Jake Elguicze - Treasurer & Vice President-Investor Relations Benson F. Smith - Chairman, President & Chief Executive Officer Liam Kelly - Chief Operating Officer & Executive Vice President Thomas E.

Powell - Chief Financial Officer & Executive Vice President

Lawrence Keusch - Raymond James & Associates, Inc. Thomas J.

Bakas - Piper Jaffray & Co (Broker) Kristen M. Stewart - Deutsche Bank Securities, Inc.

David L. Turkaly - JMP Securities LLC Matthew Mishan - KeyBanc Capital Markets, Inc.

David R. Lewis - Morgan Stanley & Co.

LLC Brian D. Weinstein - William Blair & Co.

LLC Jason H. Wittes - Brean Capital LLC Ravi Misra - Leerink Partners LLC Anthony Charles Petrone - Jefferies LLC

Thanks, operator, and good morning, everyone, and welcome to the Teleflex Incorporated Fourth Quarter 2015 Earnings Conference Call. The press release and slides to accompany this call are available on our website, at www.teleflex.com.

As a reminder, this call will be available on our website, and a replay will be available by dialing 888-286-8010, or for international calls, 617-801-6888; passcode 70373672. Participating on today's call are Benson Smith, Chairman, President and Chief Executive Officer; Liam Kelly, Executive Vice President and Chief Operating Officer; and Thomas Powell, Executive Vice President and Chief Financial Officer.

Benson, Liam and Tom will make some brief prepared remarks, and then we'll open up the call to Q&A. Before we begin, I would like to remind you that some of the matters discussed in the conference call will contain forward-looking statements regarding future events as outlined in our slides.

We wish to caution you that such statements are, in fact, forward-looking in nature and are subject to risks and uncertainties, and actual events or results may differ materially. The factors that could cause actual results or events to differ materially include, but are not limited to, factors made in our press release today, as well as our filing with the SEC, including our Form 10-K, which can be accessed on our website.

The format for this morning's event will be similar to our prior conference calls with Benson providing a high-level overview of our quarterly results and an update on some key strategic initiatives. He'll then turn the call over to Liam, who will review our product line and geographic revenue results, provide updates with regards to recent GPO and IDN developments, new product introductions and regulatory approvals, as well as highlight an acquisition that was completed in the quarter.

Following Liam will be Tom, who will review our fourth quarter financial results and share with you our initial financial guidance for 2016. And finally, we'll open up the call to Q&A.

With that said, I'd like to now turn the call over to Benson.

Thanks, Jake, and good morning, everyone. Today, I'd like to start my prepared remarks by saying thank you to our shareholders.

Throughout 2015, the management team of Teleflex have been emphasizing that our 2015 guidance was predicated on a very strong fourth quarter. We very much appreciate the confidence of our shareholders and the Teleflex team to do just that.

We realized that our year-to-date results at the end of third quarter might have raised some concern about our ability to hit our full-year guidance. For example, our adjusted EPS at the end of the third quarter was only 1% ahead of our year-to-date prior adjusted EPS.

That meant we had to have a 40% improvement over our prior fourth quarter in order to come in at full-year double-digit adjusted EPS increase. That may have seem like a pretty steep hill to climb, however, internally, we were able to see through a lot of the noise and felt very confident in predicting an exceptionally strong fourth quarter, not just on EPS but constant-currency revenue, gross margin, and operating margin as well.

Looking back at 2015, we fully appreciate that from an external perspective, our quarterly results seemed lopsided. And there's a simple explanation to that.

They seemed lopsided because they were lopsided. Generally speaking, the number of shipping days, changes in foreign exchange rates, general comparisons to the prior year's quarter and some unique product growth trajectories can have a significant impact on any given quarter and we saw many of those factors at their extreme in 2015.

Fortunately, we do not expect to see the same degree of lopsidedness in 2016, but we will see some. In Q1 2016 in particular, we'll have two-less shipping days.

We also expect to see the most unfavorable currency comparisons for the year in Q1 2016. However, in the remaining three quarters, we move into much more favorable territory.

We'll have extra shipping days, much less negative currency comparisons and a growing impact from new products. My view is that our strong results in the fourth quarter put us in an excellent position for continued growth throughout our P&L in 2016.

Since Liam and Tom will go into the numbers in more detail, I want to use my time to do a brief review of the past few years, as well as emphasize some particular highlights that I believe are representative of where we are headed strategically as a company. So, let's begin.

Fourth quarter revenues were strong and they increased 7.4% on a constant-currency basis, totaling $484.5 million. We're very pleased to see the continued robust top-line performance from our Vascular, Surgical and OEM franchises.

In addition, we're extremely encouraged to see the resurgence of revenue growth within our Anesthesia European and Asian businesses as well during the fourth quarter. We did benefit from an additional shipping day as compared to the prior year period, which we estimated contributed approximately 100 basis points toward our constant-currency revenue growth.

We also had approximately 140 basis points from our M&A activities. If you would remove the additional revenues associated with the extra shipping day and any revenue attributed to M&A, we still achieved a 5% organic constant-currency revenue growth rate in Q4.

These favorable fourth quarter numbers allowed us to deliver a full-year constant-currency revenue growth of 5.4% and further boost our confidence for 2016, as well in our ability to achieve the longer-term targets that we outlined in May of last year at our Analyst Day. Moving to some additional highlights.

In the fourth quarter, we achieved adjusted earnings per share of $2.01. When compared to the prior year period, adjusted EPS was up approximately 41%.

Two items in particular that I would like to mention that drove this earnings growth were the 54.1% adjusted gross margins and 23.7% adjusted operating margins that were accomplished in the quarter. These amounts, along with our adjusted EPS were the highest for Teleflex since transitioning through a pure-play medical device company.

From a full-year perspective, our adjusted earnings per share reached $6.33. This was up 10.3% versus the prior year and was near the top-end of our initially provided 2015 guidance range.

We were able to achieve this in-spite of an $0.87 currency headwind. This is a testament to the financial leverage we are generating throughout the P&L, including the initial benefits we obtained in the fourth quarter from our previously announced manufacturing restructuring plant.

This plant, which was announced in April of 2014, remains on track. We continue to believe that we will achieve annualized pre-tax savings of between $28 million and $35 million and that will be substantially complete by the end of 2017.

Furthermore, because of the progress we have made in this initial restructuring, the individuals responsible for these activities have now come to the point whereby they can begin to work on new opportunities to further optimize our cost structure. As such, this morning, we announced a new facility restructuring.

Footprint consolidation announcements are never easy. And we make these decisions only after very careful consideration.

Over the past several months, we have been evaluating opportunities to improve our operating leverage over a multi-year period and the plant we announced today is designed to further improve our competitive position. Similar to our prior plan, our new effort is focused on the consolidation of operations and will result in a reduction in workforce at certain of the company's facilities.

