<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 March 26, 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 March 26, 1995
- ----------------------------- -----------------------------
Common Stock, $1.00 Par Value 17,394,544
<PAGE> 2
Teleflex Incorporated
Condensed Consolidated Balance Sheet
(Dollars in Thousands)
<TABLE>
<CAPTION>
Assets
Mar. 26, Dec. 25,
1995 1994
-------- --------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 12,801 $ 24,094
Accounts receivable less allowance for
doubtful accounts 199,759 183,745
Inventories
Raw materials and manufactured parts 77,792 75,269
Work-in-process and finished goods 112,054 97,836
Prepaid expenses 5,744 9,273
-------- --------
408,150 390,217
Property, plant and equipment, at cost,
less accumulated depreciation 265,786 264,318
Investments in affiliates 7,337 7,980
Intangibles and other assets 47,524 48,274
-------- --------
$728,797 $710,789
======== ========
Liabilities and shareholders' equity
Current liabilities
Current portion of borrowings and
demand loans $ 69,397 $ 63,678
Accounts payable and accrued expenses 92,063 96,144
Estimated income taxes payable 15,405 9,851
-------- --------
176,865 169,673
Long-term borrowings 189,217 190,499
Deferred income taxes and other 40,944 41,592
-------- --------
407,026 401,764
Shareholders' equity 321,771 309,025
-------- --------
$728,797 $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
----------------------
Mar. 26, Mar. 27,
1995 1994
-------- --------
<S> <C> <C>
Revenues $226,893 $191,084
-------- --------
Cost of sales 155,119 132,576
Operating expenses 48,006 38,497
Interest expense 4,794 4,681
-------- --------
207,919 175,754
-------- --------
Income before taxes 18,974 15,330
Provision for taxes on income 6,641 5,365
-------- --------
Net income $ 12,333 $ 9,965
======== ========
Earnings per share $0.70 $0.57
Dividends per share $0.135 $0.115
Average number of common and common
equivalent shares outstanding 17,633 17,512
</TABLE>
<PAGE> 4
Teleflex Incorporated
Condensed Consolidated Statement of Cash Flows
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three Months Ended
----------------------
Mar. 26, Mar. 27,
1995 1994
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $12,333 $ 9,965
Adjustments to reconcile net income to cash
flows from operating activities:
Depreciation and amortization 8,733 7,936
(Increase) in accounts receivable (8,714) (23,794)
(Increase) decrease in inventory (9,149) 2,650
Decrease in prepaid expenses 3,920 392
Increase (decrease) in accounts payable
and accrued expenses (7,305) 708
Increase in estimated income
taxes payable 5,052 3,153
------- -------
4,870 1,010
------- -------
Cash flows from financing activities:
Proceeds from new borrowings 3,580
Reduction in long-term borrowings (12,065) (1,474)
Increase (Decrease) in current borrowings
and demand loans 3,663 (349)
Proceeds from stock compensation plans
and distribution of treasury shares 2,747 1,262
Dividends (2,333) (1,990)
------- -------
(4,408) (2,551)
------- -------
Cash flows from investing activities:
Expenditures for plant assets 7,187 4,104
Payments for businesses acquired 3,768
Investments in affiliates 127 1,370
Other 673 (137)
------- -------
11,755 5,337
------- -------
Net (decrease) in cash
and cash equivalents (11,293) (6,878)
Cash and cash equivalents at the
beginning of the period 24,094 11,255
------- -------
Cash and cash equivalents at the
end of the period $12,801 $ 4,377
======= =======
</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 March 26, 1995 and March 27, 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 March 26, 1995, 1,079,932 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)
March 26, 1995 March 27, 1994
<S> <C> <C>
Sales
Commercial Products $107,309 $ 88,584
Medical Products 68,269 57,381
Aerospace Products and Services 51,315 45,119
-------- --------
Total $226,893 $191,084
======== ========
Operating profit
Commercial Products $ 17,234 $ 14,281
Medical Products 7,639 7,005
Aerospace Products and Services 1,727 776
-------- --------
Total $ 26,600 $ 22,062
======== ========
</TABLE>
<PAGE> 6
Management's Analysis of Quarterly Financial Data
Results of operations:
Overall
Revenues increased 19% in the first quarter of 1995 to $226,893 from
$191,084 in 1994. The increase was the result of gains in all three segments,
Commercial, Medical and Aerospace. The company generated over 80% of the
increase internally while the remainder was the result of several small
acquisitions made over the last year. Increases in foreign currency
translation rates had a small favorable impact on the overall revenue growth of
the company. The Commercial, Medical and Aerospace segments comprised 47%, 30%
and 23% of the company's net sales, respectively.
