EX-99.1 2 exhibit1.htm EX-99.1 EX-99.1

Exhibit 99.1

     
Teleflex ®
  NEWS
 
    
155 South Limerick Road, Limerick, PA 19468 USA — Phone: 610-948-5100 — Fax: 610-948-0811
     
Contact:Julie McDowell
Vice President, Corporate Communications
610-948-2836
 


 
    
FOR IMMEDIATE RELEASE
  October 25, 2006

TELEFLEX ANNOUNCES THIRD QUARTER 2006 RESULTS
Revenue Up 9%, Core Growth 6%, Net Income Up 7%
Strong Cash Flow from Operations

Limerick, PA — Teleflex Incorporated (NYSE: TFX) today reported financial results for the third quarter ended September 24, 2006.
Third Quarter Revenues

Revenues were $639.1 million, up 9% from $587.4 million in the third quarter of 2005. Core revenue growth, which excludes the impact of acquisitions, divestitures and currency, was 6%.

Third Quarter Income from Continuing Operations

Income from continuing operations for the third quarter increased to $36.3 million or $0.92 per diluted share from $35.7 million or $0.87 per diluted share in the prior year quarter. Excluding special charges, (restructuring costs of $2.4 million and a gain on sale of assets of $0.6 million) income from continuing operations for the third quarter was $38.0 million or $0.96 per diluted share compared to $35.8 million or $0.87 per diluted share (excluding restructuring and other costs of $3.7 million and a gain on sale of assets of $3.6 million) in 2005.

Third Quarter Loss from Discontinued Operations

For the third quarter, the loss from discontinued operations was $0.3 million or $0.01 per diluted share compared to a loss of $2.1 million or $0.05 per diluted share in the prior year.

Third Quarter Net Income

Net income for the third quarter rose to $36.0 million or $0.91 per diluted share, increases of 7% and 11% respectively, compared to $33.6 million or $0.82 per diluted share in third quarter of 2005.

(MORE)

Commentary

Jeffrey P. Black, chairman and chief executive officer of Teleflex said, “Teleflex businesses delivered a strong quarter with solid revenue and core growth in all three segments. The Aerospace Segment had double-digit topline growth and another quarter of operating profit improvement. We made good progress in the Medical Segment as operating margins continued to improve and business performance stayed ahead of the expectations we set for the quarter. And, our Commercial Segment executed well despite tough end markets in automotive and marine, posting a substantial year over year increase in operating profits.”

Black continued, “In addition, we delivered strong operating cash flow, completed our stock buyback program, and maintained a strong balance sheet. All told, we believe the third quarter’s strong results put Teleflex on target to deliver on our guidance for the year.”

Third Quarter Business Segment Commentary

Segment commentary excludes the impact of discontinued operations and items included in restructuring costs as disclosed in the condensed consolidated statements of income.

Commercial

Commercial Segment revenues increased 7% in the third quarter of 2006 to $290.4 million from $270.2 million last year. The increase resulted from core growth of 3% and 4% from currency. Segment revenues benefited primarily from increased sales of industrial products including auxiliary power units, alternative fuel systems and heavy duty rigging while sales of automotive shifters and cables declined slightly on reduced production of some platforms by automotive manufacturers in North America and Europe.

Commercial Segment operating profit increased 60% over the third quarter last year, to $14.8 million from $9.2 million. Segment operating profit improvement in the quarter was largely related to higher volume and improved operational efficiencies for certain industrial products and favorable comparisons with the prior year quarter. In the prior year quarter, results were negatively impacted by duplicate costs and inefficiencies related to product transfers in the automotive business.

Medical

Medical Segment revenues were $207.7 million, a 6% increase over revenues of $196.6 million in 2005. Increased sales of disposable medical products to healthcare providers in Europe and North America and sales of specialty devices for medical device manufacturers were the largest contributors to core growth of 4%.

(MORE)

Medical Segment operating profit increased 14% to $44.2 million from $38.9 million in 2005. Operating profit increased when compared to the prior year primarily as a result of cost reduction initiatives and benefits of restructuring.

