Logo of jester cap with thought bubble.

Image source: The Motley Fool.

Integer Holdings Corporation (ITGR -1.21%)
Q1 2019 Earnings Call
May. 02, 2019, 9:00 a.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Good morning. My name is Heidi, and I will be your conference operator today. At this time, I would like to welcome everyone to the Integer Holdings Q1 2019 earnings call. [Operator instructions] Thank you.

Tony Borowicz, senior vice president, strategy, corporate development, and investor relations, you may begin your conference.

Tony Borowicz -- Senior Vice President, Strategy, Corporate Development, and Investor Relations

Great. Thank you, Heidi. And good morning, everyone, and thank you for joining us. And welcome to Integer's first-quarter 2019 conference call.

This call is being webcast live and a replay, along with the copy of the press release and earnings presentation, will be available on the Investor Relations section of our corporate website. The results and data we discuss today reflect the consolidated results of Integer for the periods indicated. During our call, we will discuss some non-GAAP measures. For reconciliation of these non-GAAP measures, please see the appendix of today's presentation and the notes to the financial statement in today's earnings release.

10 stocks we like better than Integer Holdings Corporation
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.* 

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Integer Holdings Corporation wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019

As a reminder, today's presentation includes forward-looking statements. Please refer to the company's SEC filings for a discussion of the risk factors that could cause our results to differ materially. Joining me on the call to discuss our first-quarter results are Joe Dziedzic, president and chief executive officer; and Jason Garland, executive vice president and chief financial officer. In today's call, Joe will provide opening comments.

Jason will review our financial results for the quarter and then provide full-year 2019 guidance. Joe will come back on to provide his closing remarks, then we'll take your questions. At this point, I'll turn the call over to Joe for his comments.

Joe Dziedzic -- President and Chief Executive Officer

Thank you, Tony, and good morning, everyone. I'm pleased to report that we delivered another strong quarter of both sales and earnings growth, thanks to the outstanding work our 8,000 associates are doing for our customers. We continue to make significant strides in advancing our strategic imperatives and we recently announced three key leadership changes, all of which will enable us to accelerate the execution of our strategy. In the first quarter, we reported sales growth of 8% and delivered very strong profit growth with adjusted EBITDA increasing 22% and adjusted EPS increasing 59%.

About half of the sales growth in the quarter was driven by a very positive event, the signing of a long-term agreement with our current customer for their existing products. This agreement further deepened and strengthened our long-term relationship with this customer. In recent years, we have not highlighted the signing of long-term agreements because they are part of our ongoing business and we cannot disclose our customer by name. We're highlighting this one because of the lumpiness it creates in our 2019 quarterly sales and we want to provide insight into the sales run rate.

The growth and profit was driven by improved operational execution and with strong double-digit growth with or without the incremental sales from the long-term agreement. The first quarter was a strong start to the year and gives us confidence in our guidance, which we increased slightly on both sales and EPS. Jason will provide more details on the financials in his update In the last two weeks, we've announced three leadership changes, starting with Jen Bolt's promotion to senior vice president of global operations. In this new role, Jen will provide enterprisewide leadership to our global manufacturing operations to execute our manufacturing excellence strategy, including the Integer production system.

Jen is not only a domain expert in manufacturing excellence, she brings 14 years of Integer experience, serving in various leadership capacities, most recently as the president of both Electrochem and Portable Medical. Prior to joining Integer, Jen spent 12 years in the automotive industry, where she honed her lean manufacturing expertise. I want to thank -- I want to publicly thank Jen for leading Electrochem to significant growth during her three years as president, for turning around the Portable Medical product line and enabling us to move it from Improve Profitability to Invest to Grow, as well as leading the development of the manufacturing excellence's strategic imperative since the beginning of last year. Jen has been a role model leader during my time at Integer and I look forward to her contributions in this significantly expanded role.

The picture in the middle is Joel Becker, who joined Integer last week as our new president of CRMN. Joel brings a wealth of experience in the medical device industry and adds significant knowledge of our customers, having spent 20 years at St. Jude Medical, most recently, in the capacity of president of the Americas. His experience not only spans Cardiac Rhythm Management & Neuromodulation, which he will be responsible for at Integer, but also includes commercial and product expertise and other Integer cardio vascular markets, which will serve the broader organization well.

