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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 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 NO. 1-5353
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TELEFLEX INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 23-1147939
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
630 WEST GERMANTOWN PIKE, SUITE 450, PLYMOUTH 19462
MEETING, PENNSYLVANIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
Registrant's telephone number, including area code: (610) 834-6301
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, par value $1 per share--New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
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
--- ---
The aggregate market value of the voting stock held by non-affiliates of
the registrant was approximately $607,143,292 as of February 1, 1996.
The registrant had 17,549,691 Common Shares outstanding as of February 1,
1996.
Documents Incorporated by Reference: (a) Annual Report to Shareholders for
the fiscal year ended December 31, 1995, incorporated partially in Part I and
Part II hereof; and (b) Proxy Statement for the 1996 Annual Meeting of
Shareholders, incorporated partially in Part III hereof.
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PART I
ITEM 1. BUSINESS
The Company* was incorporated in 1943 as a manufacturer of precision
mechanical push/pull controls for military aircraft. From this original single
market, single product orientation, the Company began to emphasize products and
services in a broader range of economically diverse markets to reduce its
vulnerability to economic cycles. Since the mid-1970s, the Company's investments
have been directed toward specific market niches employing its technical
capabilities to provide solutions to specific engineering problems and, more
recently toward expanding into new but related medical businesses. The
continuing stream of new products and value-added product improvements that have
resulted from this strategy have enabled the Company to participate in larger
market segments. Several of these new products and product improvements were
developed by means of an unusual investment program of the Company called the
New Venture Fund. Established in 1972, the Fund directs monies representing
one-half percent of sales into the development of new products and services.
This concept allows for entrepreneurial risk taking in new areas by encouraging
innovation and competition among the Company's managers for funds to pursue new
programs and activities independent of their operating budgets. Examples of New
Venture projects include the initial funding of SermeTel(R) research and most of
the early seed money for certain medical products.
The Company's business is separated into three segments -- Aerospace
Products and Services, Medical Products and Commercial Products.
AEROSPACE PRODUCTS AND SERVICES SEGMENT
The Aerospace Products and Services Segment serves the commercial aerospace
and turbine engine markets. Its businesses design and manufacture precision
controls and cargo systems for aviation, provide coating and repair services and
blade manufacturing for users of both flight and land-based turbine engines.
These products and services, many of which are proprietary, require a high
degree of engineering sophistication and are often custom designed. External
economic influences on these products and services relate primarily to spending
patterns in the worldwide aerospace industry. The Aerospace Products and
Services Segment consists of the Aerospace Controls (formerly Aerospace/Defense)
Group and Sermatech International.
In 1995 and in the first quarter of 1996 the Company sold three product
lines as part of a structural realignment within the Aerospace Products and
Services Segment. These businesses produced a variety of mechanical and
electromechanical controls for commercial and military aircraft, ordnance and
space vehicles. The sale of these product lines effectively ends most of the
Company's involvement in the military/defense sector of the aerospace industry
to focus the Aerospace Controls Group on air cargo handling systems for
commercial aircraft and other aircraft controls. The Company's cargo handling
systems include patented digitally controlled systems to move and secure
containers of cargo inside commercial aircraft. These systems are sold either to
aircraft manufacturers as original installations or to airlines and air freight
carriers for retrofit of existing systems. The Company also designs,
manufactures and repairs electromechanical components used on both commercial
and, to a lesser extent military aircraft. These other aircraft controls include
flight controls, canopy and door activators, cargo winches and control valves.
The Company's design engineers work with design personnel from the major
aircraft manufacturers in the development of controls for use on new aircraft.
In addition, the Company supplies spare parts to aircraft operators typically
through distributors. This spare parts business extends as long as the
particular type of aircraft continues in service.
In the early 1960s, aircraft manufacturers began to encounter high
temperature lubrication problems in connection with mechanical controls for
aircraft jet engines. Through its subsidiary, Sermatech International, the
Company utilized its aerospace experience and engineering capabilities to
develop a series of formulations of inorganic coatings to solve these high
temperature lubrication problems. These products were further
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* As used herein the "Company" refers to Teleflex Incorporated and its
consolidated subsidiaries.
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developed by the Company and sold under the trademark SermeTel(R) to provide
anti-corrosion protection for compressor blades and other airfoils. Sermatech
International, through a network of facilities in five countries, provides a
variety of sophisticated protective coatings and other services for gas turbine
engine components; highly-specialized repairs for critical components such as
fan blades and airfoils; and manufacturing and high quality dimensional
finishing of airfoils. The Company has added technologies through acquisition
and internal development and now offers a diverse range of technical services
and materials technologies to turbine markets throughout the world. In 1993 the
Company acquired Mal Tool & Engineering, a manufacturer of fan blades for flight
turbines, and airfoils for both flight and land-based gas turbines and steam
turbines. The acquisition broadens the Company's product offering including
turnkey manufactured and coated airfoils and provides another entree to major
international turbine manufacturers. During the fourth quarter of 1995 the
Company formed a joint venture with General Electric Aircraft Engines, Airfoil
Technologies International LLC (ATI), to provide fan blade and airfoil repair
services. The Sermatech repair operations were contributed to ATI which is owned
51% by the Company. ATI will provide a vehicle for the technological and
geographic expansion of the Sermatech repairs services business.
MEDICAL PRODUCTS SEGMENT
Within the Medical Products Segment, the Company operates three businesses:
TFX OEM, Rusch International and Pilling Weck. In the late 1970s, the Company
decided to apply its polymer technologies to the medical market, and began by
extruding intravenous catheter tubing which it sold to original equipment
manufacturers. Through TFX OEM, the Company produces standard and
custom-designed semi-finished components for other medical device manufacturers
using its polymer materials and processing technology. Through acquisitions the
Company established the other two product lines of this segment: hospital supply
and surgical devices.
In 1989, the acquisition of Willy Rusch AG and affiliates in Germany
brought with it an established manufacturing base and distribution network,
primarily in Europe. This and other smaller acquisitions designed to broaden the
Company's product offerings form the base of the hospital supply business. The
Company conducts its hospital supply business under the name of Rusch
International. This business includes the manufacture and sale of invasive
disposable and reusable devices for the urology, gastroenterology,
anesthesiology and respiratory care markets worldwide. The Rusch International
product offerings include, among others, latex catheters, endotracheal tubes,
laryngoscopes, face masks and tracheostomy tubes.
The acquisitions of the Pilling Company in 1991 and Edward Weck
Incorporated in 1993 became the foundation of the surgical devices business now
operating as Pilling Weck. The Weck acquisition was assimilated during 1994 into
the existing surgical device operations. The combination of Pilling and Weck
significantly expands the product offerings, marketing opportunities and selling
capabilities in the surgical devices market in the United States; and provides
opportunities for increasing international sales. During 1994 and 1995, smaller
acquisitions were made to balance the Company's product offerings in Europe.
Pilling Weck manufactures and distributes primarily through its own sales force
instruments used in both traditional (open) and minimally-invasive surgical
procedures including general and specialized surgical instruments such as
scissors, forceps, vascular clamps, needle holders, retractors, ligation clips,
appliers, skin staples and electrosurgery products.
COMMERCIAL PRODUCTS SEGMENT
The Commercial Products Segment businesses design and manufacture
proprietary mechanical controls for the automotive market; mechanical,
electrical and hydraulic controls, and electronics products for the pleasure
marine market; and proprietary products for the fluid transfer and outdoor power
equipment markets.
Products in the Commercial Products Segment generally are less complex and
are produced in higher unit volume, are manufactured for general distribution,
as well as custom fabricated to meet individual customer needs. Consumer
spending patterns generally influence the market trends for these products.
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The Commercial Products Segment consists of three major product lines:
Marine, Automotive and Industrial.
The Company is a leading domestic producer of mechanical steering systems
for pleasure power boats. It also manufactures hydraulic steering systems,
engine throttle and shift controls and electrical instrumentation and has
expanded into electronic navigation, location and communication systems. In 1991
the Company acquired Marinex Industries, Ltd., a British manufacturer of marine
electronics. Its Cetrek autopilots and navigational equipment complement
Teleflex's hydraulic steering products which together can be sold to both the
commercial and pleasure marine markets. Techsonic Industries, Inc., a
manufacturer of marine information systems (electronic navigation, communication
and fish location devices) sold through mass merchandisers under the Humminbird
brand name, became a wholly owned subsidiary in 1992. In 1994, the Company
acquired TX Controls, a Swedish manufacturer of mechanical and hydraulic
steering systems, engine control systems and cables for application on marine
craft and industrial vehicles. The acquisition of TX Controls, along with
Marinex, enhanced the Company's access to the international marine market. Aside
from the Humminbird products, the Company's marine products are sold principally
to boat builders, in the aftermarket, and are used principally on pleasure craft
but also have application on commercial vessels.
The Company is a major supplier of mechanical controls to the domestic
automotive market. The principal products in this market are accelerator,
transmission, shift, park lock, window regulator controls and a new heat
resistant flexible fuel line. In 1995 the Company acquired the cable controls
businesses of Handy & Harmon Automotive Group. This acquisition broadens the
automotive product line by adding a park brake and provides a manufacturing
plant in Mexico. Acceptance by the automobile manufacturers of a Company-
developed control for use on a new model ordinarily assures the Company a large,
but not exclusive, market share for the supply of that control. The sales of
mechanical automotive controls were $139,128,000, $164,500,000 and $193,361,000
in 1993, 1994 and 1995, respectively.
Industrial controls and electrical instrumentation products are also
manufactured for use in other applications, including agricultural equipment,
outdoor power equipment, leisure vehicles and other on- and off-road vehicles.
In addition, the Company produces stainless steel overbraided fluoroplastic hose
for fluid transfer in such markets as the chemical, petroleum and food
processing industries.
MARKETING
In 1995, the percentages of the Company's consolidated net sales
represented by its major markets were as follows: aerospace -- 24%;
medical -- 32%; marine and industrial -- 23%; and automotive -- 21%.
The major portion of the Company's products are sold to original equipment
manufacturers. Generally, products sold to the aerospace and automotive markets
are sold through the Company's own force of field engineers. Products sold to
the marine, medical and general industrial markets are sold both through the
Company's own sales forces and through independent representatives and
independent distributor networks.
For information on foreign operations, export sales, and principal
customers, see text under the heading "Business segments and other information"
on page 21 of the Company's 1995 Annual Report to Shareholders, which
information is incorporated herein by reference.
COMPETITION
The Company has varying degrees of competition in all elements of its
business. None of the Company's competitors offers products for all the markets
served by the Company. The Company believes that its competitive position
depends on the technical competence and creative ability of its engineering and
development personnel, the know-how and skill of its manufacturing personnel as
well as its plants, tooling and other resources.
PATENTS
The Company owns a number of patents and has a number of patent
applications pending. The Company does not believe that its business is
materially dependent on patent protection.
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SUPPLIERS
Materials used in the manufacture of the Company's products are purchased
from a large number of suppliers. The Company is not dependent upon any single
supplier for a substantial amount of the materials it uses.
BACKLOG
As of December 31, 1995 the Company's backlog of firm orders for the
Aerospace Products and Services Segment was $81 million, of which it is
anticipated that substantially all will be filled in 1996. The Company's backlog
for Aerospace Products and Services on December 25, 1994 was $106 million. The
decline in the backlog in 1995 compared with 1994 is due to the sale of two
product lines in 1995 and one in the first quarter of 1996.