Aerospace

Aerospace Segment revenues increased 17% to $141.1 million from $120.7 million in 2005. Core growth of 13% was driven primarily by increased sales and installation of new build and conversion wide body cargo handling systems and related aftermarket parts, and, to a lesser extent, increases in volume for repairs products and services and precision machined components for aircraft engines.

Aerospace Segment operating profit increased 6% to $12.2 million from $11.5 million in 2005. Operating profit increased as a result of higher volume levels, cost and productivity improvements.

Continuing Operations – First Nine Months

For the first nine months of 2006, revenues increased 5% to $1.95 billion compared to revenues of $1.87 billion for the same period in 2005. Income from continuing operations for the first nine months was $101.3 million or $2.52 per diluted share. In the prior year period, income from continuing operations was $98.7 million or $2.41 per diluted share. Income from continuing operations excluding special charges, loss on sale of assets and a one-time tax benefit for the first nine months of 2006 was $108.4 million or $2.69 per diluted share. Income from continuing operations excluding special charges and gain on sale of assets for the prior year was $109.2 million or $2.67 per diluted share.

Cash Flow from Operations

For the first nine months of 2006, cash flow from operations was $213.7 million, compared with cash flow from operations of $245.0 million in the same period last year.

Outlook

The company continues to expect 2006 diluted earnings per share from continuing operations before special charges, gain or loss on sale of assets and the tax benefit to be in the range of $3.75 to $3.90. Special charges are now expected to be in the range of 35 cents to 45 cents per diluted share. The tax benefit is expected to be 12 cents per diluted share. The company continues to expect cash flow from operations for the full year 2006 will approximate $300 million.

Stock Repurchase Program

In July 2005, the Board of Directors authorized the repurchase of up to $140 million of outstanding Teleflex common stock. The company repurchased a total of 2,317,347 shares during 2005 and the first nine months of 2006 for an aggregate purchase price of $140 million.

(MORE)

Third Quarter Conference Call Webcast

  As previously announced, Teleflex will comment on its third quarter results on a conference call to be held Thursday, October 26, 2006, at 10:00 a.m. (ET). The call will be

available live and archived on the company’s website at www.teleflex.com and accompanying charts will be posted prior to the call. An audio replay will be available until October 31st at 5:00 p.m. (ET) by calling 888-286-8010 (US/Canada) or 617-801-6888 (International) and enter Passcode # 35748260.

Additional Notes and Notes on Non-GAAP Financial Measures:

This press release addresses certain income measures which exclude the effect of restructuring and other costs associated with our restructuring and divestiture programs, a one-time tax benefit, and gains or losses on sale of assets which may be considered non-GAAP financial measures. A table reconciling income and diluted earnings per share from continuing operations to income and diluted earnings per share from continuing operations excluding special charges, tax benefit and gain or loss on sale of assets is set forth below.

                                                                 
    3Q 2006           9 Month 2006
    Continuing Operations          Continuing Operations
                    (dollars in thousands, except per share)                        
Income and diluted earnings per share
   $   36,282           $ 0.92           $ 101,309           $ 2.52
Special charges:
                                                                
Restructuring and other costs
       3,275                           16,243                
Income tax (benefit) on restructuring costs
           (910 )                           (4,182 )                
 
                                                                
Restructuring costs, net of tax
           2,365           0.06           12,061           0.30
 
                                                                
(Gains) losses:
                                                                
(Gain) loss on sale of assets
           (453 )                           732                
Income tax (benefit) on (gain) loss on sale of assets
           (169 )                           (851 )                
 
                                                                
(Gain) loss on sale of assets, net of tax
           (622 )           (0.02 )           (119 )           (0.00 )
 
                                                                
One-time tax benefit:
                                                                
Tax benefit
                                           (4,843 )           (0.12 )
 
                                                                
Income and diluted earnings per share excluding special charges, tax benefit, and (gain) loss on sale of assets
   $   38,025        $ 0.96           $ 108,408        $ 2.69
 
                                                                
                                                                 
    3Q 2005           9 Month 2005
    Continuing Operations          Continuing Operations
                    (dollars in thousands, except per share)                        
Income and diluted earnings per share
   $   35,714           $ 0.87           $ 98,717           $ 2.41
Special charges:
                                                                
Restructuring and other costs
       5,776                           21,723                
Income tax (benefit) on restructuring costs
           (2,085 )                           (7,603 )                
 
