<PAGE> 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 24, 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)
<TABLE>
<S> <C>
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)
</TABLE>
(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.
<TABLE>
<S> <C>
Class Outstanding at September 24, 1995
- ----------------------------- ---------------------------------
Common Stock, $1.00 Par Value 17,485,996
</TABLE>
<PAGE> 2
Teleflex Incorporated
Condensed Consolidated Balance Sheet
(Dollars in Thousands)
<TABLE>
<CAPTION>
Assets
Sept. 24, Dec. 25,
1995 1994
-------- --------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 43,202 $ 24,094
Accounts receivable less allowance for
doubtful accounts 186,094 183,745
Inventories
Raw materials and manufactured parts 78,151 75,269
Work-in-process and finished goods 120,387 97,836
Prepaid expenses 5,152 9,273
-------- --------
432,986 390,217
Property, plant and equipment, at cost,
less accumulated depreciation 271,541 264,318
Investments in affiliates 7,961 7,980
Intangibles and other assets 47,624 48,274
-------- --------
$760,112 $710,789
======== ========
Liabilities and shareholders' equity
Current liabilities
Current portion of borrowings and
demand loans $ 78,304 $ 63,678
Accounts payable and accrued expenses 93,710 96,144
Estimated income taxes payable 18,146 9,851
-------- --------
190,160 169,673
Long-term borrowings 186,076 190,499
Deferred income taxes and other 40,396 41,592
-------- --------
416,632 401,764
Shareholders' equity 343,480 309,025
-------- --------
$760,112 $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 Nine Months Ended
------------------- -------------------
Sept. 24, Sept. 25, Sept. 24, Sept. 25,
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues $210,340 $193,367 $671,121 $593,907
-------- -------- -------- --------
Cost of sales 145,876 133,602 460,659 410,869
Operating expenses 47,076 43,697 143,978 125,181
Interest expense 4,692 4,688 14,347 13,953
-------- -------- -------- --------
197,644 181,987 618,984 550,003
-------- -------- -------- --------
Income before taxes 12,696 11,380 52,137 43,904
Provision for taxes on income 4,444 3,983 18,248 15,366
-------- -------- -------- --------
Net income $ 8,252 $ 7,397 $ 33,889 $ 28,538
======== ======== ======== ========
Earnings per share $0.46 $0.42 $1.91 $1.63
Dividends per share $0.155 $0.135 $0.445 $0.385
Average number of common and common
equivalent shares outstanding 17,829 17,543 17,758 17,509
</TABLE>
<PAGE> 4
Teleflex Incorporated
Condensed Consolidated Statement of Cash Flows
(Dollars in Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
----------------------
Sept. 24, Sept. 25,
1995 1994
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $33,889 $28,538
Adjustments to reconcile net income to cash
flows from operating activities:
Depreciation and amortization 27,049 24,128
Decrease (increase) in accounts receivable 4,946 (26,622)
Decrease (increase) in inventory (15,947) 111
Decrease in prepaid expenses 4,213 836
Increase (decrease) in accounts payable
and accrued expenses (9,360) 12,212
Increase in estimated income
taxes payable 7,873 4,962
------- -------
52,663 44,165
------- -------
Cash flows from financing activities:
Proceeds from new borrowings 3,580 3,574
Reduction in long-term borrowings (15,553) (6,641)
Increase (decrease) in current borrowings
and demand loans 11,706 (358)
Proceeds from stock compensation plans
and distribution of treasury shares 4,961 3,276
Dividends (7,742) (6,607)
------- -------
(3,048) (6,756)
------- -------
Cash flows from investing activities:
Expenditures for plant assets 20,648 15,739
Payments for businesses acquired 8,176 1,972
Proceeds from sale of businesses and assets (6,345)
Investments in affiliates 690 3,180
Other, including translation 993 (1,846)
------- -------
30,507 12,700
------- -------
Net increase in cash
and cash equivalents 19,108 24,709
Cash and cash equivalents at the
beginning of the period 24,094 11,255
------- -------
Cash and cash equivalents at the
end of the period $43,202 $35,964
======= =======
</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 September 24, 1995 and September 25, 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 September 24, 1995, 2,046,132 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)
Sept. 24, 1995 Sept. 25, 1994
<S> <C> <C>
Sales
Commercial Products $87,701 $79,154
Medical Products 72,612 63,967
Aerospace Products and Services 50,027 50,246
-------- --------
Total $210,340 $193,367
======== ========
Operating profit
Commercial Products $10,864 $8,849
Medical Products 6,410 8,350
Aerospace Products and Services 2,686 1,126
------- -------
Total $19,960 $18,325
======= =======
</TABLE>
<TABLE>
<CAPTION>
Nine months ended
(000)
Sept. 24, 1995 Sept. 25, 1994
<S> <C> <C>
Sales
Commercial Products $299,158 $260,432
Medical Products 217,182 183,433
Aerospace Products and Services 154,781 150,042
-------- --------
Total $671,121 $593,907
======== ========
Operating profit
Commercial Products $44,815 $37,897
Medical Products 21,916 23,459
Aerospace Products and Services 7,116 3,271
------- -------
Total $73,847 $64,627
======= =======
</TABLE>
<PAGE> 6
Management's Analysis of Quarterly Financial Data
Results of Operations:
Overall
Revenues increased 9% in the third quarter of 1995 to $210.3 million
from $193.4 million in 1994. The increase was the result of growth in the
Commercial and Medical segments while the Aerospace Segment remained flat.
