-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B1KrWN/WSH5EJ2lV45W7SW+6Sn3YlswKHwilx57ct/uusL7yoADQs5nE3EPEAT5j 67AzM3rUHlTeRJ/1gauE5A== 0000893220-00-000625.txt : 20000511 0000893220-00-000625.hdr.sgml : 20000511 ACCESSION NUMBER: 0000893220-00-000625 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000326 FILED AS OF DATE: 20000510 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELEFLEX INC CENTRAL INDEX KEY: 0000096943 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 231147939 STATE OF INCORPORATION: DE FISCAL YEAR END: 1227 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05353 FILM NUMBER: 623886 BUSINESS ADDRESS: STREET 1: 630 W GERMANTOWN PK STE 450 STREET 2: SUITE 450 CITY: PLYMOUTH MEETING STATE: PA ZIP: 19462 BUSINESS PHONE: 2158346301 MAIL ADDRESS: STREET 1: 630 WEST GERMANTOWN PIKE STREET 2: SUITE 450 CITY: PLYMOUTH MEETING STATE: PA ZIP: 19462 10-Q 1 QUARTERLY REPORT OF TELEFLEX INCORPORATED 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 10-Q [X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 26, 2000 OR [ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ____________ COMMISSION FILE NUMBER 1-5353 TELEFLEX INCORPORATED (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 23-1147939 -------------------- ------------------------------------- (STATE OF INCORPORATION) (IRS EMPLOYER IDENTIFICATION NUMBER) 630 WEST GERMANTOWN PIKE, SUITE 450 PLYMOUTH MEETING, PA 19462 - -------------------------------------------- ------------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
(610) 834-6301 ------------------------------------------------ (TELEPHONE NUMBER INCLUDING AREA CODE) NONE ------------------------------------------------ (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No Indicate the number of shares outstanding of each of the issuer's classes of Common Stock as of the latest practicable date.
CLASS OUTSTANDING AT MARCH 26, 2000 - -------------------------------------------- ----------------------------- Common Stock, $1.00 Par Value 38,117,043
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 TELEFLEX INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEET -------------------------------------------------------- (DOLLARS IN THOUSANDS)
MAR. 26, DEC. 26, 2000 1999 ---------- ---------- ASSETS - -------------------------------------------------------------------------------------- Current assets Cash and cash equivalents................................. $ 35,534 $ 29,040 Accounts receivable less allowance for doubtful accounts............................................... 353,255 324,629 Inventories............................................... 238,064 227,486 Prepaid expenses.......................................... 22,186 23,785 ---------- ---------- 649,039 604,940 Property, plant and equipment, at cost, less accumulated depreciation.............................................. 473,123 465,901 Investments in affiliates................................... 51,722 55,749 Intangibles and other assets................................ 171,105 136,854 ---------- ---------- $1,344,989 $1,263,444 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY - -------------------------------------------------------------------------------------- Current liabilities Current portion of borrowings and demand loans............ $ 110,452 $ 98,500 Accounts payable and accrued expenses..................... 225,320 204,582 Income taxes payable...................................... 31,571 26,330 ---------- ---------- 367,343 329,412 Long-term borrowings........................................ 267,989 246,191 Deferred income taxes and other............................. 87,182 85,277 ---------- ---------- 722,514 660,880 Shareholders' equity........................................ 622,475 602,564 ---------- ---------- $1,344,989 $1,263,444 ========== ==========
F-1 3 TELEFLEX INCORPORATED CONDENSED CONSOLIDATED STATEMENT OF INCOME - ------------------------------------------------------------------------------- (DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE)
THREE MONTHS ENDED -------------------- MAR. 26, MAR. 28, 2000 1999 -------- -------- Revenues.................................................... $427,590 $392,190 -------- -------- Cost of sales............................................... 306,178 281,239 Operating expenses.......................................... 76,416 72,020 Interest expense............................................ 5,034 4,316 -------- -------- 387,628 357,575 -------- -------- Income before taxes......................................... 39,962 34,615 Provision for taxes on income............................... 13,148 11,561 -------- -------- Net income.................................................. $ 26,814 $ 23,054 ======== ======== Earnings per share Basic..................................................... $ 0.70 $ 0.61 Diluted................................................... $ 0.70 $ 0.60 Dividends per share......................................... $ 0.130 $ 0.115 Average number of common and common equivalent shares outstanding Basic..................................................... 38,096 37,637 Diluted................................................... 38,415 38,390
