<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
----------------------------------
Washington, D.C. 20549
----------------------
Form 10-Q
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(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
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(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
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(Telephone Number Including Area Code)
None
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(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
<PAGE> 2
Teleflex Incorporated
Condensed Consolidated Balance Sheet
(Dollars in Thousands)
<TABLE>
<CAPTION>
Assets
------
June 25, Dec. 25,
1995 1994
-------- --------
<S> <C> <C>
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
======== ========
</TABLE>
<PAGE> 3
Teleflex Incorporated
Condensed Consolidated Statement of Income
(Dollars in Thousands Except for Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
--------------------- --------------------
June 25, June 26, June 25, June 26,
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
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
</TABLE>
<PAGE> 4
Teleflex Incorporated
Condensed Consolidated Statement of Cash Flows
(Dollars in Thousands)
<TABLE>
<CAPTION>
Six Months Ended
-------------------
June 25, June 26,
1995 1994
-------- --------
<S> <C> <C>
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
======= =======
</TABLE>
<PAGE> 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:
<TABLE>
<CAPTION>
Three months ended
(000)
June 25, 1995 June 26, 1994
<S> <C> <C>
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
======= =======
</TABLE>
<TABLE>
<CAPTION>
Six months ended
(000)
June 25, 1995 June 26, 1994
<S> <C> <C>
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
======= =======
</TABLE>
<PAGE> 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.
<PAGE> 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.
<PAGE> 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:
<TABLE>
<CAPTION>
Name Votes For Withheld
---- --------- --------
<S> <C> <C>
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
</TABLE>
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.
<PAGE> 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
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-26-1994
<PERIOD-END> JUN-25-1995
<CASH> 33,812
<SECURITIES> 0
<RECEIVABLES> 189,482
<ALLOWANCES> 0
<INVENTORY> 194,102
<CURRENT-ASSETS> 423,015
<PP&E> 268,519
<DEPRECIATION> 0
<TOTAL-ASSETS> 745,676
<CURRENT-LIABILITIES> 179,470
<BONDS> 190,672
<COMMON> 17,463
0
0
<OTHER-SE> 318,144
<TOTAL-LIABILITY-AND-EQUITY> 745,676
<SALES> 223,888
<TOTAL-REVENUES> 223,888
<CGS> 159,664
<TOTAL-COSTS> 159,664
<OTHER-EXPENSES> 48,896
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,861
<INCOME-PRETAX> 20,467
<INCOME-TAX> 7,163
<INCOME-CONTINUING> 13,304
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,304
<EPS-PRIMARY> .75
<EPS-DILUTED> .75
</TABLE>