Joel's background positions him well to accelerate our CRM and neuro strategy. Carter Houghton will be joining Integer as the President of Electrochem and Portable Medical. Carter also brings extensive medical device industry and leadership experience. For the past 10 years, he has served as president or general manager of various medical and industrial business units at Haemonetics and Hologic.

I'm confident that Carter's significant leadership experience will build on a positive momentum of the business and execute on the growth strategies that we have in place. My final comment on all three of these leaders is that they are a strong fit for the culture we're building at Integer. They all share a passion for making the difference in the world through the work they do, they aspire to excellence, they build trust and work to operate as a team. With these changes, I am happy to report that the leadership changes are now complete and that we are in a stronger position to accelerate our manufacturing excellent strategy and to achieve our long-term goals of generating above-market sales and profit growth.

This slide summarizes our new leadership team, with the presidents on the left-hand side of the slide and the operational strategic imperative leaders on the right-hand side. Jen and Kirk are dedicated full time to their operational strategic imperatives. Amy and Joel's strategic imperatives are core to the leadership of their product lines and what they do every day. Joe Flanagan leverages his process expertise through his quality background to lead our business process excellence imperatives.

The takeaway is that every senior leader has domain expertise in the element of the strategy they are leading. I am more confident than ever that we have not only the necessary skills and experience on the team to execute our strategy but the right leaders too. Slide 8 is the slide I use to depict our long-term strategy. There is one notable change to our strategy that I want to point out.

The Portable Medical product line has been shifted from the Improve Profitability category to the Invest to Grow category. In late 2017, I asked Jen to take over leadership of the Portable Medical product line to address its operational and financial challenges, which she and the team did very effectively. There are still more opportunity to improve, but the product line is now in a position to pursue the growth opportunities in their end markets. Carter's medical device experience will enable him to help accelerate growth in this business.

I want to take a moment and provide more depth on one of the most important elements of our operational strategy, manufacturing excellence. At Integer, manufacturing excellence is about creating consistent, structured and rigorous processes to drive safety, quality, on-time delivery and efficiency across all of our manufacturing operations We have developed four work streams to achieve excellence in manufacturing. The first work stream is developing the Integer production system. This system defines the best practice processes across the 16 core manufacturing system elements.

All Integer sites will implement this system. The second work stream is performing a lean diagnosis, which I characterize as a gap analysis of the current state versus the targeted best practice state. The gaps have been prioritized in the site transformation plan to drive resource allocation. The third work stream involves developing the standard KPIs and dashboards that allow a site to monitor their progress on closing the gaps identified in the lean diagnosis.

The fourth work stream is what makes this entire process sustainable. It is developing a culture of continuous improvement through training, standard work, and organizational alignment. We launched this imperative in July of last year with our manufacturing leaders, and in September, with our broader leadership team. You can see the significant progress we have made on the right of Slide No.

8. We have further defined the Integer production system, we have completed a lean diagnosis for more than half of our 15 manufacturing sites and all site-level key process indicators have been defined. The training for leaders and all associates to enhance our continuous improvement culture is in process and is expected to be completed at all sites by the end of this year. This training will establish the framework for driving a sustainable, continuous improvement culture.

The successful execution of this imperative will be the catalyst to achieve our goal of driving profitability at two times the rate of our sales growth. Let me now turn the call over to Jason to discuss our financial results. Afterwards, I will come back to provide some concluding remarks before opening the call for your questions. Jason?

Jason Garland -- Executive Vice President and Chief Financial Officer

Thank you, Joe. Good morning, everyone, and thank you again for joining our call. I'll start with the review of our first-quarter adjusted financial results. The strong first-quarter sales included the positive impact from signing the long-term agreement, resulting in 8% growth in the quarter.

Adjusted EBITDA was $66 million, and with strong leverage increased by 19% organically and 22% on a reported basis. This delivered $33 million of adjusted net income or $1 of adjusted earnings per diluted share, which is up $0.37 or 61% on a year-over-year reported basis. I provided some color on our adjusted net income growth. Please turn your attention to Slide 12.

