-----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, L++ULtdcZAeA1IGyygj5SJ/jIDYVRUGYEcE4dzp0LNOsi3GU7bvAe7STGFSJw9A8 +s7iSdUi9JG8Hryn41Ia+A== 0000893220-02-000311.txt : 20020415 0000893220-02-000311.hdr.sgml : 20020415 ACCESSION NUMBER: 0000893220-02-000311 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020327 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-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05353 FILM NUMBER: 02587364 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-K 1 w58094e10-k.txt TELEFLEX, INCORPORATED FORM 10-K - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 30, 2001 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 NO. 1-5353 ------------------------ TELEFLEX INCORPORATED (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 23-1147939 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
630 WEST GERMANTOWN PIKE, SUITE 450, PLYMOUTH MEETING, 19462 PENNSYLVANIA (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Registrant's telephone number, including area code: (610) 834-6301 Securities registered pursuant to Section 12(b) of the Act: Common Stock, par value $1 per share -- New York Stock Exchange Preference Stock Purchase Rights -- New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] 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. YES X NO The aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $1,585,677,311 as of February 1, 2002. The registrant had 38,958,059 Common Shares outstanding as of February 1, 2002. Documents Incorporated by Reference: (a) Annual Report to Shareholders for the fiscal year ended December 30, 2001, incorporated partially in Part I and Part II hereof; and (b) Proxy Statement for the 2002 Annual Meeting of Shareholders, incorporated partially in Part III hereof. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART I ITEM 1. BUSINESS Teleflex Incorporated ("the Company") was incorporated in 1943 as a manufacturer of precision mechanical push/pull controls for military aircraft. From this original single market, single product orientation, the Company began to emphasize products and services in a broader range of economically diverse markets to reduce its vulnerability to economic cycles. Since the mid-1970s, the Company's investments have been directed toward specific market niches employing its technical capabilities to provide solutions to specific engineering problems and toward expanding into medical businesses. The continuing stream of new products and value-added product improvements that have resulted from this strategy have enabled the Company to participate in larger market segments. Several of these new products and product improvements were developed by means of an unusual investment program of the Company called the New Venture Fund. Established in 1972, the Fund directs monies representing one-half percent of sales into the development of new products and services. This concept allows for entrepreneurial risk taking in new areas by encouraging innovation and competition among the Company's managers for funds to pursue new programs and activities independent of their operating budgets. Examples of New Venture projects include the funding of second generation adjustable pedal research, flexible fuel hose and most of the early seed money for certain medical products. The Company's business is separated into three business segments -- Commercial, Medical and Aerospace. COMMERCIAL SEGMENT The Commercial Segment designs and manufactures proprietary mechanical and electrical controls for the automotive market; mechanical, electronic and hydraulic controls, and electronic products for the pleasure marine market; and proprietary products for fluid transfer and industrial applications. Products in the Commercial Segment generally are produced in higher unit volume than that of the Company's other two segments. They are manufactured for broad distribution as well as custom fabricated to meet individual customer needs. For the most part consumer spending patterns influence the market trends for these products. The Commercial Segment consists of three major product lines: Automotive, Marine, and Industrial. The Company is a major supplier of driver control systems to automotive manufacturers worldwide. The principal products in this market are automatic and manual transmission gearshift systems; mechanical and electronic throttle systems; complete pedal box systems, including adjustable pedals; and various release cables and flexible fluoropolymer hoses. In 1997, the Company acquired Comcorp Technologies, Inc., a supplier of pedal assemblies and other automotive components and systems. Also in 1997, the Company acquired United Parts Group N.V., a European manufacturer of gearshift systems and other components supplying most of the European automakers. This acquisition accelerated the Company's entrance into the European automotive market. The acquisitions of both Comcorp and United Parts are part of the Company's strategy to integrate cable controls with other automotive components in order to provide systems solutions for customers. Acceptance by the automobile manufacturers of a Company-developed control for use on a new model ordinarily assures the Company a large, but not exclusive, market share for the supply of that control. In 2000, the Company acquired GFI Control Systems, a Tier I supplier of natural gas, propane and hydrogen components and systems to the alternative fuel vehicle market. The Company is a leading domestic producer of mechanical steering systems for pleasure powerboats. It also manufactures hydraulic steering systems, engine throttle and shift controls, electrical gauges and instrumentation, autopilots and electronic fishfinders. The Company's marine products are sold to boat builders and in the aftermarket with the Humminbird line of electronic fishfinders sold substantially through retail outlets. These products are used principally on pleasure craft. In February 2001, the Company acquired Morse Controls, a supplier of performance and control systems and aftermarket parts to the recreational and commercial marine markets, as well as for the truck, bus, construction and agricultural vehicle markets. 1 Industrial controls and electrical instrumentation products are also manufactured for use in other applications, including construction and agricultural equipment, leisure vehicles and other on- and off-road vehicles. In addition, the Company produces stainless steel overbraided fluoroplastic hose for fluid transfer in such markets as the chemical, petroleum, food processing and automotive industries. In July 2001, the Company acquired the Fluid Handling Division of McKechnie Vehicle Components. With operations in the United States and Europe, this acquisition added fuel vapor assemblies, brake vacuum assemblies and other products to the Company's existing product lines, expanding the Company's offering to the automotive and truck fluid transfer markets. MEDICAL SEGMENT The Medical Segment manufactures and distributes a broad range of invasive disposable and reusable devices for the urology, gastroenterology, anesthesiology and respiratory care markets worldwide. It also designs and manufactures a variety of specialty surgical products, and provides instrument management services. Products in this segment generally are required to meet exacting standards of performance and have long product life cycles. Economic influences on sales relate primarily to spending patterns in the worldwide medical devices and supply market. Within the Medical Segment, the Company has two major product lines: Hospital Supply and Surgical Devices. The Company also supplies other medical devices manufacturers with standard and custom-designed semi-finished components using its polymer materials and processing technology, including precision extrusions. The Hospital Supply product line, operating as Rusch International, has established a manufacturing base and distribution network, primarily in Europe. Acquisitions designed to broaden the Company's product and geographic offerings have been made over the years. During 2000, the Company acquired Medical Marketing Group, a supplier of specialty catheters to the United States home care market. The Hospital Supply product line includes the manufacture and sale of invasive disposable and reusable devices for the urology, gastroenterology, anesthesiology and respiratory care markets worldwide. Product offerings include, among others, catheters, endotracheal tubes, laryngoscopes, face masks, tracheostomy tubes and stents for airway management, fluoropolymer-based precision tubing, components and wire products. Surgical Devices designs, manufactures and distributes, largely through its own sales force, instruments used in surgical procedures. These products include general and specialized surgical instruments primarily for the cardiovascular, ear, nose and throat, and orthopedic markets, and closure products, such as ligation clips, appliers and skin staplers. The Company also provides specialized instrument management services. In 1997, the acquisition of a manufacturer with a complementary line of closure products increased the Company's product offerings. During 1998 and 1999, the Company acquired Sterilization Management Group (SMG) and a majority of the shares of Medical Sterilization, Inc., expanding its instrument management service capabilities. In 1999, the Company extended its mix and distribution of the Surgical Devices product line in the United States with the acquisition of Kmedic, an orthopedic instrument company. AEROSPACE SEGMENT The Aerospace Segment serves the commercial aerospace, power generation and industrial turbo-machinery markets and, to a lesser extent, the military market. Its businesses design and manufacture cargo handling systems and containers for aviation, provide surface treatments, repair services and manufactured components for users of both flight and ground-based turbine engines. Sales are both to original equipment manufacturers and the aftermarket. These products and services, many of which are proprietary, require a high degree of engineering sophistication and are often custom designed. Economic influences on these products and services relate primarily to spending patterns in the worldwide aerospace industry and to demand for power generation. Telair International manufactures and distributes cargo handling systems and containers for commercial aircraft. The Company's cargo handling systems include patented, digitally controlled systems to move and secure containers of cargo inside commercial aircraft. In 1997, the Company acquired Scandinavian Bellyloading Company, a European manufacturer of cargo loading systems for narrow-body aircraft, which 2 complemented the Company's existing wide-body cargo handling systems. Cargo handling systems are sold either to aircraft manufacturers as original installations or to airlines and air freight carriers for retrofit of existing systems. The acquisition of Century Aero Products in 1999 and Air Cargo Equipment Corporation in 2000, both domestic manufacturers of cargo containers, complements the Company's cargo handling systems and positions the Company as a full service provider of both wide-body and narrow-body cargo handling systems and components. The Company also designs, manufactures and repairs mechanical and electromechanical components used on both commercial and, to a lesser extent, military aircraft. These other aircraft controls include flight controls, canopy and door actuators, cargo winches and control valves. In addition, the Company supplies spare parts to aircraft operators. This spare parts business extends as long as the particular type of aircraft continues in service. Sermatech International, through a network of facilities in eight countries, provides a variety of sophisticated protective coatings and repair services for ground turbine engine components, highly-specialized repairs for critical components such as fan blades and airfoils for flight-based turbine engines, and manufacturing and high quality dimensional finishing of airfoils and other turbine engine components. The Company offers a diverse range of technical services and materials technologies to turbine markets throughout the world. The Company formed a joint venture, Airfoil Technologies International LLC (ATI), with General Electric Aircraft Engines to provide fan blade and airfoil repair services for flight-based turbine engine blades. ATI provides a vehicle for the technological and geographic expansion of the Sermatech repairs services business. To further broaden the Company's turbo-machinery technological and manufacturing capabilities and to improve the range of product offerings, the Company, in 1996, acquired Lehr Precision, Inc., an electro-chemical machining manufacturer of turbo-machinery components used on both flight and ground turbines. In 1997, the Company acquired Gas-Path Technology, Inc. to expand its ground turbine repair capabilities within the Sermatech network of facilities. In 2000, the Company acquired an engineering firm, Turbine Technology Services Corporation, which broadens the Company's capabilities and provides a mechanism for expanding the coatings and repairs services. MARKETING In 2001, the percentages of the Company's consolidated net sales represented by its major markets were as follows: Commercial -- 48%; Medical -- 22%; and Aerospace -- 30%. The major portion of the Company's Automotive and Industrial products are sold to original equipment manufacturers. The majority of the Company's Marine and Aerospace products are sold to the aftermarket. Medical products are sold both directly to hospitals and to distributors, with a small portion sold to original equipment manufacturers. Generally, products sold to the aerospace and automotive markets are sold through the Company's own force of field engineers. Products sold to the marine, medical and general industrial markets are sold both through the Company's own sales forces and through independent representatives and independent distributor networks. For information on foreign operations, export sales, and principal customers, see text under the heading "Business segments and other information" on page 22 of the Company's 2001 Annual Report to Shareholders, which information is incorporated herein by reference. COMPETITION The Company has varying degrees of competition in all elements of its business. None of the Company's competitors offers products for all the markets served by the Company. The Company believes that its competitive position depends on the technical competence and creative ability of its engineering and development personnel, and the know-how and skill of its manufacturing personnel, as well as its plants, tooling and other resources. PATENTS The Company owns a number of patents and has a number of patent applications pending. The Company does not believe that its business is materially dependent on patent protection. 