As of December 31, 1995 the Company's backlog of firm orders for the
Medical Products and Commercial Products segments was $24 million and $84
million, respectively. This compares with $21 million and $74 million,
respectively, as of December 25, 1994. Substantially all of the December 31,
1995 backlog will be filled in 1996. Most of the Company's medical and
commercial products are sold on orders calling for delivery within no more than
a few months so that the backlog of such orders is not indicative of probable
net sales in any future 12-month period.
EMPLOYEES
The Company had approximately 9,800 employees at December 31, 1995.
EXECUTIVE OFFICERS
The names and ages of all executive officers of the Company as of March 1,
1995 and the positions and offices with the Company held by each such officer
are as follows:
<TABLE>
<CAPTION>
POSITIONS AND OFFICES
NAME AGE WITH COMPANY
- ------------------------ --- -------------------------------------------------------------
<S> <C> <C>
Lennox K. Black 65 Chairman of the Board and Director
David S. Boyer 53 President, Chief Executive Officer and Director
John J. Sickler 53 President -- TFX Equities Inc.
Dr. Roy C. Carriker 58 President and Chief Operating Officer -- TFX Aerospace
Richard A. Woodfield 53 President and Chief Operating Officer -- TFX Medical
Harold L. Zuber, Jr. 46 Vice President, Chief Financial Officer and Controller
Steven K. Chance 50 Vice President, General Counsel and Secretary
Ira Albom 66 Senior Vice President
Louis T. Horvath 57 Vice President -- Quality and Productivity
Ronald D. Boldt 53 Vice President -- Human Resources
Janine Dusossoit 42 Vice President -- Investor Relations
Thomas M. Byrne 49 Assistant Treasurer
</TABLE>
Mr. Boyer was elected President and Chief Executive Officer on April 28,
1995. Prior to that date he was President.
Dr. Carriker was named President and Chief Operating Officer -- TFX
Aerospace on January 3, 1994. Prior to that date he was President -- Sermatech
International.
Mr. Woodfield was elected President and Chief Operating Officer -- TFX
Medical on March 9, 1992. Prior to that date, he was President of Empire
Abrasive Equipment Corporation.
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Mr. Horvath was named to the position of Vice President -- Quality and
Productivity on January 4, 1996. Prior to that date he was Vice
President -- Quality Management.
Mr. Boldt was named to the position of Vice President -- Human Resources on
March 9, 1992. Prior to that date he was Director of Human Resources.
Ms. Dusossoit was named to the position of Vice President -- Investor
Relations on March 1, 1993. From April 1, 1992 to March 1, 1993 she was Director
of Investor Relations. Prior to that date she was a business consultant.
Officers are elected by the Board of Directors for one year terms. No
family relationship exists between any of the executive officers of the Company.
ITEM 2. PROPERTIES
The Company's operations have approximately 90 owned and leased properties
consisting of plants, engineering and research centers, distribution warehouses
and other facilities. The properties are maintained in good operating condition.
All the plants are suitably equipped and utilized, and have space available for
the activities currently conducted therein and the increased volume expected in
the foreseeable future.
The following are the Company's major facilities:
<TABLE>
<CAPTION>
SQUARE OWNED OR EXPIRATION
LOCATION FOOTAGE LEASED DATE
- ------------------------------------------------------------- ------- -------- ----------
<S> <C> <C> <C>
AEROSPACE PRODUCTS AND SERVICES SEGMENT
Spanish Fork, UT............................................. 189,000 Owned N/A
Oxnard, CA................................................... 145,000 Leased 2003
Mentor, OH................................................... 90,000 Owned N/A
Limerick, PA................................................. 70,000 Owned(1) N/A
Derbyshire, England.......................................... 70,000 Leased 1999
Manchester, CT............................................... 63,000 Owned N/A
Compton, CA.................................................. 49,000 Leased 1999
Biddeford, ME................................................ 32,000 Leased 1998
Hausham, Germany............................................. 30,000 Owned N/A
MEDICAL PRODUCTS SEGMENT
Kernen, Germany.............................................. 263,000 Owned N/A
Durham, NC................................................... 144,000 Owned N/A
Kernen, Germany.............................................. 114,000 Leased 2013
Taiping, Malaysia............................................ 85,000 Owned N/A
Lurgan, Northern Ireland..................................... 80,000 Owned N/A
Duluth, GA................................................... 69,000 Leased 1999
Fort Washington, PA.......................................... 65,000 Owned N/A
Jaffrey, NH.................................................. 60,000 Owned(1) N/A
Franiere, Belgium............................................ 59,000 Leased 2005
Montevideo, Uruguay.......................................... 45,000 Owned N/A
Bourg-en-Bresse, France...................................... 38,000 Leased 1999
Bad Liebenzell, Germany...................................... 36,000 Leased 2000
Betschdorf, France........................................... 32,000 Owned N/A
High Wycombe, England........................................ 25,000 Leased 2012
Limerick, Ireland............................................ 16,000 Leased 2020
COMMERCIAL PRODUCTS SEGMENT
Van Wert, OH................................................. 110,000 Owned(1) N/A
Limerick, PA................................................. 110,000 Owned N/A
Hagerstown, MD............................................... 103,000 Owned(1) N/A
Waterbury, CT................................................ 99,000 Leased 1998
</TABLE>
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<TABLE>
<CAPTION>
SQUARE OWNED OR EXPIRATION
LOCATION FOOTAGE LEASED DATE
- ------------------------------------------------------------- ------- -------- ----------
<S> <C> <C> <C>
Eufaula, AL.................................................. 98,000 Owned N/A
Suffield, CT................................................. 90,000 Leased 1998
Haysville, KS................................................ 98,000 Leased 2002
Hillsdale, MI................................................ 75,000 Owned(1) N/A
Nuevo Laredo, Mexico......................................... 67,000 Leased 1998
Willis, TX................................................... 65,000 Owned(1) N/A
Eufaula, AL.................................................. 61,000 Owned N/A
Lebanon, VA.................................................. 52,000 Owned(1) N/A
Goteborg, Sweden............................................. 37,000 Owned N/A
Swainsboro, GA............................................... 37,000 Leased 2004
Vancouver, B.C., Canada...................................... 30,000 Owned N/A
Troy, MI..................................................... 29,000 Leased 2003
Sarasota, FL................................................. 25,000 Owned N/A
Selmer, TN................................................... 24,000 Leased 2005
Poole, England............................................... 20,000 Owned N/A
</TABLE>
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(1) The Company is the beneficial owner of these facilities under installment
sale or similar financing agreements.
In addition to the above, the Company owns or leases approximately 600,000
square feet of warehousing, manufacturing and office space located in the United
States, Canada, Europe and Asia.
ITEM 3. LEGAL PROCEEDINGS
Two subsidiaries of the Company have been identified as potentially
responsible parties (PRPs) in connection with the Casmalia Resources Hazardous
Waste Management Facility. The Company has joined a group of other PRPs,
predominately in the aerospace industry, to negotiate with the United States
Environmental Protection Agency (EPA) a good faith offer to take over
responsibility for a program of closure and post-closure care of the site. The
PRPs from the aerospace industry are currently engaged in negotiations with a
second PRP group with the aim of providing a common negotiating front with the
EPA.
In July 1994, the North Penn Water Authority (NPWA) instituted suit against
the Company in the United States District Court for the Eastern District of
Pennsylvania. NPWA alleges that acts or omissions of the Company and four other
defendants caused releases of chlorinated solvents that have contaminated, and
continue to contaminate, one of NPWA's wells located near Lansdale,
Pennsylvania. NPWA seeks injunctive relief to require defendants to abate the
alleged contamination. NPWA also seeks the recovery of costs allegedly incurred
because of the contamination. The Company filed an answer denying any liability
to NPWA for the claims made in the complaint and is vigorously defending this
action. The parties are engaged in settlement negotiations.
In addition, the Company has been named as a PRP by the EPA at various
sites throughout the country.
In the opinion of the Company's management, based on current allocation
formulas and the facts presently known, the ultimate outcome of these
environmental matters will not result in a liability material to the Company's
consolidated financial condition or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
See "Quarterly Financial Data" on page 23 of the Company's 1995 Annual
Report to Shareholders for market price and dividend information. Also see the
Note entitled "Borrowings and Leases" on pages 19 and 20 of such Annual Report
for certain dividend restrictions under loan agreements, all of which
information is incorporated herein by reference. The Company had approximately
1,400 registered shareholders at February 1, 1996.
ITEM 6. SELECTED FINANCIAL DATA
See pages 24 through 27 of the Company's 1995 Annual Report to
Shareholders, which pages are incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
See the text under the heading "Financial Review" on pages 28 through 33 of
the Company's 1995 Annual Report to Shareholders, which information is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See pages 15 through 23 of the Company's 1995 Annual Report to
Shareholders, which pages are incorporated herein by reference.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
For information with respect to the Company's Directors and Director
nominees, see "Election Of Directors" and "Additional Information About The
Board Of Directors" on pages 2 through 4 of the Company's Proxy Statement for
its 1996 Annual Meeting, which information is incorporated herein by reference.
For information with respect to the Company's Executive Officers, see Part
I of this report on pages 4 and 5, which information is incorporated herein by
reference.
ITEM 11. EXECUTIVE COMPENSATION
See "Additional Information About The Board of Directors", "Board
Compensation Committee", "Five-Year Shareholder Return Comparison" and
"Executive Compensation and Other Information" on pages 3 through 8 of the
Company's Proxy Statement for its 1996 Annual Meeting, which information is
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
See "Security Ownership of Certain Beneficial Owners and Management" on
pages 1 and 2 and "Election Of Directors" on pages 2 and 3 of the Company's
Proxy Statement for its 1996 Annual Meeting, which information is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Additional Information About The Board Of Directors", "Board
Compensation Committee" and "Executive Compensation and Other Information" on
pages 3 through 8 of the Company's Proxy Statement for its 1996 Annual Meeting,
which information is incorporated herein by reference.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Consolidated Financial Statements:
The index to Consolidated Financial Statements and Schedules is set
forth on page 10 hereof.
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during the last quarter of the
period covered by this report.
(c) Exhibits:
The Exhibits are listed in the Index to Exhibits.
For the purposes of complying with the amendments to the rules governing
Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the
undersigned registrant hereby undertakes as follows, which undertaking shall be
incorporated by reference into registrant's Registration Statements on Form S-8
Nos. 2-84148 (filed June 28, 1989), 2-98715 (filed May 11, 1987), 33-34753
(filed May 10, 1990) and 33-53385 (filed April 29, 1994):
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized as of the
date indicated below.
TELEFLEX INCORPORATED
By LENNOX K. BLACK
------------------------------------
Lennox K. Black
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and as of the date indicated below.
By DAVID S. BOYER
------------------------------------
David S. Boyer
(Principal Executive Officer)
By HAROLD L. ZUBER, JR.
------------------------------------
Harold L. Zuber, Jr.
(Principal Financial and Accounting
Officer)
Pursuant to General Instruction D to Form 10-K, this report has been signed
by Steven K. Chance as Attorney-in-Fact for a majority of the Board of Directors
as of the date indicated below.
<TABLE>
<S> <C>
John H. Remer Director
Lewis E. Hatch, Jr. Director
Palmer E. Retzlaff Director
Sigismundus W. W. Lubsen Director
David S. Boyer Director
Lennox K. Black Director
Pemberton Hutchinson Director
Donald Beckman Director
James W. Stratton Director
Joseph S. Gonnella, MD Director
</TABLE>
By STEVEN K. CHANCE
------------------------------------
Steven K. Chance
Attorney-in-Fact
Dated: March 22, 1996
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TELEFLEX INCORPORATED
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements together with the report thereon of
Price Waterhouse LLP dated February 13, 1996 on pages 15 to 22 of the
accompanying 1995 Annual Report to Shareholders are incorporated in this Annual
Report on Form 10-K. With the exception of the aforementioned information, and
those portions incorporated by specific reference in this document, the 1995
Annual Report to Shareholders is not to be deemed filed as part of this report.