Our reported first quarter adjusted net income increased $12 million year over year, up 61% on sales growth of 8%. This growth was driven by improved operational leverage on higher sales volume, SG&A expense management, and increased customer funding for research and development. In addition, we saw a favorable foreign exchange impact, we've reduced our interest expense and we lowered our adjusted effective tax rate from 22.8% to 17.3% in the first quarter of 2019. The interest expense improvement of $1 million was driven by our ongoing debt deleveraging and interest rate management.

Now we'll turn to a review of our product line sales results. To remind everyone, Slide 14 shows trailing four-quarter organic sales. We believe this is a more meaningful indicator of our growth trend and how we are performing in the market versus an individual quarter that may contain anomalies resulting from the timing of customer purchasing decisions. We continue to post positive trends in our core medical product line and expect positive growth trends in Electrochem in the second half of 2019.

Now let me turn to specific discussions for each product line. Moving to Slide 15, the Cardio & Vascular product line continues to drive strong organic top-line growth, increasing 12% year over year in the first quarter. First-quarter sales growth was driven by customer share gains, new product launches and includes the impact of the long-term agreement discussed earlier. Excluding the impact of that agreement, sales growth was consistent with the previous two quarters.

Electrophysiology and peripheral vascular continue to fuel growth, primarily due to catheter components. We expect above-market growth trends to continue, led by our arterial and neurovascular catheters and structural heart penetration, though electrophysiology will slow due to the maturing life cycle of a specific customer program On the next slide, sales in the cardiac and neuromodulation product line returned the growth of 7% in the first quarter. Excluding the previously mentioned long-term agreement, growth was still positive at low single digits. We expect neuromodulation growth to remain in the double-digit range, driven by spinal cord stimulation market and increasingly stronger revenue from early stage neuromodulation company.

It's important to point out that a significant portion of our growth is tied to our strategy of partnering with early stage neuro companies. We're working more than a dozen, some of which have already emerged from the clinical trial phase with approved devices. We expect these emerging growth companies to remain an integral part of our neuro growth story. Slide 17 shows the last part of our medical segment.

You'll recall in July 2018, Viant acquired our AS&O product line. The Advanced Surgical, Orthopedics & Portable Medical product line shown today includes sales under supply agreements with Viant. The first quarter was down to a difficult Portable Medical comparable, partially offset by a strong demand in orthopedic market. We expect renewed Portable Medical growth in the second half of 2019 and continued strong orthopedic product demand.

Finally, Slide 18 summarizes Electrochem, our nonmedical segment. Electrochem sales grew 7% in the first quarter, driven by a recovery from prior-year inventory reductions by energy customers and a new customer product launch. We expect our growth to accelerate in the second half from new customers, new product launches, and renewed military funding. Before summarizing our revised 2019 outlook, I'd like to share an action taken in April that improves our outlook for the year.

We remain diligent about managing our capital structure, paying down debt, and actively managing our interest rate risk. At the beginning of April, we took advantage of an inverted yield curve to reduce our exposure to variable interest rates. We lowered our interest expense from our prior forecast by executing a $400 million notional swap, which also reduced rate risk. We now have approximately two-thirds of our debt, with interest rates fixed through April 2020.

This 12-month horizon allows flexibility as we continue to evaluate our ongoing capital structure. This transition is one of the factors contributing to our ability to increase our full-year EPS guidance. Moving to Slide 21, we are raising both our sales and earnings guidance. Our first quarter was a strong start.

And as we think about the remainder of the year, the second quarter is the toughest comparable, while the third and fourth quarters are about average for the year. Our growth rate of 4% to 6% for the full year is unchanged. However, we raised the bottom end of our guidance range and now expect sales to be between $1,265,000,000 to $1,280,000,000. The $5 million increase in the bottom end of our range reflects the higher-than-expected impacts from the long-term agreement.

Our expectations for adjusted EBITDA remain unchanged with growth between 6% to 9%, which remains at one and a half times sales growth. With our lower interest expense as discussed and improved line of sight to our effective tax rate, we have increased our earnings per share by $0.10 from the previous guidance of $4.05 to $4.25 to a new range of $4.15 to $4.35, reflecting a growth of 9% to 14%, which is more than twice the rate of sales growth. We continue to make incremental investments, both in human and financial capital to deliver on this improved operating leverage. Turning to Slide 22, even though the first-quarter free cash flow of $11 million appears low, it was in line with our expectation and our full-year outlook remains intact.

