Please stand by. Good morning, ladies and gentlemen, and welcome to the Teleflex Q3 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 Q3 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 Q3 results, our acquisition of Palette Life Sciences, and our financial guidance for 2023. Turning to the Q3, 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. Q3 adjusted earnings per share was $3.64, an 11.3 increase year over year. During the Q3, we experienced stable to improving macro and healthcare utilization trends. In the acute care setting, which is our primary market, utilization during the Q3 returned towards normal seasonality. From a macro perspective, we witnessed a stable to improving environment for material inflation and supply chain in the Q3 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 Q3 revenue results. I will begin with a review of our geographic segment revenues for the Q3. 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 performances across our other businesses. Now, turning to Asia. Revenues were $93.2 million, increasing 17.1% year-over-year. During the Q3, 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 anti-corruption measures. Let's now move to a discussion of our Q3 revenues by global product category. Commentary on global product category growth for the Q3 will also be on a constant currency basis. Starting with vascular access, revenue increased 0.3% to $169.9 million. As expected, the quarter was negatively impacted by the previously announced Endurance catheter recall. Initial launch activities for our next generation Arrow VPS Rhythm DLX navigation device and the new Arrow PICC preloaded with the NaviCurve stylet continued to generate a positive customer response and system placements. We drove double-digit growth in our underlying PIC business. Moving to interventional access, revenue was $134.1 million, up 22.4% year-over-year. In the quarter, we continued to drive our complex PCI and emerging structural heart portfolios. Balloon pumps, access enclosure, OnControl, and Manta were meaningful contributors to growth in the quarter. Turning to anesthesia, revenue declined 1.3% year-over-year to $97.6 million. As expected, the previously announced ET tube recall negatively impacted year-over-year growth. In our surgical business, revenue was $112.8 million, up 20.6% year-over-year. Among our larger franchises, ligation, staplers, and instruments were notable drivers of growth. For 2023, we now expect Standard Bariatrics Titan stapler revenues in the teens. For interventional urology, revenue was $73.6 million, representing a decrease of 6.8% year-over-year. In the U.S., the office remains the biggest challenge for UroLift. We are continuing our efforts to stabilize this site of service. In the international markets, we remain focused on driving UroLift revenue in Japan, while in China, our initial launch activities are tracked to plan. OEM had another solid quarter, with revenues increasing 14% year-over-year to $82.3 million. The strength in the quarter was broad-based across our portfolio, including micro catheters. Q3 other revenue increased 5.3% to $76.1 million year-over-year. As it relates to the other revenues, we have been informed by Medline that they are now in a position to exit the MSA earlier in 2023 than previously anticipated. We now expect the MSA to cease earlier in December, rather than December thirty-first. Tom will give an update on the financial impact later in the call. That completes my comments on the Q3 revenue performance. Turning to some other business updates. On October tenth, we announced the close of the acquisition of privately held Palette Life Sciences for an upfront cash payment of $600 million at closing and up to an additional $50 million upon the achievement of certain commercial milestones. Palette's product portfolio, particularly Barrigel, will complement the UroLift system, covering the top two diseases within urology care: BPH and prostate cancer. Barrigel is a differentiated rectal spacer. The product is easily sculpted when placed between the prostate and rectum, and allows the physician to achieve predictable protection of healthy rectal tissue prior to radiation therapy. There is a large and growing global market for rectal spacers. The American Cancer Society estimates that there will be 288,000 new cases of prostate cancer in the U.S., with the incidence growing 3% a year. In addition, the increasing use of hyperfractionation radiation therapy is driving demand for rectal spacers to protect healthy tissue. From a strategic perspective, the addition of Palette's portfolio complements our strong presence in the treatment of benign prostate enlargement and helps to expand the clinical landscape of our interventional urology business. Of note, urologists perform the majority of rectal spacer placements, which will leverage our existing call point. We have a broad and established urology sales organization, which will be augmented by Palette's clinical expertise in the use of rectal spacing for radiation therapy in prostate cancer treatment. The acquisition will also enable Teleflex to engage with other specialists in areas including radiation oncology, female urology, and pediatric urology. We will implement strong peer-to-peer education, a patient awareness focus, and leverage best practices. We also expect interest in rectal spacers to provide opportunities to cross-sell UroLift, although such synergies have not been included in our acquisition model. Finally, Barrigel has established brand success, which allows Teleflex to effectively invest in and grow within a