The following Financial Statement Schedule together with the report thereon of
Price Waterhouse LLP dated February 13, 1996 on page 11 should be read in
conjunction with the consolidated financial statements in such 1995 Annual
Report to Shareholders. Financial Statement Schedules not included in this Form
10-K Annual Report have been omitted because they are not applicable or the
required information is shown in the consolidated financial statements or notes
thereto.
FINANCIAL STATEMENT SCHEDULE
Schedule:
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
VIII Valuation and qualifying accounts............................................. 12
</TABLE>
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REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors
of Teleflex Incorporated
Our audits of the consolidated financial statements referred to in our report
dated February 13, 1996 appearing on page 22 of the 1995 Annual Report to
Shareholders of Teleflex Incorporated (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the Financial Statement Schedule listed in Item 14(a)
of this Form 10-K. In our opinion, the Financial Statement Schedule presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
PRICE WATERHOUSE LLP
Thirty South Seventeenth Street
Philadelphia, Pennsylvania 19103
February 13, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (No. 2-84148, No. 2-98715, No. 33-34753, and No.
33-53385) of Teleflex Incorporated of our report dated February 13, 1996
appearing on page 22 of the 1995 Annual Report to Shareholders which is
incorporated in this Annual Report on Form 10-K. We also consent to the
incorporation by reference of our report on the Financial Statement Schedule,
which appears above.
PRICE WATERHOUSE LLP
Thirty South Seventeenth Street
Philadelphia, Pennsylvania 19103
March 22, 1996
11
<PAGE> 13
TELEFLEX INCORPORATED
SCHEDULE VIII -- VALUATION AND QUALIFYING ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS
<TABLE>
<CAPTION>
BALANCE AT ADDITIONS DOUBTFUL BALANCE AT
BEGINNING CHARGED TO ACCOUNTS END OF
FOR THE YEAR ENDED OF YEAR INCOME WRITTEN OFF YEAR
- ----------------------------------------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
December 31, 1995........................ $3,036,900 $1,333,600 $ (573,500) $3,797,000
December 25, 1994........................ $2,352,700 $1,251,800 $ (567,600) $3,036,900
December 26, 1993........................ $2,701,100 $1,151,100 $(1,499,500) $2,352,700
</TABLE>
12
<PAGE> 14
MARCH 22, 1996
INDEX TO EXHIBITS
EXHIBIT
3 (a) - The Company's Articles of Incorporation (except for Article
Thirteenth and the first paragraph of Article Fourth) are incorporated herein
by reference to Exhibit 3(a) to the Company's Form 10-Q for the period ended
June 30, 1985. Article Thirteenth of the Company's Articles of Incorporation
is incorporated herein by reference to Exhibit 3 of the Company's Form 10-Q for
the period ended June 28, 1987. The first paragraph of Article Fourth of the
Company's Articles of Incorporation is incorporated herein by reference to
Exhibit 3 of the Company's Form 10-Q for the period ended June 25, 1989 (filed
with Form 8, dated August 23, 1989).
(b) - The Company's Bylaws are incorporated herein by reference to
Exhibit 3(b) of the Company's Form 10-K for the year ended December 28, 1987.
10 (a) - The 1982 Stock Option Plan, incorporated herein by reference to
the Company's registration statement on Form S-8 (Registration No. 2-84148),
as supplemented, with amendments of April 26, 1991 incorporated by reference to
the Company's definitive Proxy Statement for the 1991 Annual Meeting of
Shareholders.
(b) - The 1990 Stock Compensation Plan, incorporated herein by
reference to the Company's registration statement on Form S-8 (Registration No.
33-34753), with amendments of April 28, 1995 incorporated by reference to the
Company's definitive Proxy Statement for the 1995 Annual Meeting of
Shareholders.
(c) - The Salaried Employees' Pension Plan, as amended and restated
in its entirety, effective July 1, 1989 and the retirement income plan as
amended and restated in its entirety effective January 1, 1994 and related
Trust Agreements, dated July 1, 1994 is incorporated by reference to the
company's Form 10-K for the year ended December 25, 1994.
(d) - Description of deferred compensation arrangements between the
Company and its Chairman, L. K. Black, incorporated by reference to the
Company's definitive Proxy Statement for the 1996 Annual Meeting of
Shareholders.
<PAGE> 15
INDEX TO EXHIBITS . . . PAGE 2
(e) - Description of compensation arrangement between the company and
its President and Chief Executive Officer, David S. Boyer, incorporated by
reference to the company's definitive Proxy Statement for the 1996 Annual
Meeting of Shareholders.
(f) - Teleflex Incorporated Deferred Compensation Plan entered into
as of January 1, 1995.
(g) - Information on the Company's Profit Participation Plan,
insurance arrangements with certain officers and deferred compensation
arrangements with certain officers, non-qualified supplementary pension plan
for salaried employees and compensation arrangements with directors is
incorporated by reference to the Company's definitive Proxy Statement for the
1994, 1995 and 1996 Annual Meeting of Shareholders.
(h) - The Company's Voluntary Investment Plan is incorporated by
reference to Exhibit 28 of the Company's registration statement on Form S-8
(Registration No. 2-98715).
13 - Pages 15 through 27 of the Company's Annual Report to Shareholders for the
period ended December 31, 1995.
22 - The Company's Subsidiaries.
24 - Consent of Independent Accountants (see page 11 herein).
25 - Power of Attorney.
<PAGE> 1
EXHIBIT 10(F)
TELEFLEX INCORPORATED
DEFERRED COMPENSATION PLAN
THIS PLAN is entered into as of the 1st day of January, 1995 by
Teleflex Incorporated (the "Corporation"), a Delaware corporation.
WITNESSETH:
Teleflex Incorporated and its' participating affiliates that have
adopted the Plan wish to provide certain employees it and with a deferred
compensation arrangement. It is the intent of the Corporation to provide this
benefit under the terms and conditions hereinafter set forth.
1. Effective Date. The Plan shall be effective January 1, 1995.
"Fiscal Year" shall mean each twelve-consecutive month period beginning on
January 1 and ending the following December 31 during which the Plan is in
effect.
2. Eligibility. Any employee of the Corporation or an affiliate
who is a Key (Management) Employee shall be eligible to participate herein
(hereinafter referred to as the "Participant").
3. Salary Deferrals. Prior to the beginning of any Fiscal
Year, a Participant may elect to defer any whole percent (2% to 10% max.) of
their base salary, commissions or other regularly paid cash compensation
payable during that Fiscal Year.
In addition, a participant may elect to defer any whole percentage (up
to 100%) of their annual discretionary bonus (minimum 10%).
4. Deferred Benefits. Any amounts deferred by a Participant
pursuant to Paragraph 3, together with the accrued interest thereon from the
investment of such amounts in accordance with Paragraph 5 hereof, shall
constitute the Deferred Benefits payable hereunder.
5. Investments.
Each participant's deferred compensation account will be credited with
earnings quarterly in arrears based upon the yield on 5 yr. U.S. Treasury Bonds
as published in the Wall Street Journal the last business day of the preceding
November.
<PAGE> 2
6. Funding. In order to meet its contingent deferred obligation
hereunder, the Corporation may, but shall not be required to, set aside or
earmark an amount necessary to provide the Deferred Benefits described in
Paragraph 4 hereof. In any event, the Corporation's obligation hereunder shall
constitute a general, unsecured obligation, payable solely out of its general
assets, and no Participant shall have any right to specific assets. This shall
be considered an "unfunded" arrangement for purposes of ERISA.
7. Distributions.
a. Deferred Benefits shall be distributed or commence to be
distributed to a Participant within 30 days after their election to
have benefits commence (not less than 5 years hence) or at death,
disability, retirement or termination of employment for any reason.
The Corporation may permit an earlier distribution; provided, however,
that early distributions will only be permitted under the
circumstances set forth in Treas. Reg. Section 1.457-2 (h)(4) and (5).
Any installments of Deferred Benefits which are unpaid at a
Participant's death shall be paid to the beneficiary designated by the
Participant or, in the absence of a surviving beneficiary, to their
estate.
Distribution elections shall be made at the time of deferral.
Distribution options include: a lump-sum, five or ten annual
installments of principal and interest.
8. Administration of the Plan. The Plan Administrative Committee
shall have full power and authority to interpret, construe and administer this
Plan and the Committee's interpretation and construction hereof, and actions
hereunder, or the amount or recipient of the payment to be made herefrom, shall
be binding and conclusive on all persons for all purposes. In this connection,
the Committee may delegate to any individual, the duty to act for the Committee
hereunder. No officer or employee of the Corporation shall be liable to any
person for any action taken or omitted in connection with the interpretation
and administration of this Plan unless attributable to his own willful
misconduct or lack of good faith.
9. Amendments.
a. All amendments to the Plan may be accomplished by
execution of a written document by an executive officer of the
Corporation.
-2-
<PAGE> 3
b. The Corporation, through The Plan Administrative Committee
reserves the right to amend the Plan at any time, in any
manner whatsoever, after delivery of written notification to
all Participants of its intention and the effective date
thereof; provided, however, that no amendment shall reduce any
Deferred Benefits which a Participant had earned for any
Fiscal Year or part thereof before the effective date of the
amendment, as determined in accordance with the provisions of
the Plan in effect immediately before such date.
10. Change of Control. In the event that any person, entity or
group of persons, within the meaning of section 13(d) or 14(d) of the
Securities Exchange Act of 1934 ("Act"), or any comparable successor provisions
shall acquire beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Act) of 20 percent or more of either the outstanding
shares of common stock or the combined voting power of Company's then
outstanding voting securities entitled to vote generally, or the approval by
the stockholders of Company of a reorganization, merger, or consolidation, in
each case, with respect to which persons who were stockholders of Company
immediately prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50 percent of the combined voting power
entitled to vote generally in the election of directors of the reorganized,
merged or consolidated Company's then outstanding securities, or a liquidation
or dissolution of Company's then outstanding securities, or in the event
of liquidation or dissolution of Company or of the sale of all or substantially
all of Company's assets, then the entire deferred benefit account balance
standing to the credit of each participant shall be contributed to a Grantor
Trust within 30 days thereafter.
11. Termination of the Plan. Continuance of the Plan is completely
voluntary, and is not assumed as a contractual obligation of the Corporation.
The Corporation, having adopted the Plan, shall have the right, at any time,
to discontinue prospectively the Plan, after delivery of written notification
to the Participants of its intention and the effective date thereof; provided,
however, that any such termination shall not adversely affect a Participant's
Deferred Benefits accrued to the date of such termination.