3 SUPPLIERS Materials used in the manufacture of the Company's products are purchased from a large number of suppliers around the world. The Company is not dependent upon any single supplier for a substantial amount of the materials it uses. BACKLOG As of December 30, 2001, the Company's backlog of firm orders for the Aerospace Segment was $287 million, of which it is anticipated that more than one-half will be filled in 2002. The Company's backlog for the Aerospace Segment on December 31, 2000 was $303 million. As of December 30, 2001, the Company's backlog of firm orders for the Medical and Commercial segments was $33 million and $156 million, respectively. This compares with $28 million and $139 million, respectively, as of December 31, 2000. Substantially all of the December 30, 2001 backlog will be filled in 2002. Most of the Company's medical and commercial products are sold on orders calling for delivery within no more than a few months so that the backlog of such orders is not indicative of probable net sales in any future 12-month period. EMPLOYEES The Company had approximately 17,600 employees at December 30, 2001. EXECUTIVE OFFICERS The names and ages of all executive officers of the Company as of March 1, 2002 and the positions and offices with the Company held by each such officer are as follows:
POSITIONS AND OFFICES NAME AGE WITH COMPANY - ---- --- --------------------- Lennox K. Black 71 Chairman of the Board, Chief Executive Officer and Director John J. Sickler 59 Vice Chairman Dr. Roy C. Carriker 64 Vice Chairman Jeffrey P. Black 42 President Harold L. Zuber, Jr. 52 Executive Vice President and Chief Financial Officer Steven K. Chance 56 Vice President, General Counsel and Secretary Ronald D. Boldt 59 Vice President -- Human Resources Janine Dusossoit 48 Vice President -- Investor Relations Kevin K. Gordon 39 Vice President -- Corporate Development C. Jeffrey Jacobs 48 Treasurer Thomas M. Byrne 55 Assistant Treasurer Stephen J. Gambone 45 Controller and Chief Accounting Officer Joan W. Schwartz 59 Associate General Counsel and Assistant Secretary
Mr. Jacobs was elected Treasurer on April 27, 2001. Prior to that date he was Director, Treasury Operations. Ms. Schwartz was elected Assistant Secretary on April 27, 2001. Prior to that date she was Assistant General Counsel. Mr. Sickler was elected Vice Chairman on December 8, 2000. Prior to that date he was a Senior Vice President of the Company. Dr. Carriker was elected Vice Chairman on December 8, 2000. Prior to that date he was President and Chief Operating Officer of TFX Aerospace. Mr. Jeffrey P. Black was elected President of the Company on December 8, 2000. Prior to that date he was President of Teleflex Fluid Systems. Mr. Black is the son of Lennox K. Black. Mr. Gordon was elected Vice President -- Corporate Development on December 8, 2000. Prior to that date he was Director of Business Development. 4 Mr. Lennox K. Black replaced David S. Boyer as Chief Executive Officer on January 31, 2000. Prior to that date he was Chairman of the Board. Mr. Boyer resigned his position as President and Chief Executive Officer on January 31, 2000. Mr. Gambone was elected Controller and Chief Accounting Officer on April 24, 1998. Prior to that date he was Manager, Internal Auditing and Reporting. Officers are elected by the Board of Directors for one year terms. ITEM 2. PROPERTIES The Company's operations have approximately 150 owned and leased properties consisting of plants, engineering and research centers, distribution warehouses and other facilities. The properties are maintained in good operating condition. All the plants are suitably equipped and utilized and have space available for the activities currently conducted therein and the increased volume expected in the foreseeable future. The following are the Company's major facilities:
SQUARE OWNED OR EXPIRATION LOCATION FOOTAGE LEASED DATE - -------- ------- -------- ---------- COMMERCIAL SEGMENT Litchfield, IL.............................................. 164,000 Owned N/A Nuevo Laredo, Mexico........................................ 141,000 Leased 2011 Dassel, Germany............................................. 140,000 Owned N/A Van Wert, OH................................................ 130,000 Owned(1) N/A Richmond, Canada............................................ 120,000 Leased 2011 Singapore, Asia............................................. 115,000 Owned N/A Warren, MI.................................................. 115,000 Leased 2003 Limerick, PA................................................ 110,000 Owned N/A Kendallville, IN............................................ 108,000 Owned N/A Dalstorp, Sweden............................................ 105,000 Owned N/A Hagerstown, MD.............................................. 103,000 Owned(1) N/A Basildon, England........................................... 102,000 Leased 2054 Waterbury, CT............................................... 99,000 Leased 2002 Eufaula, AL................................................. 98,000 Owned N/A Haysville, KS............................................... 98,000 Leased 2013 Vrable, Slovakia............................................ 98,000 Leased 2016 Suffield, CT................................................ 90,000 Leased 2009 Heiligenhaus, Germany....................................... 87,000 Owned N/A Hillsdale, MI............................................... 85,000 Owned(1) N/A Matamoris, Mexico........................................... 85,000 Leased 2006 Sarasota, FL................................................ 82,000 Owned(1) N/A Kitchener, Canada........................................... 75,000 Owned N/A Shenyang, P.R. China........................................ 70,000 Leased 2010 Willis, TX.................................................. 70,000 Owned(1) N/A Eufaula, AL................................................. 61,000 Owned N/A Birmingham, England......................................... 60,000 Leased 2016 La Clusienne, France........................................ 60,000 Owned N/A Enschede, Netherlands....................................... 54,000 Owned N/A Lebanon, VA................................................. 53,000 Owned(1) N/A Milton Keynes, England...................................... 50,000 Owned N/A Lyons, OH................................................... 50,000 Owned N/A
5
SQUARE OWNED OR EXPIRATION LOCATION FOOTAGE LEASED DATE - -------- ------- -------- ---------- MEDICAL SEGMENT Kernen, Germany............................................. 263,000 Owned N/A Durham, NC.................................................. 144,000 Owned N/A Kernen, Germany............................................. 114,000 Leased 2013 Syosset, NY................................................. 100,000 Leased 2010 Taiping, Malaysia........................................... 85,000 Owned N/A Lurgan, Northern Ireland.................................... 80,000 Owned N/A Duluth, GA.................................................. 69,000 Leased 2009 Jaffrey, NH................................................. 60,000 Owned(1) N/A Decatur, GA................................................. 51,000 Leased 2002 AEROSPACE SEGMENT Cincinnati, OH.............................................. 160,000 Leased 2004 Oxnard, CA.................................................. 145,000 Owned N/A Rancho Dominguez, CA........................................ 110,000 Leased 2004 Muncie, IN.................................................. 105,000 Leased 2008 Singapore, Asia............................................. 104,000 Owned N/A Mentor, OH.................................................. 90,000 Owned N/A Miami, FL................................................... 90,000 Leased 2004 Manchester, CT.............................................. 74,000 Owned N/A Limerick, PA................................................ 70,000 Owned N/A Derbyshire, England......................................... 70,000 Leased 2014 Murray Hill, NJ............................................. 64,000 Leased 2011 Baltimore, MD............................................... 62,000 Leased 2003 Houston, TX................................................. 61,000 Owned N/A Houston, TX................................................. 55,000 Leased 2002 Lincoln, England............................................ 50,000 Leased 2018
- --------------- (1) The Company is the beneficial owner of these facilities under installment sale or similar financing agreements. In addition to the above, the Company owns or leases approximately 2,600,000 square feet of warehousing, manufacturing and office space located in the United States, Canada, Mexico, South America, Europe, Australia and Asia. ITEM 3. LEGAL PROCEEDINGS The Company is subject to numerous federal, state and local environmental laws and regulations including the Resource Conservation and Recovery Act, Comprehensive Environmental Response, Compensation and Liability Act, the Clean Air Act, and the Clean Water Act. Environmental programs are in place throughout the Company, including training, auditing and monitoring to ensure compliance with such laws and regulations. The Company has been named as a Potentially Responsible Party by the Environmental Protection Agency at various sites throughout the country. Environmental costs, including liabilities associated with such sites, and the costs of complying with existing environmental regulations are not expected to result in a liability material to the Company's consolidated financial position or results of operations. The Company is a party to lawsuits and claims arising out of the normal course of business. In the opinion of management, there are no pending claims or litigation the outcome of which would have a material effect on the Company's consolidated financial position or results of operations. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. 6 PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS See "Price Range And Dividends of Common Stock" on page 31 of the Company's 2001 Annual Report to Shareholders for market price and dividend information. Also see the Note entitled "Borrowings and leases" on page 21 of such Annual Report for certain dividend restrictions under loan agreements, all of which information is incorporated herein by reference. The Company had approximately 1,200 registered shareholders at February 1, 2002. ITEM 6. SELECTED FINANCIAL DATA See pages 24 and 25 of the Company's 2001 Annual Report to Shareholders, which pages are incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS See the text under the heading "2001 Financial Review" on pages 26 through 30 of the Company's 2001 Annual Report to Shareholders, which information is incorporated herein by reference. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK See the text section entitled "Liquidity, Market Risk and Capital Resources" contained within the "2001 Financial Review" on pages 26 through 30 of the Company's 2001 Annual Report to Shareholders, which information is incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See pages 17 through 23 of the Company's 2001 Annual Report to Shareholders, which pages are incorporated herein by reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT For information with respect to the Company's Directors and Director nominees, see "Election Of Directors", "Nominees For The Board of Directors" and "Additional Information About The Board Of Directors" on pages 3 through 5 of the Company's Proxy Statement for its 2002 Annual Meeting, which information is incorporated herein by reference. For information with respect to the Company's Executive Officers, see Part I of this report on pages 4 and 5, which information is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION See "Additional Information About The Board of Directors", "Compensation Committee Report on Executive Compensation", "Five-Year Shareholder Return Comparison" and "Executive Compensation and Other Information" on pages 5 through 12 of the Company's Proxy Statement for its 2002 Annual Meeting, which information is incorporated herein by reference. 7 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT See "Security Ownership of Certain Beneficial Owners and Management" on pages 12 and 13, "Election Of Directors" and "Nominees For The Board of Directors" on pages 3 and 4 of the Company's Proxy Statement for its 2002 Annual Meeting, which information is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS See "Additional Information About The Board Of Directors", "Compensation Committee Report on Executive Compensation", and "Executive Compensation and Other Information" on pages 5 through 12 of the Company's Proxy Statement for its 2002 Annual Meeting, which information is incorporated herein by reference. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) Consolidated Financial Statements: The Index to Consolidated Financial Statements and Schedules is set forth on page 10 hereof. (b) Reports on Form 8-K: None. (c) Exhibits: The Exhibits are listed in the Index to Exhibits. For the purposes of complying with the amendments to the rules governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned registrant hereby undertakes as follows, which undertaking shall be incorporated by reference into registrant's Registration Statements on Form S-8, Nos. 2-84148 (filed June 28, 1989), 2-98715 (filed May 11, 1987), 33-34753 (filed May 10, 1990), 33-53385 (filed April 29, 1994), 333-77601 (filed May 3, 1999), 333-38224 (filed May 31, 2000), 333-41654 (filed July 18, 2000) and 333-59814 (filed April 30, 2001): Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 8 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized as of the date indicated below. TELEFLEX INCORPORATED By LENNOX K. BLACK ------------------------------------ Lennox K. Black (Chairman of the Board & Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and as of the date indicated below. By HAROLD L. ZUBER, JR. ------------------------------------ Harold L. Zuber, Jr. (Executive Vice President & Principal Financial Officer) By STEPHEN J. GAMBONE ------------------------------------ Stephen J. Gambone (Controller & Principal Accounting Officer) Pursuant to General Instruction D to Form 10-K, this report has been signed by Steven K. Chance as Attorney-in-Fact for a majority of the Board of Directors as of the date indicated below. Lennox K. Black Director Donald Beckman Director James W. Stratton Director Joseph S. Gonnella, MD Director William R. Cook Director Palmer E. Retzlaff Director Sigismundus W. W. Lubsen Director Patricia C. Barron Director
