Anthony, we've changed, your math is pretty good. We're in around 2,900 of the 12,000 trained. And what's very encouraging for me is that we trained 120 urologists in the third quarter, which is right back to our normalized run rate pre-COVID training urologists. And I genuinely, well I know that the DTC is helping with that because we know urologists are coming to us because their patients have come into their office asking them about UroLift. The other part of your question regarding the 12,000 urologists, how many do we need to train? What's the magic number? In our research as we broke down our champions, what we've discovered is the champion, the average urologists see 75 BPH patients. But what we've discovered is whether you see 50 unique BPH patients a month or whether you see 150 unique BPH patients a month, you have the same opportunity to become a champion. And a champion is a urologist who does six procedures or more a month. So, we have to train all of the - pretty much all of the 12,000 urologists to get this 100% penetrated. And that's what makes it so exciting, Anthony, because it's such a big opportunity. As we train more urologists and we make this a standard of care for BPH, it is a massive market for us to grow into.

Great. And then - that's helpful. And then the two follow-ups real quick here. We noticed that just the APAC trends 2Q to 3Q actually decelerated, again, the view is that they are a little bit ahead of the curve with COVID. So, maybe just to touch on what actually happened in APAC in 3Q. And then Tom, just in terms of the last slide on the deck for the margin outlook. The total pre-tax savings $85 million to $98 million is the overall target. I think, you exiting 2019, it was $26 million of that was realized. So, maybe just an update on where you guys sit on realizing the expected savings from restructuring? Thanks again.

Yes, Anthony. I'll take the APAC one, obviously APAC was impacted by our decision to take the Japan business direct. So, if you normalize for that, it was about 11%. If you normalize for COVID, it was in those very low double digits but about 11%, slight degradation, and that was really driven by an increase in COVID cases in India and Southeast Asia, and a resurgence in Australia. We are a little bit unique, I guess, insofar, as that we are more exposed to Australia. It's a bigger part of our APAC business than it would be for other companies and similar to India. So, those are the key drivers for APAC. And I'll let Tom answer the other part of the question.

Well, sure, on the restructuring programs, I'd first like to just say that despite COVID outbreak, the program still continues to track towards plan and schedule. So, we feel very good about that. In fact, one of the initiatives have moved up and we're going to be able to realize some savings earlier over the next couple of years than was previously expected. In total, the savings are $85 million to $98 million, as you mentioned. About 25% of those were realized by the end of 2019. And then we expect to realize a fairly significant amount in 2020 and 2021, little less in 2022 and then a fairly substantial amount in 2023. So, as far as the cadence, we're going to - what's remaining, you're going to see about half of that realized in 2020-2021 and the rest in the next three years. Is that helps?

Thank you.

Yes.

We have our next question from Matt Mishan of KeyBanc. Please go ahead.

Hey, Liam, based on Z-Medica, can you take a step back and explain why the technology is differentiated versus competitive products and the clinical evidence that's driving the growth?

Yes, absolutely, Matt. And there are a multiple clinical papers written on the 75 peer reviews and really it comes down to some of the key factors. If you look at some of the human data 88.3% successful hemorrhagic control, success rates are right up there. And if you look at the military did one the Combat Gauze, higher success rate of achieving hemostasis at 89% for the - and 100% for the second application compared to standard gauze. So, you're looking at 89% and 100% hemostasis compared to standard gauze at zero percent and 13%. And, again, in the area of blood loss in trauma significantly less blood loss after packing was seen and this is the QuikClot plus where you can actually put it internally and obviously reduction in blood loss. And there is also an external use study and radial access that shows shortening the hemostasis by 94 minutes to TR - compared to TR band. So, it's really hemostasis and time that is the focus of the clinical peer reviews. And the product outperforms the standard of care that is used today in the market and is being adopted rapidly in EMS and trauma centers around the United States, in particular, and we want to expand that overseas.

Okay, excellent. And then just the last one, how are you accurately measuring the COVID impact on your business?

So, I'm actually going to ask Tom, if you don't mind, to answer that because Tom has been working with the finance team and the business units to work through that.

Okay. Well, let me walk you through it. And I - we will admit it's not a perfect estimation, but we, as a business, wanted to understand the impact, so that we could understand our trends, I've spent quite a bit of time focusing on that. And so I'll share with you our approach. So, essentially, we began with the budget and then we made adjustments for known deviation from the budget. Plus or minus trends versus a budget prior to COVID to see how different businesses were performing, changes in competitive dynamics, canceled programs and events and CMA programs. We also looked at back order status and any changes there that could impact the results. We looked at distributor ordering patterns, as well as even customer communications regarding order push outs. And so we used all of this data to come up with kind of a number of adjustments that we attributed to COVID. And then the difference is essentially from budget was attributed to the COVID impact here, net of all of these adjustments. And we used some other approaches to triangulate around to just validate that. As for margins, once we had established the revenue impact, we could then apply our variable manufacturing costs. We included COVID-related manufacturing increases whether it was social distancing, PP&E, attendance et cetera. And we made adjustments for such factors such as sales commissions, as well as the OpEx cost savings initiatives. So that was our approach. I think we've taken a really hard look at it, but recognize that it isn't a perfect science, but rather our best estimation of the impact. And I hope you find itself.