The quarter included $3 million of payments specific to the first quarter, including annual bonuses and customer rebates. It was also impacted by the timing from increased accounts receivable on quarter -- higher quarter-end sales. For the full year, we continue to expect to generate $160 million to $170 million of cash flow from operations and $110 million to $120 million of free cash flow. We continue to expect slightly higher capital spending in the range of $50 million to $55 million as compared with $44 million spent in 2018.

This increase reflects our plan to invest more aggressively in our strategy to drive accelerated growth. In addition to higher capital spending, we continue to expect cash taxes to increase to $30 million -- $35 million, compared to $23 million spent in 2018, primarily attributable to the full use of the net operating loss carryforwards and deferred tax payment pertaining to the AS&O sale. Given this cash flow projection, we are maintaining our debt pay-down guidance of $105 million to $115 million in 2019, with debt leverage in the range of 2.5 to 3.5 times EBITDA, inclusive of potential bolt-on acquisitions. I'll now turn the call back to Joe for his final comments.

Joe Dziedzic -- President and Chief Executive Officer

Thanks, Jason. Our first quarter was a strong start to the year, and we are well-positioned to deliver on our increased 2019 guidance. I'm excited to say that our senior leadership team is now complete. In the last 16 months, we have added three new presidents, a new CFO, and a new chief human resources officer.

All three of the remaining original senior leaders from when I joined Integer have expanded their responsibilities meaningfully. Jen Bolt is now leading our manufacturing excellence strategic imperative across all 15 of our manufacturing sites. Tony Borowicz has added investor relations and strategy to his previous business development responsibilities, and Joe Flanagan has added Business Process Excellence leadership to his existing Quality and Regulatory responsibilities. I am confident we have built a leadership team that will execute our strategy to realize our vision of improving patients' lives, while delivering for our customers, associates and shareholders.

I want to publicly and personally thank Tony Gonzalez for his dedication and commitment to Integer over the past 14 years and more specifically, for his leadership of the CRMN product line for the past three and a half years. Tony stepped into an extremely challenging customer and operating environment and has both developed and deepened customer relationships in a way that would be felt for many years to come. Tony exemplifies customer focus and will be missed. Tony will remain available for the rest of this year to ensure a smooth transition for customers, for Joel and the CRMN team.

We wish Tony the best in the next phase of his personal and professional life. In closing, I am confident we have the product line and operational strategy and the leadership team in place to deliver on our clear financial objectives to earn a valuation premium for our shareholders. Thank you. I will now turn the call back over to the moderator to facilitate the Q&A.


Questions & Answers:


Thank you. [Operator instructions] And your first question comes from the line of Matthew Mishan with KeyBanc. Please go ahead.

Matthew Mishan -- KeyBanc Capital Markets -- Analyst

Great. Thanks for taking the questions.

Joe Dziedzic -- President and Chief Executive Officer

Good morning, Matt.

Matthew Mishan -- KeyBanc Capital Markets -- Analyst

Hey. Good morning, Joes. What was the -- let's start with the long-term agreement. What was the impact of the agreement to EBITDA and net income in the quarter? How does that $11.7 million kind of flow through?

Joe Dziedzic -- President and Chief Executive Officer

So, we look at that as really flowing through at our average rates for the year. They'll be in line with that as the contract flows through the P&L.

Matthew Mishan -- KeyBanc Capital Markets -- Analyst

But for the quarter, like, what did the $11.7 million contribute to EBITDA net income for the quarter?

Joe Dziedzic -- President and Chief Executive Officer

Fairly low, fairly marginal impact. Again, the contract, as it flows through the year, will be at our average rates. But for the first quarter, where we get a little bit less profitability due to the fact that we're getting revenue on the work we perform through the process. But look, it's -- in the end, we see this does an extremely positive sign for us.

Again, a great example of the deepening relationship we're getting with our customers, and it's where we want to continue to drive our focus.

Matthew Mishan -- KeyBanc Capital Markets -- Analyst

OK. So there were costs associated with that in the quarter, like minimal impact on EBITDA net income?