By STEVEN K. CHANCE ------------------------------------ Steven K. Chance Attorney-in-Fact Dated: March 26, 2002 9 TELEFLEX INCORPORATED INDEX TO CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements together with the report thereon of PricewaterhouseCoopers LLP dated February 13, 2002 on pages 17 to 25 of the accompanying 2001 Annual Report to Shareholders are incorporated in this Annual Report on Form 10-K. With the exception of the aforementioned information and those portions incorporated by specific reference in this document, the 2001 Annual Report to Shareholders is not to be deemed filed as part of this report. The following Financial Statement Schedule together with the report thereon of PricewaterhouseCoopers LLP dated February 13, 2002 on page 11 should be read in conjunction with the consolidated financial statements in such 2001 Annual Report to Shareholders. Financial Statement Schedules not included in this Form 10-K Annual Report have been omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto. FINANCIAL STATEMENT SCHEDULE Schedule:
PAGE ---- II Valuation and qualifying accounts........................... 12
10 REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE To the Board of Directors of Teleflex Incorporated Our audits of the consolidated financial statements referred to in our report dated February 13, 2002 appearing on page 23 of the 2001 Annual Report to Shareholders of Teleflex Incorporated (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedule listed in Item 14(a) of this Form 10-K. In our opinion, the Financial Statement Schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. PricewaterhouseCoopers LLP Philadelphia, Pennsylvania February 13, 2002 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 2-84148, No. 2-98715, No. 33-34753, No. 33-53385, No. 333-77601, No. 333-38224, No. 333-41654 and No. 333-59814) of Teleflex Incorporated of our report dated February 13, 2002 appearing on page 23 of the 2001 Annual Report to Shareholders which is incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference of our report on the Financial Statement Schedule, which appears above. PricewaterhouseCoopers LLP Philadelphia, Pennsylvania March 26, 2002 11 TELEFLEX INCORPORATED SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS ALLOWANCE FOR DOUBTFUL ACCOUNTS
BALANCE AT ADDITIONS DOUBTFUL BALANCE AT BEGINNING CHARGED TO ACCOUNTS END OF FOR THE YEAR ENDED OF YEAR INCOME WRITTEN OFF YEAR - ------------------ ---------- ---------- ----------- ---------- December 30, 2001........................... $5,776,000 $5,957,000 $(2,729,000) $9,004,000 December 31, 2000........................... $4,825,000 $2,460,000 $(1,509,000) $5,776,000 December 26, 1999........................... $4,577,000 $1,613,000 $(1,365,000) $4,825,000
12 March 26, 2002 INDEX TO EXHIBITS
EXHIBIT - ------- 3(a) - The Company's Articles of Incorporation (except for Article Thirteenth and the first paragraph of Article Fourth) are incorporated herein by reference to Exhibit 3(a) to the Company's Form 10-Q for the period ended June 30, 1985. Article Thirteenth of the Company's Articles of Incorporation is incorporated herein by reference to Exhibit 3 of the Company's Form 10-Q for the period ended June 28, 1987. The first paragraph of Article Fourth of the Company's Articles of Incorporation is incorporated herein by reference to Exhibit 3(a) of the Company's Form 10-K for the year ended December 27, 1998. (b) - The Company's Bylaws are incorporated herein by reference to Exhibit 3(b) of the Company's Form 10-K for the year ended December 28, 1987. 4 - The Company's Shareholders' Rights Plan is incorporated herein by reference to the Company's Form 8-K dated December 7, 1998. 10(a) - The 1982 Stock Option Plan, incorporated herein by reference to the Company's registration statement on Form S-8 (Registration No. 2-84148), as supplemented, with amendments of April 26, 1991 incorporated by reference to the Company's definitive Proxy Statement for the 1991 Annual Meeting of Shareholders. (b) - The 1990 Stock Compensation Plan, incorporated herein by reference to the Company's registration statement on Form S-8 (Registration No. 33-34753), revised and restated as of December 1, 1997, incorporated by reference to Exhibit 10(b) of the Company's Form 10-K for the year ended December 28, 1997. (c) - The Salaried Employees' Pension Plan, as amended and restated in its entirety, effective July 1, 1989 and the retirement income plan as amended and restated in its entirety, effective January 1, 1994 and related Trust Agreements, dated July 1, 1994, is incorporated by reference to the Company's Form 10-K for the year ended December 25, 1994. (d) - Description of deferred compensation arrangements between the Company and its Chairman and Chief Executive Officer, L. K. Black, incorporated by reference to the Company's definitive Proxy Statement for the 2002 Annual Meeting of Shareholders. (e) - Teleflex Incorporated Deferred Compensation Plan, effective as of January 1, 1995, and amended and restated on Form S-8 (Registration No. 333-77601) is incorporated by reference to Exhibit 10(f) of the Company's Form 10-K for the year ended December 27, 1998. (f) - Information on the Company's Profit Participation Plan, insurance arrangements with certain officers and deferred compensation arrangements with certain officers, non-qualified supplementary pension plan for salaried employees and compensation arrangements with directors is incorporated by reference to the Company's definitive Proxy Statement for the 2000,2001 and 2002 Annual Meeting of Shareholders. (g) - The Company's Voluntary Investment Plan is incorporated by reference to Exhibit 28 of the Company's registration statement on Form S-8 (Registration No. 2-98715). (h) - The 2000 Stock Compensation Plan, incorporated herein by reference to the Company's registration statement on Form S-8 (Registration No. 333-38224), filed on May 31, 2000. (i) - The Company's Global Employee Stock Purchase Plan, incorporated herein by reference to the Company's registration statement on Form S-8 (Registration No. 333-41654) filed on July 18, 2000. (j) - The Company's 1990 Stock Compensation Plan, as amended and restated on Form S-8 (Registration No. 333-59814) is herein incorporated by reference.
13 - Pages 17 through 31 of the Company's Annual Report to Shareholders for the period ended December 30, 2001. 21 - The Company's Subsidiaries. 23 - Consent of Independent Accountant (see page 11 herein). 24 - Power of Attorney.
EX-13 3 w58094ex13.txt TELEFLEX INCORPORATED ANNUAL REPORT Teleflex Incorporated and Subsidiaries EXHIBIT 13 CONSOLIDATED STATEMENT OF INCOME
Year ended - --------------------------------------------------------------------------------------------------------------------------- DECEMBER 30, December 31, December 26, 2001 2000 1999 - --------------------------------------------------------------------------------------------------------------------------- (Dollars in thousands, except per share) REVENUES $1,905,004 $1,764,482 $1,601,069 - --------------------------------------------------------------------------------------------------------------------------- COSTS AND EXPENSES Materials, labor and other product costs 1,369,713 1,274,203 1,155,879 Selling, engineering and administrative expenses 347,131 311,278 284,702 Interest expense, net 28,465 20,787 17,732 - --------------------------------------------------------------------------------------------------------------------------- 1,745,309 1,606,268 1,458,313 - --------------------------------------------------------------------------------------------------------------------------- Income before taxes 159,695 158,214 142,756 Taxes on income 47,384 48,990 47,536 - --------------------------------------------------------------------------------------------------------------------------- NET INCOME $ 112,311 $ 109,224 $ 95,220 - --------------------------------------------------------------------------------------------------------------------------- EARNINGS PER SHARE Basic $2.90 $2.86 $2.52 Diluted $2.86 $2.83 $2.47 - ---------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial statements. Teleflex Annual Report Page 17 Teleflex Incorporated and Subsidiaries CONSOLIDATED BALANCE SHEET
Year ended - --------------------------------------------------------------------------------------------------------------------------- DECEMBER 30, December 31, 2001 2000 - --------------------------------------------------------------------------------------------------------------------------- (Dollars in thousands) ASSETS Current assets Cash and cash equivalents $ 46,900 $ 45,139 Accounts receivable, less allowance for doubtful accounts, 2001 - $9,004; 2000 - $5,776 363,674 334,346 Inventories 308,775 259,845 Prepaid expenses 28,128 22,708 - --------------------------------------------------------------------------------------------------------------------------- Total current assets 747,477 662,038 - --------------------------------------------------------------------------------------------------------------------------- Plant assets Land and buildings 204,915 171,776 Machinery and equipment 774,796 659,288 - --------------------------------------------------------------------------------------------------------------------------- 979,711 831,064 Less accumulated depreciation 414,016 341,561 - --------------------------------------------------------------------------------------------------------------------------- Net plant assets 565,695 489,503 Investments in affiliates 41,493 39,515 Intangibles and other assets 280,355 210,232 - --------------------------------------------------------------------------------------------------------------------------- $1,635,020 $1,401,288 - --------------------------------------------------------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable $ 170,257 $ 97,040 Current portion of long-term borrowings 41,865 20,997 Accounts payable 122,518 119,221 Accrued expenses 129,287 116,483 Income taxes payable 31,499 30,131 - --------------------------------------------------------------------------------------------------------------------------- Total current liabilities 495,426 383,872 Long-term borrowings 228,180 220,557 Deferred income taxes and other 133,271 106,437 - --------------------------------------------------------------------------------------------------------------------------- Total liabilities 856,877 710,866 - --------------------------------------------------------------------------------------------------------------------------- Shareholders' equity Common shares, $1 par value Issued: 2001 - 38,932,948 shares; 2000 - 38,344,427 shares 38,933 38,344 Additional paid-in capital 96,143 79,546 Retained earnings 689,269 602,544 Accumulated other comprehensive income (46,202) (30,012) - --------------------------------------------------------------------------------------------------------------------------- Total shareholders' equity 778,143 690,422 - --------------------------------------------------------------------------------------------------------------------------- $1,635,020 $1,401,288 - ---------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial statements. Page 18 [TELEFLEX LOGO] Teleflex Incorporated and Subsidiaries CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended - -------------------------------------------------------------------------------------------------------------------------- DECEMBER 30, December 31, December 26, 2001 2000 1999 - -------------------------------------------------------------------------------------------------------------------------- (Dollars in thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net income $112,311 $109,224 $95,220 Adjustments to reconcile net income to cash flows from operating activities: Depreciation and amortization 92,401 77,417 67,389 Deferred income taxes 9,682 8,972 4,710 Decrease (increase) in accounts receivable 3,287 (6,620) (32,325) (Increase) decrease in inventories (14,621) (18,150) 5,472 (Increase) decrease in prepaid expenses (4,563) 1,030 (4,710) (Decrease) increase in accounts payable and accrued expenses (9,497) 15,297 (4,870) (Decrease) increase in income taxes payable (743) 2,245 3,182 - -------------------------------------------------------------------------------------------------------------------------- 