Understood. And thank you for the detail.

Yes.

Thanks, Matt.

Next question is from Matt O'Brien of Piper Sandler. Please go ahead.

Hey, good morning, guys. This is Drew [ph] on for Matt. Thank you for taking the questions. I wanted to follow up a little bit on the Z-Medica transaction, obviously, congrats on getting your hands on pretty, some pretty interesting products there. Maybe you could speak to a little bit on both the potential sales force efficiencies, it seems like they could be pretty meaningful. And then how long will be the process of training your sales force before you can roll it out to the vast majority?

Yes. So, we actually see the sales force synergies as the synergies the Teleflex brings because of our channel into the EMS space. So, if we look at that, we have a very strong sales organization that sells the EZ-IO, sells laryngeal masks as a whole plethora of products into that EMS and military call point and we've very strong relationships with the military, which is, as you can see from their co-sponsor of EZPLAZ product to get it into the marketplace. So, we see that really as an opportunity for us to accelerate the growth into that key call point. And then thereafter to expand within the other areas of trauma. As I've said in earlier in the call, total synergies by year three, we expect in the region of $10 million and that comes from a variety of areas and is an opportunity for us. But we want - this is a growth asset and our thinking here is that we will continue to invest behind this in the channel into the future in order to ensure that we will have more sales people on the ground in the combined organization than we did as Z-Medica as a stand-alone. And we will also look to expand into our channel overseas. We also have a direct call point into some of these key areas overseas and opportunities there to expand this portfolio. So, it's a very nice acquisition high single-digit growth, great margins both on the gross and operating margin. Great clinical data and very long IP. So, it's well protected and growing into a $600 million market.

Okay. That's very helpful. And then my follow-up is, on the performance in your Other category, I think, that includes your respiratory business, which benefited from COVID early on. I mean, it looks like it kind of returned to flat this quarter. Is the right way to think about that that some of the tailwinds from COVID early on are starting to die down? Or is there the potential for that to pick up a little bit again as you know the severity of the current COVID outbreak? Thank you.

Yes. So, what you would expect that would happen is, as you get over the increase in the curbs [ph] of COVID as we did in Q3 exactly as you pointed out, Drew, you would anticipate that those businesses will get back to more normalized levels. As you head into Q4 and as you see COVID beginning to increase again, you would expect that both our respiratory and our vascular businesses would benefit from that increase. Normally we would anticipate that respiratory would benefit from a strong flu season. My own view is that the flu season this year is irrelevant because of COVID and hospitals will protect themselves to have supply of these products in the fourth quarter in case the resurgence continues and in case that we go into a second lockdown. I don't think we're going to go into a second lockdown, Drew, I think the hospitals have really learned how to treat patients with COVID. And they're also segregating areas in the hospitals, if not entire hospitals, to move COVID patients to them, so they can continue to conduct procedures even in the midst of a second COVID outbreak.

Thank you.

Next question is from Matt Taylor of UBS. Please go ahead.

Hi, guys. This is Young [ph] for Matt. I'll just ask one question in the interest of time, that's kind of a high level one. But I'm just wondering when do you expect the operating environment can get back to normal on the other side of COVID, for example, after vaccine is widely distributed. I realized the pathway there is pretty lumpy, tough question, but just kind of curious about your thoughts there. If we can achieve 75% herd immunity with the vaccine, can business trends return to pre-COVID level potentially even before that or one or two quarters after that? Just want to get your high-level thoughts on that.

Well, if you look at quarter three, what we saw was things begin to turn back to normal until we saw the upswing in COVID cases starting in Europe and then spread to North America. So, we were in quarter three as we went through it getting to, especially the first couple of months of quarter three. And then you get into the third month of quarter three and we saw COVID cases begin to rise again. I think that the answer to the question is, first of all, get out beyond COVID in in Q1, Q2 next year then get a vaccine. And I think it's also a little bit psychological that people feel that there is a vaccine out there. So, therefore they will feel more comfortable going back and getting procedures done and they won't be as concerned about a second or a third wave as it would be probably at that stage. So, I think, the vaccine is key, I think that the virus itself weakening and managing it better is also key as we go into the first half of 2021. And I would be very hopeful that if we get through the first half of 2021 and early in 2021, we'll begin to start come out the other side of this COVID pandemic and have a vaccine available and begin to return to some sense of normalcy. But again my crystal ball is as clear as yours is right now, everyone's crystal ball is a little bit murky.

Okay, thank you. Very helpful.

Next question is from Dave Turkaly of JMP. Please go ahead.

Great, thanks. And not trying to beat the dead horse here, but you mentioned France, Spain, Italy, Australia and the US, the case increase. I'm just curious if anecdotally you've seen any evidence of elective deferrals happening in any of those areas currently. I know what happened in the past, but I - I know there's more cases, but I'm just curious, are you seeing that currently today?