F-2 4 TELEFLEX INCORPORATED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - -------------------------------------------------------------------------------- (DOLLARS IN THOUSANDS)
THREE MONTHS ENDED -------------------- MAR. 26, MAR. 28, 2000 1999 -------- -------- Cash flows from operating activities: Net income................................................ $ 26,814 $ 23,054 Adjustments to reconcile net income to cash flows from operating activities: Depreciation and amortization.......................... 18,091 15,880 (Increase) in accounts receivable...................... (25,090) (36,284) (Increase) in inventory................................ (4,550) (1,117) Decrease (increase) in prepaid expenses................ 1,761 (1,844) Increase in accounts payable and accrued expenses...... 14,918 9,160 Increase in income taxes payable....................... 4,716 6,123 -------- -------- 36,660 14,972 -------- -------- Cash flows from financing activities: Proceeds from new borrowings.............................. 28,000 7,000 Reduction in long-term borrowings......................... (2,236) (2,219) Increase in current borrowings and demand loans........... 13,642 4,944 Proceeds from stock compensation plans.................... 1,258 533 Dividends................................................. (4,835) (4,328) -------- -------- 35,829 5,930 -------- -------- Cash flows from investing activities: Expenditures for plant assets............................. (19,793) (21,208) Payments for businesses acquired.......................... (48,548) (7,652) Investments in affiliates................................. 191 (8,238) Other..................................................... 2,155 (2,103) -------- -------- (65,995) (39,201) -------- -------- Net increase (decrease) in cash and cash equivalents........ 6,494 (18,299) Cash and cash equivalents at the beginning of the period.... 29,040 66,689 -------- -------- Cash and cash equivalents at the end of the period.......... $ 35,534 $ 48,390 ======== ========
F-3 5 TELEFLEX INCORPORATED STATEMENT OF COMPREHENSIVE INCOME - --------------------------------------------------------------------------------
THREE MONTHS ENDED -------------------- MAR. 26, MAR. 28, 2000 1999 -------- -------- Net income.................................................. $26,814 $23,054 Unrealized holding gain..................................... 235 -- Cumulative translation adjustment........................... (3,915) (2,507) ------- ------- Comprehensive income........................................ $23,134 $20,547 ======= =======
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- NOTE 1 The accompanying unaudited condensed consolidated financial statements for the three months ended March 26, 2000 and March 28, 1999 contain all adjustments, consisting only of normal recurring adjustments, which in the opinion of management are necessary to present fairly the financial position, results of operations and cash flows for the periods then ended in accordance with the current requirements for Form 10-Q. NOTE 2 At March 26, 2000, 2,296,514 shares of common stock were reserved for issuance under the company's stock compensation plans. NOTE 3 Inventories consisted of the following:
MAR. 26, DEC. 26, 2000 1999 -------- -------- Raw materials............................................... $ 90,728 $ 84,490 Work-in-process............................................. 43,807 38,690 Finished goods.............................................. 103,529 104,306 -------- -------- $238,064 $227,486 ======== ========
F-4 6 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) - ----------------------------------------------------------------------------- NOTE 4 BUSINESS SEGMENT INFORMATION:
THREE MONTHS ENDED -------------------- MAR. 26, MAR. 28, PERCENT 2000 1999 CHANGE -------- -------- ------- Sales Commercial................................................ $218,816 $184,496 19% Medical................................................... 95,506 88,557 8% Aerospace................................................. 113,268 119,137 -5% -------- -------- Total.............................................. $427,590 $392,190 9% ======== ======== Operating Profit Commercial................................................ $ 24,488 $ 19,619 25% Medical................................................... 12,209 10,303 18% Aerospace................................................. 12,681 13,268 -4% -------- -------- 49,378 43,190 14% -------- -------- Less: Interest expense.......................................... 5,034 4,316 17% Corporate expenses........................................ 4,382 4,259 3% -------- -------- Income before taxes......................................... 39,962 34,615 15% Taxes on income............................................. 13,148 11,561 14% -------- -------- Net income.................................................. $ 26,814 $ 23,054 16% ======== ========
