Good morning, ladies and gentlemen, and welcome to the Teleflex Third Quarter 2023 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode. At the end of the company’s prepared remarks, we will conduct a question-and-answer session. Please note that this conference call is being recorded and will be available on the company’s website for replay shortly. And, now, I will turn the call over to Mr. Lawrence Keusch, Vice President of Investor Relations and Strategy Development. Please go ahead.

Good morning, everyone, and welcome to the Teleflex Incorporated third quarter 2023 earnings conference call. The press release and slides to accompany this call are available on our website at teleflex.com. Please note that webcast viewers have the ability to advance the presentation slides on their own, simply follow along with the presentation as we proceed through the call. As a reminder, a replay will be available on our website. Those wishing to access the replay can refer to our press release from this morning for details. 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 will open 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 the slides posted to the Investor Relations section of the Teleflex website. 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. Now, I’ll turn the call over to Liam for his remarks.

Thank you, Larry; and good morning, everyone. It is a pleasure to speak with you today. On this morning’s call, we will discuss the third quarter results, our acquisition of Palette Life Sciences, and our financial guidance for 2023. Turning to the third quarter. Teleflex revenues were $746.4 million, a year-over-year increase of 8.7% and an increase of 7.4% on a constant currency basis. Third quarter adjusted earnings per share was $3.64, an 11.3% increase year-over-year. During the third quarter, we experienced stable to improving macro and healthcare utilization trends. In the acute care setting, which is our primary market, utilization during the third quarter returned towards normal seasonality. From a macro perspective, we witnessed a stable to improving environment for material inflation and supply chain in the third quarter on a sequential basis. These dynamics are generally tracking to our expectations for the year. Now, let’s turn to a deeper dive into our third quarter revenue results. I will begin with a review of our geographic segment revenues for the third quarter. All growth rates that I refer to are on a constant currency basis, unless otherwise noted. Americas revenues were $428.2 million, which represents 5.5% growth year-over-year. In particular, we saw strong performance in our Surgical and Interventional businesses. EMEA revenues of $142.7 million, increased 4% year-over-year. During the quarter, Interventional led the growth, while we saw balanced performance across our other businesses. Now, turning to Asia. Revenues were $93.2 million, increasing 17.1% year-over-year. During the third quarter, we saw stable demand across the majority of the region. Revenues in China increased in excess of 20% year-over-year and reflected solid underlying demand. Given our specific portfolio of products, we have not seen any impact on our business in China as a result of government-initiated anticorruption measures. Let’s now…

Thanks, Liam, and good morning. Given the previous discussion of the company’s revenue performance, I’ll begin with margins. For the quarter, adjusted gross margin was 59.4%, a 70 basis point increase versus the prior year period. The year-over-year increase was primarily due to favorable price, benefits from cost improvement initiatives and lower logistics and distribution-related costs, partially offset by continued cost inflation and unfavorable fluctuations in foreign exchange rates. Adjusted operating margin was 27.2% in the third quarter. The 30 basis point year-over-year increase was the result of the flow-through of gross margin, partially offset by increased headcount and employee-related expenses, investments to grow the business and the inclusion of Standard Bariatrics operating expenses. Net interest expense totaled $15.7 million in the third quarter, an increase from $13.2 million in the prior year period. The year-over-year increase in net interest expense reflects higher interest rates versus the prior year and higher average debt outstanding utilized to fund the acquisition of Palette, partly offset by increased interest income. Our adjusted tax rate for the third quarter of 2023 was 8% compared to 9.8% in the prior year period. The year-over-year decrease in our adjusted tax rate is primarily due to a reduction in tax costs resulting from a US tax law requiring the capitalization of R&D expenses. At the bottom line, third quarter adjusted earnings per share was $3.64, an increase of 11.3% versus prior year. Turning now to select balance sheet and cash flow highlights. Cash flow from operations for the nine months was $372.4 million compared to $244.4 million in the prior year period. The $128 million increase was primarily attributable to favorable operating results, lower tax payments and favorable changes in working capital. The favorable changes in working capital were primarily driven by lower inventory purchases stemming from…