188,257 189,415 134,068 - -------------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term borrowings 75,000 46,390 50,866 Reduction in long-term borrowings (46,304) (64,706) (46,941) Increase in notes payable and current borrowings 74,531 13,902 1,812 Proceeds from stock compensation plans 8,228 5,258 5,890 Dividends (25,586) (22,163) (19,126) - -------------------------------------------------------------------------------------------------------------------------- 85,869 (21,319) (7,499) - -------------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES Expenditures for plant assets (97,744) (80,652) (96,516) Payments for businesses acquired (170,700) (87,846) (43,895) Proceeds from disposition of product lines and assets -- 17,812 -- Investments in affiliates (766) (4,423) (22,377) Other (3,155) 3,112 (1,430) - -------------------------------------------------------------------------------------------------------------------------- (272,365) (151,997) (164,218) - -------------------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,761 16,099 (37,649) Cash and cash equivalents at the beginning of the year 45,139 29,040 66,689 - -------------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents at the end of the year $ 46,900 $ 45,139 $29,040 - --------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial statements. Teleflex Annual Report Page 19 Teleflex Incorporated and Subsidiaries CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Year ended - --------------------------------------------------------------------------------------------------------------------------- DECEMBER 30, December 31, December 26, 2001 2000 1999 - --------------------------------------------------------------------------------------------------------------------------- (Dollars in thousands, except per share) COMMON SHARES Balance, beginning of year $ 38,344 $ 38,019 $ 37,615 Shares issued under compensation plans 589 325 404 - --------------------------------------------------------------------------------------------------------------------------- Balance, end of year 38,933 38,344 38,019 - --------------------------------------------------------------------------------------------------------------------------- ADDITIONAL PAID-IN CAPITAL Balance, beginning of year 79,546 73,786 72,080 Shares issued under compensation plans 16,597 5,760 1,706 - --------------------------------------------------------------------------------------------------------------------------- Balance, end of year 96,143 79,546 73,786 - --------------------------------------------------------------------------------------------------------------------------- RETAINED EARNINGS Balance, beginning of year 602,544 515,483 439,389 Net income 112,311 109,224 95,220 Cash dividends (25,586) (22,163) (19,126) - --------------------------------------------------------------------------------------------------------------------------- Balance, end of year 689,269 602,544 515,483 - --------------------------------------------------------------------------------------------------------------------------- ACCUMULATED OTHER COMPREHENSIVE INCOME Cumulative translation adjustment (44,404) (30,012) (20,875) Financial instruments marked to market (1,798) -- -- Unrealized loss on securities -- -- (3,849) - --------------------------------------------------------------------------------------------------------------------------- Balance, end of year (46,202) (30,012) (24,724) - --------------------------------------------------------------------------------------------------------------------------- TOTAL SHAREHOLDERS' EQUITY $ 778,143 $ 690,422 $602,564 - --------------------------------------------------------------------------------------------------------------------------- CASH DIVIDENDS PER SHARE $.66 $.58 $.51 - --------------------------------------------------------------------------------------------------------------------------- COMPREHENSIVE INCOME Net income $112,311 $109,224 $ 95,220 Financial instruments marked to market (1,798) -- -- Cumulative translation adjustment (14,392) (9,137) (6,241) Unrealized holding gain (loss) on securities -- 5,520 (3,849) Reclassification for gain included in net income -- (1,671) -- - --------------------------------------------------------------------------------------------------------------------------- Total comprehensive income $ 96,121 $103,936 $ 85,130 - ---------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial statements. Page 20 [TELEFLEX LOGO] Teleflex Incorporated and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share) DESCRIPTION OF BUSINESS Teleflex Incorporated designs, manufactures and distributes engineered products and services for the automotive, marine, industrial, medical and aerospace markets worldwide. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements include the accounts of Teleflex Incorporated and its subsidiaries. These consolidated financial statements have been prepared in conformity with generally accepted accounting principles and include management's estimates and assumptions that affect the recorded amounts. Cash and cash equivalents include funds invested in a variety of liquid short-term investments with an original maturity of three months or less. Inventories are stated principally at the lower of average cost or market and consist of the following:
2001 2000 - ------------------------------------------------------------ Raw materials $133,364 $108,808 Work-in-process 44,530 36,065 Finished goods 130,881 114,972 - ------------------------------------------------------------ $308,775 $259,845 - ------------------------------------------------------------
Plant assets include the cost of additions and those improvements which increase the capacity or lengthen the useful lives of the assets. Repairs and maintenance costs are expensed as incurred. With minor exceptions, straight-line composite lives for depreciation of plant assets are as follows: buildings 20 to 40 years; machinery and equipment 8 to 12 years. Intangible assets, principally the excess purchase price of acquisitions over the fair value of net tangible assets acquired, (goodwill) are being amortized over periods not exceeding 30 years. The company periodically reviews the carrying value of intangible assets primarily based on an analysis of cash flows. Effective in 2002, goodwill and other intangible assets with indefinite lives will no longer be amortized but will instead be tested for impairment annually. The amount of amortization expense that will cease in 2002 is approximately $14,000. Assets and liabilities of non-domestic subsidiaries are translated at the rates of exchange at the balance sheet date; income and expenses are translated at the average rates of exchange prevailing during the year. The related translation adjustments are accumulated in shareholders' equity. Investments in companies in which ownership interests range from 20% to 50% and the company exercises significant influence over operating and financial policies are accounted for using the equity method. Revenues are recognized when the earnings process is complete. This generally occurs when products are shipped in accordance with terms of agreements, title and risk of loss transfers to customers, collection is probable, and pricing is fixed and determinable. ACQUISITIONS In February 2001, the company acquired Morse Controls for $135,000 in cash. Morse Controls is a supplier of industrial and marine products with annual sales of $130,000. Also, during 2001 and 2000, the company acquired a number of smaller businesses across several markets for $35,700 and $87,846 in cash, respectively. For 2001 and 2000, liabilities of $45,945 and $39,237 were assumed in connection with the acquisitions. The assets, liabilities and operating results of these businesses are included in the company's financial statements from their dates of acquisition. A total of $73,400, representing the excess of acquisition cost in 2001 over the fair value of the acquired businesses' net assets, is being amortized over periods from 15 to 30 years. Financial position and results of operation would not have been materially different had the acquisitions occurred at the beginning of the years acquired. BORROWINGS AND LEASES
2001 2000 - ----------------------------------------------------------- Senior Notes at an average fixed rate of 7.2%, due in installments through 2008 $ 76,000 $ 83,500 Term loan notes, primarily Euro, at an average fixed rate of 5.4%, with an average maturity of three years 159,198 120,602 Other debt, mortgage notes and capital lease obligations, at interest rates ranging from 3% to 9% 34,847 37,452 - ----------------------------------------------------------- 270,045 241,554 Current portion of borrowings (41,865) (20,997) - ----------------------------------------------------------- $228,180 $220,557 - -----------------------------------------------------------
The various senior note agreements provide for the maintenance of certain financial ratios and limit the repurchase of the company's stock and payment of cash dividends. Under the most restrictive of these provisions, $204,000 of retained earnings was available for dividends at December 30, 2001. Notes payable consists of demand loans due to banks of $95,257 at an average interest rate of 4.1% and a $75,000 loan secured by certain accounts receivable at an interest rate of 2.3%. In addition, the Company has approximately $250,000 available under several interest rate alternatives in unused lines of credit. Interest expense in 2001, 2000 and 1999 did not differ materially from interest paid, nor did the carrying value of year end long-term borrowings differ materially from fair value. The aggregate amounts of debt, including capital leases, maturing in each of the four years after 2002 are as follows: 2003 - $53,127; 2004 - $79,397; 2005 - $47,982; 2006 - $16,882. The company has entered into certain operating leases which require minimum annual payments as follows: 2002 - $35,377; 2003 - $28,376; 2004 - $25,887; 2005 - - $23,816; 2006 - $17,069. The total rental expense for all operating leases was $33,934, $29,640 and $25,608 in 2001, 2000 and 1999, respectively. Teleflex Annual Report Page 21 Teleflex Incorporated and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Dollars in thousands, except per share) FINANCIAL INSTRUMENTS The company uses forward rate contracts to manage currency transaction exposure and interest rate swaps for exposure to interest rate changes. The Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133) which became effective on January 1, 2001. All derivative financial instruments are recorded on the balance sheet at fair market value and subsequent changes in value are recognized in the statement of income or as part of comprehensive income. The cumulative effect of adopting SFAS No. 133 at January 1, 2001 was ($200). Approximately $100 of the amount in accumulated other comprehensive income would be reclassified as an expense to the statement of income during 2002 should foreign currency exchange rates and interest rates remain at December 30, 2001 levels. The following table provides financial instruments activity included as part of accumulated other comprehensive income in 2001: Balance at January 1, 2001 $ (200) Additions and revaluations (5,675) Clearance of hedge results to income 4,077 - ----------------------------------------------------------- Balance at December 30,2001 $(1,798) - -----------------------------------------------------------
SHAREHOLDERS' EQUITY AND STOCK COMPENSATION PLANS The authorized capital of the company is comprised of 100,000,000 common shares, $1 par value, and 500,000 preference shares. No preference shares were outstanding during the last three years. Options to purchase common stock are awarded at market price on the date of grant and expire no later than 10 years after that date. No compensation expense has been recognized for stock option plans. Diluted earnings per share would have been reduced $.04 or less in 2001, 2000 and 1999 had compensation expense for stock options been determined based on the fair value at the grant date. The fair value of options granted during 2001, 2000 and 1999 of $14.51, $10.56 and $16.50, respectively, was estimated using the Black-Scholes option-pricing model. Officers and key employees held options for the purchase of 2,036,194 shares of common stock at prices ranging from $14.13 to $47.25 per share with an average exercise price of $33.65 per share and an average remaining contractual life of 7 years. Such options are presently exercisable with respect to 894,799 shares at an average exercise price of $28.85. Options to purchase 514,150, 464,550 and 447,750 shares of common stock were granted at average exercise prices of $42.43, $29.20 and $40.97, in 2001, 2000 and 1999, respectively. Options exercised were 371,290, 282,576 and 517,690 at average exercise prices of $22.01, $16.27 and $13.96 in 2001, 2000 and 1999, respectively. Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed in the same manner except that the weighted average number of common shares is increased for dilutive securities. The difference between basic and diluted weighted average common shares results from the assumption that dilutive stock options were exercised. INCOME TAXES The provision for income taxes consisted of the following:
2001 2000 1999 - ------------------------------------------------------------ Current Federal $25,415 $27,842 $33,978 State 2,902 3,269 3,335 Foreign 9,385 8,907 5,513 Deferred 9,682 8,972 4,710 - ------------------------------------------------------------ $47,384 $48,990 $47,536 - ------------------------------------------------------------
The deferred income taxes provided and the balance sheet amounts of $60,785 in 2001 and $50,722 in 2000 related substantially to the methods of accounting for depreciation. Income taxes paid were $36,170, $36,961 and $39,923 in 2001, 2000 and 1999, respectively.