So, I mean, the key market here is the United States. And if you look at the United States and if you look at pre-COVID and after COVID and our best benchmark really is the UroLift business. The states that are - I'm looking at the bigger states now where you carry a lot of your volume that are still below pre-COVID levels are, Massachusetts, New Jersey, South Carolina. Those that are rebounding back very strongly and above that are North Carolina, New York and Illinois, just three examples. So, what you've got is a mixed bag. So, in the United States we haven't seen the deferral of those procedures. But what we have seen is in places like India and indeed in Australia, in the third quarter, we saw the deferral of some procedures and hospitals pushing them back. So, yes, we did see it in some of the geographies. It will be interesting to see now what we will see in places like France and Spain. I think what they're going to try and do is keep patients flowing through the hospitals because the bigger human tragedy here could be people not getting procedures, and therefore, having a very bad outcome in the future because they didn't get that critical procedures that were needed because they were afraid of COVID. So, I think, that's a bigger human tragedy in the making. If we don't keep our hospitals open and keep patients flowing through them. And I think the other thing that you're seeing, as I said earlier, is that patients feel more confident going to the office and the ASC than they do in the hospital and we're seeing especially with UroLift the office setting, doing quite well compared to the hospital setting getting back to above pre-COVID levels in the office in its entirety within the United States. I hope that answers your question as accurately as I can.

No, that's great. Thank you. And that's it for me. Thank you.

Thank you.

Next question is from Mike Matson of Needham. Please go ahead.

Thanks. So, just on UroLift 2, can you give us your latest thinking on the impact to margins and growth, if any, of the product and then the timing to when you're fully converted to UroLift 2?

Yes. So, the margin is still the same. It will move the UroLift margins from the mid-70s to high-70s, you should think about it getting about 4 full percentage points on that business. And last year that business did about $300 million. We'll begin the roll out early in 2021. I think that it's easy for the urologists to adopt this. The early indications that we have from our pre-market work has been really, really positive. The docs really like the way the product works, it's easier to use same grade outcomes, same - easier to use and same visibility, same everything. I'm really glad we took our time to change the visibility factor on this because it's coming back with the real positive feedback from the urologists. So, as we begin to roll it out in 2021 as we get into 2022, we should be able to have a large portion of the North American market converted.

Okay, thanks. And then just on the OEM business, you had mentioned this lagged impact because of the customer kind of destocking or whatever that's occurring, but is that largely over do you think or would that continue into the fourth quarter?

So, I think, we will definitely see an improvement in the OEM business in the fourth quarter. What happens there Mike is, obviously, we make products for other companies, branded companies, all of which you will know, and you probably covered a large proportion of them. And what we've seen is, as their elective procedures fall off and there was a lag to them placing orders in our OEM business and we expected this to happen. This is not unexpected, we knew the OEM was going to be impacted by COVID a quarter later than the rest of our businesses. What we've also seen in some of these key companies destock as they are shoring up their capital and making sure that they're managing their free cash flow. So, we've seen some of them destock, you can only do that for a certain period of time. So, I would expect to see our OEM business begin the path to recovery in Q4.

Great. Thank you.

Next question is from Chris Cooley of Stephens. Please go ahead.

Good morning, and thank you for taking the question. I'll just ask one at this point. But, Liam or Tom, I'd appreciate if you could provide some additional color on the fourth quarter. Not so much in terms of what you excluded like Z-Medica, the extra selling days, but what you contemplated in that guide from the perspective of hospital and most notably the US hospital. Curious if you're assuming heavier inventory carries through calendar year-end improvements in throughput in terms of procedure growth. To the extent that it's there. Just kind of some of those exogenous variables would like to get your perspectives on. Thank you so much.

Yes, Chris. Thank you for the question. What we did was we looked at what we saw in October and we pretty much projected that into the remainder of the year. Now, - and we did not assume an uptick in procedures. We did not assume a procedure recovery, and we may be too conservative here. But we do not anticipate getting back to pre-COVID levels in Q4. We still think that's going to be in early 2021. Now, October for the first four weeks of October look pretty reasonable, I mean, we were pretty much flat in the first few weeks of October. We do come up against a tougher comp when we get into November and December. Chris, you will know that, for example, the UroLift grew by 54% last year and our overall business performed very well in the fourth quarter of last year. So, we took that into consideration. We did not anticipate a further lock down. We anticipated that we would see COVID being well managed. We had seen in the month of October the upswing in the COVID cases, so that initial upswing was in our thinking when we laid out what we expect to happen for the fourth quarter. Those are the things we included and those that we excluded. And of course we excluded DTC, we included the - we excluded the billing days and they will add about 3%, we excluded FX; that should help us. We excluded - I'm sorry, I'm going back to the exclusions rather than inclusions, Chris, but we did also exclude Z-Medica that hopefully we'll close in the fourth quarter.

Thank you, and congratulations.

Thanks, Chris.

There are no further questions at this time. I will now turn the call over to Jake for any closing remarks.

Thanks, operator. And thank you to everyone that joined us on the call today. This concludes the Teleflex Incorporated third quarter 2020 earnings conference call.