-----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, AqlBVcu+WBcEmjuYfKbzwq/EYvAuugw0cb3xLzAzcDuvO73X8jpW8j2xuSgSHKVm HVdg54gdhBPg8yWwrBiMjw== 0000893220-97-001771.txt : 19971110 0000893220-97-001771.hdr.sgml : 19971110 ACCESSION NUMBER: 0000893220-97-001771 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970928 FILED AS OF DATE: 19971107 SROS: NONE 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: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05353 FILM NUMBER: 97710719 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 FORM 10-Q FOR TELEFLEX, INCORPORATED 1 SECURITIES AND EXCHANGE COMMISSION ---------------------------------- Washington, D.C. 20549 ---------------------- Form 10-Q --------- (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 28, 1997 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 Sept.28, 1997 - ----------------------------- ---------------------------- Common Stock, $1.00 Par Value 37,012,100 2 Teleflex Incorporated Condensed Consolidated Balance Sheet (Dollars in Thousands) Assets
Sept. 28, Dec. 29, 1997 1996 ------------- ----------- Current assets Cash and cash equivalents $32,937 $68,618 Accounts receivable less allowance for doubtful accounts 233,646 193,587 Inventories 203,951 190,696 Prepaid expenses 5,967 13,120 --------- --------- 476,501 466,021 Property, plant and equipment, at cost, less accumulated depreciation 317,508 291,787 Investments in affiliates 24,166 17,356 Intangibles and other assets 96,715 82,690 --------- --------- $914,890 $857,854 ========= ========= Liabilities and shareholders' equity Current liabilities Current portion of borrowings and demand loans $70,596 $70,587 Accounts payable and accrued expenses 106,362 108,922 Estimated income taxes payable 22,675 17,157 --------- --------- 199,633 196,666 Long-term borrowings 194,801 195,945 Deferred income taxes and other 69,584 56,067 --------- --------- 464,018 448,678 Shareholders' equity 450,872 409,176 --------- --------- $914,890 $857,854 ========= =========
3 Teleflex Incorporated Condensed Consolidated Statement of Income (Dollars in Thousands Except Per Share)
Three Months Ended Nine Months Ended ------------------------ ------------------------ Sept. 28, Sept. 29, Sept. 28, Sept. 29, 1997 1996 1997 1996 ---------- ---------- ---------- ---------- Revenues $281,757 $215,144 $831,364 $687,986 ---------- ---------- ---------- ---------- Cost of sales 197,065 148,773 577,146 473,173 Operating expenses 59,833 47,597 168,890 142,558 Interest expense 3,683 3,361 10,517 10,845 ---------- ---------- ---------- ---------- 260,581 199,731 756,553 626,576 ---------- ---------- ---------- ---------- Income before taxes 21,176 15,413 74,811 61,410 Provision for taxes on income 7,348 5,364 25,957 21,372 ---------- ---------- ---------- ---------- Net income $13,828 $10,049 $48,854 $40,038 ========== ========== ========== ========== Earnings per share $0.36 $0.28 $1.30 $1.11 Dividends per share $0.100 $0.088 $0.288 $0.253 Average number of common and common equivalent shares outstanding 37,889 36,052 37,555 35,949
4 Teleflex Incorporated Condensed Consolidated Statement of Cash Flows (Dollars in Thousands)
Nine Months Ended ------------------------------------ Sept. 28, Sept. 29, 1997 1996 --------- --------- Cash flows from operating activities: Net income $48,854 $40,038 Adjustments to reconcile net income to cash flows from operating activities: Depreciation and amortization 35,539 28,900 (Increase) in accounts receivable (32,084) (3,391) (Increase) in inventories (11,020) (8,063) Decrease in prepaid expenses 6,959 2,537 (Decrease) in accounts payable and accrued expenses (8,308) (2,602) Increase (decrease) in estimated income taxes payable 5,456 (340) Gain on disposition of product lines (2,055) -------- --------- 45,396 55,024 -------- --------- Cash flows from financing activities: Proceeds from new borrowings 9,000 20,030 Reduction in long-term borrowings (11,905) (18,817) Increase (decrease) in current borrowings and demand loans 5,008 (512) Proceeds from stock compensation plans 3,053 4,167 Dividends (10,554) (8,891) -------- --------- (5,398) (4,023) -------- --------- Cash flows from investing activities: Expenditures for plant assets (52,344) (24,134) Payments for businesses acquired (14,273) Proceeds from disposition of product lines and assets 32,140 Investments in affiliates (7,712) (444) Other (1,350) 787 -------- --------- (75,679) 8,349 -------- --------- Net (decrease) increase in cash and cash equivalents (35,681) 59,350 Cash and cash equivalents at the beginning of the period 68,618 55,654 -------- --------- Cash and cash equivalents at the end of the period $32,937 $115,004 ======== =========
5 Teleflex Incorporated Notes to Condensed Consolidated Financial Statements Note 1 The accompanying unaudited condensed consolidated financial statements for the three months ended September 28, 1997 and September 29, 1996 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 September 28, 1997, 3,406,349 shares of common stock were reserved for issuance under the company's stock compensation plans. Note 3 On April 25, 1997 the Board of Directors approved a two-for-one split of the Company's common stock effected in the form of a 100% stock dividend. The dividend was distributed on June 16, 1997 to holders of record on May 23, 1997. The per share data included in this report have been adjusted to reflect this stock dividend. Note 4 Inventories consisted of the following:
Sept.1997 Dec. 1996 Raw materials $ 69,774 $ 72,704 Work-in-process 36,780 35,010 Finished goods 97,397 82,982 -------- -------- $203,951 $190,696 ======== ========
6 Note 5 Business segment information:
Three months ended (000) Sept. 28,1997 Sept.29, 1996 Sales Commercial Products $119,504 $93,110 Medical Products 78,364 75,524 Aerospace Products 83,889 46,510 -------- -------- Total $281,757 $215,144 ======== ======== Operating profit Commercial Products $11,311 $9,855 Medical Products 8,159 7,811 Aerospace Products 9,234 4,380 ------- ------- Total $28,704 $22,046 ======= =======
Nine months ended (000) Sept.28, 1997 Sept.29, 1996 Sales Commercial Products $367,936 $317,742 Medical Products 239,059 229,095 Aerospace Products 224,369 141,149 -------- ------- Total $831,364 $687,986 ======== ======== Operating profit Commercial Products $45,428 $41,950 Medical Products 24,848 25,533 Aerospace Products 25,732 14,243 ------- ------- Total $96,008 $81,726 ======= =======
7 Management's Analysis of Quarterly Financial Data Results of Operations: Revenues increased 31% in the third quarter of 1997 to $281.8 million from $215.1 million in 1996. The increase resulted from gains in all three segments, Commercial, Medical and Aerospace, approximately one-half of which resulted from acquisitions. The Commercial, Medical and Aerospace segments comprised 42%, 28% and 30% of the company's net sales, respectively. Gross profit margin declined to 30.1% in 1997 compared with 30.8% in 1996 and operating expenses as a percentage of sales declined to 21.2% in 1997 from 22.1%. The decreases are due primarily to the reduction in the proportion of sales from the Medical Segment which has a higher gross profit margin and operating expense to sales percentage relative to the other two segments. Operating profit increased 30% in the third quarter of 1997 from $22.0 million to $28.7 million while operating margin remained constant at 10.2%. While operating profit increased in all three segments, operating margin increases in Aerospace and, to a lesser extent, Medical offset a decline in the Commercial Segment. Industry Segment Review: Sales in the Commercial Segment increased 28% from $93.1 million in 1996 to $119.5 million in 1997 due to increases in the Automotive and Industrial product lines while Marine product line sales remained flat. Operating profit increased 15% from $9.9 million in 1996 to $11.3 million in 1997 while operating margin declined from 10.6% to 9.5% due to a decrease in the Automotive product line, in part as a result of recent acquisitions. The Medical Segment sales increased 4% from $75.5 million to $78.4 million in the third quarter of 1997 compared with 1996. Improved sales of Hospital Supply products and sales from a 1997 acquisition in the Surgical Devices product line offset a decline from the effects of the stronger dollar against major European currencies. Operating profit increased 5% from $7.8 million in 1996 to $8.2 million in 1997 and operating margin increased slightly from 10.3% in 1996 to 10.4% in 1997. The improvement is due to the substantial completion of manufacturing plant realignments and a reduction in expenses in the surgical devices product line in connection with integrating the 1997 acquisition. 8 The Aerospace Segment sales increased 80% from $46.5 million in 1996 to $83.9 million in 1997 primarily from gains in the turbo-machinery, repairs and component manufacturing businesses and from an acquisition. Operating profit increased over 100% from $4.4 million in 1996 to $9.2 million in 1997 and operating margin improved from 9.4% in 1996 to 11.0% in 1997. The increases in both operating profit and operating margin resulted primarily from the increased sales volume. Cash flow from operations decreased $9.6 million in the third quarter of 1997 compared with 1996 as increased net income and depreciation were offset by the effects of increased working capital, primarily accounts receivable as a result of increased sales. Working capital increased from $269.4 million at December 29, 1996, to $276.9 million at September 28, 1997. The ratio of current assets to current liabilities was 2.4 to 1 at both September 28, 1997 and December 29, 1996. Expenditures for plant assets increased $28.2 million over the same period in 1996. The expenditures, approximately 60% of which are in the Aerospace Segment, including construction of a plant in Singapore are being made to meet the increased sales demand. Long-term borrowings at September 28, 1997 of $194.8 million declined by $1.1 million compared with December 29, 1996. An increase from additional borrowings was offset by repayments and lower foreign currency translation rates. The increase in shareholders' equity resulted in an improvement in the ratio of long-term borrowings to total capitalization from 32% at December 29, 1996 to 30% at September 28, 1997. 9 Teleflex Incorporated Part II Other Information Item 6. Exhibits and Reports on Form 8-K (A) Reports on form 8-K. No reports on form 8-K were filed during the quarter. 10 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) November 7, 1997 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS DEC-28-1997 DEC-30-1996 SEP-28-1997 32,937 0 233,646 0 203,951 476,501 317,508 0 941,890 199,633 194,801 0 0 37,012 413,860 914,890 281,757 281,757 197,065 197,065 59,833 0 3,683 21,176 7,348 13,828 0 0 0 13,828 .36 .36
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