2001 2000 1999 - ---------------------------------------------------------- Tax at U.S. statutory rate 35.0% 35.0% 35.0% State income taxes 1.2 1.3 1.6 Foreign income taxes (4.6) (3.9) (1.8) Export sales benefit (1.7) (1.5) (1.5) Other (.2) .1 -- - ---------------------------------------------------------- Effective income tax rate 29.7% 31.0% 33.3% - ----------------------------------------------------------
BUSINESS SEGMENTS AND OTHER INFORMATION The company has determined that its reportable segments are Commercial, Medical and Aerospace. This assessment reflects the aggregation of businesses which have similar products and services, manufacturing processes, customers and distribution channels and is consistent with both internal management reporting and resource and budgetary allocations. Reference is made to pages 24 and 25 for a summary of operations by business segment. A summary of revenues, identifiable assets and operating profit relating to the company's non-domestic operations, substantially European, and export sales is as follows:
2001 2000 1999 - ------------------------------------------------------------ Revenues $752,579 $675,787 $642,827 Identifiable assets $652,924 $580,756 $539,282 Operating profit $ 66,907 $ 60,132 $ 50,552 Export sales $234,800 $196,500 $181,500 - ------------------------------------------------------------
PENSION AND OTHER POSTRETIREMENT BENEFITS The company provides defined benefit pension and postretirement benefit plans to eligible employees. Assumptions used in determining pension expense and benefit obligations reflect a weighted average discount rate of 7.5% in 2001 and 2000, an investment rate of 9% and a salary increase of 5%. Page 22 [TELEFLEX LOGO] Assumptions used in determining other postretirement expense and benefit obligations include a weighted average discount rate of 7.7% in 2001 and 7.6% in 2000 and an initial health care cost trend rate of 7.5% declining to 4.5% over four years. Increasing the trend rate by 1% would increase the benefit obligation by $1,631 and would increase the 2001 benefit expense by $153. Decreasing the trend rate by 1% would decrease the benefit obligation by $1,395 and would decrease the 2001 benefit expense by $128. The following tables provide net benefit cost, a reconciliation of benefit obligations, plan assets and funded status of the plans:
Pension Other Benefits - ---------------------------------------------------------------- 2001 2000 2001 2000 - ---------------------------------------------------------------- Service cost $ 4,303 $ 4,237 $ 276 $ 331 Interest cost 7,648 6,639 1,095 1,030 Actual return (2,282) (9,649) -- -- Net amortization and deferral (5,560) 2,103 357 348 Foreign plans 933 1,269 -- -- - ---------------------------------------------------------------- Net benefit cost $ 5,042 $ 4,599 $ 1,728 $ 1,709 - ---------------------------------------------------------------- Benefit obligations, beginning of year $ 98,505 $ 90,089 $ 16,418 $ 14,911 Service cost 4,303 4,237 276 331 Interest cost 7,648 6,639 1,095 1,030 Amendments (70) 107 (752) 225 Actuarial (gain) loss (3,122) 975 5,540 910 Acquisitions 6,032 1,012 1,375 -- Currency translation (831) (1,034) -- -- Benefits paid (5,344) (4,789) (1,162) (989) Foreign plans 933 1,269 -- -- - ---------------------------------------------------------------- Benefit obligations, end of year 108,054 98,505 22,790 16,418 - ---------------------------------------------------------------- Fair value of plan assets, beginning of year 84,694 76,226 -- -- Actual return 2,282 9,649 -- -- Acquisitions 9,484 446 -- -- Contributions 2,771 2,525 -- -- Benefits paid (5,002) (4,152) -- -- - ---------------------------------------------------------------- Fair value of plan assets, end of year 94,229 84,694 -- -- - ---------------------------------------------------------------- Funded status (13,825) (13,811) (22,790) (16,418) Unrecognized transition (asset) obligation (666) (834) 4,603 5,022 Unrecognized net actuarial (gain) loss (5,810) (10,444) 5,202 (370) Unrecognized prior service cost 3,637 4,129 (85) 638 - ----------------------------------------------------------------- Accrued benefit cost $(16,664) $(20,960) $(13,070) $(11,128) - -----------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS [PricewaterhouseCoopers Logo] To the Board of Directors and Shareholders Teleflex Incorporated In our opinion, the consolidated financial statements appearing on pages 17 through 23 of this Annual Report present fairly, in all material respects, the financial position of Teleflex Incorporated and its subsidiaries at December 30, 2001 and December 31, 2000 and the results of their operations and cash flows for each of the three years in the period ended December 30, 2001, in conformity with generally accepted accounting principles in the United States. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP - ------------------------------ PricewaterhouseCoopers LLP Philadelphia, Pennsylvania February 13, 2002
- ----------------------------------------------------------- Quarterly data (unaudited) - ----------------------------------------------------------- 2001 First Second Third Fourth - ----------------------------------------------------------- Revenues $470,734 $503,004 $466,014 $465,252 Gross profit 135,233 143,535 128,592 127,931 Net income 29,981 31,061 22,102 29,167 Basic earnings per share .78 .80 .57 .75 Diluted earnings per share .77 .79 .56 .74 - ----------------------------------------------------------- 2000 First Second Third Fourth - ----------------------------------------------------------- Revenues $427,590 $465,553 $420,405 $450,934 Gross profit 121,412 133,713 114,336 120,818 Net income 26,814 29,324 21,722 31,364 Basic earnings per share .70 .77 .57 .82 Diluted earnings per share .70 .76 .56 .81 - -----------------------------------------------------------
Teleflex Annual Report Page 23 Teleflex Incorporated and Subsidiaries SELECTED FINANCIAL AND BUSINESS SEGMENT DATA
2001 2000 1999 - --------------------------------------------------------------------------------------------------- Revenues Commercial $ 908,183 $ 860,201 $ 757,720 Medical 429,338 411,815 372,282 Aerospace 567,483 492,466 471,067 Other income(a) -- -- -- - --------------------------------------------------------------------------------------------------- $ 1,905,004 $ 1,764,482 $ 1,601,069 - --------------------------------------------------------------------------------------------------- Operating profit Commercial $ 83,774 $ 86,911 $ 75,823 Medical 62,689 56,483 49,551 Aerospace 60,337 53,115 52,940 - --------------------------------------------------------------------------------------------------- 206,800 196,509 178,314 Interest expense, net 28,465 20,787 17,732 Corporate expenses, net of other income 18,640 17,508 17,826 - --------------------------------------------------------------------------------------------------- Income before taxes 159,695 158,214 142,756 Taxes on income 47,384 48,990 47,536 - --------------------------------------------------------------------------------------------------- Net income $ 112,311 $ 109,224 $ 95,220 - --------------------------------------------------------------------------------------------------- Basic earnings per share $ 2.90 $ 2.86 $ 2.52 Diluted earnings per share $ 2.86 $ 2.83 $ 2.47 Cash dividends per share $ .66 $ .58 $ .51 Average common shares outstanding 38,752 38,203 37,857 Average shares, assuming dilution 39,280 38,633 38,525 Net income as a percent of revenues 5.9% 6.2% 5.9% Average number of employees 16,927 15,986 13,980 Identifiable assets Commercial $ 683,188 $ 513,217 $ 451,389 Medical $ 442,648 $ 424,183 $ 388,430 Aerospace $ 405,315 $ 360,123 $ 332,109 Capital expenditures Commercial $ 40,768 $ 35,528 $ 43,623 Medical $ 20,688 $ 19,592 $ 17,751 Aerospace $ 35,681 $ 24,815 $ 33,523 Depreciation and amortization Commercial $ 37,825 $ 28,359 $ 24,875 Medical $ 27,025 $ 24,748 $ 20,574 Aerospace $ 26,720 $ 23,435 $ 21,132 Long-term borrowings $ 228,180 $ 220,557 $ 246,191 Shareholders' equity $ 778,143 $ 690,422 $ 602,564 Book value per share $ 19.99 $ 18.01 $ 15.85 Return on average shareholders' equity 15.3% 16.9% 16.7% - ---------------------------------------------------------------------------------------------------
Page 24 [TELEFLEX LOGO]
1998 1997 1996 1995 1994 1993 1992 1991 - ------------------------------------------------------------------------------------------------------------------------------- (Dollars and shares in thousands, except per share and employee data) $ 649,644 $ 497,366 $ 422,443 $ 403,637 $ 356,708 $ 284,106 $ 210,464 $ 168,598 338,305 323,114 307,555 293,341 253,020 180,623 179,376 130,540 449,629 325,293 201,185 215,711 202,944 202,067 177,292 180,399 -- -- -- -- -- -- 3,206 3,472 - ------------------------------------------------------------------------------------------------------------------------------- $1,437,578 $1,145,773 $ 931,183 $ 912,689 $ 812,672 $ 666,796 $ 570,338 $ 483,009 - ------------------------------------------------------------------------------------------------------------------------------- $ 62,010 $ 61,562 $ 57,849 $ 59,719 $ 53,324 $ 37,794 $ 25,754 $ 19,996 41,879 35,466 34,630 30,237 32,386 21,486 25,463 19,900 55,163 38,787 21,007 12,683 5,367 14,906 16,100 21,722 - ------------------------------------------------------------------------------------------------------------------------------- 159,052 135,815 113,486 102,639 91,077 74,186 67,317 61,618 17,054 14,435 13,876 18,632 18,361 14,466 15,482 13,765 17,238 14,975 12,831 10,407 9,725 7,410 3,185 2,519 - ------------------------------------------------------------------------------------------------------------------------------- 124,760 106,405 86,779 73,600 62,991 52,310 48,650 45,334 42,210 36,333 29,617 24,730 21,795 18,624 16,638 15,527 - ------------------------------------------------------------------------------------------------------------------------------- $ 82,550 $ 70,072 $ 57,162 $ 48,870 $ 41,196 $ 33,686 $ 32,012(b) $ 29,807 - ------------------------------------------------------------------------------------------------------------------------------- $ 2.21 $ 1.91 $ 1.61 $ 1.40 $ 1.20 $ .99 $ .95(b) $ .90 $ 2.15 $ 1.86 $ 1.58 $ 1.37 $ 1.17 $ .98 $ .93(b) $ .88 $ .45 $ .39 $ .34 $ .30 $ .26 $ .23 $ .21 $ .20 37,347 36,759 35,482 34,885 34,373 33,958 33,557 33,062 38,425 37,661 36,197 35,574 35,061 34,533 34,264 33,701 5.7% 6.1% 6.1% 5.4% 5.1% 5.1% 5.6% 6.2% 12,603 10,830 9,373 9,553 8,740 7,920 6,920 6,160 $ 405,347 $ 351,345 $ 227,594 $ 201,808 $ 184,971 $ 158,206 $ 142,041 $ 101,187 $ 361,282 $ 333,698 $ 320,699 $ 331,349 $ 311,547 $ 266,239 $ 206,562 $ 194,609 $ 324,532 $ 276,708 $ 194,305 $ 183,636 $ 188,348 $ 202,130 $ 142,523 $ 141,104 $ 26,243 $ 22,570 $ 12,821 $ 15,445 $ 13,489 $ 7,967 $ 7,386 $ 7,505 $ 13,943 $ 10,611 $ 10,421 $ 12,107 $ 7,029 $ 7,361 $ 5,316 $ 7,138 $ 28,561 $ 40,992 $ 16,767 $ 2,794 $ 4,538 $ 8,865 $ 6,384 $ 5,585 $ 23,353 $ 14,335 $ 11,907 $ 11,446 $ 9,930 $ 9,251 $ 6,262 $ 5,633 $ 18,044 $ 18,459 $ 16,267 $ 15,087 $ 11,694 $ 8,030 $ 6,505 $ 4,725 $ 17,852 $ 14,440 $ 9,827 $ 10,471 $ 10,771 $ 10,176 $ 8,002 $ 7,366 $ 275,581 $ 237,562 $ 195,945 $ 196,844 $ 190,499 $ 183,504 $ 134,600 $ 119,370 $ 534,450 $ 463,753 $ 409,176 $ 355,364 $ 309,024 $ 269,790 $ 240,467 $ 211,702 $ 14.21 $ 12.49 $ 11.30 $ 10.13 $ 8.94 $ 7.90 $ 7.12 $ 6.37 16.5% 16.1% 15.0% 14.7% 14.2% 13.2% 14.2% 14.9% - -------------------------------------------------------------------------------------------------------------------------------