Joe Dziedzic -- President and Chief Executive Officer


Matthew Mishan -- KeyBanc Capital Markets -- Analyst

OK. Excellent. And then as you've gone through and conducted the lean diagnosis, are there common issues you're finding in the plans? Is there a low-hanging fruit in certain areas?

Joe Dziedzic -- President and Chief Executive Officer

Absolutely, Matt. There's a wide range of operating opportunities in each of our sites. We -- last summer, or the first half of 2018, Jen led an assessment of all of our 15 operating -- 15 manufacturing sites. And there were absolutely themes that came through in that assessment.

As you can imagine, some sites are more sophisticated, more developed in their application of lean practices than others. And that ultimately, what we're driving for is a very consistent, standardized, approach to how we run our manufacturing plants. We've laid out a very clear strategy. It's about a two-and-a-half-year plan to implement our Integer production system across all of our 15 sites where we're going to end up with the 16 core manufacturing process elements or Integer production system elements will be performed the same way across all of our sites.

So the impact of implementing the Integer production system will vary across the sites, but one thing we know is ultimately, it will lead to excellence in safety, quality, on-time delivery and efficiencies. And we have to be excellent at all four of those to deliver for patients, for our customers and, ultimately, for shareholders through the efficiency measure. So there's opportunity in every site. We're about 8 sites into the lean diagnosis process.

And the results are meaningful. When you look at our 2019 guidance, we're showing EBITDA growth that's one and a half time the sales growth. So we've got 6% to 9% EBITDA growth on 4% to 6% sales growth. That's a direct result of the early, early contributions of the manufacturing excellence strategic imperative.

As we look out into the future, 2020 and beyond, a critical -- the most important element of our strategy that's going to get us to growing profit at twice the rate of sales is the manufacturing excellence strategy. That's exactly why Jen is being freed up to focus 100% of her time on driving this imperative.

Matthew Mishan -- KeyBanc Capital Markets -- Analyst

OK. And then you've seen some deceleration in neuromodulation growth from some of your customers. Could you comment a little bit on what you guys are seeing? I mean, it was really interesting to hear that you're seeing increasingly strong revenue from early stage neuromodulation. Are you seeing some of the private guys come in and maybe take some share?

Joe Dziedzic -- President and Chief Executive Officer

Well, first, let me start with we're obviously watching and hearing all the results for the first quarter. And our view, I, think is quite consistent with everything we -- you've heard from our customers, in that the long-term prospects for neuromodulation remain very positive. No one's view has changed on that. There's so much investment in new therapies that creates more opportunities to help patients with neuromodulation.

We don't see any difference in the long-term prospects. Growth is not linear in any company, in any industry, with any technology. So as we look at neuro and you think about Integer for neuro, you have to consider our portfolio. We serve the big players that we're hearing the news from.

We also serve the emerging companies that already have product and commercialization. But we also have a strong portfolio of early stage companies that we're working with on designs, prototype, development clinical trials and right now we're experiencing in some growth in some of those early stage companies where they're getting through their trial, their clinical trials and starting to commercialize. And so when you look at our total portfolio, we see double-digit growth neuro for as far as we can look. And we're not dependent upon any one or a few players, we have a, nice strong, diverse mix of players that we're serving in the market.

Matthew Mishan -- KeyBanc Capital Markets -- Analyst

OK. And the last one, and then I'll just jump in -- good.

Joe Dziedzic -- President and Chief Executive Officer

I'll add one more thing, Matt. As we look at what we were planning for neuro at the beginning of the year and late last year for 2019, we're actually slightly ahead when we look at our forecast for the year and what we were expecting going in -- exiting last year and entering this year.

Matthew Mishan -- KeyBanc Capital Markets -- Analyst

All right, that's very helpful. And then last one, and then I'll jump back in the queue. You were talking a little bit about M&A last quarter. What does the pipeline look like for M&A? And how active are you in that at this point?

Joe Dziedzic -- President and Chief Executive Officer

It's incredibly active, and it's a long list of opportunities. I'll just reiterate what we talked about on the last call. We are not looking for revenue. We are not acquiring to get scale.

We're looking for very specific targeted technologies and capability that will allow us to accelerate the penetration into the faster-growing markets that we're targeting. So we're looking at very specific technologies. In some cases, we're knocking on doors that aren't for sale because we're looking for specific capabilities that will help us penetrate the faster growing markets. It's a long list.