                                                                
Restructuring costs, net of tax
           3,691           0.09           14,120           0.34
 
                                                                
Gains:
                                                                
Gain on sale of assets
           (5,569 )                           (5,569 )                
Income tax on gain on sale of assets
           1,950                           1,950                
 
                                                                
Gain on sale of assets, net of tax
           (3,619 )           (0.09 )           (3,619 )           (0.09 )
 
                                                                
Income and diluted earnings per share excluding special charges and gain on sale of assets
   $   35,786        $ 0.87           $ 109,218        $ 2.67
 
                                                                

(MORE)

Certain financial information is presented on a rounded basis which may cause minor differences.

Core growth includes activity of a purchased company beyond the initial twelve months after the date of acquisition. Core growth excludes the impact of translating the results of international subsidiaries at different currency exchange rates from year to year, and the comparable activity of divested companies within the most recent twelve-month period.

Teleflex at a Glance:
Teleflex is a diversified company with 2005 annual revenues of $2.5 billion. The company designs, manufactures and distributes quality-engineered products and services for the commercial, medical and aerospace markets worldwide. Teleflex employs more than 20,000 people worldwide who focus on providing innovative solutions for customers. Additional information about Teleflex, including a recent archived conference call with analysts and investors, can be obtained from the company’s website on the Internet at www.teleflex.com.

Caution Concerning Forward-looking information:
This press release contains forward-looking statements, including, but not limited to, statements relating to our business performance outlook for 2006; forecasted 2006 diluted earnings per share from continuing operations excluding special charges, gain or loss on sale of assets and a tax benefit; forecasted 2006 special charges; forecasted 2006 non-cash expense related to stock options; and forecasted 2006 cash flow from operations.   Actual results could differ materially from those in these forward-looking statements due to, among other things, unanticipated expenditures in connection with the effectuation of restructuring programs; costs and length of time required to comply with legal requirements applicable to certain aspects of the restructuring program; unanticipated difficulties in connection with consolidation of manufacturing and administrative functions; customer reaction to new programs; and other factors described in Teleflex’s filings with the Securities and Exchange Commission.

(MORE)

TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

                                                         
    Three Months Ended
    September 24,           September 25,
    2006           2005
    (Dollars and shares in thousands, except per share)
Revenues.......................................................................................................
   $   639,132           $   587,390    
Materials, labor and other product costs..................................................................
       453,990               421,327    
 
                                                        
Gross profit..................................................................................................
       185,142               166,063    
Selling, engineering and administrative expenses.......................................................
       115,009               104,666    
Gain on sales of businesses and assets...................................................................
           (453 )                           (5,569 )        
Restructuring and impairment charges.....................................................................
       3,275               5,776    
 
                                                        
Income from continuing operations before interest, taxes and minority interest.................
       67,311                   61,190        
Interest expense.............................................................................................
           10,283                           11,000        
Interest income.............................................................................................
           (1,742 )                           (1,202 )        
Income from continuing operations before taxes and minority interest.............................
       58,770                   51,392        
Taxes on income from continuing operations.............................................................
       15,861                   10,360        
 
                                                        
Income from continuing operations before minority interest............................................
           42,909                           41,032        
Minority interest in consolidated subsidiaries, net of tax...............................................
           6,627                           5,318        
 
                                                        
Income from continuing operations......................................................................
           36,282                   35,714        
 
                                                        
Operating loss from discontinued operations (including loss on disposal of $(401) and $(1,291), respectively)........................................................................
           (473 )                   (4,299 )        
Tax benefit on loss from discontinued operations........................................................
           (157 )                   (2,185 )        
 
                                                        
Loss from discontinued operations..........................................................................
           (316 )                   (2,114 )        
 
                                                        
Net income.....................................................................................................
           $ 35,966               $   33,600        
 
                                                        
 
                                                        
Earnings (losses) per share:
                                                        
 
                                                        
Basic:
                                                        
Income from continuing operations..................................................................
           $ 0.92               $   0.88        
Loss from discontinued operations..................................................................
           $ (0.01 )               $   (0.05 )        
 
                                                        
Net income...........................................................................................
           $ 0.91               $   0.83        
 
