-----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, TD8pW9vU6Li4Ee6E3sRJSBrKOundw//+8K88AXyRDNcyvCjHjH0TLJZ/INtnwtWy 5DLmp5NM4r/n2a423sFW2w== /in/edgar/work/20000731/0000893220-00-000903/0000893220-00-000903.txt : 20000921 0000893220-00-000903.hdr.sgml : 20000921 ACCESSION NUMBER: 0000893220-00-000903 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000625 FILED AS OF DATE: 20000731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELEFLEX INC CENTRAL INDEX KEY: 0000096943 STANDARD INDUSTRIAL CLASSIFICATION: [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: 681843 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 e10-q.txt FORM 10-Q FOR 6/25/2000 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 JUNE 25, 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 JUNE 25, 2000 - -------------------------------------------- ---------------------------- Common Stock, $1.00 Par Value 38,210,112
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 TELEFLEX INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEET ------------------------------------ (DOLLARS IN THOUSANDS)
JUNE 25, DEC. 26, 2000 1999 ---------- ---------- ASSETS - -------------------------------------------------------------------------------------- Current assets Cash and cash equivalents................................. $ 21,001 $ 29,040 Accounts receivable less allowance for doubtful accounts............................................... 341,877 324,629 Inventories............................................... 253,203 227,486 Prepaid expenses.......................................... 25,456 23,785 ---------- ---------- 641,537 604,940 Property, plant and equipment, at cost, less accumulated depreciation.............................................. 483,640 465,901 Investments in affiliates................................... 48,036 55,749 Intangibles and other assets................................ 194,019 136,854 ---------- ---------- $1,367,232 $1,263,444 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY - -------------------------------------------------------------------------------------- Current liabilities Current portion of borrowings and demand loans............ $ 92,705 $ 98,500 Accounts payable and accrued expenses..................... 238,548 204,582 Income taxes payable...................................... 34,755 26,330 ---------- ---------- 366,008 329,412 Long-term borrowings........................................ 261,182 246,191 Deferred income taxes and other............................. 95,544 85,277 ---------- ---------- 722,734 660,880 Shareholders' equity........................................ 644,498 602,564 ---------- ---------- $1,367,232 $1,263,444 ========== ==========
F-1 3 TELEFLEX INCORPORATED CONDENSED CONSOLIDATED STATEMENT OF INCOME --------------------------------------------------- (DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE)
THREE MONTHS ENDED SIX MONTHS ENDED -------------------- -------------------- JUNE 25, JUNE 27, JUNE 25, JUNE 27, 2000 1999 2000 1999 -------- -------- -------- -------- Revenues........................................ $465,553 $421,126 $893,143 $813,316 -------- -------- -------- -------- Cost of sales................................... 331,840 299,725 638,018 580,964 Operating expenses.............................. 84,714 77,608 161,130 149,628 Interest expense................................ 5,427 4,501 10,461 8,817 -------- -------- -------- -------- 421,981 381,834 809,609 739,409 -------- -------- -------- -------- Income before taxes............................. 43,572 39,292 83,534 73,907 Provision for taxes on income................... 14,248 13,438 27,396 24,999 -------- -------- -------- -------- Net income...................................... $ 29,324 $ 25,854 $ 56,138 $ 48,908 ======== ======== ======== ======== Earnings per share Basic......................................... $ 0.77 $ 0.69 $ 1.47 $ 1.30 Diluted....................................... $ 0.76 $ 0.67 $ 1.46 $ 1.27 Dividends per share............................. $ 0.150 $ 0.130 $ 0.280 $ 0.245 Average number of common and common equivalent shares outstanding Basic......................................... 38,180 37,743 38,138 37,690 Diluted....................................... 38,624 38,528 38,519 38,459
F-2 4 TELEFLEX INCORPORATED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ---------------------------------------------- (DOLLARS IN THOUSANDS)
