0000893220-95-000507.txt : 19950810 0000893220-95-000507.hdr.sgml : 19950810 ACCESSION NUMBER: 0000893220-95-000507 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950625 FILED AS OF DATE: 19950809 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELEFLEX INC CENTRAL INDEX KEY: 0000096943 STANDARD INDUSTRIAL CLASSIFICATION: AIRCRAFT PART & AUXILIARY EQUIPMENT, NEC [3728] IRS NUMBER: 231147939 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05353 FILM NUMBER: 95560091 BUSINESS ADDRESS: STREET 1: 630 W GERMANTOWN PK STE 450 STREET 2: SUITE 450 CITY: PLYMOUTH MEETING STATE: PA ZIP: 19462 BUSINESS PHONE: 2158346301 MAIL ADDRESS: STREET 1: 630 WEST GERMANTOWN PIKE STREET 2: SUITE 450 CITY: PLYMOUTH MEETING STATE: PA ZIP: 19462 10-Q 1 TELEFLEX, INCORPORATED FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION ---------------------------------- Washington, D.C. 20549 ---------------------- Form 10-Q --------- (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 25, 1995 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number 1-5353 ----------------------------- TELEFLEX INCORPORATED ------------------------------------------------------ (Exact Name of Registrant as Specified in its Charter) Delaware 23-1147939 ------------------------ ------------------------------------ (State of Incorporation) (IRS Employer Identification Number) 630 West Germantown Pike, Suite 450 Plymouth Meeting, PA 19462 --------------------------------------- ---------- (Address of Principal Executive Office) (Zip Code) (610) 834-6301 -------------------------------------- (Telephone Number Including Area Code) None ---------------------------------------------------- (Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of Common Stock as of the latest practicable date. Class Outstanding at June 25, 1995 ----------------------------- ---------------------------- Common Stock, $1.00 Par Value 17,463,136 2 Teleflex Incorporated Condensed Consolidated Balance Sheet (Dollars in Thousands)
Assets ------ June 25, Dec. 25, 1995 1994 -------- -------- Current assets Cash and cash equivalents $ 33,812 $ 24,094 Accounts receivable less allowance for doubtful accounts 189,482 183,745 Inventories Raw materials and manufactured parts 80,909 75,269 Work-in-process and finished goods 113,193 97,836 Prepaid expenses 5,619 9,273 -------- -------- 423,015 390,217 Property, plant and equipment, at cost, less accumulated depreciation 268,519 264,318 Investments in affiliates 7,417 7,980 Intangibles and other assets 46,725 48,274 -------- -------- $745,676 $710,789 ======== ======== Liabilities and shareholders' equity ------------------------------------ Current liabilities Current portion of borrowings and demand loans $ 70,424 $ 63,678 Accounts payable and accrued expenses 94,102 96,144 Estimated income taxes payable 14,944 9,851 -------- -------- 179,470 169,673 Long-term borrowings 190,672 190,499 Deferred income taxes and other 39,927 41,592 -------- -------- 410,069 401,764 Shareholders' equity 335,607 309,025 -------- -------- $745,676 $710,789 ======== ========
3 Teleflex Incorporated Condensed Consolidated Statement of Income (Dollars in Thousands Except for Per Share Amounts)
Three Months Ended Six Months Ended --------------------- -------------------- June 25, June 26, June 25, June 26, 1995 1994 1995 1994 -------- -------- -------- -------- Revenues $233,888 $209,456 $460,781 $400,540 -------- -------- -------- -------- Cost of sales 159,664 144,691 314,783 277,267 Operating expenses 48,896 42,987 96,902 81,484 Interest expense 4,861 4,584 9,655 9,265 -------- -------- -------- -------- 213,421 192,262 421,340 368,016 -------- -------- -------- -------- Income before taxes 20,467 17,194 39,441 32,524 Provision for taxes on income 7,163 6,018 13,804 11,383 -------- -------- -------- -------- Net income $ 13,304 $ 11,176 $ 25,637 $ 21,141 ======== ======== ======== ======== Earnings per share $ 0.75 $ 0.64 $ 1.45 $ 1.21 Dividends per share $ 0.155 $ 0.135 $ 0.290 $ 0.250 Average number of common and common equivalent shares outstanding 17,813 17,474 17,723 17,493
4 Teleflex Incorporated Condensed Consolidated Statement of Cash Flows (Dollars in Thousands)