(a) Beginning in 1993, other income, which was insignificant, has been reclassified as an offset to interest expense and corporate expenses. (b) Excludes an increase in net income of $860, or $.03 per share as a result of a change in accounting for income taxes. Teleflex Annual Report Page 25 1 2001 FINANCIAL REVIEW CRITICAL ACCOUNTING POLICIES Accounting policies that management believes are most critical to the company's financial condition and operating results pertain to the valuation of accounts receivable, inventory, goodwill and revenue recognition. In developing estimates management considered available information and used judgment. OVERVIEW The company's major financial objectives are to achieve a 15% to 20% average annual growth rate in revenues and net income, to generate a 20% return on average shareholders' equity and to pay dividends of 20% of trailing twelve months' earnings. Over the last five years revenues and net income have grown at a compounded rate of 15% and 14%, respectively. Return on average shareholders' equity declined to 15.3% in 2001 from 16.9% in 2000 after seven consecutive years of improvement. Over the past five years, dividends paid have increased at a compounded rate of 14% and in 2001 the annualized quarterly dividend rate was increased 13% to 68 cents per share. [REVENUES BAR GRAPH] The company is committed to maintaining a balance among its three segments: Commercial, Medical, and Aerospace. Balance among the three segments reduces the company's risk of changes in the business cycle of any one segment, thus enabling the company to consistently achieve its growth objectives. Diversification gives the company the opportunity to invest in all stages of a segment's market cycle and provides a broader base of markets in which to grow. The company also diversifies within each segment by entering into new geographic areas and different sectors within a market and by extending products to additional markets. As a result, despite cyclical downturns within each of the segments, the company's total operating profit has continued to increase. The company intends to achieve its growth objectives through a combination of core growth, development of new products and new markets for existing products, and acquisitions. Over the past five years, the company's core growth has accounted for approximately one-third of its overall growth. During the same time, the company has invested more than $400 million for acquisitions. These acquisitions fit strategically within the company's businesses and bring new technologies, capabilities and market opportunities that will supplement future core growth. During 2000 and 2001, the company purchased twenty businesses with annualized sales of approximately $300 million, $201 million of which is included in 2001 revenues. Acquisitions, while adding initially to revenues, may not contribute proportionately to earnings in the early years. In these years, earnings generally are reduced by up-front costs such as interest, depreciation and amortization, and, in many instances, the expenses of integrating a newly acquired business into an existing operation. Additionally, many of the acquisitions include new technologies and products that require incremental investment to enhance their growth prospects. The company has maintained a conservative capital structure with total debt ranging from 30% to 40% of total capitalization. This provides the flexibility to increase borrowings should growth opportunities arise. Under these circumstances, it is conceivable that debt for a period of time may be in the range of 50% of total capitalization. The use of debt financing enables the company to maintain a lower cost of capital thus further enhancing value for shareholders. The company finances non-domestic operations primarily in their local currencies, thus reducing exposure to exchange rate fluctuations. Historically, operations have generated sufficient cash flow to finance the company's core growth while borrowings have been incurred largely to finance acquisitions. Over the past five years, cash flow from operations has totaled over $700 million. This operating cash flow is reinvested in the company's core businesses, provides for the payment of dividends and enables the company to continue to upgrade and expand its plant and equipment. The company, while not particularly capital intensive, has spent approximately 5% of sales annually on plant and equipment. RESULTS OF OPERATIONS 2001 VS. 2000: Revenues increased 8% in 2001 to $1.90 billion from $1.76 billion in 2000 due to gains in each of the company's three segments. An increase in sales from acquisitions was offset by declines from core sales, the impact of currency exchange rates and product line dispositions. Core sales declined because of weakness in the automotive and pleasure marine markets and, after the events of September 11, in the aerospace market. Non-domestic operations comprised 40% of the company's revenues and gained 11% over 2000 from acquisitions and core sales, despite a decline from currency exchange rates. For 2001, the Commercial, Medical and Aerospace segments comprised 48%, 22% and 30% of the company's net sales, respectively. In 2001, gross profit margin increased slightly resulting from gains in the Aerospace and Medical segments, which more than offset a decline in the Commercial Segment. Selling, engineering and administrative expenses as a percentage of sales increased in 2001 as a reduction in the Medical Segment was more than offset by increases in the Commercial and Aerospace segments. Operating profit increased 5% in 2001 to $206.8 million from $196.5 million in 2000. The increase was due to gains in the Medical and Aerospace segments which compensated for a decline in the Commercial Segment. Operating margin declined to 10.9% from Page 26 [TELEFLEX LOGO] 11.1% as an increase in Medical was offset by declines in Commercial and Aerospace. Expenses associated with the company's cost reduction programs contributed to the decline in operating margin. For 2001 the Commercial, Medical and Aerospace segments represented 41%, 30% and 29% of the company's operating profit, respectively. Interest expense increased as a result of additional borrowings incurred to finance acquisitions offset by lower interest rates. Interest expense as a percentage of sales increased to 1.5% in 2001 from 1.2% in 2000. The effective income tax rate declined to 29.7% in 2001 from 31.0% in 2000 because a higher proportion of income was earned in countries with relatively lower tax rates, including tax holidays. Net income in 2001 increased 3% to $112.3 million while diluted earnings per share increased 1% to $2.86. Basic earnings per share increased 1% to $2.90. [NET INCOME BAR GRAPH] The Financial Accounting Standards Board approved Statement of Financial Accounting Standard (SFAS) No. 141, "Business Combinations" and No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires business combinations to be accounted for using the purchase method of accounting. SFAS No. 142 requires goodwill and other intangible assets to be subject to an annual determination of their continuing value (an impairment test) rather than be amortized annually. While the company is still analyzing the effects of SFAS No. 142, it is not expected to record an impairment loss upon initial adoption in the first quarter of 2002. The amortization expense for goodwill that will cease in 2002 will contribute $14 million to operating profit, or, 24 cents per diluted share. 2000 VS. 1999: Revenues increased 10% in 2000 to $1.76 billion from $1.60 billion in 1999 resulting from gains in each of the company's three segments. Acquisitions accounted for half of the company's increase in revenue. Non-domestic operations comprised 38% of the company's revenues and increased 5% over 1999. The company's overall revenues were reduced as a result of weaker foreign currencies, mainly in the Medical Segment. The Commercial, Medical and Aerospace segments accounted for 49%, 23% and 28% of the company's revenues, respectively. Gross profit margin remained at 27.8% in 2000 resulting from increases in the Commercial and Aerospace segments which offset a decline in the Medical Segment. Selling, administrative and engineering expenses as a percentage of sales declined slightly in 2000 to 17.6% resulting from a reduction in the Medical Segment which offset increases in the Commercial and Aerospace segments. Operating profit increased 10% to $196.5 million from $178.3 million as all three segments gained. Operating margin remained at 11.1% resulting from a higher Medical Segment offsetting a lower Aerospace Segment while the Commercial Segment remained flat. The Commercial, Medical and Aerospace segments represented 44%, 29%, and 27% of the company's operating profit, respectively. Interest expense increased from higher interest rates and lower invested cash balances, as total borrowings declined slightly. Interest expense as a percentage of sales increased to 1.2% in 2000 from 1.1% in 1999. The effective income tax rate declined to 31.0% in 2000 compared with 33.3% in 1999 due to a higher proportion of income earned in 2000 in countries with relatively lower tax rates. In addition, for 2000 the company's effective tax rate was lower from a decrease in deferred taxes resulting from a reduction in the German statutory tax rate enacted in the fourth quarter. Net income increased 15% in 2000 to $109.2 million from $95.2 million and diluted earnings per share also increased 15% to $2.83. Basic earnings per share increased 13% to $2.86. COMMERCIAL SEGMENT The Commercial Segment designs and manufactures proprietary mechanical and electrical controls for the automotive market; mechanical, electronic and hydraulic controls, and electronic products for the pleasure marine market; and proprietary products for fluid transfer and industrial applications. Products in the Commercial Segment generally are produced in higher unit volume than those of the company's other two segments. They are manufactured for broad distribution as well as custom fabricated to meet individual customer needs. For the most part consumer spending patterns influence the market trends for these products. 2001 VS. 2000: Sales in the Commercial Segment increased 6% in 2001 to $908.2 million from $860.2 million in 2000. This Segment's overall increase in sales resulted from acquisitions, as core volume was lower from the recession-driven weakness in the automotive and marine markets. An increase in sales of the Marine and Industrial product lines offset a decline in the Automotive product line. The gain in Marine resulted from the acquisition of Morse Controls, which offset a decline in core sales from lower consumer demand in the marine market. The increase in the Industrial product line resulted from an acquisition of a manufacturer of fluid handling systems and from new applications for light-duty cables. The decline in the Automotive product line was the result of lower vehicle production and pricing pressures in the North American automotive industry, which was partially offset by increased sales of the adjustable pedal system. Teleflex Annual Report Page 27 2001 FINANCIAL REVIEW (CONTINUED) Operating profit declined 4% in 2001 to $83.8 million from $86.9 million in 2000 and operating margin dropped to 9.2% from 10.1%. In Marine, an increase in operating profit resulted from the acquisition of Morse Controls while additional development expenses for integrated electronic engine systems and a new line of fishfinders reduced operating margin. In Industrial, operating profit and margin increased from the additional volume of light-duty cables. The decline in North American build rate reduced operating profit and margin in the Automotive product line. Total assets in this Segment grew as a result of acquisitions. Return on average assets decreased in 2001 to 14.0% from 18.0% in 2000 due to the lower operating profits in the Automotive product line. [OPERATING PROFIT BAR CHART] 2000 VS. 1999: Sales in the Commercial Segment increased 14% in 2000 to $860.2 million from $757.7 million in 1999. All three product lines, Automotive, Marine and Industrial, reported sales gains with approximately one-half the growth coming from acquisitions. The increase in the Automotive product line was the result of a strong automotive market in North America and increased sales of new products including the adjustable pedal system. Within the Marine product line the increase was largely due to sales of new products. Sales in the Industrial product line benefited from acquisitions and new applications for light-duty cables. Operating profit rose 15% in 2000 to $86.9 million from $75.8 million while operating margin increased from 10.0% to 10.1%. Operating profit and margin increased in the Automotive product line from the additional volume despite product development expenses and plant start up for the adjustable pedal system. Within Industrial, operating profit increased on the additional volume but operating margin declined from lower margins of the acquired businesses and expenses associated with their integration. Marine operating profit and margin were lower from new product development expenses for integrated electronic engine systems and the adjustable pedal for the truck and bus market. Assets increased in 2000 due to acquisitions in the Industrial product line. Return on average assets increased to 18.0% in 2000 from 17.7% in 1999 as operating profit gains in the Automotive product line offset a lower return from acquisitions. MEDICAL SEGMENT The Medical Segment manufactures and distributes a broad range of invasive disposable and reusable devices for the urology, gastroenterology, anesthesiology and respiratory care markets worldwide. It also designs and manufactures a variety of specialty surgical products, and provides instrument management services. Products in the Medical Segment generally are required to meet exacting standards of performance and have long product life cycles. Economic influences on sales relate primarily to spending patterns in the worldwide medical devices and supply market. 