It will include the relocation of certain manufacturing locations, as well as the relocation and outsourcing of certain distribution opportunities. We expect certain actions to commence in the second quarter this year, and that these actions will be substantially complete by the end of 2018.

As I stated a few moments ago, we try to be thoughtful when making this decision. And it is our intention to speak with affected employees shortly.

I realized this may be unsettling time for Teleflex employees as they hear the news of a new restructuring program. And I would like to thank all of our employees for their hard work and dedication.

The circumstances driving this, though, were unavoidable. Everyone is concerned about the high cost of healthcare and we must improve our margins up to the level of our competitors in order to continue to grow.

To those employees affected, you have my commitment that we will treat you in a fair manner as we proceed. This is not something that will happen overnight either.

We currently expect that this plan will achieve annualized savings of between $12 million and $16 million once it is fully implemented. And it will start realizing at least some of the savings in 2017.

As many of you are aware, we previously provided adjusted gross and operating margin targets to hit by the end of 2018. Specifically, those were that we would obtain between 350 basis points and 400 basis points of adjusted gross and operating margin expansion, as compared to our full-year 2015 levels.

The annualized savings associated with this most recent restructuring plant were not part of the targets we communicated last May at our Analyst Day. However, at this point in time, we are not raising our margin goals for 2018.

Here, we are simply being conservative to allow for the unexpected. However, we will periodically update the investment community with revised estimates in timing.

I want to point out that at this time, all signs point to our ability to achieve that 350 basis points and 400 basis points of gross and operating margin without the synergies associated from this new plan. So, we're all quite optimistic that this will have an additive potential.

Now, before turning the call over to Liam, I would like to briefly review some key highlights over the past few years. When this management team took over the helm of Teleflex in 2011, the company had sizable base of revenue but limited sources of sustainable organic growth, outstanding product pipeline and few acquisition targets.

By the end of 2011, our full-year revenue was slightly under $1.5 billion, our adjusted gross margin was 47.6% and our adjusted tax rate was 26.3%. Our adjusted earnings per share were $3.83 and our market cap was approximately $2.5 billion.

Fast forward to 2015, our revenue had accelerated to $1.8 billion, representing a compound annual growth rate of 5%. Our adjusted gross margin had expanded 510 basis points.

Our adjusted tax rate has declined 950 basis points. And our adjusted earnings per share has grown at a compound annual growth rate of 13%, reaching $6.33.

In addition, during the past few years, a combination of larger strategic acquisitions, late-stage technology acquisitions and distributor-to-direct conversions have played a significant part in Teleflex's ability to reshape our product portfolio, drive above the market revenue growth rates, and improve our margin and earnings profile. These items have resulted in significant shareholder value creation and a market cap at the end of 2015 of approximately $5.5 billion.

I point all this out because I want you to know that this management team is dedicated to delivering improved patient care, while reducing the cost of healthcare around the world. We are excited about the opportunities we have in front of us to drive both margin improvement and revenue growth.

We are not slowing down and remain as committed as ever towards additional shareholder value creation. That completes my prepared remarks.

I will now turn the call over to Liam, and he will provide you with an update on our strategic business line results.

Thank you, Benson, and good morning, everyone. For the consolidated company, fourth quarter 2015 constant-currency revenues grew 7.4%.

Normalizing for mergers and acquisitions and an additional billing day in the quarter, our organic revenue growth was up 5%. Sales volumes of existing products were particularly strong domestically within our Anesthesia, OEM and Vascular businesses.

Vascular sales volume increases were the largest as they were aided by the contribution of our Vidacare product lines, which grew approximately 25% versus the prior-year period, and sales of our CVC products continue to perform well. As a side note, on a full-year constant-currency basis, Vidacare product sales grew approximately 20%.

I'm also pleased to confirm that the PICC product recall that we referred to in quarter two and quarter three of 2015 is now behind us. We continue to see strong growth in our core market, North America, with growth in the fourth quarter of over 8%.

In addition to the volume growth we saw domestically, during this quarter, we also saw a return of volume growth within many of our international markets. Core product volumes improved approximately 360 basis points in Europe and approximately 1,000 basis points in Asia.

(13:46) growth in Asia stemmed from an easier comparable in China. However, not all areas of the globe saw improvement as Latin America core product volumes were down in the fourth quarter.

This is something that we expected to occur and signaled as much in our third quarter earnings conference call. Turning next to revenue growth from acquisitions and distributor go-directs.

During the most recent quarter, revenue growth coming from these areas contributed approximately 140 basis points towards our overall constant-currency growth. This was consistent with the levels we saw in the third quarter and was driven by the acquisitions of Human Medics, Mini-Lap and Stenning.

And while during the course of 2015, we did not complete another Vidacare or LMA-sized deal, we did put approximately $100 million of cash to use in the form of acquisitions, the likes of which added a little more than 1% towards our full-year constant-currency revenue growth rate. In addition to acquisition and go-direct, we also had approximately 1% of growth coming from new product introductions.

New product sales were particularly strong within our OEM and Surgical businesses. In fact, during the course of 2015, we successfully introduced 20 new products and line extensions, and as Tom will share with you in a few moments, these already launched products are expected to be a catalyst for additional revenue growth in 2016.

A few of the key product launches that occurred in 2015 are those that are expected to occur in the first half of 2016 include Protector, Mini-Lap, EFx Shield, ConchaTherm Neptune, Percuvance and pre-loaded PICC products. New products are a key component of our growth strategy as they provide sustainable multi-year growth, allow us to take share, enhance our growth margins, and identify Teleflex as an innovator in the marketplace.

By way of example, Percuvance represents a market potential of $300 million to $400 million over a multi-year period. This would be accretive to Teleflex margins and is pure share growth, not cannibalizing any of our existing products.

We recently completed the pre-market launch for this product. And of the 10 U.S.

sites involved, nine have committed to proceeding through the value analysis committee stage with four having already added the product to their formulary following that process. We will go to full market launch in EMEA in quarter one and in North America in quarter two.

Our LMA Protector is getting a similar response from its limited market release. All 11 U.S.

hospitals which took part in the launch are now ordering the product. Finally, from a core product pricing standpoint, we saw the average selling price of our products expand a modest 10 basis points.

This was primarily due to increases in surgical product pricing, somewhat offset by a decline in respiratory and EMEA product pricing. Next, I would like to provide some additional color surrounding our segment and product-related constant-currency revenue growth drivers.

Vascular North America fourth quarter revenue increased 10.3% to $90.3 million. The increase in Vascular revenue was largely due to sales of central venous and catheter navigation products, as well as very strong business fundamentals exhibited from our Vidacare EZ-IO and OnControl devices.

Moving to Anesthesia North America, fourth quarter revenue was $50.6 million, up 6.8% versus the prior-year period. Growth in this segment was driven by increased sales of Vidacare EZ-IO product, Airway Management devices and higher sales on our Atomization product offering.

Turning to our Surgical North America business: its revenue increased 6.9% to $43.1 million. The increase here is attributable to higher sales of automatic polymer ligation appliers, chest drainage products and the positive contribution from the acquisition of Mini-Lap.