                                                        
 
                                                        
Diluted:
                                                        
Income from continuing operations..................................................................
           $ 0.92               $   0.87        
Loss from discontinued operations...................................................................
           $ (0.01 )               $   (0.05 )        
 
                                                        
Net income...........................................................................................
           $ 0.91               $   0.82        
 
                                                        
 
                                                        
Dividends per share..........................................................................................
           $ 0.285               $   0.250        
 
                                                        
Weighted average common shares outstanding:
                                                        
Basic........................................................................................................
           39,465                           40,569        
Diluted...................................................................................................
           39,566                           41,185        

(MORE)

TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

                                                         
    Nine Months Ended
    September 24,           September 25,
    2006           2005
    (Dollars and shares in thousands, except per share)
Revenues.......................................................................................................
   $   1,953,914           $   1,867,999    
Materials, labor and other product costs..................................................................
       1,382,650               1,337,956    
 
                                                        
Gross profit..................................................................................................
       571,264               530,043    
Selling, engineering and administrative expenses.......................................................
       367,793               337,236    
(Gain) loss on sales of businesses and assets............................................................
           732                           (5,569 )        
Restructuring and impairment charges.....................................................................
       16,243               19,723    
 
                                                        
Income from continuing operations before interest, taxes and minority interest.................
       186,496                   178,653        
Interest expense.............................................................................................
           31,158                           33,747        
Interest income.............................................................................................
           (4,877 )                           (2,296 )        
Income from continuing operations before taxes and minority interest.............................
       160,215                   147,202        
Taxes on income from continuing operations.............................................................
       40,691                   33,288        
 
                                                        
Income from continuing operations before minority interest............................................
           119,524                           113,914        
Minority interest in consolidated subsidiaries, net of tax...............................................
           18,215                           15,197        
 
                                                        
Income from continuing operations......................................................................
           101,309                   98,717        
 
                                                        
Operating income (loss) from discontinued operations (including gain on disposal of $663 and $34,830, respectively)..........................................................................
           (24 )                   3,645        
Taxes (benefit) on income from discontinued operations...............................................
           (426 )                   1,063        
 
                                                        
Income from discontinued operations......................................................................
           402                   2,582        
 
                                                        
Net income.....................................................................................................
           $ 101,711               $   101,299        
 
                                                        
 
                                                        
Earnings per share:
                                                        
 
                                                        
Basic:
                                                        
Income from continuing operations..................................................................
           $ 2.53               $   2.43        
Income from discontinued operations...............................................................
           $ 0.01               $   0.06        
 
                                                        
Net income...........................................................................................
           $ 2.54               $   2.50        
 
                                                        
 
                                                        
Diluted:
                                                        
Income from continuing operations..................................................................
           $ 2.52               $   2.41        
Income from discontinued operations...............................................................
           $ 0.01               $   0.06        
 
                                                        
Net income...........................................................................................
           $ 2.53               $   2.47        
 
                                                        
 
                                                        
Dividends per share..........................................................................................
           $ 0.820               $   0.720        
 
                                                        
Weighted average common shares outstanding:
                                                        
Basic........................................................................................................
           40,019                           40,552        
Diluted...................................................................................................
           40,241                           40,972        

(MORE)

TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

                                         
    September 24,           December 25,
    2006           2005
    (Dollars in thousands)
ASSETS
                                        
Current assets
                                    
Cash and cash equivalents.........................................................................
           $ 202,425       $   239,536
Accounts receivable, net..........................................................................
           408,914           421,236
Inventories...........................................................................................
       422,290           404,271
Prepaid expenses.................................................................................
       31,608           20,571
Deferred tax assets...............................................................................
       66,254           57,915
Assets held for sale................................................................................
       14,859           16,899
 
                                        
Total current assets...........................................................................
       1,146,350           1,160,428
Property, plant and equipment, net...................................................................
           424,084           447,816
Goodwill.................................................................................................
       495,340           504,666
Intangibles and other assets...........................................................................
       247,717           259,218
Investments in affiliates...............................................................................
       24,095           24,666
Deferred tax assets...................................................................................
           5,304                   6,254
 
                                        
Total assets....................................................................................
           $ 2,342,890       $   2,403,048
 