Thank you, Tom. In closing, I will highlight our three key takeaways from the third quarter of 2023. First, our diversified portfolio and global footprint drove durable growth in the third quarter. Our execution remains strong. We are launching new products, and our margins remain healthy. Second, the strong third quarter performance and stable to improving macro environment keeps us well positioned to deliver on our updated financial guidance for 2023. As we look to close out the year, we are positioned for better than 6% constant currency growth under our revised 2023 guidance. Third, we will continue to focus on our strategy to drive durable growth. We will invest in organic growth opportunities and drive innovation, expand our margins and execute on our disciplined capital allocation strategy to enhance long-term value creation. We are excited about the close of the Palette acquisition. We believe that the acquisition will be a meaningful contributor to our growth in the coming years, be immediately accretive to adjusted gross margin and will enhance our adjusted operating margin in the near term. That concludes my prepared remarks. Now, I would like to turn the call back to the operator for Q&A.

Thank you. [Operator Instructions] And your first question comes from the line of Patrick Wood with Morgan Stanley. Your line is open.

Amazing. Thank you so much for taking the question. I guess on the Interventional sort of things, I’m curious and maybe to some degree on Surgical. A, do you guys see any sort of a stocking benefit in the quarter, because it’s very strong numbers? And, B, was there any kind of benefit? Or are you seeing any kind of benefits? One of your peers obviously has a bit of a recall going on their side of the business on the balloon market. So, I’m just curious if you had any business doing a little bit better there? Thanks.

Patrick, thank you very much for the question. Just taking a step back, I just want to start by saying that we’re really pleased with this quarter’s results, including Surgical and Interventional which outperformed. We feel, as a company, we deliver all aspects of our income statement in quarter three. Our updated guidance is bullish, and it reflects the three quarters to date performance and our confidence in a strong finish to the year. Many of our key franchises, including the ones you mentioned, are performing well. Healthcare utilization is back to pre-pandemic levels. And I think that the purpose for the acute care focus of our company is really paying dividends. Inflation in supply chain is stable to improving. And as we go through each quarter, we’re more confident in our ability to deliver. One of the only areas I’d say that we have not seen improvement is probably in the urology office side of service, which still remains a challenge. But with all that as the backdrop, we really feel confident in our updated revenue guidance of 6.4% to 6.6%, and our ability to achieve it. Specifically, to your questions on Interventional Access and Surgical, no, this was underlying growth driven by these businesses. We had outperformance in Interventional in our – some of our key product portfolios, including balloon pumps. And, in Surgical, also ligation stapling and also the instrument portfolio did very well. Regard to stocking, no, third quarter is traditionally a destocking month for distributors, and that’s what would have happened in this quarter as we would have expected. And regarding the company that has had a recall, they are now – they have come back to the market in fits and starts, and it’s a duopoly. So, normally, hospitals will focus on one company. They will either use our pump or their pump. And I think we may have seen some marginal benefit, but that really wasn’t – really what drove the upside in totality for the Interventional business. It was multifaceted across a broad range of the portfolio.

Super clear. And thanks as well for the thoughtful GLP-1 commentary. That was really helpful.

All right, Patrick.

Your next question comes from the line of Jayson Bedford with Raymond James. Your line is open.

Good morning. I hate to start with a boring financial question, but maybe for Tom, what was the revenue and EPS impact of the recalls, both in Vascular Access and Anesthesia? And is there an impact on the fourth quarter?

So, are you talking about revenue, Jayson?

Well, both. Was there a – I think, you mentioned there was a revenue impact in the third quarter. I’m just wondering if there’s a way to quantify that? And then was there an EPS impact of the recalls as well? I’m just wondering if that will recur in the fourth quarter.

Yes. So if you added both of the recalls together, you would be looking in the quarter of a revenue impact of in or around that $5-ish million, Jayson, would be what it would be. If I think of the gross margin of both of the products impacted, you’re probably looking at just modestly below company average dropping through something around there. So, just less than 60% gross margin dropping through. So, you could figure out the EPS impact on that, I would say. You would agree, Tom?