Shifting to our overseas businesses: EMEA revenues totaled $135.2 million in the quarter and generated constant-currency revenue growth of 3.6%. This was a nice rebound from the performance we saw in the third quarter and was led most notably by sales of interventional access and urology products.

Moving to Asia: Our fourth quarter revenue increased 18% to $69.2 million. The quarterly increase in Asia revenues was primarily due to higher central venous and dialysis catheter sales within China, the impact from the acquisitions of Human Medics and Stenning, as well as our go-direct initiative in Japan.

Turning to OEM: Revenue in the fourth quarter increased 10.3% to $37.8 million and was primarily due to higher sales of introducer, dilator, performance fiber and catheter products. And lastly, fourth quarter revenues for our business within the All Other category was up 0.2%, totaling $58.3 million.

And while the quarter was essentially flat versus a year ago, we did see a sequential improvement in this area, as lower sales within Latin America were offset by increased respiratory therapy and cardiac intra-aortic product sales. Next, I would like to shift gears and update you on additional group purchasing organization and IDN agreements that we received.

The area of GPO and IDN awards has been a real highlight for Teleflex over the past few years. And that includes for sure 2015.

For the full-year, we won 23 new agreements and extended another 31. While during the fourth quarter, we were awarded a total of 22 agreements.

This represents the largest number of agreements awarded in any single quarter in the company's history as a pure-play medical device company. These relationships are extremely important to us, as they bolster our ability to continue to drive volume growth across a myriad of product lines, both in 2016 and for several years to come.

Of the agreements won in quarter four, 13 were brand new while nine were renewals of existing awards. Several of these new wins were Sole Source Awards, and these Sole Source wins were in the area of Anesthesia and Vascular Access product areas.

Next, I would like to update you on some advancements we are making in the area of catheter navigation technology. The first being an internally-developed product, while the second comes to us via acquisition.

Starting first with the ARROW VPS precision stylet. We recently received 510(k) clearance from the FDA to market a newly-designed ARROW VPS stylet.

The new design allows Teleflex to provide hospitals with a complete offering of single, double and triple-lumen pre-loaded pressure injectable ARROW PICC with Chlorag+ard Technology for use with our current ARROW VPS Device platform. And when combined, these technologies provide clinicians with the solution to reduce central venous catheter malposition, while helping prevent microbial colonization and thrombus accumulation on catheter surfaces.

We are very excited to launch this new product as we believe it offers an alternative to the premium end of the tip location and navigation market has been looking for. In addition to this internally-developed product, during the fourth quarter, we also took steps to address a market need that is focused on the lower-end price point of the tip location and navigation market.

As such, we acquired Nostix. Founded in 2011, Nostix has developed affordable and differentiated tip placement confirmation products.

This all-cash acquisition was completed in December 2015 and it complements our current ARROW Vascular Positioning System and strengthens our PICC confirmation portfolio. The Nostix device enables expansion into tip location for central venous catheters, chronic hemodialysis catheters and ports.

While we do not expect this acquisition to contribute to revenue in a material way in 2016, we are quite excited about its long-term potential, including the products that are still under development. That takes me to the end of my prepared remarks.

At this time, I would like to turn the call over to Tom, for him to review our financial results for the fourth quarter and 2016 guidance. Tom?

Thanks, Liam, and good morning, everyone. Even the previous discussion of the company's revenue growth drivers, I'll begin my prepared remarks at the gross profit line.

But before I do, I'd like to reinforce the point made earlier by Benson, which is that 2015 was a tremendous year for Teleflex, including a strong final quarter to close out the year. Full-year 2015 constant-currency revenue growth of 5.4%, and adjusted earnings per share of $6.33 were both at the upper end of our initially provided 2015 guidance ranges.

Additionally, our North American businesses continue to perform well with our higher-margin Vascular and Surgical franchises, each delivering full-year constant-currency revenue growth in excess of 8%. Our business in Europe remained relatively stable.

And while emerging market softened a bit, they do not comprise a significant part of our global revenue, thereby mitigating downside risk. Despite currency taking a 700-basis point bite as our 2015 revenue growth, we were able to leverage a 1.6% decline in as-reported revenue into a 12.6% increase in adjusted net income.

We accomplished the financial leverage through expansion of both our gross margin and our operating margin. And by taking steps to further reduce our effective tax rate and optimize our capital structure.

Also during the year, we acquired and integrated several smaller businesses and continued the execution of our facility restructuring plan. Clearly, 2015 was a good year for Teleflex.

Turning now to fourth quarter results. For the quarter, adjusted gross profit was $262.2 million versus $243.1 million in the prior year quarter.

Adjusted gross margin was 54.1%, representing a 300 basis point increase when compared to the prior-year period. During the fourth quarter, adjusted gross margin benefited from manufacturing cost improvement programs, distributor conversions, acquisitions and new product introductions.

Additionally, we realized the benefit of volume throughput as well as favorable product mix in our Respiratory North America, Anesthesia North America, and Asia segments. During the quarter, foreign exchange negatively impacted our gross margin by approximately 25 basis points.

Also in the fourth quarter, adjusted operating margin improved by 530 basis points. The increase was largely the outcome of the gross margin gain, continued tight control over discretionary overhead spending and a favorable prior-year SG&A comparable.

For the quarter, adjusted operating profit and margin were $114.8 million and 23.7% respectively versus $87.5 million and 18.4% respectively in the prior year quarter. On a sequential basis, operating margin increased by 250 basis points from the third quarter of 2015.

If you were to normalize our results to exclude the impact of currency, adjusted operating margin in the fourth quarter would have been approximately 100 basis points higher. Continuing down the income statement: For the quarter, adjusted net interest expense decreased to approximately $10.2 million, reflecting the impact of the second quarter refinancing of the 6.875% senior subordinated notes, as well as the repayment of approximately $50 million in revolver borrowings during the third quarter.

For the fourth quarter, adjusted tax rate was 13.6%, a reduction of 60 basis points as compared to the prior-year period. On the bottom line, fourth quarter adjusted earnings per share was $2.01, or an increase of approximately 41%.

If we were to eliminate the impact of foreign currency, earnings per share would have increased by approximately 56%. Turning now to select balance sheet and cash flow highlights.

For the year, cash provided by operations was $303 million, or an increase of 4.5% over the prior year. The increase was primarily the outcome of improved operating results, partially offset by the timing of tax payments, payments associated with restructuring plans, an increase in contribution to pension plans and changes in working capital items.

From a balance sheet standpoint at the end of the year, cash on hand totaled approximately $338 million, of which approximately $22 million was located in the United States. Leverage as per our credit facility definition stood at approximately 2.4 times.

And that completes my comment on 2015. Now I'll move to 2016 guidance, beginning with revenue.

For 2016, we expect constant-currency revenue growth of between 5% and 6%. This is in line with the results we achieved in 2015 and the longer-term goals and objectives we provided at our Analyst Day event held last May.