2001 VS. 2000: In 2001 Medical Segment sales increased 4% to $429.3 million from $411.8 million in 2000 as a result of gains in both product lines, Hospital Supply and Surgical Devices. Within Hospital Supply, core growth and acquisitions more than offset declines from the divestiture of two product lines and weaker foreign currencies. In Surgical Devices, an increase in closure systems core products, new products such as the Hem-o-lok clips and a gain in instrument management services compensated for a decline in instruments. Operating profit grew 11% in 2001 to $62.7 million from $56.5 million in 2000 and operating margin increased to 14.6% from 13.7%. In Hospital Supply increased sales volume contributed to the gain in operating profit and margin. The disposition of two lower-margin product lines, the addition of direct distribution in Europe and the elimination of a distribution site also improved operating margin. In Surgical Devices the gains were due primarily to increased volume of closure products. Assets increased in 2001 as a result of the acquisitions, which offset the negative effects of currency translation. Return on average assets increased to 14.5% from 13.9% due to the higher operating profit combined with a relatively smaller increase in the asset base. 2000 VS. 1999: In 2000, Medical Segment sales increased by 11% to $411.8 million from $372.3 million in 1999 resulting from gains in both the Hospital Supply and Surgical Devices product lines. Excluding a decline in currency exchange rates, sales would have gained another 6%. The increase in the Hospital Supply product line resulted from core growth and the acquisition of a manufacturer of urological products and an Italian distributor. Within the Surgical Devices product line, growth from sales of new closure and instrument products resulted in the sales increase. Operating profit increased 14% in 2000 to $56.5 million and operating margin improved to 13.7% from 13.3%. The increases in operating profit and margin are the result of the volume gains in both Hospital Supply and Surgical Devices. Within Hospital Supply, the operating margin improvement resulted from the shift of production to low cost manufacturing facilities and increased sales of higher margin products. Page 28 [TELEFLEX LOGO] Assets increased due to the acquisitions and additional capital expenditures within Surgical Devices related to instrument management services. Return on average assets increased to 13.9% in 2000 from 13.2% in 1999 resulting from the gain in operating profit, which more than offset the increase in assets. [CAPITAL EXPENDITURES BAR CHART] AEROSPACE SEGMENT The Aerospace Segment serves the commercial aerospace, industrial turbo-machinery markets and, to a lesser extent, the military market. Its businesses design and manufacture cargo handling systems and containers for aviation; provide surface treatments, repair services and manufactured components for users of both flight and ground-based turbine engines. Sales are both to original equipment manufacturers (OEMs) and to the aftermarket. These products and services, many of which are proprietary, require a high degree of engineering sophistication, and are often custom-designed. Economic influences on these products and services relate primarily to spending patterns in the worldwide aerospace industry and to demand for power generation. 2001 VS. 2000: Sales in the Aerospace Segment grew 15% in 2001 to $567.5 million from $492.5 million in the prior year. Sales increases in cargo handling systems from both wide and narrow body products, in industrial gas turbine (IGT) services from an acquisition and a strong market, and in repair services, offset a decline in manufactured components. A portion of the Aerospace Segment's sales were negatively impacted in the fourth quarter by September 11, particularly repair services that are dependent on airline flight hours. Operating profit increased 14% in 2001 to $60.3 million from $53.1 million in 2000 while operating margin decreased to 10.6% from 10.8%. The higher operating profit is the result of the additional volumes in cargo handling systems, repair services and IGT services. The lower operating margin resulted from the sharp decline in fourth quarter volume, particularly in repair services; additional expenses associated with the start up of several IGT services facilities and, lower margins of acquired businesses. Assets increased in 2001 from the start up of several IGT facilities, from acquisitions and from inventory in the cargo handling systems product line related to volume. Return on average assets increased to 15.8% in 2001 from 15.3% in 2000 due to the gain in operating profit. 2000 VS. 1999: Sales in the Aerospace Segment increased 5% in 2000 to $492.5 million from $471.1 million in 1999. Sales increases in cargo handling systems due to increased market share, in IGT services due to a strong market and in repair services offset a decline in manufactured components. The acquisition of a manufacturer of containers for aircraft added to the growth in cargo handling systems and the purchase of an engineering services firm contributed to the increase in IGT services. The decline in the build rate for aircraft resulted in reduced manufactured component sales. Operating profit increased slightly to $53.1 million in 2000 from $52.9 million in 1999 while operating margin declined to 10.8% in 2000 from 11.2% in 1999. Operating profit gains due to the sales increases in cargo handling systems, IGT services and repair services offset a decline from manufactured components. Expenses associated with the combination of facilities in both cargo handling systems and IGT services and the closing of two component manufacturing plants lowered operating margin in 2000. The increase in assets in 2000 was due to the acquisitions. Return on average assets declined to 15.3% from 16.1% due to lower component manufacturing operating profit and a reduced return from acquisitions. LIQUIDITY, MARKET RISK AND CAPITAL RESOURCES Cash flows from operating activities were $188.3 million compared to $189.4 million in 2000 and $134.1 million in 1999. In 2001 higher net income and depreciation and amortization were offset by additional working capital requirements, primarily related to the timing of accounts payable. Both accounts receivable and inventories have increased relative to sales in 2001. Accounts receivable collections were hampered by the recession-related weakness in Commercial Segment markets and the slow down in the aerospace market while inventories were increased in part from the integration of Morse Controls. In 2000 the increase resulted from higher net income and depreciation and amortization and from improvements in working capital. In addition to the cash generated from operations the company has approximately $130 million in committed and $120 million in uncommitted unused lines of credit. The availability of the lines of credit is dependent upon the company maintaining its strong financial condition including its continued compliance with bank covenants. [DIVIDENDS PER SHARE BAR CHART] Teleflex Annual Report Page 29 2001 FINANCIAL REVIEW (CONTINUED) Various senior note agreements provide for the maintenance of certain financial ratios and limit the repurchase of the company's stock and payment of cash dividends. Under the most restrictive of these provisions, $204 million of retained earnings was available for dividends at December 30, 2001. For 2001 total borrowings increased $102 million as the financing of the Morse Controls acquisition was partially offset by declines from currency exchange rates and by scheduled repayments. [CASH FLOW FROM OPERATIONS BAR CHART] Total debt to total capitalization increased from 33% to 36% as a result of the additional borrowings. Approximately 50% of the company's total borrowings of $440 million are denominated in currencies other than the U.S. dollar, principally the Euro, providing a natural hedge against fluctuations in the value of non-domestic assets. For 2000, total borrowings for the company decreased $6 million and total debt to total capitalization declined from 36% to 33%. The declines were the result of repayments and currency exchange rate changes offset by additional borrowings to finance acquisitions. Contractual obligations at December 30, 2001 are summarized as follows:
Payments Due by Period Less than 1-3 4-5 After Total 1 year years years 5 years - -------------------------------------------------------------------------------- Long-term borrowings $270 $42 $133 $65 $30 - -------------------------------------------------------------------------------- Operating lease obligations $166 $35 $ 54 $41 $36
In summary, the company's financial condition remains strong. The company believes that its cash flows from operations and the ability to access additional funds through the credit facilities will enable it to fund its operating requirements, capital expenditures and additional acquisition opportunities. CONTINGENCIES AND ENVIRONMENTAL MATTERS The company is subject to numerous federal, state and local environmental laws and regulations including the Resource Conservation and Recovery Act, Comprehensive Environmental Response, Compensation and Liability Act, the Clean Air Act, and the Clean Water Act. Environmental programs are in place throughout the company including training, auditing and monitoring to ensure compliance with such laws and regulations. The company has been named as a Potentially Responsible Party by the Environmental Protection Agency at various sites throughout the country. Environmental costs, including liabilities associated with such sites, and the costs of complying with existing environmental regulations are not expected to result in a liability material to the company's consolidated financial position or results of operations. The company is a party to lawsuits and claims arising out of the normal course of business. In the opinion of management, there are no pending claims or litigation the outcome of which would have a material effect on the company's consolidated financial position or results of operations. [CAPITALIZATION BAR CHART] Page 30 [TELEFLEX LOGO] Teleflex Incorporated and Subsidiaries INVESTOR INFORMATION ANNUAL MEETING The Annual Meeting of shareholders will take place on April 26, 2002 at the: Jefferson House Restaurant (in the Ballroom) 2519 DeKalb Pike (Rte. 202) Norristown, Pennsylvania The meeting will convene at 10:00 a.m. All shareholders are cordially invited to attend. [TFX LISTED NYSE LOGO] MARKET AND OWNERSHIP OF COMMON STOCK New York Stock Exchange Trading Symbol: TFX As of December 30, 2001, the company's fiscal year end, the approximate number of shareholders of record was 1,186. INVESTOR RELATIONS Investors, analysts and others seeking information about the company should contact: Janine Dusossoit Vice President, Investor Relations (610) 834-6301 Financial and product information about Teleflex may be obtained on the company's Web site at www.teleflex.com. A copy of the Annual Report as filed with the Securities and Exchange Commission on Form 10-K and interim reports on Form 10-Q can be accessed on the company's Web site or can be mailed upon request to: Communications Department Teleflex Incorporated 155 South Limerick Road Limerick, Pennsylvania 19468 (610) 948-2811 e-mail: pcarr@teleflex.com TRANSFER AGENT AND REGISTRAR Questions concerning transfer requirements, lost certificates, dividends, duplicate mailings, change of address, or other stockholder matters should be addressed to the Transfer Agent: American Stock Transfer & Trust Company 40 Wall Street, 46th Floor New York, New York 10005 (800) 937-5449 DIVIDENDS Quarterly dividends customarily are mailed to reach shareholders on or about the 15th of March, June, September and December. Shareholders may have dividends deposited directly into their savings or checking account. Teleflex Incorporated offers a dividend reinvestment and direct stock purchase and sale plan. Contact American Stock Transfer & Trust Company for further information. PRICE RANGE AND DIVIDENDS OF COMMON STOCK
2001 High Low Last Dividends - -------------------------------------------------------------------------------- First Quarter $44.81 $38.38 $40.95 $ 0.15 Second Quarter $50.99 $39.80 $44.00 $ 0.17 Third Quarter $50.31 $34.00 $37.39 $ 0.17 Fourth Quarter $47.70 $37.10 $47.70 $ 0.17
2000 High Low Last Dividends - -------------------------------------------------------------------------------- First Quarter $36.13 $26.13 $35.50 $ 0.13 Second Quarter $38.94 $32.94 $35.75 $ 0.15 Third Quarter $39.50 $32.88 $34.38 $ 0.15 Fourth Quarter $45.38 $31.81 $44.19 $ 0.15
INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP Philadelphia, Pennsylvania FORWARD-LOOKING STATEMENTS In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company notes that certain statements contained in this report are forward-looking in nature. These forward-looking statements include matters such as business strategies, market potential, future financial performance, product deployments and other future-oriented matters. Such matters inherently involve many risks and uncertainties (including risks and uncertainties associated with changes in competitive and market conditions, changes in regulation and technology, policies of suppliers and customer acceptance of new products), which can cause actual results to differ materially from those projected in the forward-looking statements. For additional information, please refer to the Company's Securities and Exchange Commission filings including its most recent Form 10-K. Teleflex Annual Report Page 31 EX-21 4 w58094ex21.txt TELEFLEX INCORPORATED SUBSIDIARIES EXHIBIT 21 TELEFLEX INCORPORATED SUBSIDIARIES