                                        
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                        
Current liabilities
                                        
Current borrowings.................................................................................
           $ 59,323       $   125,510
Accounts payable.................................................................................
           211,505               206,548
Accrued expenses.................................................................................
       189,430           206,231
Income taxes payable..............................................................................
       38,160           46,222
Deferred tax liabilities..............................................................................
       296           408
Liabilities held for sale..............................................................................
       117           66
 
                                        
Total current liabilities.........................................................................
       498,831           584,985
Long-term borrowings.................................................................................
           486,001               505,272
Deferred tax liabilities..................................................................................
       49,948           50,535
Other liabilities.......................................................................................
           106,075                   102,782
 
                                        
Total liabilities.................................................................................
       1,140,855           1,243,574
Minority interest in equity of consolidated subsidiaries..........................................
           35,058                   17,400
Commitments and contingencies
                                        
Shareholders’ equity....................................................................................
       1,166,977           1,142,074
 
                                        
Total liabilities and shareholders’ equity....................................................
           $ 2,342,890       $   2,403,048
 
                                        

(MORE)

TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

                                         
    Nine Months Ended
    September 24,           September 25,
    2006       2005
    (Dollars in thousands)
Cash Flows from Operating Activities of Continuing Operations:
                                    
Net income..............................................................................................
           $ 101,711       $   101,299
Adjustments to reconcile net income to net cash provided by operating activities:
                                    
Income from discontinued operations...........................................................
           (402 )                   (2,582 )
Depreciation expense..............................................................................
       62,119           65,930
Amortization expense of intangible assets....................................................
       10,037           10,868
Amortization expense of deferred financing costs...........................................
       963           757
Stock-based compensation.......................................................................
           5,100                   —
(Gain) loss on sales of businesses and assets.....................................................
       732           (5,569 )
Impairment of long-lived assets................................................................
       5,230           2,664
Minority interest in consolidated subsidiaries.................................................
           18,215                   15,197
Other................................................................................................
       649           (831 )
Net change in operating assets and liabilities................................................
       9,347           57,310
 
                                        
Net cash provided by operating activities from continuing operations..................
       213,701           245,043
 
                                        
 
                                        
Cash Flows from Financing Activities of Continuing Operations:
                                    
Proceeds from long-term borrowings...............................................................
       —           61,085
Reduction in long-term borrowings...............................................................
       (33,402 )           (122,417 )
Decrease in notes payable and current borrowings..............................................
       (60,789 )           (46,358 )
Proceeds from stock compensation plans.........................................................
       8,939           21,191
Payments to minority interest shareholders.......................................................
           (618 )                   (14,035 )
Purchases of treasury stock..........................................................................
       (93,552 )           (39,263 )
Dividends.............................................................................................
       (33,006 )           (29,200 )
 
                                        
Net cash used in financing activities from continuing operations..................
       (212,428 )           (168,997 )
 
                                        
 
                                        
Cash Flows from Investing Activities of Continuing Operations:
                                    
Expenditures for property, plant and equipment...................................................
       (42,343 )           (45,690 )
Payments for businesses acquired...................................................................
           (4,334 )                   (14,701 )
Proceeds from sales of businesses and assets.....................................................
       3,643           124,420
Proceeds from affiliates................................................................................
       3,002           173
Working capital payment for divested business....................................................
           (6,029 )                   —
 
                                        
Net cash provided by (used in) investing activities from continuing operations.......
       (46,061 )           64,202
 
                                        
 
                                        
Cash Flows from Discontinued Operations – 2005 Revised:
                                        
Net cash provided by (used in) operating activities..............................................
           851                   (384 )
Net cash used in financing activities...............................................................
           —                   (198 )
Net cash used in investing activities..................................................................
           (93 )                   (2,682 )
 
                                        
Net cash provided by (used in) discontinued operations.................................
       758           (3,264 )
 
                                        
Effect of exchange rate changes on cash and cash equivalents....................................
           6,919           (6,861 )
 
                                        
 
                                    
Net increase (decrease) in cash and cash equivalents.................................................
       (37,111 )           130,123
Cash and cash equivalents at the beginning of the period.............................................
       239,536           115,955
 