significant new market. From a financial perspective, we expect the acquisition to be immediately accretive to revenue growth and adjusted gross margin, and enhance our adjusted operating margin in the near term. Moving to the topic of GLP-1 drugs, which has been an investor focus over the past couple of quarters. We continue to evaluate clinical data and monitor the usage of GLP-1s to assess potential exposure for Teleflex. We have reviewed the markets that we serve, and at this time, we do not expect GLP-1s to have a significant direct impact on Teleflex's diversified product portfolio. Although our largest exposure is Standard Bariatrics with the Titan stapler, revenues for this product are expected to account for less than 1% of Teleflex's overall revenue in 2023. Over the past 2 quarters, we have seen an impact on sleeve gastrectomy volumes from the interest in GLP-1s. It is important to note that while the SELECT trial showed a 20% reduction in major adverse cardiac events over 5 years, a recent study from the Cleveland Clinic-... which was presented at the American Society for Metabolic and Bariatric Surgery 2023 annual scientific meeting, showed that bariatric surgery has been associated with a 42% lower risk of major adverse cardiac events. While we continue to expect some softness to bariatric surgery volumes, we believe we will offset this due to our focus on capturing market share. We remain active in gaining back approvals and training surgeons during the quarter. We've also done a deep dive into our interventional business to assess the possible impact of GLP-1s in light of the results from the Select study, which showed an absolute reduction in the rate of major adverse cardiac events of 1.6%, from approximately 8% to 6.4% over five years. When considering the types of events defined in maze for the study and the follow-up period, the reduction in these events on an annual basis is measured in the tens of basis points. So actually, a relatively small impact. In addition, when considering that GLP-1 patients could live longer, it may only serve to delay cardiac events. Also, demographics remain a powerful driver, with global populations aging. Accordingly, we do not expect GLP-1s to have a significant impact on our interventional business. More broadly, we sell other surgical products to bariatric surgeons, including metal ligation clips and closure devices. But the revenue associated with these products in this surgical specialty is immaterial to Teleflex. Indeed, the vast majority of our surgical products are utilized in general cardiac, urology, and gynecological surgeries, and are not expected to be significantly impacted by GLP-1 usage. Teleflex also sells hemodialysis catheters through our vascular and interventional business units. In total, hemodialysis catheter sales in North America account for less than 1% of Teleflex revenues, with the majority utilized for the treatment of acute kidney injury or AKI, which is not expected to be impacted by GLP-1 use. It is estimated that AKI develops in up to 67% of patients admitted to the intensive care unit, with the vast majority not associated with chronic kidney disease. Common causes of AKI in hospitalized patients include severe infection, low blood pressure, and blockages of the renal tract, and it is often reversible. Between the businesses mentioned, as well as assumptions for other discrete product categories, total sales for products that have potential direct exposure to increased use of GLP-1 drugs is approximately 1%-2% of Teleflex revenues. That said, the potential impact should be less than that, as the use of GLP-1 drugs may reduce some usage but would be unlikely to completely eliminate the need for our products exposed. Our highly diversified product portfolio is primarily focused on critical care procedures, and as a result, we estimate that over 98% of Teleflex revenues should not be directly impacted as a result of increased usage of GLP-1 drugs. We will continue to evaluate clinical data and monitor the usage of GLP-1s to assess potential exposure to Teleflex moving forward. Moving to an update on our interventional access business. We are pleased to share that we are in the final stages of completion for the commercial launch of Wattson temporary pacing guide wire. Wattson is a unique bipolar guide wire used specifically for TAVR and BAV procedures, and engineered to help reduce the risk of ventricular perforation while providing confidence and capture during rapid pacing. As a dual delivery guide wire and pacing wire, Wattson will complement our expanding structural heart portfolio, which already includes the Manta large bore closure device and the Langston dual lumen for contrast delivery and pressure measurement. We are building momentum with a focus on complex PCI and structural heart. Of note, we continue to drive our innovation engine and will be launching a number of new products over the coming years. That completes my prepared remarks. Now, I would like to turn the call over to Tom for a more detailed review of our Q3 financial results. Tom? 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 Q3. 