I would agree with the revenue impact. And then with the cost of the recall, we’re largely accrued in the second quarter of the year.

That’s fair.

Very minimal impact in the third quarter. Yes.

Okay. And then just more on UroLift. I know, it’s only been a month, but, Liam, are you seeing any cross-selling opportunities here between Palette and UroLift?

So, we’re just in the very early stages of the integration and pulling the two companies together. There are a number of the sales team that are very welcome back to Teleflex that actually joined Palette. So, they already know the UroLift product. We have had a plethora of inquiries from our existing UroLift base asking us to trial the Palette Barrigel product, which is very, very encouraging. And it’s too early, Jayson, yet to see any impact of the cross-selling the other way from the Barrigel sales organization into the UroLift side of the house. And, again, as we said in our prepared remarks, we haven’t built that into our model, Jayson. Do we think that we will expect some? Yes, potentially, there will be a halo effect when you’re able to go into some urologists that in the past may not have considered UroLift as an option. But, as you know, 97% of urologists that do BPH also do prostate cancer. And of our base of urologists that use UroLift, only 20% of them are so use the Barrigel products. So, a lot of white space for us to grow into an early indications with the inbounds from our base is very encouraging.

Your next question comes from the line of Shagun Singh with RBC. Your line is open.

Great. Thank you so much for taking the question. I’m just trying to understand the underlying growth rate better here. For Q4, I think your ex-FX implies about 50 basis points of decline. I believe there’s a selling day headwind, which could be about 610 basis points. Palette is about 130 just based on our math, MSA maybe 50 basis points headwind, which gets us to 4.8% underlying versus 7.4% in Q3. So, firstly, is that math correct? It does imply deceleration from Q3 to Q4 on an underlying basis stacked two-year growth. Just wondering what is driving that? Is there some conservatism? And then what it implies for 2024 and LRP growth of low-6%? Sorry for all those numbers.

No. That’s okay, Shagun, and thank you again for the question. So, I’ll go through a few pieces of it. So, our updated guidance is 6.4% to 6.6%. If you look at that on a constant currency basis, that’s 0.4% to 1.2%. Then, if you take into account the billing days that as you would have heard in Tom’s remarks, is $53 million or around 7%, that is an underlying growth of 7.4% to 8.1%. Then as you also heard from Tom, we’ve added in the Palette that closed earlier but also the MSA that leaves earlier. So, the MSA is approximately $4 million, and that is slightly shy of half of what we bring in from the Palette acquisition. So that’s how I would look at it. So, I would say that it’s not at all decelerating. If you take in today’s the account, the days – the lower end of our guidance into the Q4 would employ 7.4% to 7.4%, and the upper end would obviously show some acceleration. And, I think, as I said in my opening, that is truly, Shagun, a reflection of our performance through three quarters and our enthusiasm of what we see in front of us for the fourth quarter, I think, we’ve executed pretty well through three quarters. This is the third quarter in a row, we’ve been in a position to call up revenue. And I think we have a significant step up from the beginning of the year, and I just like to throw out one more number. At the beginning of the year, the low end of our guidance range was 4.75%. As we go now into the fourth quarter, the low end of our guidance range of 6.4%, a significant uptick.

That’s really helpful. And then just as a follow-up on the margin side. You guys are absorbing about $0.25 of Palette dilution in 2023. You’ve raised your EPS guidance. So, what is driving this underlying improvement? And any color on 2024? I think, consensus looking for 50 basis points of margin expansion? And how should we think about 2024 in the context of your LRP? Thank you for taking the questions.

Well, on the margin, what’s driving it is, largely, we’re seeing favorable results in pricing, mix and some manufacturing-related variances in the third quarter. As expected, inflation improves in the third quarter, both sequentially and year-over-year. Foreign exchange was a bit of a headwind in the quarter relatively – and, candidly, if you go back in time, it was actually a benefit earlier in the year has shifted to a headwind of sorts. So, those are some of the drivers that we saw in the third quarter, and we see continued improvement and stabilization in the macro environment, if you will, with regards to inflation and logistics costs and timing that we expect to play through into the fourth quarter as well. And then as it relates to margins for next year, we’re still working through our annual planning process and really aren’t in a position today to be providing guidance for next year at this point.