                                        
Cash and cash equivalents at the end of the period...................................................
           $ 202,425       $   246,078
 
                                        

(MORE)

TELEFLEX INCORPORATED AND SUBSIDIARIES
SUMMARY OF SEGMENT RESULTS
(Unaudited)

                                         
    Three Months Ended
    September 24,                   September 25,
    2006                   2005
    (Dollars in thousands)
 
                                        
Revenues:
                                        
Commercial...................................................... .......................................
   $   290,357                   $ 270,173
Medical............................................................... ....................................
           207,722                   196,553
Aerospace......................................................... .......................................
           141,053                   120,664
 
                                        
Total revenues............................................. ..........................................
           639,132                   587,390
 
                                        
 
                                        
Operating profit (1):
                                        
Commercial...................................................... .......................................
           14,756                   9,199
Medical............................................................... ....................................
           44,223                   38,938
Aerospace......................................................... .......................................
           12,205                   11,521
 
                                        
Segment operating profit........................................... .................................
       71,184           59,658
Less: Corporate expenses............................................ .....................................
       7,678           3,579
 
                                        
Total operating profit................................................. ..............................
           63,506                   56,079
Gain on sales of businesses and assets................................................................ ......
           (453 )                   (5,569 )
Restructuring and impairment charges.....................................................................
       3,275           5,776
Minority interest in consolidated subsidiaries (2).................................................. .......
           (6,627 )                   (5,318 )
 
                                        
Income from continuing operations before interest, taxes and minority interest..................
           $ 67,311       $   61,190
 
                                        

(1)   Total operating profit is defined as segment operating profit, which includes a segment’s revenues reduced by its materials, labor and other product costs along with the segment’s selling, engineering and administrative expenses and minority interest, less unallocated corporate expenses. Gain on sales of businesses and assets, restructuring and impairment charges, interest income and expense and taxes on income are excluded from the measure.

(2)   Minority interest in consolidated subsidiaries is included in segment operating profit presented above and must be removed in order to calculate income from continuing operations before interest, taxes and minority interest, as presented on the Company’s condensed consolidated statements of income for the three months ended September 24, 2006 and September 25, 2005, respectively.

(MORE)

TELEFLEX INCORPORATED AND SUBSIDIARIES
SUMMARY OF SEGMENT RESULTS
(Unaudited)

                                         
    Nine Months Ended
    September 24,                   September 25,
    2006                   2005
    (Dollars in thousands)
 
                                        
Revenues:
                                        
Commercial...................................................... .......................................
           $ 932,051                   $ 888,687
Medical............................................................... ....................................
           628,604                   624,410
Aerospace......................................................... .......................................
           393,259                   354,902
 
                                        
Total revenues............................................. ..........................................
           1,953,914                   1,867,999
 
                                        
 
                                        
Operating profit (1):
                                        
Commercial...................................................... .......................................
           60,092                   59,377
Medical............................................................... ....................................
           111,819                   114,878
Aerospace......................................................... .......................................
           34,994                   20,054
 
                                        
Segment operating profit........................................... .................................
       206,905           194,309
Less: Corporate expenses............................................ .....................................
       21,649           16,699
 
                                        
Total operating profit................................................. ..............................
           185,256                   177,610
(Gain) loss on sales of businesses and assets..............................................................
           732                   (5,569 )
Restructuring and impairment charges.....................................................................
       16,243           19,723
Minority interest in consolidated subsidiaries (2).................................................. .......
           (18,215 )                   (15,197 )
 
                                        
Income from continuing operations before interest, taxes and minority interest..................
           $ 186,496       $   178,653
 
                                        

(1)   Total operating profit is defined as segment operating profit, which includes a segment’s revenues reduced by its materials, labor and other product costs along with the segment’s selling, engineering and administrative expenses and minority interest, less unallocated corporate expenses. (Gain) loss on sales of businesses and assets, restructuring and impairment charges, interest income and expense and taxes on income are excluded from the measure.

(2)   Minority interest in consolidated subsidiaries is included in segment operating profit presented above and must be removed in order to calculate income from continuing operations before interest, taxes and minority interest, as presented on the Company’s condensed consolidated statements of income for the nine months ended September 24, 2006 and September 25, 2005, respectively.

###