SIX MONTHS ENDED --------------------- JUNE 25, JUNE 27, 2000 1999 --------- -------- Cash flows from operating activities: Net income................................................ $ 56,138 $ 48,908 Adjustments to reconcile net income to cash flows from operating activities: Depreciation and amortization.......................... 37,561 32,567 (Increase) in accounts receivable...................... (13,304) (39,932) (Increase) in inventory................................ (6,945) (3,892) (Increase) in prepaid expenses......................... (1,233) (2,633) Increase in accounts payable and accrued expenses...... 12,783 9,966 Increase (decrease) in income taxes payable............ 4,809 (150) --------- -------- 89,809 44,834 --------- -------- Cash flows from financing activities: Proceeds from new borrowings.............................. 28,000 32,999 Reduction in long-term borrowings......................... (9,820) (21,160) Increase in current borrowings and demand loans........... 1,765 5,748 Proceeds from stock compensation plans.................... 3,532 2,408 Dividends................................................. (10,684) (9,253) --------- -------- 12,793 10,742 --------- -------- Cash flows from investing activities: Expenditures for plant assets............................. (39,385) (40,690) Payments for businesses acquired.......................... (67,679) (39,445) Investments in affiliates................................. (2,988) (8,946) Other..................................................... (589) (833) --------- -------- (110,641) (89,914) --------- -------- Net (decrease) in cash and cash equivalents................. (8,039) (34,338) Cash and cash equivalents at the beginning of the period.... 29,040 66,689 --------- -------- Cash and cash equivalents at the end of the period.......... $ 21,001 $ 32,351 ========= ========
F-3 5 TELEFLEX INCORPORATED STATEMENT OF COMPREHENSIVE INCOME ---------------------------------
THREE MONTHS ENDED SIX MONTHS ENDED ------------------- ------------------- JUNE 25, JUNE 27, JUNE 25, JUNE 27, 2000 1999 2000 1999 -------- -------- -------- -------- Net income............................................. $29,324 $ 25,854 $ 56,138 $48,908 Unrealized holding gain................................ 1,005 -- 1,240 -- Cumulative translation adjustment...................... (3,960) (584) (7,875) (3,091) ------- -------- -------- ------- Comprehensive income................................... $26,369 $ 25,270 $ 49,503 $45,817 ======= ======== ======== =======
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - ------------------------------------------------------------------------------- NOTE 1 The accompanying unaudited condensed consolidated financial statements for the three months and six months ended June 25, 2000 and June 27, 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 June 25, 2000, 6,200,464 shares of common stock were reserved for issuance under the company's stock compensation plans. NOTE 3 Inventories consisted of the following:
JUNE 25, DEC. 26, 2000 1999 -------- -------- Raw materials............................................... $100,041 $ 84,490 Work-in-process............................................. 44,073 38,690 Finished goods.............................................. 109,089 104,306 -------- -------- $253,203 $227,486 ======== ========
F-4 6 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) - -------------------------------------------------------------------------------- NOTE 4 BUSINESS SEGMENT INFORMATION:
THREE MONTHS ENDED SIX MONTHS ENDED -------------------- -------------------- JUNE 25, JUNE 27, PERCENT JUNE 25, JUNE 27, PERCENT 2000 1999 CHANGE 2000 1999 CHANGE -------- -------- ------- -------- -------- ------- Sales Commercial.................. $241,398 $204,301 18% $460,214 $388,797 18% Medical..................... 105,376 94,395 12% 200,882 182,952 10% Aerospace................... 118,779 122,430 -3% 232,047 241,567 -4% -------- -------- -------- -------- Total................ $465,553 $421,126 11% $893,143 $813,316 10% ======== ======== ======== ======== Operating profit Commercial.................. $ 26,273 $ 22,072 19% $ 50,761 $ 41,691 22% Medical..................... 14,839 12,952 15% 27,048 23,255 16% Aerospace................... 12,457 13,294 -6% 25,138 26,562 -5% -------- -------- -------- -------- 53,569 48,318 11% $102,947 91,508 13% -------- -------- -------- -------- Less: Interest expense............ 5,427 4,501 21% 10,461 8,817 19% Corporate expenses.......... 4,570 4,525 1% 8,952 8,784 2% -------- -------- -------- -------- Income before taxes........... 43,572 39,292 11% 83,534 73,907 13% Taxes on income............... 14,248 13,438 6% 27,396 24,999 10% -------- -------- -------- -------- Net income.................... $ 29,324 $ 25,854 13% $ 56,138 $ 48,908 15% ======== ======== ======== ========