Included in our revenue guidance is the assumption that core product volumes increased between 2.7% and 3%. The base volume growth expectation is consistent with the 2015 trend whereby volume increased by approximately 280 basis points.

New product introductions are expected to deliver between 2% and 2.5% of growth, which represents a strengthening pipeline versus the 2015 growth of 1.1%. Given the increased expectation for new products, I'll explain in a moment and provide a little more detail.

The new product lineup includes our Mini-Lap and Percuvance suite of minimally invasive surgical products, our AE5 ligating clip applier, the EFx Shield Closure System, the ConchaTherm humidification device and next-generation CVC kits just to name a few. Approximately 60% of the projected new product revenue growth is attributed to products that had been introduced into the market as of the end of 2015.

And a number of which would be considered line extensions. Our experience is that line extension should allow for quicker clinical adoption as they do not cause a change in clinical practice.

For 2016, we project M&A to contribute between 20 basis points and 30 basis points of revenue growth. The principal M&A transactions include two distributor acquisitions, Stenning and Human Medics, the acquisition of an OEM balloon and catheter company named TrinTris, and the recent acquisition of a catheter tip confirmation system named Nostix.

For planning and guidance purposes it's our practice to include only previously-completed M&A in our assumptions and any subsequent transactions would be incremental to this guidance. Moving to our thoughts on pricing: Net pricing on our core business is expected to be up 10 basis points to 20 basis points and is consistent with the levels that we saw in 2015.

We continue to expect that modest pricing opportunities will come from targeted markets and product offerings. In total 2016 constant-currency revenue is projected to increase by 5% to 6%.

Our assumption is that FX will create a 2% headwind and as an outcome, we expect as-reported revenue to increase by 3% to 4%. Based on our currency assumptions, this translates to an as-reported revenue range of $1.864 billion to a $1.882 billion.

When we provide financial guidance associated with foreign exchange rates, we take our projections to forward-looking expectations from a variety of leading bank economists. As an example, in 2016, we are assuming a full-year euro-to-dollar exchange rate is approximately $1.06.

This is down from our full-year 2015 average of approximately $1.11 and is the primary reason why we expect foreign exchange to cause a 2% headwind to our as-reported revenue results in 2016. Turning next to gross margin: For 2016, we expect adjusted gross margin to increase 130 basis points to 230 basis points to a range of 54% to 55%, an increase to be driven by two broad categories.

First, we expect operational efficiency to contribute approximately 60% of the anticipated 2016 gross margin gain. The operational gains will be sourced from a combination of the previously-announced manufacturing facility restructuring program and additional benefits from other specifically identified operations efficiency programs.

The programs include logistics and distribution optimization, procurement initiatives and initial benefits from our material substitution program. Additionally, in 2015, we incurred an elevated level of expense related to product recalls.

Our expectation is that this expense will return to a more historical level in 2016. In addition to gains from operational efficiency, we also expect that commercial volume and favorable product mix will drive approximately 40% of the total anticipated 2016 adjusted gross margin gain.

Gains in this area will be led by further Vidacare penetration, new product introductions with higher gross margins, product rationalization initiatives, the positive impact from price increases, benefits from the Truphatek and ACE Medical acquisitions, and further adoption of the Anesthesia, Atomization and LMA product offerings. Moving to adjusted operating margins, we anticipate the adjusted operating margin will increase by approximately 200 basis points to 250 basis points to range of between 23.5% and 24% in 2016.

Gains from gross margin will be the principal driver of the increase. But similar to 2015, we will look to further accelerate those gains to a combination of actions including a reduced level of investment in certain emerging markets, given their macroeconomic conditions, continuing benefits from our 2015 North American Strategic Business Unit Reorganization, and a moratorium on the medical device excise tax.

These productivity actions will provide meaningful flow-through from gross margin to operating margin, while also freeing up funds to further invest in strategic opportunities such as Percuvance, Vidacare and MAD Nasal. Additionally, in 2016, we look to increase R&D spending by approximately $10 million to $12 million to further support our internal development efforts and product pipeline.

The increase to R&D spending was largely funded through the temporary moratorium of the medical device tax that provided a 2016 benefit for approximately $14 million on a pre-tax basis. And that takes me to our preliminary adjusted earnings per share outlook for 2016.

This slide serves as a bridge from our full-year 2015 adjusted EPS to our full-year 2016 adjusted EPS outlook. Beginning with 2015 adjusted EPS of $6.33.

From an operating standpoint, in 2016, we project our base business will add approximately $1.16 to $1.26 per share of growth of approximately 18% to 20%. On the tax line, we expect our full-year 2016 adjusted tax rate to be between 18.5% and 19.5%.

The increase versus the 2015 rate of 16.8% is primarily due to one-time items that we do not expect to reoccur in 2016, as well as the expectations for a higher mix of U.S. taxable income in 2016 versus 2015.

As such, we expect that the tax rate will create a headwind to adjusted earnings per share for approximately $0.16 to $0.19. Moving to share count: Our current estimate is for adjusted weighted average shares to increase by 800,000 shares to approximately $45.5 million for the full-year 2016.

As a result of the share increase, our earnings growth will be reduced by an estimated $0.12 to $0.13 per share. Turning to FX, based on our current estimates, we expect foreign exchange will create an adjusted earnings per share headwind of approximately $0.11.

And finally, as a result of this morning's manufacturing footprint restructuring announcement, we expect to incur aggregate pre-tax charges of between $34 million and $44 million over the life of the plant, of which, we expect to incur pre-tax charges of between $21 million and $23 million in 2016. These charges will be added back when we calculate adjusted earnings per share.

However, we do expect to incur approximately $0.05 to $0.06 of expenses associated with this plan that will not be added back when computed 2016 adjusted earnings per share. When fully complete, we expect this plan will result in annualized savings of between $12 million and $16 million.

In the aggregate, our outlook for 2016 adjusted earnings per share is $7 to $7.15, representing growth of between 10.6% and 13% versus 2015. And while it is not our practice to provide specific quarterly guidance, I did want to highlight some considerations regarding variability between our 2016 quarterly expectations.

Overall, we expect both constant-currency revenue growth and as-reported revenue growth to be lower than average in Q1, largely due to Q1 having two fewer shipping days as compared to the prior-year period. We estimate that two fewer days will reduce revenue growth by approximately 2%.

The days will be made up with one additional shipping day in each of Q2 and Q4. Additionally, we expect momentum from previously introduced new products to build as the year progresses and we also have a number of new products with expected launch dates in Q2 and Q3.

As such, revenue seasonalization will skew a little more heavily towards the final three quarters of the year. And for modeling purposes, if we began with the first quarter 2015 revenue of $429 million, we anticipate the two fewer shipping days will reduce Q1 2016 revenue by approximately 2%, or $9 million.