Six Months Ended ------------------- June 25, June 26, 1995 1994 -------- -------- Cash flows from operating activities: Net income $25,637 $21,141 Adjustments to reconcile net income to cash flows from operating activities: Depreciation and amortization 17,947 16,226 Decrease (increase) in accounts receivable 2,876 (26,205) Decrease (increase) in inventory (12,153) 5,809 Decrease in prepaid expenses 3,676 603 Increase (decrease) in accounts payable and accrued expenses (6,027) 6,582 Increase in estimated income taxes payable 4,528 1,430 ------- ------- 36,484 25,586 ------- ------- Cash flows from financing activities: Proceeds from new borrowings 3,580 Reduction in long-term borrowings (12,539) (1,222) Increase (decrease) in current borrowings and demand loans 2,310 (2,090) Proceeds from stock compensation plans and distribution of treasury shares 3,729 2,359 Dividends (5,036) (4,286) ------- ------- (7,956) (5,239) ------- ------- Cash flows from investing activities: Expenditures for plant assets 14,202 10,293 Payments for businesses acquired 3,768 1,564 Investments in affiliates 577 2,109 Other, including translation 263 611 ------- ------- 18,810 14,577 ------- ------- Net increase in cash and cash equivalents 9,718 5,770 Cash and cash equivalents at the beginning of the period 24,094 11,255 ------- ------- Cash and cash equivalents at the end of the period $33,812 $17,025 ======= =======
5 Teleflex Incorporated Notes to Condensed Consolidated Financial Statements Note 1 The accompanying unaudited condensed consolidated financial statements for the three months ended June 25, 1995 and June 26, 1994 contain all adjustments, consisting only of normal recurring adjustments, which in the opinion of management are necessary to present fairly the financial position, results of operations and cash flows for the periods then ended in accordance with the current requirements for Form 10-Q. Note 2 At June 25, 1995, 2,049,532 shares of common stock were reserved for issuance under the company's stock compensation plans. Note 3 Business segment information:
Three months ended (000) June 25, 1995 June 26, 1994 Sales Commercial Products $104,148 $92,694 Medical Products 76,301 62,085 Aerospace Products and Services 53,439 54,677 -------- -------- Total $233,888 $209,456 ======== ======== Operating profit Commercial Products $16,717 $14,767 Medical Products 7,867 8,104 Aerospace Products and Services 2,703 1,369 ------- ------- Total $27,287 $24,240 ======= =======
Six months ended (000) June 25, 1995 June 26, 1994 Sales Commercial Products $211,457 $181,278 Medical Products 144,570 119,466 Aerospace Products and Services 104,754 99,796 -------- -------- Total $460,781 $400,540 ======== ======== Operating profit Commercial Products $33,951 $29,048 Medical Products 15,506 15,109 Aerospace Products and Services 4,430 2,145 ------- ------- Total $53,887 $46,302 ======= =======
6 Management's Analysis of Quarterly Financial Data Results of Operations: Overall Revenues increased 12% in the second quarter of 1995 to $233.9 million from $209.4 million in 1994. The increase was the result of growth in the Commercial and Medical segments which offset a decline in the Aerospace Segment. Two-thirds of the gain was generated internally and the remainder resulted from several acquisitions made over the last year. Increases in foreign currency translation rates had a small favorable effect on the overall revenue growth of the company. The Commercial, Medical and Aerospace segments comprised 44%, 33% and 23% of the company's net sales, respectively. Gross profit margin improved from 30.9% in 1994 to 31.7% in 1995 and operating expenses increased from 20.5% to 20.9% due primarily to the increased sales contribution from the Medical Segment which provides the company a larger proportion of its gross profit and has higher selling expenses relative to the other two segments. Operating profit increased 13% in the second quarter of 1995 from $24.2 million to $27.3 million while operating margin was relatively flat at 11.7% of sales compared with 11.6% in 1994. An increase in operating profit of the Commercial Segment and both operating profit and operating margin of the Aerospace Segment offset declines in the Medical Segment. The 1995 increase in interest expense was due to the effects of translation on the company's foreign currency denominated borrowings and to an increase in average