MANAGEMENT'S ANALYSIS OF QUARTERLY FINANCIAL DATA - -------------------------------------------------------------------------------- RESULTS OF OPERATIONS: - ---------------------- Revenues increased 11% in the second quarter of 2000 to $465.6 million from $421.1 million in 1999. The growth was almost equally split between core business expansion and acquisitions. Sales increased in the Commercial and Medical segments by 18% and 12%, respectively, offsetting a 3% decline in Aerospace. The Commercial, Medical and Aerospace segments comprised 52%, 23% and 25% of the company's net sales, respectively. The gross profit margin decreased slightly to 28.7% in 2000 compared with 28.8% in 1999. The decrease was due to an improvement in Commercial that was more than offset by declines in Medical and Aerospace. Operating expenses as a percentage of sales decreased to 18.2% in 2000 compared with 18.4% in 1999 resulting primarily from a decrease in Medical which offset increases in the Commercial and Aerospace segments. Operating profit increased 11% in the second quarter from $48.3 million in 1999 to $53.6 million in 2000 resulting from gains in the Commercial and Medical segments which compensated for a decline in the Aerospace Segment. Operating margin was constant at 11.5%. The Commercial, Medical and Aerospace segments comprised 49%, 28% and 23% of the company's operating profit, respectively. Interest expense increased in 2000 from borrowings incurred to finance acquisitions and an increase in interest rates. The effective income tax rate was 32.7% in 2000 compared with 34.2% in 1999. The decline resulted from a higher proportion of income in 2000 earned in countries with relatively lower tax rates. Net income and diluted earnings per share for the quarter were $29.3 million and $0.76, which represents a 13% increase for both compared with 1999. F-5 7 INDUSTRY SEGMENT REVIEW: - ------------------------ Sales in the Commercial Segment increased 18% from $204.3 million in 1999 to $241.4 million in 2000, resulting from strong OEM markets, new product offerings and enhanced market share. Operating profit increased from $22.1 million in 1999 to $26.3 million in 2000 and operating margin increased slightly from 10.8% to 10.9%. Automotive, Marine and Industrial product lines all reported increases in operating profit with the most significant reason being improved volume in the domestic automotive business. The volume improvement advanced Automotive operating margin enough to compensate for a margin decline in Marine and Industrial. The Marine margin declined as investment in product development increased while Industrial was tempered by recent acquisitions. The Medical Segment sales increased 12% from $94.4 million in 1999 to $105.4 million in 2000 due to gains in both the Hospital Supply and Surgical Devices product lines. Approximately two-thirds of the increase can be attributed to acquisitions, primarily in Hospital Supply. Operating profit increased 15% from $13.0 million to $14.8 million, while operating margin increased to 14.1% from 13.7% resulting from gains in operational efficiency and improved product mix. The Aerospace Segment sales decreased 3% from $122.4 million in 1999 to $118.8 million in 2000 from a decline in the manufactured components product line which more than offset the growth in the other product lines -- cargo handling systems, coatings and repairs. Operating profit decreased 6% and margins declined from 10.9% to 10.5% due to the drop in manufactured components sales volume. CASH FLOWS FROM OPERATIONS AND LIQUIDITY: - ----------------------------------------- Cash flow from operations more than doubled to $89.8 million. An emphasis on working capital management, especially accounts receivable, was instrumental in enhancing internal cash generation relative to the same period in 1999. All three segments contributed to the increase. Long-term borrowings increased from $261.2 million at June 25, 2000 as compared with $246.2 million at December 26, 1999 due to additional borrowings to finance recent acquisitions. The ratio of long-term borrowings to total capitalization was 29% on June 25, 2000, remaining unchanged from the December 26, 1999 figure. 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 TELEFLEX INCORPORATED PART II OTHER INFORMATION ------------------------- ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------------------------------------------------------------ The company's 2000 Annual Meeting of Shareholders was held on April 28, 2000. At the meeting, shareholders approved the 2000 Stock Compensation Plan as detailed in the Form S-8 filed with the Securities and Exchange Commission on May 31, 2000. A total of 27,298,111 shares were voted in favor of the plan, 2,205,757 shares opposed and 157,873 shares abstained. At the Annual Meeting, the following were elected to the Board of Directors of the Company for a term expiring in 2003:
NAME VOTES FOR WITHHELD - ---- ---------- -------- Sigismundus W.W. Lubsen..................................... 33,814,272 507,855 Palmer E. Retzlaff.......................................... 33,742,760 579,367
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. F-7 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 July 27, 2000 F-8 EX-27 2 ex27.txt FINANCIAL DATA SCHEDULE
5 1,000 US DOLLAR 3-MOS DEC-31-2000 MAR-27-2000 JUN-25-2000 1 21,001 0 341,877 0 253,203 641,537 802,885 319,245 1,367,232 366,008 261,182 0 0 38,210 606,288 1,367,232 465,553 465,553 331,840 331,840 84,714 0 5,427 43,572 14,248 29,324 0 0 0 29,324 .77 .76
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