We've been very focused on it. There's a number of opportunities in the pipeline. We're hopeful that we can get something done soon. It's critical to our longer-term growth.

At this point, [Inaudible]

Matthew Mishan -- KeyBanc Capital Markets -- Analyst


Joe Dziedzic -- President and Chief Executive Officer

Thanks, Matt.


And your next question comes from the line of Jim Sidoti with Sidoti & Company. Please go ahead.

Jim Sidoti -- Sidoti and Company -- Analyst

Great. Great. So, back to the signing of the agreement and that $11 million boost in the quarter. Will that impact your second, third, and fourth quarters? Should those numbers come down a little because you recognized that revenue in the first quarter?

Joe Dziedzic -- President and Chief Executive Officer

No, Jim. That lumpiness is what we saw -- the lumpiness we saw in the first quarter is really the transition to this new contract, and we don't expect any meaningful variation to the future quarters as related to that.

Jim Sidoti -- Sidoti and Company -- Analyst

OK. And then one more on that. I saw your accounts receivable kind of ticked up a little bit. Is that import due to the -- recognizing of that net revenue?

Joe Dziedzic -- President and Chief Executive Officer

No, actually, we classified that in prepaid, so that's there. I mean, we've got several things going on with AR, but I mentioned it on -- just a minute ago that if you look at our first quarter, we ended up with a dynamic where we started off a little bit slow and we ended up with a lot of sales in the back half. And so, of course, as you know, that's going to cycle through collections within the period. So you've got that dynamic as well.

So no, that's actually sitting in a different account.

Jim Sidoti -- Sidoti and Company -- Analyst

OK. And then you mentioned Portable Medical is now in the Invest to Grow category or product line. Does that mean new product development, acquisitions, or improvement in manufacturing efficiencies [Inaudible]

Joe Dziedzic -- President and Chief Executive Officer

Jim, great question. So when we went through our strategy process in the second half of 2017, one of the things we identified was our Portable Medical business. The way we're being managed, we had design and development and the sales commercial marketing side run by one of our presidents, and in the manufacturing and supply chain, it was managed by a different President. And so we put the business together in late 2017.

And what was clear to us is' we were under -- we were not capitalizing on the growth opportunities in the end markets that we're serving, whether it's the cardiac assist or hearing therapy emergency care and resuscitation end markets. And when we look at the profitability of the business, quite frankly, it was unacceptable. The profitability was well below anything that we would accept and not generating acceptable returns. So we asked Jen to step in and take over that business.

She's done a phenomenal job of leading the team to streamlining the organization, removing the redundancies and driving really quite frankly, some of the strategic imperative elements into that business on an accelerated manner. And so we improved the profitability to the point now where we can focus on that growth, where we have operations that are capable of absorbing growth. And so now we're shifting the focus in that business from purely improvement in driving increased yields and better on-time delivery and serving customers. Now the business is ready to absorb growth.

So it's -- right now, we're looking at organic growth, Jim. There's lots of opportunities with the customers that we're serving. They look to us as a company that has the depth and capability and scale. We have an operation in a low-cost country that allows us to very competitive in the space.

So we're looking at organic growth and so we're making investments to accelerate that growth quite organically because the opportunity is there and that'll generate the best returns for us.

Jim Sidoti -- Sidoti and Company -- Analyst

All right. Thank you.


[Operator instructions] And there are no further questions in the queue. I turn the call back over to the presenters.

Tony Borowicz -- Senior Vice President, Strategy, Corporate Development, and Investor Relations

Thank you, everyone, for joining us on the call today. We stand by ready to answer any follow-up questions. Again, thanks for your attendance.


[Operator signoff]

Duration: 34 minutes

Call participants:

Tony Borowicz -- Senior Vice President, Strategy, Corporate Development, and Investor Relations

Joe Dziedzic -- President and Chief Executive Officer

Jason Garland -- Executive Vice President and Chief Financial Officer

Matthew Mishan -- KeyBanc Capital Markets -- Analyst

Jim Sidoti -- Sidoti and Company -- Analyst

More ITGR analysis

All earnings call transcripts