In addition, foreign exchange headwinds are expected to be greatest in Q1, negatively impacting our year-over-year top-line results by approximately 3%, or $13 million. Now, importantly, we expect to offset this FX headwind with underlying growth within each of our segments.

Similarly, for 2016, we expect quarterly EPS utilization to be much more heavily weighted towards Q2 and less weighted towards Q1, due to the shift in shipping days and the impact of foreign exchange and the fact that the benefit from operations productivity programs will build as the year progresses. However, for the combined first quarter and second quarter of 2016, we expect EPS seasonalization will be fairly comparable to the first half of 2015.

And that takes me to my closing remarks. To summarize, over the past few years, we have built a strong operating platform that provides multiple avenues to deliver on our revenue, margin expansion and earnings growth commitments.

For 2016, our financial plan delivers a 5% to 6% constant-currency revenue growth, an expansion of adjusted gross margin in line with our commitment of an additional 350 basis points to 400 basis points over the next three years, and adjusted EPS growth in the low double-digits. Our cash flow generation remains strong, and we project 2016 cash flow from operations to approach $330 million.

Combining the expected 2016 free cash flow generation with cash on the balance sheet and a moderate leverage profile, we are well-positioned to continue to invest for the future and to build shareholder value. That concludes my prepared remarks.

At this time, I'd like to turn the call back over to the operator for questions. Operator?

Hi. Good morning, everyone.

Good morning, Larry.

Good morning, Larry.

Good morning. So, for Benson or for Tom, just on the announced manufacturing footprint consolidation, I think if I just do the very high-level math, it's sort of 70 basis points or so benefit to gross margin.

And I recall that in totality, you had anticipated that there were items that could improve gross margins by maybe 300 basis points, 350 basis points. So, when I add the two programs together, you're probably 250 basis points, somewhere in that range.

So, A, I want to check and see if that math still holds and then if there are still further opportunities to improve the gross margin.

So, this is Benson, Larry. Your math is correct and the right assumption around that is that even including the second phase which we've announced does not represent the total sum of our footprint consolidation opportunities.

As we did with the first phase, we've made the decision that the least risky way to proceed here is to do this in a phase effort. So, we are still confident about the overall sum that we'll get from footprint consolidation and you are right that there's more on the table than what is represented by these first two plants.

Okay. And then just on that point, just as we think about the gross margin expansion for 2016, are there, as we think of it through the year, are there any inflection points or specific events that occur that might cause a step up or is it sort of ratable through the year?

Just any help as we think about that would be great.

So, Tom and I both talked a little bit about the first quarter with two less shipping days that is going to have a volume impact to us of at least 2%. Volume is a component of what drives gross margin and our expenses don't go down as a result of those two less shipping days.

So it has an impact on operating margins as well. Excluding just the impact of first quarter as a result of the two less shipping days, it's going to be essentially ratable through the second quarter, third quarter and fourth quarters.

A little more heavily weighted towards the fourth quarter, but not substantially so as the new products we're introducing have higher margins.

Okay. Terrific.

Thanks very much guys.

Tom on for Brooks.

Good morning.

(41:19)

Morning. I just wanted to start with M&A.

You guys did some smaller deals in 2015. But I'm wondering just, if you're seeing the environment change given the change in valuations and valuation expectations, if that might impact a potential larger deal in 2016 and just sort of – some high-level comments in the M&A pipeline.

So, the clearest answer I can give you is that we remain absolutely committed to continue to do Vidacare and LMA-size and type acquisitions. It's very hard to give any clearer guidance in that since we can't announce something until the deal is essentially consummated from an agreement on both our parts.

The overall, I would say the overall market environment has been a little affected by increased valuation expectations. But we still look for those opportunities where – because of the synergies we're able to bring to the table, we're the most likely buyer.

So, that's – I wish I could provide more clarity, but we continue to remain committed. We have a very active identification list of companies that we have an interest in.

And at the very least, I think you can expect a continued deployment of capital at the level we did in 2015 on those smaller acquisitions.

Okay. Great.

Thanks. And then just one more if I may.

There's a nice tick-up in revenue in Asia, or the growth rate there this quarter. I'm wondering how sustainable that is, and if that's just the function of – I guess just a little more color on that would be helpful.

So, we did have a good – it's Liam here. We just have a good comparable in the fourth quarter as we outlined during our quarter three earnings call.

And for 2016, as we've said, we expect in the high-single-digit growth out of APAC and that will be our expectation. The pickup in China was pretty solid in the fourth quarter.

And our overall Asia growth was 18%. China for sure was accretive to that.

Our overall business as we go direct, places like Australia become a bigger part of the overall APAC numbers. So just as a term of reference, you don't get the double-digit growth out of place like Australia as you would out of China, Southeast Asia, for example.

So high-single digits is our expectation out of Asia in the coming year.

Thanks, guys.

Hi. Thanks for taking the question and congratulations on the results.

I was just wondering if you could actually comment on the broader, just kind of dynamics as you see them, just across the different geographies. I know that you had been expecting some weakness within Latin America.

Maybe if you could just comment on what you're seeing more broadly just across like North America, in the U.S. in particular.

So, North America, we continued to see robust growth and expect that to continue into 2016. Of our major business franchises, the one that was at the low end of the scale was our Anesthesia business throughout three quarters of 2015.

We started to see a nice pickup at the end of 2015 in the fourth quarter and expect that to continue. We do not expect any negativity in U.S.

results stemming from the ACA and haven't seen any evidence that that's likely to be the case for our particular product portfolio. Other device companies may have more exposure there.

Latin America certainly continues to be a problematic area for us as a result of the low prices for oil revenue. We have, looking at our 2016 guidance, discounted much growth from that area so we don't see any vulnerability there.

But we certainly don't see the situation improving. Liam?

I'll just add a little bit of color to that, Kristen. If you look at what happened in North America through Q2 to Q4, we went from 4.3% to 5.6% to 8.2%.

Now, there are some billing days moving there, but nonetheless progression. And in particular, in Latin America and in particular, in regard to Venezuela, we have very little recovery forecast for Venezuela in our 2016 numbers.

Europe, we have characterized as stable. We have a good organization in Europe so I think that we'll probably see some modest uptick even in a stable environment there.

And Liam has commented on Asia. So, I think the sum total is, more of what we've seen in the latter half of 2015, are the trajectories we expect to see in 2016.

Okay. Then – sorry if you had already addressed this, but just in terms of medical device facts, are you guys reinvesting that back into the business?

And if so, where are those investments going back? Is it more of the marketing?

Is it more for R&D?

So, the answer to the question, it's primarily being reinvested. We went through a list of internal projects that we wanted to fund this year and our total increase in R&D spending is up about $10 million to $12 million.

So, that's about the number that we save from the medical device tax. In terms of where it's going, we're advancing some of our efforts in terms of our MAD Nasal product that requires some regulatory approvals.

And we're expanding our Clinical Education group in order to get more mileage out, and we have withheld a little bit of that for some cushion for FX. If we learned anything over the past few years, is nobody seems to know exactly what the currency is going to be in a given year.