-3-
<PAGE> 4
12. Miscellaneous.
a. Title to and beneficial ownership of any assets, whether cash
or investments, which the Corporation may set aside or earmark to meet its
deferred obligation hereunder, shall at all times remain in the Corporation and
no Participant or beneficiary shall under any circumstances acquire any
property interest in any specific assets of the Corporation; provided, however,
that legal title to any assets set aside in trust by the Corporation shall be
in the trustee of the trust. Nothing contained in this Plan and no action
taken pursuant to the provisions of this Plan shall create or be construed to
create a fiduciary relationship between the Corporation and any Participant or
any other person. Any funds which may be invested under the provisions of this
Plan shall continue for all purposes to be a part of the general funds of the
Corporation and no person other than the Corporation shall by virtue of the
provisions of this Plan have any interest in such funds. To the extent that
any person acquires a right to receive payments from the Corporation under this
agreement, such right shall be no greater than the right of any unsecured
general creditor of the Corporation.
b. The right of the Participant or any other person to the
payment of deferred compensation or other benefits hereunder shall not be
assigned, transferred, pledged or encumbered except by will or by the laws of
descent and distribution.
c. If the Corporation shall find that any person to whom any
payment is payable under this Plan is unable to care for their affairs because
of illness or accident, or is a minor, any payment due (unless a prior claim
therefor shall have been made by a duly appointed guardian, committee or other
legal representative) may be paid to the spouse, a child, a parent, or a
brother or sister, or to any person deemed by the Corporation to have incurred
expense for such person otherwise entitled to payment, in such manner and
proportions as the Corporation may determine. Any such payment shall be a
complete discharge of the liabilities of the Corporation under this Plan.
d. Nothing contained herein shall be construed as conferring upon
a Participant the right to continue in the employ of the Corporation in any
capacity.
-4-
<PAGE> 5
e. This Plan shall be binding upon and inure to the
benefit of the Corporation, its successors and assigns and the
Participant and their heirs, executors, administrators and legal
representatives.
This Plan shall be construed in accordance with, and governed by, the
law of the State of Delaware except to the extent that such law is superseded
by ERISA.
In WITNESS WHEREOF, the Corporation has caused this Plan to be
executed and attested by its duly authorized officers and has caused its seal
to be affixed as of the date first above written.
(CORPORATE SEAL)
TELEFLEX INCORPORATED
Attest:
[SIG] By [SIG]
- ------------------------ -------------------
Secretary
Date 2/20/95
-------------------
-5-
<PAGE> 1
EXHIBIT 13
Teleflex Incorporated and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Year ended
- -------------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, December 25, December 26,
1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share)
<S> <C> <C> <C>
REVENUES $912,689 $812,672 $666,796
- -------------------------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES
Materials, labor and other product costs 628,027 557,391 459,055
Selling, engineering and administrative expenses 192,430 173,929 140,965
Interest expense 18,632 18,361 14,466
- -------------------------------------------------------------------------------------------------------------------------------
839,089 749,681 614,486
- -------------------------------------------------------------------------------------------------------------------------------
Income before taxes 73,600 62,991 52,310
Estimated taxes on income 24,730 21,795 18,624
- -------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 48,870 $ 41,196 $ 33,686
- -------------------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE $2.75 $2.35 $1.95
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
15
<PAGE> 2
Teleflex Incorporated and Subsidiaries
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
DECEMBER 31, December 25,
1995 1994
- ---------------------------------------------------------------------------------------------------------
(Dollars in thousands)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 55,654 $ 24,094
Accounts receivable, less allowance for doubtful
accounts, 1995 - $3,797; 1994 - $3,037 186,077 183,745
Inventories 192,522 173,105
Prepaid expenses 11,553 9,273
- ---------------------------------------------------------------------------------------------------------
Total current assets 445,806 390,217
- ---------------------------------------------------------------------------------------------------------
Plant assets
Land and buildings 104,339 101,991
Machinery and equipment 344,171 310,680
- ---------------------------------------------------------------------------------------------------------
448,510 412,671
Less accumulated depreciation 176,724 148,354
- ---------------------------------------------------------------------------------------------------------
Net plant assets 271,786 264,317
Investments in affiliates 13,557 7,980
Intangibles and other assets 54,022 48,275
- ---------------------------------------------------------------------------------------------------------
$785,171 $710,789
- ---------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Demand loans $ 61,487 $ 52,240
Current portion of long-term borrowings 12,731 11,438
Accounts payable 47,569 50,631
Accrued expenses 53,836 45,512
Estimated income taxes payable 17,532 9,852
- ---------------------------------------------------------------------------------------------------------
Total current liabilities 193,155 169,673
Long-term borrowings 196,844 190,499
Deferred income taxes and other 39,808 41,593
- ---------------------------------------------------------------------------------------------------------
Total liabilities 429,807 401,765
- ---------------------------------------------------------------------------------------------------------
Shareholders' equity
Common shares, $1 par value
Issued: 1995 - 17,536,967 shares;
1994 - 17,277,221 shares 17,537 17,277
Additional paid-in capital 49,999 43,248
Retained earnings 291,067 252,650
Cumulative translation adjustment (3,239) (4,151)
- ---------------------------------------------------------------------------------------------------------
Total shareholders' equity 355,364 309,024
- ---------------------------------------------------------------------------------------------------------
$785,171 $710,789
- ---------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
16
<PAGE> 3
Teleflex Incorporated and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended
- -----------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, December 25, December 26,
1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------
(Dollars ln thousands)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 48,870 $ 41,196 $ 33,686
Adjustments to reconcile net income to cash flows
from operating activities:
Depreciation and amortization 37,740 33,019 28,071
Deferred income taxes 1,061 2,050 1,151
Decrease (increase) in accounts receivable 411 (32,269) (19,734)
(Increase) in inventories (9,266) (4,003) (1,015)
(Increase) in prepaid expenses (2,142) (704) (359)
(Decrease) increase in accounts payable
and accrued expenses (13,179) 11,641 8,224
increase (decrease)in estimated income
taxes payable 7,320 6,776 (3,661)
- -----------------------------------------------------------------------------------------------------------------------------
70,815 57,706 46,363
- -----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from new borrowings 34,941 14,131 76,171
Reduction in long-term borrowings,
including acquisition debt retired (35,693) (17,054) (27,517)
Increase (decrease)in current borrowings and
demand loans 6,130 (13,840) 12,531
Proceeds from stock compensation plans and
distribution of treasury shares 7,011 4,837 6,132
Dividends (10,453) (8,934) (7,640)
- -----------------------------------------------------------------------------------------------------------------------------
1,936 (20,860) 59,677
- -----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FOR INVESTING ACTIVITIES
Expenditures for plant assets 30,708 25,325 24,400
Payments for businesses acquired 9,202 4,485 103,530
Proceeds from sale of businesses and assets (5,038) (6,700) --
Investments in affiliates 4,172 3,251 1,369
Other 2,147 (2,354) 1,817
- -----------------------------------------------------------------------------------------------------------------------------
41,191 24,007 131,116
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 31,560 12,839 (25,076)
Cash and cash equivalents at the beginning of the year 24,094 11,255 36,331
- -----------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at the end of the year $ 55,654 $ 24,094 $ 11,255
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
17
<PAGE> 4
Teleflex Incorporated and Subsidiaries
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Year ended
- -----------------------------------------------------------------------------------------------------------------------------
DECEMBER 31, December 25, December 26,
1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share)
<S> <C> <C> <C>
COMMON SHARES
Balance, beginning of year $ 17,277 $ 17,084 $ 16,914
Shares issued under compensation plans 260 193 170
- -----------------------------------------------------------------------------------------------------------------------------
Balance, end of year 17,537 17,277 17,084
- -----------------------------------------------------------------------------------------------------------------------------
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of year 43,248 38,604 33,118
Shares issued under compensation plans 6,751 4,644 5,486
- -----------------------------------------------------------------------------------------------------------------------------
Balance, end of year 49,999 43,248 38,604
- -----------------------------------------------------------------------------------------------------------------------------
RETAINED EARNINGS
Balance, beginning of year 252,650 220,388 194,342
Net income 48,870 41,196 33,686
Cash dividends (10,453) (8,934) (7,640)
- -----------------------------------------------------------------------------------------------------------------------------
Balance, end of year 291,067 252,650 220,388
- -----------------------------------------------------------------------------------------------------------------------------
CUMULATIVE TRANSLATION ADJUSTMENT
Balance, end of year (3,239) (4,151) (6,286)
- -----------------------------------------------------------------------------------------------------------------------------
TREASURY SHARES
Balance, beginning of year -- -- (476)
Distribution of treasury shares -- -- 476
- -----------------------------------------------------------------------------------------------------------------------------
Balance, end of year -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY $355,364 $309,024 $269,790
- -----------------------------------------------------------------------------------------------------------------------------
CASH DIVIDENDS PER SHARE $.60 $.52 $.45
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
18
<PAGE> 5
Teleflex Incorporated and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share)
DESCRIPTION OF BUSINESS
Teleflex Incorporated designs, manufactures and distributes engineered products
and services for the automotive, marine, industrial, medical and aerospace
markets worldwide.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements include the accounts of Teleflex
Incorporated and its subsidiaries. These consolidated financial statements have
been prepared in conformity with generally accepted accounting principles, and
include management's estimates and assumptions that affect the recorded
amounts.
Cash and cash equivalents include funds invested in a variety of liquid
short-term investments with an original maturity of three months or less.
Inventories are stated principally at the lower of average cost or market
and consisted of the following:
<TABLE>
<CAPTION>
1995 1994
- -----------------------------------------------------------------------
<S> <C> <C>
Raw materials $ 74,281 $ 75,269
Work-in-process 40,694 44,074
Finished goods 77,547 53,762
- -----------------------------------------------------------------------
$192,522 $173,105
- -----------------------------------------------------------------------
</TABLE>
Plant assets include the cost of additions and those improvements which
increase the capacity or lengthen the useful lives of the assets. Repairs and
maintenance costs are expensed as incurred. With minor exceptions, straight-line
composite lives for depreciation of plant assets are as follows: buildings 20
to 40 years; machinery and equipment 8 to 12 years.
Intangible assets, principally the excess purchase price of acquisitions
over the fair value of net tangible assets acquired, are being amortized over
periods not exceeding 30 years.
Assets and liabilities of foreign subsidiaries are translated at the
rates of exchange at the balance sheet date; income and expenses are translated
at the average rates of exchange prevailing during the year. The related
translation adjustments are accumulated in shareholders' equity.
Earnings per share is based on the weighted average number of common and
common equivalent shares outstanding.
ACQUISITIONS AND JOINT VENTURE
During 1995 and 1994 the company paid $9,202 and $4,485 to acquire the net
assets of various businesses. The assets, liabilities and operating results of
these businesses are included in the company's financial statements from their
dates of acquisition. Liabilities of $8,400 and $18,000 were assumed in 1995
and 1994, respectively, in connection with the acquisitions. Results of
operations would not have been materially different had the acquisitions
occurred as of the beginning of the years acquired.
During the fourth quarter, the company combined certain assets of the
Sermatech repairs business with that of GE Aircraft Engines into a joint
venture, Airfoil Technologies International LLC (ATI) which will provide fan
blade and airfoil repair services. ATI, which is 51% owned by the company, did
not have a material effect on financial position or results of operations in
1995.
BORROWINGS AND LEASES
<TABLE>
<CAPTION>
1995 1994
- -----------------------------------------------------------------------
<S> <C> <C>
Senior Notes at an average
rate of 7.2% due in installments
through 2008 $ 98,000 $101,000
Mortgage notes secured by certain
assets with a net book value
of $12,084 10,294 11,161
Deutsche Mark denominated
notes at an average rate
of 6.4% due in installments
through 2000 73,710 50,085
Other debt and capital lease
obligations, at interest rates
ranging from 3% to 9% 27,571 39,691
- -----------------------------------------------------------------------
209,575 201,937
Current portion of borrowings (12,731) (11,438)
- -----------------------------------------------------------------------
$196,844 $190,499
- -----------------------------------------------------------------------
</TABLE>
The various senior note agreements provide for the maintenance of minimum
working capital amounts and ratios and limit the purchase of the company's
stock and payment of cash dividends. Under the most restrictive of these
provisions, $50,000 of retained earnings was available for dividends at
December 31, 1995.