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 Q3, 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 Q3 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 U.S. tax law requiring capitalization of R&D expenses. At the bottom line, Q3 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 the buildup in inventory in the prior year due to elevated global supply chain volatility. Moving to the balance sheet. Inclusive of the acquisition of Palette Life Sciences, our financial position remains sound and continues to provide us flexibility to execute on our disciplined capital allocation strategy. At the end of the Q3, our cash balance was $881.5 million, as compared to $292 million as of the end of 2022. The increase in cash is primarily due to $600 million of cash on the balance sheet to fund the Palette Life Sciences acquisition in October 2023. Net leverage at quarter end was approximately 1.4 times, which remains well below our 4.5 times covenant. On a pro forma basis, Q3 net leverage with Palette was approximately 2.1 times. Now turning to financial guidance. Starting with the acquisition of Palette Life Sciences, which closed on October 10 and ahead of our December 1 assumption. For the full year of 2023, we continue to expect Palette net revenue to be approximately $56 million on a standalone basis. We now expect the transaction to be approximately $0.25 diluted to the company's adjusted earnings per share in 2023, versus dilution of $0.15 previously. The incremental dilution in 2023 is primarily the result of higher interest expense, as well as incremental operating expenses associated with the earlier close of the transaction. For 2024, there is no change to our expectation for Palette to achieve year-over-year net revenue growth in the high teens or low 20% range. In addition, we continue to expect the transaction will be $0.35 diluted to the company's adjusted earnings per share in 2024. Beginning in fiscal year 2025, the transaction is expected to be increasingly accretive to adjusted EPS. Turning to an update on the manufacturing transition services agreement with Medline associated with our sale of certain respiratory assets. We have been notified by Medline that they intend to end the MSA earlier than our previous expected end date of December 31, 2023. Our revised 2023 constant currency revenue guidance now reflects a loss of approximately $4 million in sales due to the early termination of the MSA as compared to our prior guidance. Moving to our updated outlook for 2023. We are increasing our 2023 constant currency revenue guidance to 6.4%-6.6%, representing a 90 basis point increase at the low end of the range and a 35 basis point increase at the high end of the range. It's important to note that the lost revenues from the unanticipated early termination of the MSA in 2023 offset a little less than half the incremental revenue associated with the earlier than anticipated close of the Palette acquisition, implying the majority of the increase in constant currency guidance was driven by the strong operational performance in the Q3 and our positive outlook for the Q4. Turning to foreign exchange. We now assume approximately $4 million or 15 basis points headwind to revenue from foreign exchange in 2023. This compares to our prior guidance, which assumed an approximately $8 million tailwind to GAAP revenue growth in 2023. Our revised foreign exchange guidance for 2023 captures the actual rates for the Q3 and now assumes current foreign exchange rates, including a euro-to-dollar exchange rate of 1.05 for the Q4. Considering the revised foreign exchange outlook, we expect reported revenue growth of 6.25%-6.45% in 2023, implying a dollar range of $2,966 million-$2,971 million. Turning to margins, we are raising 2023 gross margin guidance by 25 basis points at the low and high end of the range to 59.25%-59.75%. Given the earlier than expected close of the Palette acquisition and the associated incremental operating expenses, we now anticipate operating margin in the range of 26.25%-26.5% for 2023. Below the line, we now expect net interest expense to approximate $76 million in 2023. The slight decrease in 2023 guidance reflects higher net interest expense associated with the earlier than anticipated close of the Palette acquisition, offset by outperformance in the Q3 and debt paydown in the Q4. Our tax rate is now expected to be approximately 10% for 2023. We are narrowing our 2023 guidance for adjusted earnings per share to a range of $13.30-$13.50. Our adjusted EPS outlook has been updated to reflect favorable operating performance, including better-than-expected results in the Q3, partly offset by an incremental $0.10 of dilution from the acquisition of Palette due to the early close and approximately $0.05 from changes in foreign exchange rates versus the prior guidance and the earlier-than-expected termination of the MSA. Although we do not provide quarterly guidance for your modeling purposes, we expect reported revenues for the Q4 to be in a range of $765 million-$771 million, which includes the impacts of 5 less selling days, representing approximately $53 million, partially offset by foreign exchange benefit of $3.6 million year-over-year. That concludes my prepared remarks. I would like to now turn it back to Liam for closing commentary. Thank you, Tom. In closing, I will highlight our three key takeaways from the Q3 of 2023. First, our diversified portfolio and global footprint drove durable growth in the Q3. Our execution remains strong. We are launching new products, and our margins remain healthy. Second, the strong Q3 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. If you'd like to ask a question, please press star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We do ask that you please limit yourself to one question and one follow-up. If you would like to ask additional questions, we invite you to add yourself to the queue again by pressing star one. 