So, we thought that was prudent to protect ourselves from the downside if FX turns out to be a little bit more negative than we thought it was.

Okay. Great.

Thanks very much.

Thank you, Kristen.

Thanks. Looking at your biggest business in North America, Vascular leading the way in growth this quarter.

I mean, I know, we've been monitoring sort of Vidacare and how that's done, but any color in terms of share gains or anything else you'd point to there? And then, looking forward, do you think this is sustainable, that this could be sort of the leading growth division of Teleflex in 2016?

So, I'll take this. It's Liam here.

So, you're right to point that Vidacare – obviously, Vidacare, over the year, grew by 20%. So, that's a part of the story.

Also on our CVCs, if you look at our CVC growth globally, that was in the mid- to high-single digit. CVCs were up close to 7% in that timeframe.

And also, we see nice opportunity in PICCs. And now that we have the Chlorag+ard PICC with the positioning systems that we announced on the call today, we think that puts us in a very strong position to address the areas of thrombus and infection with our products.

So, we see this as sustainable for sure. We don't see any reason why Vidacare growth would soften.

We continue to see opportunities to expand within our CVC and we see, in particular, growth opportunities within our PICC portfolio, and we see Vascular continuing the trend in 2016 and beyond as it did in 2015.

Thank you for that. And then...

So, we made it sustainable. We made it sustainable.

I appreciate that. Thank you.

And just for those of us that – recall the VasoNova deal and the position system, now, you're adding Nostix. I guess that we think of that as – you mentioned affordable for Nostix, is it a similar technology that's at a lower price point that you're going to use?

And you really – can you really sell these both in the same hospitals? I guess I'd just love a little more clarity on how you're going to put those two together or how they sit together?

So, I would say there's more of an international interest in the Nostix product. Once you go outside the United States, most PICCs are placed by physicians particularly in Europe.

They are more than capable of reading the ECG wave and making the determinations where the catheter is. So they're reluctant to pay a premium to have a simplified bull's eye system that is almost an insult to their clinical capability.

So, this really enables us to provide a more cost-effective system that's very directly competitive with the largest competitor out there. And also, I think importantly, allows us some future potential to develop targeting systems that will work with CVC catheters and hemodialysis catheters.

So, we still see our VasoNova system at the high end and most accurate system available, we're really delighted that we now have a VasoNova stylet that can work with our Chlorag+ard PICC products. So now customers don't have to choose between targeting and infection control and we can wrap that out.

So, we see a strong rationale for good, better, best strategy. And it's the same thing we're doing with LMA masks in terms of a low-cost, mid-cost and high-cost alternative.

Thank you very much.

Good morning. And thank you for taking my questions.

Good morning.

Good morning.

Good morning, Matt.

Hey. I believe you said that 9 out of the 10 initial customers that were testing Percuvance committed to the product after the evaluations.

Could you give us a sense of how they're progressing moving forward? I'm assuming you had some early adopters in the hospital testing the product.

Are they the ones moving forward or are they now migrating it across the hospital through larger training programs?

So, what's happening at the moment is the 10 that were part of the trial, as I said in my prepared remarks, 9 have moved forward. Four of them have already added as the formulary and the others are going through the value analysis committee.

And as you know, going through the value analysis committee can take anything from three to six months depending on the questions being asked. The product is broadening within those institutions and we have another 15 institutions that are waiting to trial the product and to go through the exact same process.

So we're broadening of beyond the early adopters, Matt, to answer your question. And we are broadening into a greater sphere of customers.

The same approach we're taking in EMEA. We got the CE mark, so we're all set to go with our launch within EMEA in quarter one.

Everything we continue to learn about the products keeps us highly enthusiastic about its long-term potential.

And of the 200 basis points to 250 basis points of growth, how much of that are you attributing to Percuvance this year?

In 2016, it's very little, very little. As Liam said, we've only been in 10 accounts at this point in time.

We will be expanding that number during the course of the year. But it does take between three months and six months to get to the value analysis committees.

And if you wanted to look, Matt, at our minimally invasive package, you would look at that at about 50 basis points to 60 basis points between our minimally – that includes Percuvance and Mini-Lap.

All right. Thank you very much.

Good morning.

Good morning.

Good morning, David.

A couple of questions on guidance, one for Tom, one for Benson. I guess, Tom, the first question is, as you're probably aware, the last four years, your fourth quarter margin is always lower than your third quarter margin.

Obviously this year, it was the opposite of that. So, what I can figure out with guidance is, your guidance basically implies no improvement in gross or operating at the low-end of the range of the four quarter level.

Just given the progression of cost restructuring, how is that possible? And then I have a quick follow-up on organic growth.

Well, when we look at our gross margin, we're not perhaps as focused on any one particular quarter because there can be pluses or minuses that happened. We're really looking at the longer-term kind of growth of a year or multiple years.

And so as we look at the fourth quarter, it's a quarter that had very, very significant volumes and that created some significant leverage for us. As we look at the year overall, we're seeing a nice progression in 2016 relative to 2015 and there's a number of drivers behind that and we pointed to a number of them in the prepared remarks.

First of all, the footprint consolidation. The first phase of that will actually begin delivering some meaningful savings in 2016 of about $15 million.

Overall, we expect footprint consolidation to contribute kind of a third or so of the overall growth in margin. We also are showing some nice operations efficiencies which were offsetting our inflation and that's driven by a number of initiatives, including SIPS (55:54).

We've got strategic procurement initiatives and that collectively is about another 10% of the total growth. And then we've got some one-off expenses that we incurred in 2015 that we expect to go away or mitigate in terms of size and that will drive another 20% of the total improvement in gross margin.

Now, in addition to the kind of cost savings on manufacturing, commercial volume and mix is going to be a nice driver for us. So we're going to continue to see margin gains coming from higher-margin products such as Vidacare, introduction of new products.

We've got some product rationalization going on across the company. And then we've got a little bit from pricing.

In addition, we've got some minor amounts of margin gain from M&A and distributor conversions included in the mix. So, I wouldn't focus particularly on one particular quarter but rather look at the trend and what we see is a nice progression in 2016 relative to 2015 for the reasons just mentioned.

Yeah. I think, David, maybe the implication of your question is isn't that full-year guidance even at 54% to 55%, a little on the conservative side?

And you're exactly right, it's a little on the conservative side.

Okay. That was my point.

You made a good point about you've got to 54% in the fourth quarter and that only mean something if 54% is the new high watermark, I guess, was the point I was trying to make. And, I guess, number two, on organic growth, same question.

You sort of delivered a 5% organic number in the fourth quarter. Your guidance implies something close to the 4.5% to 5.5% for 2016.

So, 5% the midpoint. And just given the PercuSurge opportunity in 2016 as well as the LMA opportunity, can you talk about factors that will result in organic growth being lower, frankly, in 2016 in the fourth quarter?