Your next question comes from the line of Richard Newitter with Truist Securities. Your line is open.

Hi. This is [Elaine] [ph] on for Rich. So, first question, I recall, last quarter, you kind of pinned on longer VAC Committee approval for Titan. Just wondering if it’s improving there? Or, like, any color you can provide on the trend there? Thanks.

Yes. Absolutely. So, regarding Titan, first of all, just looking at Surgical in general, it had a – an absolute – really strong quarter, growing 20.6%. And with regards to Titan specifically, you will recall that from Q1 to Q2, we doubled the number of surgeons that we were proctoring in Q2 compared to Q1. I can tell you that in Q3, we maintained that level of proctoring. And that is a good indication that you’re getting through the value analysis committees, because you cannot proctor the surgeon until you’ve gotten through the value analysis committee. It’s taking longer than we anticipated originally, but now we’re into a reasonable cadence of getting through these value analysis committees. And it is our belief that while the Titan will be impacted and the market will be impacted by GLP-1s, as we said in our prepared remarks, that the technology is compelling, and we believe that there is a pathway to continue to take share. The product is performing very, very well. There are a number of clinical studies in process that will demonstrate the time efficiency of the Titan stapler compared to other technologies. And we do believe that it will be a growth driver for Teleflex over a multiyear period, given the ability that we have to save time for the surgeon to do a better procedure, to have better patient outcomes and, ultimately, we think that’s what will matter at the end of the day, and this will be a growth driver. Probably, the overall market won’t be as big as we initially thought, because of GLP-1s. That’s just a fact of life. But our objective here is to take share within the market space, and there’s still lots of room for us to grow into and take share.

Great. That’s very helpful. Thank you. Also, on OEM, it appeared that it’s strong. So, do you have the confidence in this trend going into 2024? Thank you.

Yes. So, our guidance would – is based on what we see through Q3, what we’ve seen in the first month of Q4, candidly. And of all of our businesses, the b`iness that we have the best line of sight is our OEM business, just because of the nature of orders are booked in advance and, therefore, gives us greater visibility into what’s happening within that business. I will tell you that the microcatheter part of OEM has continued to perform very, very well for the whole year and also within the third quarter. And we feel confident that the OEM business will continue to be a double-digit grower in – for the foreseeable future, just given the backdrop of some of the technologies that we have that are unique to Teleflex and some of the product development work that we’re doing in our innovation centers around the world with key customers.

Thank you.

Your next question comes from the line of Matt Taylor of Jefferies. Your line is open.

Good morning. This is Mike Sarcone on for Matt today. Thanks for taking the questions.

Hi, Mike.

Hello. Just a follow-up on Standard Bariatrics, and thanks for all your commentary on the GLP-1 impact. Do you think you can give a little more color on the reduction you’re seeing in sleeve gastrectomy volumes? Any quantification would be helpful. And then just given that, what kind of share gain do you expect you need to at least offset the reduction versus your prior expectations for the volumes?

So, it was a $300 million market roughly, Mike. So, who knows what the impact of GLP-1s will ultimately be. That’s got to be the starting point. I have a view that it’s obviously going to reduce sleeves in the nearer term. And it will depend if that is an air pocket depending on the outcomes, the longer-term outcomes of GLP-1s, how people bear with the side effects of GLP-1s. And don’t ever underestimate the cost. There’s a significant cost to these pharma options compared to a surgical option. And I know everybody is all heated up about the 20% reduction of major events in the SELECT study. Just to put that into context, as we said in our prepared remarks, that’s going from 8% to 1.6%. So, it’s a percent of a percent, which is a dangerous way to measure something as every analyst on this call will know, the true reduction is around 1.6% in absolute terms. And, as I said in my prepared remarks, the study that came out of the Cleveland Clinic showed a 40% reduction in the same events from gastric sleeves. So, I think, clinicians will start to take a step back and look at this on balance. What we are seeing is a reduction in the customers that we’ve converted for the number of procedures that they are doing for sure. But, as I said, it’s a – it was a $300 million market. What is it? A $200 million market now, plenty of opportunity, Mike, for us to grow into, because if you talk to most surgeons, they will tell you that this is the morbidly obese population we’re talking about that get a gastric sleeve. And I believe firmly that gastric sleeves, and if you talk to bariatric surgeons, gastric sleeves will exist in the future. And so, therefore, to grow into that, let’s call it, a $200 million market is still significant opportunity for Teleflex.