The weighted average interest rate on the $61,487 of demand loans due to
banks was 6.3% at December 31, 1995. In addition, the company has approximately
$100,000 available under several interest rate alternatives in unused lines of
credit.
Interest expense in 1995, 1994 and 1993 did not differ materially from
interest paid, nor did the carrying value of year end long-term borrowings
differ materially from fair value.
19
<PAGE> 6
Teleflex Incorporated and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share)
The aggregate amounts of debt, including capital leases, maturing in each
of the four years after 1996 are as follows: 1997 - $25,639; 1998 - $50,940;
1999 - $23,436; 2000 - $33,609.
The company has entered into certain operating leases which require
minimum annual payments as follows: 1996 - $11,813; 1997 - $10,778; 1998 -
$9,814; 1999 - $8,378; 2000 - $8,511. The total rental expense for all
operating leases was $11,855, $9,418 and $8,460 in 1995, 1994 and 1993,
respectively.
SHAREHOLDERS' EQUITY
The authorized capital of the company is comprised of 50,000,000 common shares,
$1 par value, and 500,000 preference shares. No preference shares were
outstanding during the last three years.
At December 31. 1995, 2,003,063 shares of common stock were reserved for
issuance under the company's stock compensation plans. During 1995, the number
of shares available for grant was increased by 1,000,000 and options to
purchase 383,000 shares of common stock were granted. Officers and key
employees held options for the purchase of 1,324,011 shares of common stock at
prices ranging from $14.00 to $41.75 per share with an average price of $30.93
per share. Such options are presently exercisable with respect to 676,760
shares and become exercisable with respect to an additional 167,320 shares in
1996. In 1995 and 1994, 259,746 shares and 192,976 shares, respectively, were
issued under the compensation plans.
The effect of adopting SFAS No. 123, Accounting for Stock-Based
Compensation is discussed in the financial review section on page 30.
INCOME TAXES
The provision for income taxes consisted of the following:
<TABLE>
<CAPTION>
1995 1994 1993
- -----------------------------------------------------------------------
<S> <C> <C> <C>
Current
Federal $17,323 $13,274 $14,133
State 2,177 1,759 1,711
Foreign 4,169 4,712 1,629
Deferred 1,061 2,050 1,151
- -----------------------------------------------------------------------
$24,730 $21,795 $18,624
- -----------------------------------------------------------------------
</TABLE>
The deferred income taxes provided and the balance sheet amounts of $28,310 in
1995 and $29,173 in 1994 related substantially to the methods of accounting for
depreciation. Income taxes paid were $16,565, $13,300 and $20,600 in 1995. 1994
and 1993, respectively.
A reconciliation of the company's effective tax rate to the U.S.
statutory rate is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
- -----------------------------------------------------------------------
<S> <C> <C> <C>
Tax at U.S. statutory rate 35.0% 35.0% 35.0%
State income taxes 1.9 1.9 2.0
Foreign income taxes (1.0) .1 --
Export sales benefit (1.7) (1.6) (1.5)
Other (.6) (.8) .1
- -----------------------------------------------------------------------
Effective income tax rate 33.6% 34.6% 35.6%
- ------------------------------------------------------------------------
</TABLE>
PENSIONS
The company has defined benefit plans which provide retirement benefits to
eligible employees. Assumptions used in determining the actuarial present value
of domestic benefit obligations reflect a weighted average discount rate of
7.7% in 1995 and 8.0% in 1994, an investment rate of 9% and a salary increase
of 5%. The assumed discount rate was 6% for foreign plans.
Pension expense is summarized as follows:
<TABLE>
<CAPTION>
1995 1994 1993
- -----------------------------------------------------------------------
<S> <C> <C> <C>
Domestic plans
Service cost--
benefits earned
during the year $ 2,554 $ 2,825 $ 1,595
Interest cost on
projected ben-
efit obligation 3,766 3,718 2,673
Actual return on
plan assets (7,285) 664 (1,547)
Net amortization
and deferral 3,755 (4,356) (1,324)
Foreign plans 420 440 495
- -----------------------------------------------------------------------
$ 3,210 $ 3,291 $ 1,892
- -----------------------------------------------------------------------
</TABLE>
20
<PAGE> 7
Teleflex Incorporated and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share)
The following table sets forth the funded status of the plans
and the amounts shown in the balance sheet:
<TABLE>
<CAPTION>
1995 1994
- -----------------------------------------------------------------------
<S> <C> <C>
Domestic
Plan assets at fair value,
primarily common stock
and U.S. Government
obligations $ 49,194 $ 41,112
- -----------------------------------------------------------------------
Actuarial present value of
the benefit obligation
Vested (44,358) (40,238)
Non-vested (2,266) (2,429)
- -----------------------------------------------------------------------
Accumulated benefit
obligation (46,624) (42,667)
Projected effect of future
salary increases (5,733) (5,356)
- -----------------------------------------------------------------------
Total projected benefit
obligation (52,357) (48,023)
- -----------------------------------------------------------------------
Protected benefit obligation
in excess of plan assets (3,163) (6,911)
Unrecognized--
Prior service cost (366) (418)
Net loss 1,585 5,779
Transition asset (1,249) (1,385)
Unfunded foreign pension amounts (5,500) (4,700)
- -----------------------------------------------------------------------
Accrued pension liability $ (8,693) $ (7,635)
- -----------------------------------------------------------------------
</TABLE>
OTHER POSTRETIREMENT BENEFITS
The company provides postretirement medical and other benefits to eligible
employees. Assumptions used in determining the expense and benefit obligations
include a weighted average discount rate of 7.7% in 1995 and 8.0% in 1994 and
an initial health care cost trend rate of 10% in 1995 and 11% in 1994,
declining to 6% over a period of 5 years. Increasing the health care cost trend
rate by one percentage point would increase the accumulated postretirement
benefit obligation by $993 and would increase the 1995 postretirement benefit
expense by $121.
Postretirement benefit expense is summarized as follows:
<TABLE>
<CAPTION>
1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost--benefits
earned during
the year $ 250 $ 399 $ 312
Interest cost on accumulated
postretirement
benefit obligation 1,127 1,402 1,385
Net amortization
and deferral 566 776 783
- --------------------------------------------------------------------------------
$1,943 $2,577 $2,480
- --------------------------------------------------------------------------------
</TABLE>
The following table sets forth the accumulated obligation of the plans and
the amounts shown in the balance sheet:
<TABLE>
<CAPTION>
1995 1994
- -----------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement
benefit obligation:
Retirees $ (7,840) $ (9,548)
Fully eligible active plan
participants (869) (1,255)
Other active plan participants (3,048) (3,666)
- -----------------------------------------------------------------
(11,757) (14,469)
Unrecognized--
Prior service cost (547) (598)
Transition obligation 10,900 11,541
Actuarial net gain (3,824) (654)
- -----------------------------------------------------------------
Accrued postretirement liability $ (5,228) $ (4,180)
- -----------------------------------------------------------------
</TABLE>
BUSINESS SEGMENTS AND OTHER INFORMATION
Reference is made to pages 24 through 27 for a summary of operations by
business segment.
A summary of revenues, identifiable assets and operating profit relating
to the company's foreign operations, substantially European, is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues $283,892 $221,145 $187,259
Identifiable
assets $281,429 $249,000 $202,593
Operating
profit $ 27,053 $ 22,600 $ 19,700
- --------------------------------------------------------------------------------
</TABLE>
Export sales from the United States to unaffiliated customers approximated
$90,200, $92,200 and $69,800 for 1995, 1994 and 1993, respectively. Export
sales included $39,900, $30,600 and $24,000 to Canada in 1995, 1994 and 1993,
respectively.
21
<PAGE> 8
REPORT OF INDEPENDENT ACCOUNTANTS [LOGO]
To the Board of Directors and Shareholders
Teleflex Incorporated
In our opinion, the consolidated financial statements appearing on pages 15
through 27 of this Annual Report present fairly, in all material respects, the
financial position of Teleflex Incorporated and its subsidiaries at December
31, 1995 and December 25, 1994 and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 1995,
in conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
PRICE WATERHOUSE LLP
- ---------------------------
Price Waterhouse LLP
Philadelphia, Pennsylvania
February 13, 1996
22
<PAGE> 9
QUARTERLY FINANCIAL DATA
(unaudited)
<TABLE>
<CAPTION>
Quarter ended
- -------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share) March June Sept. Dec.