One-third 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 42%, 34%
and 24% of the company's net sales, respectively.
Gross profit margin declined slightly from 30.9% in 1994 to 30.6% in
1995 and operating expenses decreased from 22.6% to 22.4%. The decline in
gross profit margin was the result of declines in the Medical and Commercial
segments which were nearly offset by an improvement in the Aerospace Segment.
The slight drop in operating expenses as a percentage of sales was due to
declines in the Commercial and Aerospace segments which offset an increase in
the Medical Segment. The Medical Segment expenses were affected negatively by
a $1.2 million pre-tax charge for severence costs incurred during the quarter.
Operating profit increased 9% in the third quarter of 1995 from $18.3
million to $20.0 million while operating margin was flat at 9.5% of sales. An
increase in both operating profit and operating margin of the Commercial and
Aerospace segments offset declines in the Medical Segment.
Interest expense in 1995 was unchanged as both interest rates and debt
levels remained relatively constant. The effective tax rate was 35% in both
1995 and 1994. Net income in 1995 increased 12% to $8.3 million compared with
$7.4 million in 1994 and earnings per share increased 10% to $.46 per share
from $.42 per share.
Industry Segment Review
Sales in the Commercial Segment increased 11% from $79.2 million in
1994 to $87.7 million in 1995. The increase was due to gains in the Automotive
and Industrial product lines as the Marine product line declined slightly.
Operating profit increased 23% from $8.8 million to $10.9 million and operating
margin increased from 11% to 12% of sales. Increases in the
<PAGE> 7
Automotive and Industrial product lines offset declines in the Marine product
line.
The Medical Segment sales increased 14% from $64.0 million in 1994 to
$72.6 million in 1995. The increase was evenly spread among internal growth,
1994 acquisitions and the effects of translation. Operating profit declined
23% from $8.4 million in 1994 to $6.4 million in 1995 and operating margin
declined from 13% to 9%. 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. Additionally, in 1995 a $1.2 million
pre-tax charge for severence was incurred during the quarter.
The Aerospace Segment sales at $50.0 million in 1995 were flat
compared with 1994 as an increase in the aerospace controls product line offset
a decline in the Sermatech product line sales. Operating profit increased 139%
from $1.1 million in 1994 to $2.7 million in 1995 and operating margin improved
from 2% 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 $8.5 million for the period ended
September 1995 compared with September 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 $242.8 million at September 24, 1995. The
ratio of current assets to current liabilities was 2.3 to 1 at both September
24, 1995 and December 25, 1994. Long-term borrowings declined $4.4 million as
net payments offset 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 35% at September 24,
1995.
<PAGE> 8
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.
<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)
November 3, 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> SEP-24-1995
<CASH> 43,202
<SECURITIES> 0
<RECEIVABLES> 186,094
<ALLOWANCES> 0
<INVENTORY> 198,538
<CURRENT-ASSETS> 432,986
<PP&E> 271,541
<DEPRECIATION> 0
<TOTAL-ASSETS> 760,112
<CURRENT-LIABILITIES> 190,160
<BONDS> 186,076
<COMMON> 17,486
0
0
<OTHER-SE> 325,994
<TOTAL-LIABILITY-AND-EQUITY> 760,112
<SALES> 210,340
<TOTAL-REVENUES> 210,340
<CGS> 145,876
<TOTAL-COSTS> 145,876
<OTHER-EXPENSES> 47,076
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,692
<INCOME-PRETAX> 12,696
<INCOME-TAX> 4,444
<INCOME-CONTINUING> 8,252
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,252
<EPS-PRIMARY> .46
<EPS-DILUTED> .46
</TABLE>