Great. Thanks, Liam. We’re on board with you in that kind of 10 to 20 bps per year impact. And just – my second question is just on the ASP pricing that you’re taking. Is it possible to quantify the level of price you’re taking and how sustainable that is or your thoughts about your ability to take price in 2024 and beyond?

So yes, it’s a good question. I think we’re two years through the cycle now and most of our tenders and contracts go on a three-year cycle. So, through this year, we had laid out our plan to do 50 basis points. I can tell you we’re doing better than that. We’re a good bit north of that 50 basis points, similar to what we did last year. So, that’s a good story for us. And I think next year, we’ll be well in a position to do another 50 basis points, at least a positive pricing in the environment. After that, Mike, I think it will trail off a little bit, because we’ll have been through the cycle, the three-year cycle of your normal tenders, and we’ll assess that then in 2025.

Your next question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open.

Hey. Good morning. This is Vik in for Larry. Thanks for taking the question. Two for me. The one on 2024, I just wanted to ask about the sustainability of the 10% tax rate given the recent changes in the tax laws? And my follow-up question is, on your M&A strategy, you recently closed the Palette deal, I’m just curious as to how much capacity you have left to do additional deals and how the higher interest rate environment is impacting your M&A strategy? Thank you.

So, I’ll cover the M&A first, and then I’ll ask Tom to cover the tax question that you had, Vik. So, on the M&A, as we said in our prepared remarks, pro forma, we’re at 2.1 times levered. So, we have lots of firepower. Depending on what EBITDA the asset would bring, that would put you up towards the $2 billion mark of firepower available to Teleflex as we sit here today. Regarding the interest rate environment, interest rates were high at the time when we bought Palette, we’re still able to get to our internal cost of capital by year five. We still found a really attractive asset. We still found an asset that is going to continue the transformation of Teleflex. It’s going to augment our topline growth. It’s got really attractive margins as we’ve been through previously. And if you could find another Palette in the morning, I wouldn’t blink twice. I would be all in to execute on that. As I sit here today, we’re talking to more than a handful of companies. They range from anything from $100 million potential price to over $1 billion in potential purchase price. And I think the environment is still pretty attractive to companies like Teleflex who have the balance sheet to execute. Obviously, interest rates, we’ll remain disciplined. We’ve always remained disciplined through every cycle. When interest rates were low, we were disciplined; when interest rates are higher, we’re going to be disciplined. Nothing will change in that regard. And I’ll ask Tom to answer the question on the tax, if you don’t mind, Tom.

Sure. So, our current 2023 tax rate of approximately 10% is a very attractive rate, I would say. And we’re currently in the process of working through the AOP and plans for next year. So, we’re not in a position to provide specific guidance for 2024 at this point. You know, I would say that the expectation would be that the tax rate would be modestly higher than where we are in 2023.

Your next question comes from the line of George Sellers with Stephens Inc. Your line is open.

Hey, good morning, and thanks for taking the question. For the Palette acquisition and specifically Barrigel, could you just give us some details on what that selling process looks like? And I think you mentioned that a majority of the users of Barrigel would be the urologist, but what’s the breakout more specifically from radiation oncologists versus urologists?