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1995
- -------------------------------------------------------------------------------------------------------------------------------
Revenues $226,893 $233,888 $210,340 $241,568
Gross profit 71,774 74,224 64,464 74,200
Income before taxes 18,974 20,467 12,696 21,463
Net income 12,333 13,304 8,252 14,981
Earnings per share .70 .75 .46 .84
Cash dividends per share .135 .155 .155 .155
Price range of common stock 40 3/8--40 1/2 39 5/8--45 3/4 38 1/4--45 5/8 38--44 7/8
- -------------------------------------------------------------------------------------------------------------------------------
1994
- -------------------------------------------------------------------------------------------------------------------------------
Revenues $191,084 $209,456 $193,367 $218,765
Gross profit 58,508 64,765 59,765 72,243
Income before taxes 15,330 17,194 11,380 19,087
Net income 9,965 11,176 7,397 12,658
Earnings per share .57 .64 .42 .72
Cash dividends per share .115 .135 .135 .135
Price range of common stock 36 1/8--40 32 1/8--37 32 3/8--39 3/4 31 3/4--40 1/4
- ---------------------------------------------------------------------------------------------------------------------------------
1993
- -------------------------------------------------------------------------------------------------------------------------------
Revenues $157,575 $174,921 $156,878 $177,422
Gross profit 49,257 54,421 47,700 56,363
Income before taxes 13,174 14,250 9,661 15,225
Net income 8,563 9,263 5,904 9,956
Earnings per share .50 .54 .34 .57
Cash dividends per share .105 .115 .115 .115
Price range of common stock 29--33 5/8 27 3/4--32 30 3/4--33 3/8 28--38 1/4
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
23
<PAGE> 10
Teleflex Incorporated and Subsidiaries
SELECTED FINANCIAL AND INDUSTRY SEGMENT DATA
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
1995 1994 1993
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SUMMARY OF OPERATIONS
Revenues
Commercial Products $403,637 $356,708 $284,106
Medical Products 293,341 253,020 180,623
Aerospace Products and Services 215,711 202,944 202,067
- ----------------------------------------------------------------------------------------------------------
Net sales 912,689 812,672 666,796
Other income(a) -- -- --
- ----------------------------------------------------------------------------------------------------------
Total revenues $912,689 $812,672 $666,796
- ----------------------------------------------------------------------------------------------------------
Operating profit
Commercial Products $ 59,719 $ 53,324 $ 37,794
Medical Products 30,237 32,386 21,486
Aerospace Products and Services 12,683 5,367 14,906
- ----------------------------------------------------------------------------------------------------------
102,639 91,077 74,186
Less:
Interest expense 18,632 18,361 14,466
Corporate expenses, net of other income 10,407 9,725 7,410
- ----------------------------------------------------------------------------------------------------------
Income before taxes 73,600 62,991 52,310
Estimated taxes on income 24,730 21,795 18,624
- ----------------------------------------------------------------------------------------------------------
Net income $ 48,870 $ 41,196 $ 33,686
- ----------------------------------------------------------------------------------------------------------
Earnings per share $2.75 $2.35 $1.95
Cash dividends per share $.60 $.52 $.45
Net income from operations as a percent of revenues 5.4% 5.1% 5.1%
Percent of net sales
Commercial Products 44% 44% 43%
Medical Products 32% 31% 27%
Aerospace Products and Services 24% 25% 30%
Average number of common and common equivalent
shares outstanding 17,787 17,530 17,267
Average number of employees 9,553 8,740 7,920
- ----------------------------------------------------------------------------------------------------------
</TABLE>
[FIGURE 1]
24
<PAGE> 11
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
1992 1991 1990 1989 1988 1987 1986 1985
- --------------------------------------------------------------------------------------------------------------------
(Dollars and shares in thousands, except per share and employee data)
<S> <C> <C> <C> <C> <C> <C> <C>
$210,464 $168,598 $162,646 $173,957 $153,144 $130,310 $109,811 $101,495
179,376 130,540 115,756 42,406 38,032 25,928 21,314 --
177,292 180,399 162,731 139,262 132,413 113,540 83,057 70,321
- --------------------------------------------------------------------------------------------------------------------
567,132 479,537 441,133 355,625 323,589 269,778 214,182 171,816
3,206 3,472 3,080 4,441 4,634 1,988 3,965 3,221
- --------------------------------------------------------------------------------------------------------------------
$570,338 $483,009 $444,213 $360,066 $328,223 $271,766 $218,147 $175,037
- --------------------------------------------------------------------------------------------------------------------
$ 25,754 $ 19,996 $ 22,224 $ 22,025 $ 26,794 $ 25,239 $ 19,993 $ 15,251
25,463 19,900 16,183 5,782 3,755 2,107 168 --
16,100 21,722 20,781 20,711 16,548 15,095 14,090 13,470
- --------------------------------------------------------------------------------------------------------------------
67,317 61,618 59,188 48,518 47,097 42,441 34,251 28,721
15,482 13,765 12,401 6,886 6,225 4,886 3,679 1,626
3,185 2,519 3,880 2,395 4,493 5,894 3,642 4,887
- --------------------------------------------------------------------------------------------------------------------
48,650 45,334 42,907 39,237 36,379 31,661 26,930 22,208
16,638 15,527 14,340 12,440 12,370 11,990 10,500 8,900
- --------------------------------------------------------------------------------------------------------------------
$ 32,012(b) $ 29,807 $ 28,567 $ 26,797 $ 24,009 $ 19,671 $ 16,430 $ 13,308
- --------------------------------------------------------------------------------------------------------------------
$1.87(b) $1.77 $1.73 $1.63 $1.48 $1.20 $1.01 $.84
$.42 $.39 $.35 $.31 $.26 $.22 $.18 $.15
5.6% 6.2% 6.4% 7.4% 7.3% 7.2% 7.5% 7.6%
37% 35% 37% 49% 47% 48% 51% 59%
32% 27% 26% 12% 12% 10% 10% --
31% 38% 37% 39% 41% 42% 39% 41%
17,132 16,850 16,476 16,403 16,243 16,459 16,315 15,902
6,920 6,160 5,860 5,080 4,350 3,760 3,300 2,380
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Beginning in 1993, other income, which was insignificant, has been
reclassified as an offset to interest expense and corporate expenses.
(b) Excludes an increase in net income of $860, or $.05 per share as a result
of a change in accounting for income taxes
[FIGURE 2]
25
<PAGE> 12
Teleflex Incorporated and Subsidiaries
SELECTED FINANCIAL AND INDUSTRY SEGMENT DATA (continued)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
1995 1994 1993
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FINANCIAL POSITION
Identifiable assets
Commercial Products $201,808 $184,971 $158,206
Medical Products 331,349 311,547 266,239
Aerospace Products and Services 183,636 188,348 202,130
Corporate 68,378 25,923 14,001
- -----------------------------------------------------------------------------------------------------
Total assets $785,171 $710,789 $640,576
- -----------------------------------------------------------------------------------------------------
Capital expenditures
Commercial Products $ 15,445 $ 13,489 $ 7,967
Medical products $ 12,107 $ 7,029 $ 7,361
Aerospace Products and Services $ 2,794 $ 4,538 $ 8,865
Depreciation and amortization
Commercial Products $ 11,446 $ 9,930 $ 9,251
Medical Products $ 15,087 $ 11,694 $ 8,030
Aerospace Products and Services $ 10,471 $ 10,771 $ 10,176
Long-term borrowings $196,844 $190,499 $183,504
Shareholders' equity $355,364 $309,024 $269,790
Working capital $252,651 $220,544 $171,397
Current ratio 2.3 2.3 2.1
Book value per share $20.26 $17.89 $15.79
Return on average shareholders' equity 14.7% 14.2% 13.2%
- -----------------------------------------------------------------------------------------------------
</TABLE>
26
<PAGE> 13
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
1992 1991 1990 1989 1988 1987 1986 1985
- --------------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share)
<S> <C> <C> <C> <C> <C> <C> <C>
$142,041 $101,187 $ 84,678 $ 90,557 $ 83,601 $ 60,099 $ 51,342 $ 40,790
206,562 194,609 147,954 125,635 34,819 28,997 19,715 --
142,523 141,104 143,419 130,762 107,524 108,769 85,173 55,963
43,805 40,793 49,049 19,708 38,172 28,042 28,932 40,134
- --------------------------------------------------------------------------------------------------------------------
$534,931 $477,693 $425,100 $366,662 $264,116 $225,907 $185,162 $136,887
- --------------------------------------------------------------------------------------------------------------------
$ 7,386 $ 7,505 $ 5,581 $ 5,507 $ 8,880 $ 6,065 $ 9,289 $ 3,848
$ 5,316 $ 7,138 $ 4,236 $ 2,373 $ 960 $ 2,360 $ 1,436 --
$ 6,384 $ 5,585 $ 7,166 $ 10,701 $ 5,228 $ 6,446 $ 4,722 $ 3,186
$ 6,262 $ 5,633 $ 5,369 $ 4,715 $ 3,675 $ 3,038 $ 2,238 $ 1,816
$ 6,505 $ 4,725 $ 3,999 $ 1,693 $ 1,455 $ 1,097 $ 1,003 --
$ 8,002 $ 7,366 $ 7,024 $ 5,777 $ 5,556 $ 5,272 $ 3,682 $ 2,661
$134,600 $119,370 $112,941 $106,128 $ 57,104 $ 55,013 $ 37,578 $ 23,477
$240,467 $211,702 $187,875 $160,038 $136,328 $115,517 $100,573 $ 84,312
$166,803 $131,589 $133,840 $112,325 $ 98,217 $ 90,270 $ 69,723 $ 66,777
2.4 2.1 2.3 2.4 2.6 2.8 2.7 3.6
$14.25 $12.73 $11.44 $9.87 $8.49 $7.25 $6.25 $5.36
14.2% 14.9% 16.4% 18.1% 19.1% 18.2% 17.8% 17.0%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
27
<PAGE> 14
Teleflex Incorporated and Subsidiaries
1995 FINANCIAL REVIEW
OVERVIEW
The company's major financial objectives are to achieve a 15% to 20% growth
rate in revenues and net income and to generate a 20% return on average
shareholders' equity. Over the past five years the compounded growth rates for
sales and net income have been 15% and 11%, respectively, while return on
shareholders' equity has averaged 14%. On average over the past two years, the
company achieved its revenue and net income objectives and return on average
shareholders' equity improved to 15%. Prior to 1994, the growth rates were
tempered by the relatively weak economy first in the United States and then in
Europe, and the downward cycle in both the military and commercial aerospace
markets. Additionally, during that time period the company invested heavily,
primarily through acquisition, to build the Medical Segment.
The company is also committed to maintaining a reasonable balance among
its three segments--Commercial, Medical and Aerospace. Balance reduces
dependence on any one segment, allows for investment at the bottom of a
segment's operating cycle and gives the company a broader base of markets in
which to grow. Over the past five years, the company's operating profit has
increased despite cyclical downturns in each of the segments. As a result of
the divestiture of three product lines in the Aerospace Segment, it is expected
that the future balance among the three segments will be weighted more heavily
toward the Commercial and Medical segments. Additionally, the opportunities
for growth in these other markets are stronger than those for the Aerospace
Segment.
The company intends to achieve its growth objectives through both internal
development of new products and new markets for existing products as well as
through external means. It is expected that half of the growth over time will
be achieved through internal means and the remainder externally, primarily
through acquisitions. Over the past five years, the company's internal growth
has averaged close to the 50% objective. During the same time, the company
invested approximately $250 million in acquisitions which have contributed the
remainder of the growth.
Acquisitions, while adding initially to sales, generally do not contribute
proportionately to earnings in the early years. In these years, earnings
generally are reduced by up-front costs such as interest, depreciation and
amortization and, in many instances, the expenses of integrating a
newly-acquired business into an existing operation.
[FIGURE 3]
Historically, operations have generated sufficient cash flow to finance
the company's operating requirements while borrowings have been incurred largely
to finance acquisitions. Over the past five years, cash flow from operations
has totaled more than $250 million. This healthy cash flow also provides for
the payment of dividends and enables the company to continue to upgrade plant
and equipment. While not particularly capital intensive, the company's
businesses spend approximately 3% to 4% of net sales annually on plant and
equipment. With respect to dividends, the company's policy is to pay 20% of
trailing twelve months' earnings. This policy has been followed since the first
cash dividend payment was made in 1977.
The company generally has maintained conservative levels of long-term debt
ranging from 30% to 40% of total capitalization. However, it is not
inconceivable that debt may range up to 50% of capitalization for a limited
period in order to finance acquisitions. The company finances foreign
operations and acquisitions mostly in their local currencies, thus reducing the
overall risk of exchange rate fluctuations. As a result, approximately 50% of
the company's short and long-term debt is denominated in currencies other than
the U.S. dollar. In summary, the company believes its strong financial
position, healthy cash flows from operations and unused debt capacity provide
it with adequate financial resources and flexibility to pursue its long-term
strategic growth objectives.
28
<PAGE> 15
RESULTS OF OPERATIONS
1995 VS. 1994: Revenues increased 12% in 1995 to $912.7 million from $812.7
million in 1994. The increase was attributable to gains in each of the
company's three segments. For 1995 the Commercial, Medical and Aerospace
segments comprised 44%, 32% and 24% of the company's net sales, respectively.
Growth in the company's core businesses accounted for approximately 60% of the
increase in sales, while acquisitions in the Commercial and Medical segments
contributed the remainder. Foreign operations represented 31% of the company's
revenues and increased 28% over 1994. The increase in foreign sales resulted
from internal growth, acquisitions and to a much lesser extent, stronger
foreign currencies.
Gross profit margin remained relatively flat in 1995 as the gain in the
Aerospace Segment offset slight declines in the Medical and Commercial
segments. Selling, engineering and administrative expenses decreased slightly
as a percentage of sales due primarily to a reduction of expenses combined with
an increase in sales in the Aerospace Segment.
Operating profit increased 13% in 1995 to $102.6 million from $91.1
million in 1994. Increases in the Aerospace and Commercial segments more
than offset the decline in the Medical Segment. For 1995 the Commercial,
Medical and Aerospace segments comprised 58%, 30% and 12% of the company's
operating profit, respectively. In 1995 operating profit as a percentage of
sales (operating margin) remained unchanged as the increase in the Aerospace
Segment offset a decline in the Medical Segment.