interest rates. The 1995 results were favorably affected by approximately $500 thousand or, $.03 per share from the recovery of expenses relating to an investment. The effective tax rate was 35% in both 1995 and 1994. Net income in 1995 increased 19% to $13.3 million compared with $11.2 million in 1994 and earnings per share increased 17% to $.75 per share from $.64 per share. Industry Segment Review Sales in the Commercial Segment increased 12% from $92.7 million in 1994 to $104.1 million in 1995. The increase was due to gains in the Automotive and Marine product lines and, to a lesser extent, the Industrial product line. Operating profit increased 13% from $14.8 million to $16.7 million due to the increased sales volume, while operating margin remained constant at 16% of sales. An increase in the Marine product line operating margin offset a decline in the Industrial product line related to capacity expansion costs. 7 The Medical Segment sales increased 23% from $62.1 million in 1994 to $76.3 million in 1995. The increase was evenly spread among internal growth, 1994 acquisitions and the effects of translation. Operating profit declined 3% from $8.1 million in 1994 to $7.9 million in 1995 and operating margin declined from 13% to 10%. While sales have increased, both operating profit and operating margins were hampered by increased new product development expenses, stepped-up direct sales efforts and the assimilation of the 1994 acquisitions into the existing Medical businesses. The Aerospace Segment sales decreased 2% from $54.7 million in 1994 to $53.4 million in 1995 as both the aerospace controls and Sermatech product lines sales declined. Operating profit increased 97% from $1.4 million in 1994 to $2.7 million in 1995 and operating margin improved from 3% to 5%. The increases were the result of the capacity consolidation and productivity improvements made during 1994. Cash Flow and Financial Position Cash flow from operations increased $10.9 million for the period ended June 1995 compared with June 1994. The improvement resulted primarily from a decrease in accounts receivable offset by inventory growth and the timing of other cash payments. Working capital increased from $220.5 million at December 25, 1994 to $243.5 million at June 25, 1995. The ratio of current assets to current liabilities was 2.4 to 1 at June 25, 1995 compared with 2.3 to 1 at December 25, 1994. Long-term borrowings remained constant as net payments were offset by the effects of translation on the company's foreign currency denominated debt. The ratio of long-term borrowings to total capitalization improved from 38% at December 25, 1994 to 36% at June 25, 1995. 8 Teleflex Incorporated Part II Other Information Item 4. Submission of Matters to a Vote of Security Holders The company's 1995 Annual Meeting of Shareholders was held on April 28, 1995. At the meeting, shareholders approved the 1990 Stock Compensation Plan as amended to (i) increase by 1,000,000 the number of shares issuable under the plan and (ii) make awards eligible for exemption from the limitations of the Internal Revenue Code on deductibility of certain executive compensation expenses. A total of 11,970,330 shares were voted in favor of the plan, 1,470,611 shares were opposed and 67,528 shares abstained. At the Annual Meeting, the following were elected to the Board of Directors of the company for a term expiring in 1998:
Name Votes For Withheld ---- --------- -------- Donald Beckman 14,704,298 66,023 Pemberton Hutchinson 14,713,548 56,773 John H. Remer 14,714,155 56,166 Joseph S. Gonnella, M.D. 14,713,008 57,313
Item 6. Exhibits and Reports on Form 8-K (A) Reports on Form 8-K. No reports on Form 8-K were filed during the quarter. 9 Teleflex Incorporated Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TELEFLEX INCORPORATED /s/ Harold L. Zuber, Jr. ------------------------ Harold L. Zuber, Jr. (Principal Financial and Accounting Officer) /s/ Steven K. Chance ------------------------- Steven K. Chance (Vice President) August 8, 1995 EX-27 2 FINANCIAL DATA SCHEDULE - TELEFLEX, INC.
5 1,000 3-MOS DEC-31-1995 DEC-26-1994 JUN-25-1995 33,812 0 189,482 0 194,102 423,015 268,519 0 745,676 179,470 190,672 17,463 0 0 318,144 745,676 223,888 223,888 159,664 159,664 48,896 0 4,861 20,467 7,163 13,304 0 0 0 13,304 .75 .75