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 side of things, I'm curious, you know, and maybe to some degree on surgical, A: did 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, 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 delivered in 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 purposeful acute care focus of our company is really paying dividends. Inflation and 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 site of service, which still remains a challenge. With all that as a backdrop, we really feel confident in our updated revenue guidance of 6.4%-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 some of our key product portfolios, including balloon pumps, and in surgical, also, ligation, stapling, and also the instrument portfolio did very well. Regarding stocking, no, Q3 is traditionally a destocking month for distributors, and that's what would have happened in this quarter, as we would have expected. Regarding the company that has had a recall, they are now back. They've come back to the market in fits and starts, and it's a duopoly. So, normally, hospitals will focus on one company. They'll 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 in the Q4? So are you talking about revenue, Jayson? Well, both. Was there a... I think you mentioned there was a revenue impact in the Q3. 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'll recur in the Q4. Yeah, so if you added both of the recalls together, you would be looking in the quarter at a revenue impact of in or around that $5 million-ish, Jayson. That 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 were largely accrued in the Q2 of the year. That's fair. Okay. Very minimal impact- Okay. In the Q3. Yeah. 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, Jason, 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 or so use the Barrigel product. So a lot of white space for us to grow into, and 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, you know, I think your XFX implies about, you know, 50 basis points of decline. I believe there's a selling day headwind, which could be about 610 basis point. You know, 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, you know, is that math correct? It does imply deceleration from Q3 to Q4 on an underlying basis stack to your growth. You know, just wondering, you know, what is driving that? Is there some conservatism? And then what it implies for 2024 and, you know, LRP growth of those 6%. Sorry for all those numbers. No, that's okay, Shagun, and thank you again for the question. So I, I'll go through a few pieces of it. So our update is, the guidance is 6.4%-6.6%. If you look at that on a constant currency basis, that's 0.4%-1.2%. Then if you take into account the billing days, that is, as you would have heard in Tom's remarks, is $53 million or around 7%, that is an underlying growth of 7.4%-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 into days the account, the days, the lower end of our, of our guidance into the Q4 would employ 7.4-7.4, 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 Q4, I think we've executed pretty well through three quarters. This is the Q3 in a row we've been in a position to call up our revenue. And I think we have a significant step up from the beginning of the year, and I'd 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 Q4, the low end of our guidance range is 6.4%, a significant uptick. Oh, that, that's really helpful. And then just as, you know, as a follow-up on, on the margin side, you know, you guys are absorbing about $0.25 of Palette dilution in 2023. You've raised your EPS guidance. You know, so what is driving this underlying improvement? And, you know, any color on 2024, I think consensus is looking for 50 basis points of margin expansion. And, you know, 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, you know, favorable results in pricing, mix, and some manufacturing or related variances in the Q3. You know, as expected, inflation improved in the Q3, both sequentially and year-over-year. Foreign exchange was a bit of a headwind in the quarter, relevant. And candidly, if you go back in time, it was actually a benefit earlier in the year as it shifted to a headwind of sorts. So those are some of the drivers that we saw in the Q3, and, you know, 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 Q4 as well. Then as it relates to margins for next year, you know, 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 Lin on for Rich. First question: I recalled last quarter, you kind of pinned on longer VIC committee approval for Titan. Just wondering if it's improving there or, like, any color you can provide on the trend there. Thanks. Yeah, absolutely. So regarding Titan, first of all, just looking at surgical in general, it had a really, 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. 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. We do believe that it will be a growth driver for Teleflex over a multi-year period, given the ability that we have to save time for the surgeon to do a better procedure, to have better patient outcomes. 