JURISDICTION SUBSIDIARY OF INCORPORATION PARENT PERCENTAGE 1950 Williams Drive, LLC Delaware TFX Equities 100 924593 Ontario Limited Ontario Teleflex 81 (1) Advanced Thermodynamics Corporation Ontario 924593 Ontario 100 Access Medical S.A. France TFX International S.A. 100 AeroForge Corporation Indiana TFX Equities 100 Air Cargo Equipment Corporation Delaware Telair (CA) 100 Airfoil Management Company Delaware TFX Equities 100 Airfoil Management Limited UK Sermatech (U.K.) Limited 100 Airfoil Technologies (Florida), Inc. Delaware Aviation Product Support, Inc. 51 (2) Airfoil Technologies International LLC Delaware TFX Equities 51 (3) Airfoil Technologies Singapore PTE LTD Singapore Airfoil Technologies Internat'l 100 American General Aircraft Holding Co., Inc. Delaware Teleflex 74 Asept Inmed S.A. France TFX International S.A. 100 Astraflex BVBA Belgium TFX Group Ltd. 99 (4) Astraflex Limited UK TFX Group Ltd. 100 Aunic Engineering Limited UK Sermatech (U.K.) Limited 100 Autogas Techniek Holland B.V. The Netherlands United Parts Group, B.V. 100 Aviation Product Support, Inc. Delaware Airfoil Technologies Internat'l 60 (5) Bavaria Cargo Technologie GmbH Germany Telair International GmbH 100 Blue Armor International, Ltd. Maryland Sermatech 100 Capro de Mexico, S.A. de C.V. Mexico TFX International Corp. 99.99 (6) Capro Inc. Texas Teleflex 100 Capro-Casiraghi S.r.l. Italy Capro 80 (7) CCT De'Couper Industries, Inc. Michigan Comcorp Technologies, Inc. 100 CCT Plymouth Stamping Company Michigan Comcorp Technologies, Inc. 100 CCT Thomas Die & Stamping, Inc. Michigan CCT De'Couper Industries, Inc. 100 Cepco Precision Company of Canada, Inc. Canada Sermatech Engineering 100 Cetrek Engineering Ltd. UK Cetrek Ltd. 100 Cetrek Inc. Massachusetts Teleflex 100 Cetrek Limited UK TFX International Ltd. 100 Chemtronics International Ltd. UK Sermatech (U.K.) Limited 100 Claes Johansson Automotive AB Sweden Teleflex 30 (8) Claes Johansson Components AB Sweden Claes Johansson Automotive AB 100 Comcorp Inc. Michigan Teleflex 100 Comcorp Technologies, Inc. Michigan Teleflex 100 Comfort Pedals, Inc. Michigan Comcorp, Inc. 100 Compart Automotive B.V. The Netherlands United Parts Group B.V. 100 Entech, Inc. New Jersey TFX Equities 100 Franklin Medical Ltd. UK TFX Group Ltd. 100 G-Tel Aviation Limited UK Sermatech (U.K.) Limited 50 Gamut Technology, Inc. Texas Capro 100 Gas-Path Technology, Inc. Delaware Teleflex 100 Gator-Gard Incorporated Delaware Sermatech 100 GFI Control Systems, Inc. Ontario 924593 Ontario 100 GFI -USA, Inc. Delaware GFI Control Systems 100 Inmed (Malaysia) Holdings Sdn. Berhad Malaysia Willy Rusch AG 100 Inmed Acquisition, Inc. Delaware Teleflex 100 Inmed Corporation (9) Georgia Teleflex 100 Inmed Corporation (U.K.) Ltd. UK TFX Group Ltd. 100 Intelligent Applications Limited UK TFX Group Ltd. 100 Kaufman Industries Limited Maryland Sermatech 100 Kordial S.A. France TFX International S.A. 100 Lehr Precision, Inc. Ohio Teleflex 100 Lipac Liebinzeller Verpackungs-GmbH Germany Willy Rusch AG 100 Mal Tool & Engineering Limited UK TFX Group Ltd. 100
Page 1 EXHIBIT 21 TELEFLEX INCORPORATED SUBSIDIARIES
JURISDICTION SUBSIDIARY OF INCORPORATION PARENT PERCENTAGE Meddig Medizintechnik Vertriebs-GmbH Germany Rusch G B 87.5 Medical Service Vertriebs-GmbH Germany Willy Rusch AG 100 Mediland Rusch Care S.r.l. Italy Rusch Italia S.A.R.L. 100 Morse Controls AB Sweden Teleflex Industries Limited 100 Morse Controls Limited UK Teleflex UK Limited 100 Morse Controls (N.Z.) Limited New Zealand Morse Controls Pty. Ltd. 100 Morse Controls Pty Limited Australia Morse Controls Limited 100 Morse Controls S.L. Spain Spain TFX Equities 100 Norland Plastics Company Delaware TFX Equities 100 Phosphor Products Co. Limited UK TFX International Ltd. 100 Pilling Weck Chiurgische Produkte GmbH Germany TFX Holding GmbH 100 Pilling Weck Incorporated Delaware Teleflex 100 Pilling Weck Incorporated Pennsylvania Teleflex 100 Pilling Weck (Asia) PTE Ltd. (10) Singapore Pilling Weck (PA) 99.99 Pilling Weck (Canada)Inc. Canada 924593 Ontario 50.5 (11) Pilling Weck n.v. Belgium TFX International S.A. 100 Primaklimat AB Sweden Claes Johansson Components AB 100 Productos Aereos, S.A. de C.V. Mexico Telair International (CA) 99.99 (12) Rigel Compasses Limited UK TFX International Ltd. 100 RMH Controls Limited UK Morse Controls Limited 100 Rusch Asia Pacific Sdn. Berhad Malaysia Inmed (Malaysia) Holdings 100 Rusch AVT Medical Private Limited India TFX Equities 50 Rusch (UK) Ltd. UK TFX Group Ltd. 100 Rusch Austria Ges.mbH Austria Teleflex Holding GmbH (Austria) 100 Rusch France S.A.R.L. France Rusch G B 100 Rusch Inc. Delaware Rusch G B 100 Rusch Hospital (13) Germany Willy Rusch AG 100 Rusch Hospital S.r.l. Italy Rusch Italia S.A.R.L. 100 Rusch Italia S.A.R.L. Italy Willy Rusch AG 100 Rusch Manufacturing (UK) Ltd. UK TFX Group Ltd. 100 Rusch Manufacturing Sdn. Berhad Malaysia Inmed (Malaysia) Holdings 96.5 Rusch Medical, S.A. (14) France TFX International S.A. 100 Rusch Mexico, S.A. de C.V. Mexico Teleflex 99 (15) Rusch Sdn. Berhad Malaysia Inmed (Malaysia) Holdings 96.5 Rusch Uruguay Ltda. Uruguay Rusch G B 60 Rusch-Pilling Limited Canada Willy Rusch AG 50.5 (16) Rusch-Pilling S.A. France TFX International S.A. 100 S. Asferg Hospitalsartikler ApS Denmark Teleflex 100 Scandinavian Bellyloading Company AB Sweden Telair International GmbH 100 Scandinavian Bellyloading Internat'l, Inc. California Teleflex 100 Sermatech (Canada) Inc. Canada 924593 Ontario 100 Sermatech de Mexico s. de R.L. de C.V. Mexico TFX Equities 99.97 (17) Sermatech Engineering Group, Inc. Delaware Teleflex 100 Sermatech Gas-Path (Asia) Ltd. Thailand Sermatech 100 Sermatech (Germany) GmbH Germany TFX Holding GmbH 100 Sermatech International Incorporated PA Teleflex 100 Sermatech Korea, Ltd. Korea Sermatech 51 (18) Sermatech-Mal Tool SARL France TFX International S.A. 100 (19) Sermatech Private Limited India Sermatech International, Inc. 64 (20) Sermatech Repair Services Limited UK Airfoil Technologies Internat'l 60 (21) Sermatech-Tourolle S.A. France TFX International S.A. 100 Sermatech (U.K.) Limited UK TFX Group Ltd. 100 SermeTel Technical Services (STS) GmbH Germany TFX Holding GmbH 100 Sierra International Inc. Illinois TFX Equities 100
Page 2 EXHIBIT 21 TELEFLEX INCORPORATED SUBSIDIARIES
JURISDICTION SUBSIDIARY OF INCORPORATION PARENT PERCENTAGE Simal S.A. Belgium TFX International S.A. 100 SSI Surgical Services, Inc. (22) New York TFX Equities 85 Technology Holding Company Delaware TFX Equities 100 Technology Holding Company II Delaware Technology Holding Company III 100 Technology Holding Company III Delaware Techsonic Industries, Inc. 66 (23) Techsonic Industries, Inc. Alabama Teleflex 100 Telair International GmbH Germany TFX Holding GmbH 100 Telair International Incorporated(24) California Teleflex 100 Telair International Incorporated Delaware Teleflex 100 Telair International Services GmbH (25) Germany Bavaria Cargo Technologie 100 Telair International Services PTE LTD Singapore Telair (CA) 70.5 (26) Teleflex (Canada) Limited Canada(B.C.) 924593 Ontario 100 Teleflex Automotive (Co-Partnership) Michigan Teleflex 99 (27) Teleflex Automotive Germany GmbH (28) Germany UPDC Systems (Holding) GmbH 100 Teleflex Automotive de Mexico S.A. de C.V. Mexico TFX Equities 99.9 (29) Teleflex Automotive Manufacturing Corporation Delaware Teleflex 100 Teleflex do Brasil S.A. Brasil TFX Equities 80 (30) Telelfex Fluid Systems (Europe) BV The Netherlands United Parts Group B.V. 100 Teleflex Fluid Systems (Europe) SA Spain Teleflex Holding GmbH (Austria) 100 Teleflex Fluid Systems, Inc. Connecticut Teleflex 100 Teleflex Fluid Systems (UK) Limited UK Teleflex Machine Products, Inc. 100 Teleflex Funding Corporation Delaware Teleflex Incorporated 40 (31) Teleflex Holding GmbH (Austria) Austria Teleflex Incorporated 55.1 (32) Teleflex Industries Limited UK Teleflex UK Limited 100 Teleflex Limited UK Teleflex Industries Limited 100 Teleflex Machine Products, Inc. Delaware Teleflex Fluid 100 Teleflex - Morse GmbH Germany TFX Holding GmbH 100 Teleflex Morse Limited UK Teleflex Industries Limited 100 Teleflex-Morse (N.Z.) Limited New Zealand Morse Controls Pty. Ltd. 100 Teleflex Pte. Ltd. Singapore Pilling Weck Asia Pte. Ltd. 100 Teleflex UK Limited UK TFX Group Ltd. 100 TFX Automotive LTD (33) UK TFX Group Ltd. 100 TFX Engineering Ltd. Bermuda Teleflex Holding GmbH (Austria) 100 TFX Equities Incorporated Delaware Teleflex 100 TFX Financial Services (UK) UK TFX Engineering Ltd. (Bermuda) 100 TFX Foreign Sales Corporation Barbados TFX International Corp. 100 TFX Group Limited UK Teleflex Holding GmbH (Austria) 100 TFX Holding GmbH Germany Teleflex Holding GmbH (Austria) 100 TFX International Corporation Delaware Teleflex 100 TFX International Limited UK TFX Group Ltd. 100 TFX International S. A. France Teleflex 100 TFX Marine Incorporated Delaware Teleflex 100 TFX Medical Incorporated Delaware Teleflex 100 TFX Medical Wire Products, Inc. Delaware TFX Equities 100 TFX Scandinavia AB (34) Sweden Teleflex 100 The ISPA Company Maryland Sermatech 100 Top Surgical GmbH Germany PW Chiurgische Produkte GmbH 100 Turbine Technology Services Corporation New York Sermatech 100 United Parts Driver's Control Systems AB Sweden Telair International GmbH 100 United Parts Driver Control Systems B.V. The Netherlands United Parts Group B.V. 100 United Parts Driver Control Systems (UK) Ltd. UK TFX Group Ltd. 100 United Parts Driver Control Systems (Holding) GmbH Germany United Parts Group N.V. 94 (35) United Parts de Mexico SA de CV Mexico United Parts Group N.V. 99.998 (36)
Page 3 EXHIBIT 21 TELEFLEX INCORPORATED SUBSIDIARIES
JURISDICTION SUBSIDIARY OF INCORPORATION PARENT PERCENTAGE United Parts France S.A. France TFX International S.A. 100 United Parts Group B.V. The Netherlands Telair International GmbH 100 United Parts FHS Automobile Systeme GmbH Germany UPDC Systems (Holding) GmbH 99.9 (37) United Parts s.a. France TFX International s.a. 100 United Parts Slovakia sro Slovakia UPDC Systems BV 100 Victor Huber GmbH Germany Teleflex 100 Weck Closure Systems LLC Delaware Pilling Weck Incorporated (DE) 100 Willy Rusch AG Germany TFX Holding GmbH 100 Willy Rusch Grundstucks und Beteiligungs AG + Co KG ("Rusch G B") Germany Willy Rusch AG 99.8 (38)
1. 14% owned by Sermatech and 5% owned by Pilling Weck (PA). 2. 49% owned by Sermatech International Incorporated. 3. 49% owned by General Electric Company. 4. 1% owned by Teleflex Fluid Systems, Inc. 5. 40% owned by TFX Equities. 6. One share (.002%) is owned by TFX Equities. 7. 20% owned by Alberto Casiraghi. 8. 60.59% owned by On-Invest AB, 8.01% owned by Wirab Innovation AB, 1.40% owned by Thomas Lojdquist (see On-Invest Agreement). 9. Trades under name "Rusch Inc." 10. Formerly Rusch-Pilling (Asia) PTE LTD. -- 13 shares owned by Eric Cheong Pak Koon, 27 shares owned by Jim Yoncheck. 11. 49.5% owned by Rusch G B. 12. .01% owned by Air Cargo Equipment Corporation 13. Formerly Asid Bonz GmbH. 14. Formerly Europe Medical, S.A. 15. 1% owned by Rusch Inc. 16. 49.5% owned by 924593 Ontario. 17. .03% owned by TFX International Corporation 18. 49% owned by Aerospace Industries Ltd. 19. Formerly Mal Tool & Engineering SARL. 20. 26% owned by AVT; 10% owned by ATTS 21. 40% owned by TFX Equities. 22. Formerly Medical Sterilization, Inc. 23. 34% owned by ten other subsidiary companies. 24. Formerly The Talley Corporation. Trades under name "Teleflex Control Systems." 25. Formerly Telair Cargo Electronic Systems GmbH. 26. 29.5% owned by TPA PTE LTD & Mr. Chan. 27. 1% owned by TFX Equities 28. New name for merger of former companies, United Parts Automotive Engineering GmbH and United Parts Germany GmbH 29. One share (.001%) is owned by TFX International Corporation. 30. 20% owned by Fania-Fabrica Nacional de Instrumentos Para Auto Veiculos ("Fania"). 31 60% owned by GSS Holding, Inc. 32. 17.5% owned by TFX International Corporation, 10.1% by Inmed Corporation, 7.6% by TFX Equities Incorporated, 6% by Telair International Incorporated (DE), and 3.7% by Sermatech International Incorporated. 33. Formerly S.J. Clark (Cables) Limited. Trades under name "Clarks Cables." 34. Formerly TX Controls AB. 35. 6% owned by Compart Automotive B.V. 36. 0.002% owned by Compart Automotive B.V. 37. 0.1% owned by Arminium Treuhand. 38. Two shares (.2%) owned by Inmed Corporation Page 4 EX-24 5 w58094ex24.txt POWER OF ATTORNEY EXHIBIT 24 POWER OF ATTORNEY Each of the undersigned Directors of Teleflex Incorporated, a Delaware corporation (the "Company"), hereby appoints Lennox K. Black, Harold L. Zuber, Jr. and Steven K. Chance, and each of them, with full power of substitution, to act as his attorney-in-fact to execute, on behalf of the undersigned, the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2001. IN WITNESS WHEREOF, this Power of Attorney is executed this 4th day of February, 2002. /s/ Patricia Barron /s/ L. K. Black - -------------------------------- ---------------------------------- Patricia Barron Lennox K. Black /s/ Donald Beckman /s/ William R. Cook - -------------------------------- ---------------------------------- Donald Beckman William R. Cook /s/ Joseph S. Gonnella /s/ Sigismundus W. W. Lubsen - -------------------------------- ---------------------------------- Joseph S. Gonnella Sigismundus W. W. Lubsen /s/ Palmer E. Retzlaff /s/ James W. Stratton - -------------------------------- ---------------------------------- Palmer E. Retzlaff James W. Stratton -----END PRIVACY-ENHANCED MESSAGE-----