MANAGEMENT'S ANALYSIS OF QUARTERLY FINANCIAL DATA - ---------------------------------------------------------------------------- RESULTS OF OPERATIONS: Revenues increased 9% in the first quarter of 2000 to $427.6 million from $392.2 million in 1999. Approximately one-half of the growth was the result of acquisitions while the balance was generated internally. Sales increased in the Commercial and Medical segments by 19% and 8%, respectively, while the Aerospace Segment decreased by 5%. The Commercial, Medical and Aerospace segments comprised 51%, 22% and 27% of the company's net sales, respectively. The gross profit margin increased slightly to 28.4% in 2000 compared with 28.3% in 1999. The increase was due to higher gross profit margins in each of the three segments offset by reduction in the mix of sales in the Medical segment, which has higher gross profit margin relative to the other two segments. Operating expenses as a percentage of sales decreased to 17.9% in 2000 compared with 18.4% in 1999 resulting primarily from the reduction in the mix of Medical Segment sales. Operating profit increased 14% in the first quarter from $43.2 million in 1999 to $49.4 million in 2000 resulting from gains in Commercial and Medical offset by a slight decline in Aerospace. Operating margin increased from 11.0% in 1999 to 11.5% in 2000 as a result of increases in the Commercial and Medical segments. The Commercial, Medical and Aerospace segments comprised 49%, 25% and 26% of the company's operating profit, respectively. Net income and diluted earnings per share for the quarter were $26.8 million and $0.70, which represent increases of 16% and 17%, respectively, compared with 1999. Interest expense increased in 2000 as a result of an increase in average debt and slightly higher interest rates. The effective income tax rate was 32.9% in 2000 compared with 33.4% in 1999. The decline resulted from a higher proportion of income in 2000 earned in countries with relatively lower tax rates. F-5 7 INDUSTRY SEGMENT REVIEW: - ------------------------ Sales in the Commercial Segment gained 19% from $184.5 million in 1999 to $218.8 million in 2000 resulting from increases in all three product lines, Automotive, Marine and Industrial. New products, such as the adjustable pedal, and increased market share coupled with the continued strength of the domestic automotive market contributed to the gain. Operating profit increased 25% from $19.6 million in 1999 to $24.5 million in 2000 as a result of the sales increase. Operating margin improved from 10.6% to 11.2% primarily from an increase in the Automotive product line. The Medical Segment sales increased 8% from $88.6 million in 1999 to $95.5 million in 2000 from gains in both the Hospital Supply and Surgical Devices product lines. The gains were the result of growth in core product offerings and two acquisitions designed to add additional products and distribution channels. Operating profit increased 18% from $10.3 million to $12.2 million from the sales increases. Operating margin improved to 12.8% from 11.6% due to a combination of increased sales of higher margin products and cost reductions. The Aerospace Segment sales decreased 5% from $119.1 million in 1999 to $113.3 million in 2000 primarily from a decline in manufactured components, which offset gains in cargo systems and turbo-machinery. Operating profit decreased 4% as a result of the sales decline in manufactured components. Operating margin was relatively flat as an improved product mix in the repairs product line, along with cost reduction efforts, helped to offset the volume-based decline in manufactured components. CASH FLOWS FROM OPERATIONS AND LIQUIDITY: - ----------------------------------------- Cash flows from operating activities increased $21.7 million to $36.7 million during the quarter ended March 26, 2000 due to working capital improvements, as well as higher net income and depreciation. Long-term borrowings increased by $21.8 million to $268.0 million at March 26, 2000 as compared to $246.2 million at December 26, 1999. The increase was due to borrowings incurred to finance acquisitions offset by declines from currency exchange rate changes. This increase in long-term borrowings resulted in an increase in the ratio of long-term borrowings to total capitalization from 29% at December 26, 1999 to 30% at March 26, 2000. FORWARD-LOOKING STATEMENTS: - --------------------------- This quarterly report includes the company's current plans and expectations and is based on information available to it. It relies on a number of assumptions and estimates which could be inaccurate and which are subject to risks and uncertainties. F-6 8 PART II OTHER INFORMATION ------------------------------------ ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------------------------------------------- (A) Reports on form 8-K. No reports on form 8-K were filed during the quarter. II-1 9 TELEFLEX INCORPORATED SIGNATURES ------------------ Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TELEFLEX INCORPORATED /s/ HAROLD L. ZUBER, JR. -------------------------------------- Harold L. Zuber, Jr. Vice President and Chief Financial Officer /s/ STEPHEN J. GAMBONE -------------------------------------- Stephen J. Gambone Controller and Chief Accounting Officer May 8, 2000 II-2 EX-27 2 FINANCIAL DATA SCHEDULE FOR TELEFLEX CORPORATION
5 1,000 3-MOS DEC-31-2000 DEC-27-1999 MAR-26-2000 35,534 0 353,255 0 238,064 649,039 783,067 309,944 1,344,989 367,343 267,989 0 0 38,117 584,358 1,344,989 427,590 427,590 306,178 306,178 76,416 0 5,034 39,962 13,148 26,814 0 0 0 26,814 .70 .70
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