Gross product margin improved from 30.6% in 1994 to 31.6% in 1995 due
primarily to an increase in the Aerospace Segment. The increase in operating
expenses from 20.1% of sales in 1994 to 21.2% in 1995 resulted primarily from
an increase in the Medical Segment which offset a decline in the Aerospace
Segment.
Operating profit increased 21% in the first quarter of 1995 from
$22,062 to $26,600 and operating margin improved from 11.5% of sales to 11.7%.
All three segments reported increases in operating profit while the gain in
operating margin was the result of an increase in the Aerospace Segment.
The 1995 increase in interest expense was due primarily to the effects
of translation of the company's foreign currency denominated borrowings and, to
a lesser extent, an increase in average borrowings. The effective tax rate was
35% in both 1995 and 1994. Net income in 1995 increased 24% to $12,333
compared with $9,965 in 1994 while earnings per share increased 23% to $.70 per
share from $.57 in 1994.
Industry Segment Review
Sales in the Commercial Segment increased 21% from $88,584 in 1994 to
$107,309 in 1995. All three product lines, Automotive, Marine and Industrial,
reported higher sales from continuing improvements in market conditions and
sales of new products. Operating profit increased 21% from $14,281 to $17,234
while operating margin remained constant at 16% of sales. Operating profit
increased on the higher volume while expansion costs in the United States and
Europe kept operating margin at the prior year's level.
<PAGE> 7
The Medical Segment sales increased 19% from $57,381 in 1994 to $68,269
in 1995. The increase was generated primarily internally and, to a lesser
extent, from several small acquisitions made in 1994 and increases in foreign
currency translation rates. Operating profit increased 9% from $7,005 in 1994
to $7,639 in 1995 while operating margin declined from 12.2% in 1994 to 11.2%
in 1995. The decline in operating margin resulted from additional expenses
associated with assimilating the 1994 acquisitions into the existing Medical
businesses and from new product development costs.
The Aeropsace Segment sales increased 14% from $45,119 in 1994 to
$51,315 in 1995 due to gains in aerospace controls product line sales.
Operating profit increased 123% from $776 in 1994 to $1,727 in 1995 and
operating margin increased from 1.7% to 3.4% of sales. Both increases were the
result of the higher volume and the capactiy consolidation and productivity
improvements made during 1994.
Cash Flow and Financial Position
Cash flow from operations increased $3,860 in the first quarter
of 1995 compared with 1994. The gain was the result of higher net income and
slower growth in accounts receivable offset by increases in inventories and the
timing of other cash payments. Working capital increased from $220,544 at
December 25, 1994, to $231,285 at March 26, 1995. The ratio of current assets
to current liabilities was 2.3 to 1 at both period ends. Long-term borrowings
decreased by $1,282 from $190,499 at December 25, 1994, to $189,217 at March
26, 1995. The decline was the result of payments on long-term borrowings which
were substantially offset by the effects of translation rates on the company's
foreign currency denominated debt. Primarily as a result of the increase in
shareholders' equity, long-term borrowings to total capitalization improved
from 38% at December 25, 1994, to 37% at March 26, 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)
May 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> MAR-26-1995
<CASH> 12,801
<SECURITIES> 0
<RECEIVABLES> 199,759
<ALLOWANCES> 0
<INVENTORY> 189,846
<CURRENT-ASSETS> 408,150
<PP&E> 265,786
<DEPRECIATION> 0
<TOTAL-ASSETS> 728,797
<CURRENT-LIABILITIES> 176,865
<BONDS> 189,217
<COMMON> 17,395
0
0
<OTHER-SE> 304,376
<TOTAL-LIABILITY-AND-EQUITY> 728,797
<SALES> 226,893
<TOTAL-REVENUES> 226,893
<CGS> 155,119
<TOTAL-COSTS> 155,119
<OTHER-EXPENSES> 48,006
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,794
<INCOME-PRETAX> 18,974
<INCOME-TAX> 6,641
<INCOME-CONTINUING> 12,333
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,333
<EPS-PRIMARY> .70
<EPS-DILUTED> .70
</TABLE>