Thanks, George, and good morning. So, we’re not ignoring the radiation oncologists, let me assure you of that. We have actually a dedicated team that are exclusively dedicated to the training of the rad onc as we go through this process. It’s around 70 plus percent of the procedures are done by the urologist as compared to the rad oncs, but we’re addressing both sides of service. I think, what’s important about Barrage is the uniqueness of the product, George. It’s sculptable, which means that you can actually then mold the product around the area you’re trying to protect and the most – for prostate you’re trying to protect the anus, so you’re able to mold it around the prostate to make sure that you’re getting protectability. There is no injectable time constraints. It’s highly visible. It’s a one-step assembly. It’s – you don’t have to do any hydrodissection. If you go into the wrong area, unfortunately, it happens from time to time with some of the products on the market, it’s reversible, which is unique to this particular product. And I think all of that makes it compelling. You’re right, and as I said earlier, it’s only 20% of our current UroLift customers that use Barrigel. So, for us, it’s really about expanding the market and growing the market rather than taking share. I think, this is a unique opportunity for Teleflex given our footprint in that area. The sales process, once a urologist or a rad onc comes forward, there’s a little bit of anatomy training, and then they’re proctored and helped over four or five cases. And after that point, then they would be deemed to be fully trained and qualified to place the product.

Okay, great. That was a really helpful color. I appreciate it. And then maybe switching gears a little bit, maybe one on QuikClot. What inning would you say you’re in on penetrating that market opportunity? And have you seen any impact to demand from some of the conflicts going on internationally?

So, it’s a $600 million market for internal and external split about half of each. We just got a new cardiac indication that expanded the market by about $50 million, George. So that takes us up to around $650 million market. MilTac in general is a key customer of ours. Because of some of the budgetary constraints, it has kind of been under our expectations through the first three quarters of the year. I would expect that that might rectify itself now though unfortunately, because of what’s going on in different parts of the world. So, we would imagine that that will get back to our original plan in the fourth quarter, and that’s anticipated within our guidance that we just outlined.

Thank you for the time.

All right, George.

Your next question comes from the line of Anthony Petrone with Mizuho Group. Your line is open.

Thanks for getting us in here. Maybe, I’ll stick with Barrigel and actually ask also about pipeline as well. I know, you mentioned at the time of the transaction, $0.15 in 2023 and $0.35. I guess when we stack it up from a growth and margin perspective, is there anything you can share just on how Barrigel is growing? I know they have two other products in there as well, Deflux and Solesta in pediatric indications. What is the overall growth profile of the portfolio? And is it margin accretive to the overall corporate average? And then I’ll have a couple of follow-ups.

Yes. Thanks, Anthony. So, what we expect in the full year from Palette is $56 million in 2023. The growth profile of it is high-teens and low-20s and that’s what we would expect in 2024. Regarding your question on the different components of the growth, I think you should focus very heavily on Barrigel. That’s where the majority of the growth is coming from. That’s where we bring a lot of the value and that’s where the growth has been – historically has been in the Barrigel product since it came on to the market just because of all the things I just went through a moment ago. Regarding the gross margins of the product, as we said previously, it’s accretive to Teleflex. Not alone is it accretive to Teleflex, but it’s accretive to the high-growth portfolio. And not alone is it accretive to the high-growth portfolio, it’s accretive to the UroLift margins within the high-growth portfolio. And as most investors would be familiar with, the gross margins of UroLift were in the high-70s or are in the high-70s, I should say. So, from a gross margin perspective, it’s a really nice transaction. And that’s candidly why it warranted a really nice price, because high growth, high margins is the formula for a higher multiple on an asset. And then we still expect $0.35 of dilution from an EPS perspective for 2024, to the other part of your question.

Okay. And then the follow-up would be, maybe I’ll go back to Titan and GLP-1. Of course, out of the gate here, a lot of folks are talking about headwinds to bariatrics in the near term, but there is chatter from folks in the space that when you think of the contraindicated patients at the very upper end of the BMI scale, some of those may be able to come into the fold as they take Ozempic or Mounjaro, et cetera, GLP-1. So, do you think as this cycle plays out that you could potentially see a tailwind, although, of course, it will take some time? What are your views on the potential for GLP-1 to actually expand the market in bariatrics? Thanks.