Thank you.

So, again, if we take out the impact of the full-year of acquisitions, that's 140 basis points in the fourth quarter, which comes out and the extra shipping day 1%. So, that leaves us at about 5%.

When it comes to 2016, we have only included in our guidance those elements from the smaller acquisitions that have a high – that are either already closed or have a very high probability of closing over the next few months. The likelihood that we do more than that in 2016 is certainly probable.

So, and the 2015 number, obviously, includes everything that we did during the course of that year. So, that leaves some conservatism I think in the overall numbers as we look at that 5% to 6%.

I think the main point that we're trying to get, there's been a lot of conversation about what does our growth look like without acquisitions is fourth quarter we'd certainly have – I think, have a clear demonstration that we're certainly right at around that 5% number without any assistance from acquisitions.

Okay. Very clear.

Thank you very much.

Hey, guys. Good morning.

Thanks for taking the question.

Good morning, Brian.

My question is on emerging markets. I think you mentioned in one of the slides, decreased investment there.

Can you be more specific about where you're decreasing investment, what it's around? And is this a permanent reduction or is this kind of hitting the pause button for right now?

As we think about where to deploy resources in any given year, we think about where the growth opportunities are. And if you look back a couple of years, we saw some nice growth across Asia and China and other markets and we upped the investment there to increase our sales penetration.

For now, we're not continuing to up the level of investments that we had in the past. But just to be clear, we're not looking to scale back and exit markets, but rather just to divert resources to where we see some of the greatest growth.

And right now, we see good growth in the U.S. and we see good opportunities behind some of our new product offerings, including Percuvance, Mini-Lap and as well as Vidacare where we're going to continue to divert resources to develop those potential opportunities.

So again, it's not as if we're exiting any markets, but rather just curtailing the level of increase in those markets.

Okay. Great.

And then on GPOs, you guys constantly talk about significant wins there. But how should we think about?

And just broadly speaking, how do you think about what those GPO wins actually translate to in terms of revenue contribution over a period of time? And you mentioned the wins, but are there any GPOs that you guys are losing?

So net-net, I know you're up, but is there anything that you guys were not successful with this year when it comes to GPOs?

Well, within our numbers that we have two contracts that we locked, with neither of them were that significant. But adding to the wins that we announced, it's a small lost versus the significant win.

If we look at the contribution of GPOs and IDN agreements, obviously there is a significant part of our growth rate. And if you look at the fourth quarter in North America and you look at the 8.4%, and you look at the full-year which is 6.2%.

And if we look at the full-year, there is no billing days movement in that the 6.2%. We're getting about 1% to 1.5% growth from the market.

That's what we estimate we're getting from procedure growth. So, everything above that is share gain and obviously, our GPO and IDN strategy is the key component of that.

And we see that as a sustainable long-term. It also points to the point that Benson makes many times about our size.

We are of sufficient size to be meaningful to the GPOs and the IDNs where we have significant share in segments of the marketplace that allows us to go in and extend our contract rates with those customers. If you look at where our products are used, they're used primarily in large urban sophisticated healthcare institutions.

They're not used in smaller rural hospitals. Virtually, all of those hospitals are either – their purchasing is either supported through a GPO or an IDN arrangement.

So, without those agreements, it is very difficult for a sales person to get a hospital to shift over into a non-contracted product. So, they're an important part of our strategy to set the stage for us to be able to have product discussions in those accounts.

Great. Thank you, guys.

Hi. Thank you and good morning.

Good morning.

Good morning.

I just wanted to ask, you guys have done a tremendous job in sort of brining your growth rate up to sort of I think what was your original target of 5% to 6%, which is sort of the upper end of hospital supply names. However, if I look at your outlook, you're still benefiting from some slight positive pricing pressure, which, compared to some of your peers, is actually – they're normally seeing pricing pressures.

I'm sorry, you're seeing price increases and they're seeing pricing pressures. So, I'm wondering if you think that over the long term 5% to 6% is still the right number, especially as pricing sort of becomes more reflective of some of your peers, or if pricing – when pricing starts to become a more negative impact that it's a lower outlook than the 5% to 6% that we're seeing sort of for 2016 for organic growth.

Yeah. So, in 2016, we're only counting on 10 basis points to 20 basis points coming out of pricing.

And I would characterize that as, again, a relatively conservative approach. Our real longer-term strategy is actually to move as much of our product portfolio into product categories, which don't have the same pricing targets on their back.

So, Vidacare is a great example of a product, where there's really no significant competition. Products like Chlorag+ard – as a coating for both PICCs and CVCs really doesn't have much competition.

So, we think in many ways, we're better protected against a very extreme cost environment that we might be moving into. And we still have the opportunity of dealer and distributor conversions, which show up in pricing, but we tend to think of them more as an acquired opportunity.

All of which is helping our margin. But you're right, we have not seen the same negative price elements that other device manufacturers have had.

But we've paid a lot of internal attention to pricing on every product code up and down the catalog.

Okay. That's fair.

And then, I think last year, you did actually call out that there would be some distributor conversions. This year, you're a little less – I guess, you're a little more opaque about it.

I mean, should we expect some this year or is it just depending on how the year progresses, et cetera?

So I'll go back to my earlier comment that I made to a question and that is that our revenue guidance assumes only things that were closed in or are...

Okay.

Our revenue guidance assumes things that are largely closed. There are certainly elements to where we think that we'll do better than that and we did better than that in 2015.

So we don't expect a slowing down. It's just that that's not in our 5% to 6%.

If I could just add to that, if I look at the environment for dealer to go-direct. And we've said in the past, you can expect to see the same level of dealer-to-direct between 16% and 18%, as you've seen in the past, and we would be consistent with that.

The environment is still rich there for us to do more dealer-to-direct. We just don't have them in our guidance numbers because we only have in our guidance numbers the ones that are closed.

Okay. That's helpful.

And then, I believe, you said the LMA Protector was going to be one of the drivers this year, if I heard correctly. I know that you were doing some work to extend the label beyond two hours for that with some data collection I think you did last year.

Has that concluded, and is the new label improved from what it had been in the past?

That work is not concluded. That work is as part of our launch because in order to make any change to the label, we need to make a 510(k) submission to the FDA.

And as part of our launch, we are actually working with our customers to gather the data that would sustain such a submission. I wouldn't want you to anticipate that the Protector has a massive impact on our new product portfolio.

From a new product revenue generation, it is. We're rolling it out in a limited market release, and we continue to roll it out slowly and steadily to our customer base, in particular in North America, Australia and Europe and the UK where we have significant users of the laryngeal mask and in particular, on the second generation.

And we'll use those customers to gather the information for the submission. What I should have said was the UK in the European Union, so.

Okay. That's helpful.

And I mean, assuming that you can extend the label, could we expect more significant growth from the product? I mean, is that a major milestone to look for?

Well, in the future, we're quite optimistic that once we get the change in the label, we should be able to move more of the endotracheal tube market over. Just to give you a reference point, the endotracheal tube market globally is about a $150 million market.