Net income in 1995 increased 19% to $48.9 million while earnings per share
increased 17% to $2.75 from $2.35 in 1994.
1994 VS. 1993: Revenues increased 22% in 1994 to $812.7 million from $666.8
million in 1993. The increase was attributable to the Commercial and Medical
segments while the Aerospace Segment was essentially flat. For 1994, the
Commercial, Medical and Aerospace segments comprised 44%, 31% and 25% of the
company's net sales, respectively. The acquisition of Edward Weck Incorporated
(Weck) in December 1993 accounted for a significant portion of the growth in
the Medical Segment. The Commercial Segment gain was generated internally from
the strength in its markets and the introduction of new products. Foreign
operations, which accounted for 27% of revenues, increased 18% in 1994 and were
affected minimally by changes in foreign currency exchange rates.
Gross profit margin remained relatively flat in 1994 as gains in
Commercial and Medical segment margins were offset by a decline in Aerospace
margins. Selling, engineering and administrative expenses increased absolutely
but remained relatively constant as a percentage of sales. The major factor
contributing to the increased expenses was the larger sales contribution from
the Medical Segment, which has higher selling costs compared with the other
segments.
Operating profit increased 23% in 1994 to $91.1 million from $74.2 million
in 1993. Increases in the Commercial and Medical segments offset a drop in the
Aerospace Segment. In 1994 after several years of decline, operating margin
increased fractionally over 1993. The improvement was due primarily to
increased margins in the Commercial and Medical segments which offset a decline
in the Aerospace Segment.
Net income in 1994 was $41.2 million, up 22% from 1993 while earnings per
share increased 21% to $2.35 per share from $1.95 in 1993.
INTEREST EXPENSE, INCOME TAX EXPENSE AND OTHER
Interest expense increased slightly in 1995 resulting from additional
borrowings, incurred primarily to support foreign operations, offset by lower
rates. In 1994 the increase in interest expense was due to the significant
borrowings incurred at the end of 1993 to finance an acquisition. Interest
expense as a percent of sales decreased in 1995 to 2% from 2.3% in 1994.
[FIGURE 4]
29
<PAGE> 16
The effective income tax rate was 33.6% in 1995 compared with 34.6% in
1994 and 35.6% in 1993. The lower rate in 1995 compared with 1994 is
attributable to a change in the mix of the company's foreign income to
countries with lower tax rates. The reduced rate in 1994 was due to a
nonrecurring increase in deferred taxes in 1993 stemming from an increase in
the U.S. corporate rate from 34% to 35%.
In October 1995 the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS No.123). SFAS No. 123 defines a fair value based method of
accounting for employee stock options and similar instruments and must be
either adopted or the pro forma income statement effects must be disclosed in
notes to the financial statements. The company intends to elect disclosure of
the pro forma income statement effects of SFAS No. 123, therefore the new
Statement will not affect the company's financial position or results of
operations.
COMMERCIAL PRODUCTS SEGMENT
The Commercial Products Segment businesses design and manufacture proprietary
mechanical controls for the automotive market; mechanical, electrical and
hydraulic controls, and electronics products for the pleasure marine market;
and proprietary products for the fluid transfer and outdoor power equipment
markets.
Products in the Commercial Segment generally are less complex and are
produced in higher unit volume than those of the company's other two segments.
They are manufactured both for general distribution as well as custom
fabricated to meet individual customer needs. Consumer spending patterns
generally influence the market trends for these products.
1995 VS. 1994: Sales in the Commercial Segment increased 13% in 1995 from
$356.7 million to $403.6 million. All three product lines, Marine, Automotive,
and Industrial reported higher sales with the largest gain coming from the
Automotive product line. Internal growth, primarily from increased market
penetration, and acquisitions in each of the product lines, contributed equally
to the increase.
[FIGURE 5]
Operating profit increased 12% to $59.7 million in 1995 from $53.3 million
in 1994 generally as a result of volume improvements in all three product
lines. Operating margin remained relatively constant in 1995 as an increase in
the Marine product line, due in part to lower manufacturing costs of
electronics products, was offset by declines in the Automotive product line
from a very strong 1994 and, to a lesser extent, the Industrial product line.
In the Automotive product line, productivity improvements have not yet fully
offset the costs of integrating a 1995 acquisition into the existing operations
nor the downward pressure on sales prices. In the Industrial product line,
slightly lower operating margins were the result of expansion costs incurred to
support future sales growth in flexible hose and light-duty cable products.
The Commercial Segment's assets increased 9% in 1995 due to the
acquisitions, capital expenditures, and an increase in inventory related to
volume, offset by a decline in accounts receivable.
1994 VS. 1993: Sales in the Commercial Segment increased 26% from $284.1
million to $356.7 million. All three product lines, Marine, Automotive and
Industrial, reported higher sales as demand for their products was boosted by
the strength of their markets. Sales of new products, primarily in the Marine
product line and to a lesser extent the Automotive and Industrial product
lines, also contributed to the increase.
Operating profit increased 41% to $53.3 million in 1994 from $37.8
million in 1993 as a result of volume and operating margin gains in all three
product lines. The improved performance in the Automotive and Industrial
product lines stemmed primarily from the increased volume. Within the Marine
product line, increases in sales, primarily electronics products, coupled with
lower design and manufacturing costs accounted for the gain.
30
<PAGE> 17
Assets increased in 1994 due to a higher level of accounts receivable
related to volume and to capital equipment additions in the Marine and
Industrial product lines for new products and capacity expansion.
MEDICAL PRODUCTS SEGMENT
The Medical Products Segment includes the manufacture and distribution of a
broad range of invasive disposable and reusable devices for the urology,
gastroenterology, anesthesiology and respiratory care markets worldwide. It
also manufactures general and specialized surgical instruments used in both
traditional (open) and minimally-invasive surgical procedures.
These products generally are required to meet exacting standards of
performance and have long product life cycles. External economic influences on
the sales of these products relate primarily to spending patterns in the
worldwide medical devices and supplies market.
1995 VS. 1994: In 1995 the Medical Segment sales increased 16% to $293.3
million from $253.0 million. The gain was spread equally among internal growth,
acquisitions made over the past fifteen months and the effects of stronger
foreign currencies. The internal growth primarily resulted from increased
market penetration in the hospital supply product line in Europe and to
expansion of the surgical devices product line sales in the Asia Pacific
region.
Operating profit declined 7% in 1995 to $30.2 million compared with $32.4
million in 1994 and operating margin was also lower. Slower than expected
improvement in businesses acquired over the last several years, development and
start up costs of new products which have not contributed significantly to
sales volume, costs associated with changing to a direct selling approach in
several markets and, a $1.2 million severance charge combined to result in the
reduction. Future improvement in the Medical Segment operating margin is
primarily dependent on the success of the company's ongoing programs to
integrate several acquisitions and to increase productivity in both the
hospital supply and surgical devices product lines.
Assets increased in 1995 due to the effects of stronger foreign
currencies, higher inventory in the hospital supply product line related to
volume and support of the direct selling effort.
1994 VS. 1993: In 1994, the Medical Segment achieved sales of $253.0
million, exceeding 1993 sales by $72.4 million or 40%. The increase was the
result of the acquisition of Weck in December 1993 and, to a lesser extent,
improved sales in the hospital supply product line. Several small acquisitions,
made throughout the year had no significant impact on results of operations in
1994.
Operating profit increased 51% in 1994 to $32.4 million and operating
margin improved to 12.8% from 11.9% in 1993. Approximately one-half of the
increase in operating profit was the result of the Weck acquisition with the
remainder due to the higher volume in the hospital supply product line.
Operating margin was enhanced by the hospital supply product line cost
reduction program begun in 1993. The improvements in both operating profit and
operating margin were achieved despite the additional costs of assimilating the
Weck acquisition into the existing surgical device businesses.
Assets increased in 1994 due to several small acquisitions in both the
hospital supply and surgical device product lines. Also contributing to the
increase were higher accounts receivable from the Weck acquisition and the
sales increase in the hospital supply product line.
AEROSPACE PRODUCTS AND SERVICES SEGMENT
The Aerospace Products and Services Segment serves the aerospace and turbine
engine markets. Its businesses design and manufacture precision controls and
cargo systems for aviation; provide coating and repair services and blade
manufacturing for users of both flight and land-based turbine engines. Sales
are to both original equipment manufacturers and the aftermarket.
[FIGURE 6]
31
<PAGE> 18
These products and services, many of which are proprietary, require a high
degree of engineering sophistication, and often are custom-designed. External
economic influences on these products and services relate primarily to spending
patterns in the worldwide aerospace industry.
1995 VS. 1994: Sales in the Aerospace Segment increased 6% from $202.9 million
in 1994 to $215.7 million in 1995. The gain resulted from increased sales of
cargo handling systems in the aftermarket and higher sales in the aerospace
controls product line. Within the Sermatech product line, increased sales of
Sermatech coatings and turbo-machinery were offset by declines in repair
services.
Over the past year, the company completed a portion of its strategic
realignment of the Aerospace Segment, by selling three product lines (two were
sold in 1995 and one in January 1996) and forming a joint venture. The three
product lines which had sales and operating profit of approximately $50 million
and $3 million, respectively, were sold for total proceeds of approximately $40
million in cash and notes. There was no significant effect on results of
operations from the two product lines sold in 1995; however, a gain of between
$.10 and $.15 per share will be recorded in the first quarter of 1996 for the
product line sold subsequent to year end. During the fourth quarter the company
formed a joint venture with GE Aircraft Engines to provide fan blade and
airfoil repair services. The results of the joint venture, which is 51% owned
by the company, did not have a material effect on the 1995 financial
statements. Future growth in this Segment will depend upon the successful
implementation of a strategy which includes the redeployment of assets in
selected aerospace markets, primarily air cargo and turbo-machinery products and
services.
Operating profit more than doubled in 1995 to $12.7 million from $5.4
million in 1994 and operating margin improved from 3% to 6%. The gains resulted
from increased volume, cost reduction and productivity improvement efforts made
over the past two years and, a reduction in the level of selling, engineering
and administrative expenses.
Assets declined in 1995 due to lower capital expenditures and the sale of
assets associated with two divested product lines. The decline was partially
offset by inventory increases in the Sermatech product line.
1994 VS. 1993: Sales in 1994 of $202.9 million in the Aerospace Segment were
essentially flat as gains from cargo handling systems, ground turbine business
and the March 1993 acquisition of Mal Tool & Engineering were offset by
declines resulting from the impact of the weak commercial aviation and defense
markets.
Operating profit decreased 64% from $14.9 million in 1993 to $5.4 million
in 1994. The major factors contributing to the decline were lower volume in
certain of the operating units, costs associated with the reduction in capacity
and significant expenditures related to the development of the cargo handling
systems business.
[FIGURE 7]
Assets decreased in 1994 as a result of a decline in plant and equipment,
and inventories due to capacity reduction efforts.
LIQUIDITY AND CAPITAL RESOURCES
The company continued to generate high levels of cash from operations. In 1995,
cash flows from operating activities were $70.8 million compared with $57.7
million in 1994 and $46.4 million in 1993. The increase in 1995 was due to
higher net income and noncash depreciation and amortization. The increase in
1994 was due to higher net income and the timing of income tax and other
payments partially offset by an increase in accounts receivable related to
volume. In addition to cash from operations, the company has unused credit lines
of approximately $100 million to meet its short-term working capital and
long-term strategic growth objectives. Also, the company has a favorable debt to
total capitalization ratio which provides additional borrowing capacity for
future growth. The combination of lower
32
<PAGE> 19
acquisition-related, long-term borrowing and the increase in shareholders'
equity resulted in an improvement in the company's debt to total capitalization
from 38% in 1994 to 36% in 1995.