So, my focus, honestly, Anthony, is not on the GLP-1s expanding the market, I find that hard to see in all honesty. I see GLP-1s being used as a conduit to a gastric sleeve and a lot of surgeons are looking at it in that way. And I’m also looking at it as it impacts on Titan as to how long-lasting it will be as an impact, because you have to take the pharma forever, and you have to be able to afford to take the pharma forever. Everything I’m reading is telling me that in – if the prices stay as where they are for these GLP-1s, that the likelihood of coverage is unlikely. And I’ve spoken to a number of bariatric surgeons, and I’ve spoken to the team, and I’ve spoken to our clinical group, and the perspective is that it is going to have a short-term impact on bariatric surgeries. But, as I said earlier, from a Teleflex perspective, at least for the next number of years, our goal is to bring a better technology to the gastric sleeve market, which none of us think is going away. It might be a little bit smaller, but it’s not going away and there’s still ample market for us to grow into as a company. So, I still think that even though standard has not had the start we would have wanted it to have, I still think it’s going to be, longer term, a nice growth driver for Teleflex, and it’s going to grow into the market. And by the time we get to our penetration point, we’ll see what’s happening with GLP-1s, whether it was an air pocket or not. I think, more broadly, what I’m more encouraged by is that 98% of Teleflex’s – 98% plus percent of Teleflex’s portfolio has no impact from GLP-1. So, I think, investors are probably branding everybody as GLP-1 impacted right now just because of all the hype about it. But as you break down the different company components and what we know right now, we can see it as 98% plus of our company not impacted.

Your next question comes from the line of Matthew O’Brien with Piper Sandler. Your line is open.

Hi. This is Samantha on for Matt. A quick question from us on the MSAs. What do you think – you talked a little bit about financials on the topline, but what about the potential of lost revenue on both top and bottom line?

So, from the – just to be clear, the MSA, the manufacturing service agreement?

Yes, that’s right.

Okay. So, as Tom said in his prepared remarks, the early close will lose about $4 million in revenue. From an EPS impact, it’s around $0.01 or thereabout.

Very minimal.

Minimal, yes. So, it’s around – it’s fairly minimal from an EPS perspective, this year, and most investors will know that the MSA has now gone completely, and there was around $70 million in revenue in a full year and around $0.25 in earnings in a full year. So, that will help individuals with their modeling. So, I think the greater impact to earnings per share in this year is, obviously, the early close of Palette, which costs around $0.10. And then FX has cost us, Tom, I think another approximately $0.05 or thereabout?

That’s correct.

Okay.

That’s perfect. Thank you so much.

Your next question comes from the line of Craig Bijou with Bank of America Securities. Your line is open.

Good morning. Thanks for taking the questions. I know we’re at the end, so I’ll keep it to one topic. Wanted to ask on MANTA. Liam, I think you mentioned it in your prepared remarks. I don’t think we’ve talked about it in a while. So, just wanted to see, you know, some of the strength there? Was it the recovery in the procedures that MANTA is used in or are you seeing better adoption? And then maybe just some comments on how MANTA will contribute to your growth as part of your long-term plan or over the next couple of years?

Yes. So, MANTA is obviously launching in many jurisdictions and geographies, right now. We saw some nice strength as we’ve gone through the three quarters in Asia. And we believe it will be a multiyear driver for us, Craig. It’s a unique product. It’s – I don’t think we’re gaining honestly from any type of surge – any type of procedural rebound, because we’re still penetrating the market, still bringing it to new customers. And the uniqueness of the product, it still gives us a significant benefit and it will be a multiyear driver for us. We’re absolutely – within the high-growth portfolio, if you look at it, you’ve got some really nice products within their, you’ve got MANTA, you’ve got the Vidacare portfolio, you got our PICCs, you got Z-Medica. You’ve got Titan that had a little bump along the road. You got UroLift that had a bump, but now you’ve got Barrigel and the whole Palette and interventional urology within that high growth. So, feel really good about MANTA. And I suppose you’re right. It doesn’t get as much attention as it used to when it started its journey.

Thanks.

That is all the time we have for questions this morning. Our conference call for today is now concluded. Thank you all for your participation. You may now disconnect.