Sales price of an endotracheal tube is $1 to $2. The sales price for a second gen or a Protector is in the region of $16 to $25.

So, once we get that indication, obviously, and some of our customers that have used the product have told us that they believe that that indication should be within line of sight. But we need the clinical data to support that.

And I guess last question on this, is there an expectation that sometime in 2016 you would be able to have the data collected and potentially submit or any kind of timeline you could provide on when we should anticipate that?

We would expect to collect the data during 2016 and do the submission sometime in 2017.

Okay. Great.

Thank you. Very helpful.

Thank you.

Hi. Good morning.

This is Ravi in for Rich. Can you hear me okay?

Yes we can.

Yeah. Good morning, Ravi.

Thanks for taking the questions. Good morning.

So, just one question on the guidance and then one on the restructuring if I could. The 20 bps to 30 bps from previous M&A, if you could give a little bit more clarity around what you consider previous M&A.

I mean, if I apply that to just Vidacare, I'm looking at Vidacare growth of about 5% in 2017. That seems a little bit low versus what we were thinking.

Is that the right way to think about it? And then on M&A, understandably it seems you're being conservative on the gross margin and operating margin potential.

I'm sorry, not M&A, restructuring, on the $12 million to $16 million savings. Now, is that – do you see some portion of that realized, or what's reasonable for 2017 realization and understanding that, is that going to be mostly in gross margins?

And if so, the – moving around the manufacturing facilities, could that have a benefit on your tax line? Thank you.

So, let me talk about how we view M&A. we only count M&A as M&A revenue for the first 12 months that we've acquired the product.

So, Vidacare has already passed its 12 month number. So, once that happened – in fact I think it passed it in January of 2014.

(70:16)

Yeah. So, that wasn't – that had – really didn't have impact in our 2015 numbers and no impact in our 2016 numbers.

And Vidacare continues to grow substantially. As Liam said, the growth in – for the year was 20%.

So, these constantly expire. We obviously still get benefit from acquisitions long after they're – long after we count them as M&A growth.

But quite frankly, the reason Vidacare is growing is because we're putting a lot of sales energy in clinical education around it. Most of the acquisitions that we're talking about having an impact in 2016, again, just to reiterate what I said a few minutes ago, are things that have already closed; they tend to be relatively minor in nature and collectively, are going to produce that 20 basis points to 30 basis points.

Do we expect the year to finish stronger than that? Our history suggests that that's the case.

We continue to remain committed to both the smaller acquisitions and larger acquisitions as well. And excuse me, I forgot the second part of your question, if you could repeat that?

Sure. Thanks for the clarity on that.

It was just around the restructuring, should we consider most of this in gross margins, given the comments on facility consolidation? And then second thing is, is there a potential tax benefit as you look to relocate plants, that's not contemplated in that number?

So, the savings would be in the gross margin line and taxes could see some minor benefit, but not a meaningful change to the guidance that we've got out there for 2016.

Great. Thank you.

And then just to further the point on M&A. So, just for clarity, it is past 12 months, what's included in there, as I mentioned in my prepared remarks, is we've got Truphatek, an OEM acquisition and then Nostix.

The Truphatek and OEM probably were closed in the second quarter of last year. So, we really only have a quarter of additional growth in this year.

Then we had two distributor conversions included in M&A. And again, it closed early in 2015.

So, the incremental kind of M&A impact with 2016 is very minimal. And that's why it appears to be on the lower end of the range.

Thanks. Maybe a follow-up on restructuring, Benson.

Can you maybe walk through the prior programs and maybe this new 2017 program? If indeed there's any product divestitures that are included in there and maybe a quick follow-up after that?

So there's no product divestitures that are included in that per se. We are typically always engaged and looking at minor segments of our product line that either should be harvested or, in many cases, they're even too small to be divested, but what essentially that does not play into the restructuring element at all.

The first restructuring effort, most of the savings, although, there were other small plants involved. Most of the savings came from a relocation from our Vascular product line manufactured in Asheboro to Chihuahua.

We are in the final stages of that, so we expect to start to see some benefit of that starting to kick in at the end of 2016 and more substantially in 2017. The second stage of restructuring since we haven't made our employee announcements yet, we're not in a position to be able to give much detail until we do that.

But similarly, it's steered around moving product from high-cost labor areas to low-cost labor areas where we already have plants and facilities in place and their principal savings comes from the hourly labor rate and the overhead cost.

That's helpful. And maybe shift over to M&A.

I mean when you look at sort of the strategy it's been adding the Vascular, Surgical and Anesthesia. Is that still the strategy here or would the company be open to a new vertical?

And sort of a follow-up to that would be just a recap for Tom where the debt ratio is today and how high the company would be willing to bring that debt ratio up in order to facilitate a larger deal.

So, I'll let Tom talk about the debt ratio.

Okay. Well, in terms of our leverage per our credit facility definition, we're at 2.4 times at the end of the year and we have the ability to go up to 4 times under our current financing arrangements.

Now, we've talked previously about our willingness to go up to 3.5 times. So, long as there is a pathway to get back to what we consider to be a longer-term target of 3 times.

So, we've got ample capacity from a leverage standpoint to do additional acquisitions. We've also got cash on the balance sheet of over $300 million.

And to answer your question, our preference is certainly to look at product areas where we have an existing sales force that can sell the product and is already making a call on the existing customers. In some cases, our own product development efforts lead us into some different areas, Percuvance for example will have a substantial opportunity within the gynecological market as well as other laparoscopic markets.

But that opens the door for example for us to have additive products that get use by that same customer. So, we are opened to the idea of adjacencies as long as they're strategically consistent with where we want to move our product line in any way.

That's helpful. And last one real quick, would just be – I believe you had some recalls in a facility a couple of quarters ago, I believe in Vascular, specifically within PICCs.

I'm just wondering if that is kind of cleared up. And if it is, what sort of kind of growth boost do you get from that, bringing those products back in?

So, I'll answer that. As I said in my prepared remarks that the PICC product recall is behind us in Q4.

So, we saw the recovery in Q4 of our PICC products. As we start to go back to those customers, we expect to see that rebound continue in Q1 and Q2.

It does take a quarter or two because those customers will have stocked up with a competitor product. What we're hearing from the marketplace is that the most of them, if not all of them, will come back to us, that's very high percentage, are moving back to our product.

But it just takes a while to restock, and we saw a mid-single-digit pickup in the first – in the fourth quarter. And we expect to see that accelerate through Q1 and Q2.

Just on recalls, just in 2015 versus 2014, we saw our recalls numbers have from 44 to 22. So, even though they did have a bigger financial impact, the overall number of recalls would indicate that our processes are improving and our quality system is getting better.

Thank you.

Thanks, operator, and thanks for everyone that joined us on the call this morning. This concludes the Teleflex Incorporated fourth quarter 2015 earnings conference call.