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-1, 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's appeared to stay strong. So, do you have confidence in this strength going into 2024? Thank you. Yeah. So our guidance 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 business that we have the best line of sight is our OEM business, just because the nature of it, 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 Q3. And we feel confident that the OEM business will continue to be a double-digit grower in, in, 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 for Matt today. Thanks for taking the question. Hey, Mike. ... Hello. So 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, you know, the reduction you're seeing in sleeve gastrectomy volumes? You know, any quantification would be helpful. And then, you know, just given that, what kind of share gain do you expect you'd need to at least, you know, 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'll 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's all heated up about the 20% reduction of major events in that 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, 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 was a $300 million market. What is it? $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 a significant opportunity for Teleflex. Great. Thanks, Liam. And, yeah, we're on board with you in that kind of 10-20 BPS per year impact. And, just my second question is just on the ASP pricing that you're taking, is it possible to quantify, you know, 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 yeah, it's a good question. I think we're 2 years through the cycle now, and most of our tenders and contracts go on a 3-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'll trail off a little bit because we'll have been through the cycle, the 3-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 questions, two for me. So 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, you know, 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. 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 2.1x levered. So we have lots of firepower. Depending on what EBITDA the asset would bring, you know, 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, you know, 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 5. 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 top-line growth. It's got really attractive margins as we've been through previously. And if I 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 high, we're going to be disciplined. Nothing will change in that regard. 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, you know, I would say. 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, you know, specific guidance for 2024 at this point. Now, 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 oncologist, let me assure you of that. We have actually a dedicated team, that are exclusively dedicated to the training of the rad oncs as we go through this process. It's around 70%+, 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 Barrigel is the uniqueness of the product, George. You know, it's sculptable, which means that you can actually then mold the product around the area you're trying to protect and, 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's no injectable time constraints. It's highly visible. It's a one-step assembly. You don't have to do any hydro dissection. 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. Yeah, you're right. As I said earlier, there'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 really helpful, Liam. 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 markets. And miltech, 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'll get back to our original plan in the Q4, and that's anticipated within our guidance that we just outlined. ... 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. Me, I'll stick with Barrigel, and then actually ask also about pipeline as well. J- 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, 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. Yeah. Thank you. Thanks, Anthony. So what we expect in a full year from Palette is $56 million in 2023. The growth profile of it is high teens and low twenties, 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, it has been in the Barrigel product since it came onto 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 will 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, out of the gate here, a lot of folks are talking about headwinds to bariatrics in the near term. But there is chatter, you know, from folks in the space that, you know, when you think of the contraindicated patients at the very upper end of the BMI scale, you know, some of those may be able to come into the fold as they take Ozempic, 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-1s 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 its 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 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. As you break down the different company components and from 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. Quick question from us on the MSAs. What do you think—you know, you talked a little bit about financials on the, on the top line, but what about the potential of lost revenue on both top and bottom line? Just to be clear, the MSA, the manufacturing services 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, very minimal. It's minimal, yeah. So it's fairly minimal from an EPS perspective this year. And most investors will know that the MSA is 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'll 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's used in? 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. Yeah. 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'll be a multi-year driver for us, Craig. It's a unique product. I don't think we're gaining, honestly, from any type of surgical or 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 multi-year driver for us. We're absolutely within the high-growth portfolio. You know, if you look at it, you've got some really nice products within there. 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.