Historically the most significant investment of cash has been payments for
businesses acquired. Although minimal during 1995 and 1994, one-half of the
company's future growth is expected to come from acquisitions. These payments
over the last three years were more than $100 million and generally have been
financed through fixed-rate, long-term borrowing.
Capital expenditures were $30.7 million, $25.3 million and $24.4 million
in 1995, 1994 and 1993, respectively, and are adequate to support the ongoing
requirements of the company. The expenditures in 1995 are within the company's
historical spending patterns of between 3% and 4% of sales and it is expected
that this trend will continue into the next year. The 1995 expenditures were
primarily for machinery and equipment related to improving productivity within
the Medical Segment and increasing capacity in the Commercial Segment. In 1994,
expenditures were primarily related to the expansion of capacity within the
Commercial Segment.
In 1995 dividends per share were increased 15% over 1994 to $.60 and
aggregated $10.5 million. Dividends per share in 1994 increased 16% to $.52 per
share and totaled $8.9 million. Cash dividends have been paid since 1977 and
have increased every year since inception of the payment.
The company's policy has been to use cash from operations to finance
capital expenditures and dividend payments and borrowings to finance
acquisitions. The combination of cash flows from operations, unused lines of
credit and strong financial position provide the company with adequate
liquidity for meeting the company's operating and strategic growth needs.
[FIGURE 8]
[FIGURE 9]
SHAREHOLDERS' EQUITY
Shareholders' equity increased 15% to $355.4 million at December 31, 1995
compared with $309.0 million at December 25, 1994. The book value per share at
December 31, 1995 increased to $20.26 compared with $17.89 at December 25,
1994.
ENVIRONMENTAL MATTERS
The company is subject to numerous federal, state and local environmental laws
and regulations including the Resource Conservation and Recovery Act,
Comprehensive Environmental Response, Compensation and Liability Act, the Clean
Air Act and, the Clean Water Act. Environmental programs are in place
throughout the company which include training, auditing and monitoring to
ensure compliance with such laws and regulations. In addition, the company has
been named as a Potentially Responsible Party by the Environmental Protection
Agency at various sites throughout the country. Environmental costs, including
liabilities associated with such sites; and the costs of complying with
existing environmental regulations are not expected to result in a liability
material to the company's consolidated financial position or results of
operations.
33
<PAGE> 1
EXHIBIT 22
Teleflex Incorporated
Subsidiaries
<TABLE>
<CAPTION>
JURISDICTION PARENT PERCENTAGE
SUBSIDIARY OF INCORP.
<S> <C> <C> <C>
924593 Ontario Limited Ontario Pilling Weck 100
Access Medical S.A. France TFX International S.A. 80
Airfoil Management Company Delaware Sermatech 100
Airfoil Management Limited UK Sermatech (U.K.) Limited 100
American General Aircraft Holding Co., Inc. Delaware Teleflex 74
Asept+ France TFX International S.A. 100
Astraflex Limited UK TFX Group Ltd. 100
Aunic Engineering Limited UK Sermatech (U.K.) Limited 100
Aviation Product Support, Inc. (1) Delaware Teleflex 100
Avtech Systems, Inc, Utah The Talley Corporation 100
Bavaria Cargo Technologie GmbH Germany Telair Int'l Cargo Systems GmbH 100
Capro de Mexico Mexico TFX International Corp. 99.99 (2)
Capro Inc. Texas Teleflex 100
Cepco Precision Company of Canada, Inc. Canada Sermatech Engineering 100
Cetrek Engineering Ltd. UK Cetrek Ltd. 100
Cetrek Inc. Massachusetts Teleflex 100
Cetrek Limited UK TFX International Ltd. 100
Chemtronics International Ltd. UK Sermatech (U.K.) Limited 100
ECT Inc. Delaware Sermatech 50
Endoscopy Specialists Incorporated Delaware TFX Equities 100
Entech, Inc. New Jersey TFX Equities 100
Europe Medical, S.A. France TFX International S.A. 100
Flexible Flyer, Inc. Delaware Teleflex 100
Franklin Medical Ltd. UK TFX Group Ltd. 100
G-Tel Aviation Limited UK Sermatech (U.K.) Limited 50
Gator-Gard Incorporated Delaware Sermatech 100
Inmed (Malaysia) Holdings Sdn. Berhad Malaysia Willy Rusch AG 100
Inmed Acquisition, Inc. Delaware Teleflex 100 (3)
Inmed Corporation (4) Georgia Immed Acquisition 100
Inmed Corporation (U.K.) Ltd. UK TFX Group Ltd. 100
Inmed S.A.R.L. France TFX International S.A. 100
Kordial S.A. France TFK international S.A. 100
</TABLE>
PAGE 1
3/15/96
<PAGE> 2
Teleflex Incorporated
Subsidiaries
<TABLE>
<S> <C> <C> <C>
Lipac Liebinzeller Verpackungs-GmbH Germany Willy Rusch AG 100
Machine Tool Leasing, Inc. Nevada Teleflex 100
Mal Tool & Engineering Limited UK TFX Group Ltd. 100
Mal Tool & Engineering S.A.R.L. France TFX International S.A. 100
Meddig Medizintechnik Vertriebs-GmbH Germany Rusch G B 87.5
Medical Service Vertriebs-GmbH Germany Willy Rusch AG 100
Norland Plastics Company Delaware TFX Equities 100
Novadis S.A. France TFX international S.A. 100
Orpac, Inc. Delaware Teleflex 100
Phosphor Products Co. Limited UK TFX International Ltd. 100
Pilling Weck Chiurgische Produkte GmbH Germany TFX Holding GmbH 100
Pilling Weck Incorporated Delaware Teleflex 100
Pilling Weck Incorporated Pennsylvania Teleflex 100
Pilling Weck n.v. Belgium TFX International S.A. 100
Rigel Compasses Limited UK TFK International Ltd. 100
Rusch Asia Pacific Sdn. Berhad Malaysia Inmed (Malaysia) Holdings 100
Rusch AVT Medical Private Limited India TFX Equities 50
Rusch (UK) Ltd. UK TFX Group Ltd. 100
Rusch Austria Ges.mbH Austria Teleflex 100
Rusch France S.A.R.L. France Rusch G B 100
Rusch Inc. Delaware Rusch G B 100
Rusch Italia S.A.R.L. Italy Willy Rusch AG 100
Rusch Manufacturing (UK) Ltd. UK TFX Group Ltd. 100
Rusch Manufacturing Sdn. Berhad Malaysia Inmed (Malaysia) Holdings 96.5
Rusch Sdn. Berhad Malaysia Inmed (Malaysia) Holdings 96.5
Rusch Uruguay Ltda. Uruguay Rusch G B 60
Rusch-Pilling (Asia) PTE Ltd. Singapore Pilling Weck 99.99
Rusch-Pilling Inc. Canada 924593 Ontario 50.5 (5)
Rusch-Pilling S.A. France TFX International S.A. 100
S. Asferg Hospitalsartikier ApS Denmark Teleflex 100
Sermatech (Canada) Inc. Canada Sermatech 100
Sermatech Engineering Group, Inc. Delaware Teleflex 100
Sermatech (Germany) GmbH Germany TFX Holding GmbH 100
Sermatech International Incorporated PA Teleflex 100
Sermatech Repair Services Limited UK Sermatech (U.K.) Limited 100
</TABLE>
3/15/96 Page 2
<PAGE> 3
TeleFlex Incorporated
Subsidiaries
<TABLE>
<S> <C> <C> <C>
Sermatech (U.K.) Limited UK TFX Group Limited 100
SermeTel Technical Services (STS) GmbH Germany TFX Holding GmbH 100
Simal S.A. Belgium TFX International S.A. 100
Technology Holding Company Delaware TFX Equities 100
Technology Holding Company II Delaware Techsonic Industries, Inc. 86 (6)
Techsonic Industries, Inc. Alabama Teleflex 100
Telair International Cargo Systems GmbH Germany Telair Int'l Cargo Systems, Inc 100
Telair International Cargo Systems, Inc. Delaware Teleflex 100
Teleflex (Canada) Limited Canada (B.C.) Teleflex 100
Teleflex Automotive de Mexico S.A. de C.V. Mexico TFX Equities 99.9 (7)
Teleflex Automotive Manufacturing
Corporation Delaware Teleflex 100
Teleflex Fluid Systems, Inc. Connecticut Teleflex 100
Teleflex Precision Casting Company Utah Teleflex 100
TFX Automotive Incorporated Delaware Teleflex 100
TFX Engineering Ltd. Bermuda Teleflex 100
TFX Equities Incorporated Delaware Teleflex 100
TFX Foreign Sales Corporation Virgin Is. Teleflex 100
TFX Group Limited UK TFX International Corp. 100
TFX Holding GmbH Germany Teleflex 100
TFX International Corporation Delaware Teleflex 100
TFX International Limited UK TFX Group Ltd. 100
TFX International S. A. France Teleflex 100
TFX Marine Incorporated Delaware Teleflex 100
TFX Medical Incorporated Delaware Teleflex 100
TFX Medical Wire Products, Inc. Delaware TFX Equities 100
The Talley Corporation(8) California Teleflex 100
Top Surgical GmbH Germany PW Chiurgische Produkte GmbH 100
TX Controls AB Sweden Teleflex 100
Victor Huber GmbH Germany Teleflex 100
Willy Rusch AG Germany TFX Holding GmbH 100
Willy Rusch Grundstucks und
Beteiligungs AG ("Rusch G B") Germany Willy Rusch AG 99.8 (9)
</TABLE>
3/15/96
Page 3
<PAGE> 4
Teleflex Incorporated
Subsidiaries
1. Trades under name "APS"
2. One share (.002%) is owned by TFX Equities
3. Except for nominee shares.
4. Trades under name "Rusch Inc."
5. 49.5% owned by Rusch G B.
6. 14% owned by five other subsidiary companies
7. One share (.001%) is owned by TFX International Corporation
8. Trades under names "Teleflex Defense Systems" and "Teleflex Control Systems"
9. Two shares (.2%) are owned by Inmed Corporation.
3/15/96 Page 4
<PAGE> 1
EXHIBIT 25
POWER OF ATTORNEY
Each of the undersigned Directors of Teleflex Incorporated, a Delaware
corporation (the "Company"), hereby appoints Lennox K. Black, Harold L. Zuber,
Jr. and Steven K. Chance, and each of them, with full power of substitution, to
act as his attorney-in-fact to execute, on behalf of the undersigned, the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1995.
IN WITNESS WHEREOF, this Power of Attorney is executed this 11th day of
March, 1996.
/s/ DONALD BECKMAN /s/ LENNOX K. BLACK
- ------------------ -------------------
Donald Beckman Lennox K. Black
/s/ DAVID S. BOYER /s/ JOSEPH S. GONNELLA
- ------------------ ----------------------
David S. Boyer Joseph S. Gonnella
/s/ PEMBERTON HUTCHINSON /s/ LEWIS E. HATCH, JR.
- ------------------------ -----------------------
Pemberton Hutchinson Lewis E. Hatch, Jr.
/s/ SIGISMUNDUS W. W. LUBSEN /s/ PALMER E. RETZLAFF
- ---------------------------- ------------------------
Sigismundus W. W. Lubsen Palmer E. Retzlaff
/s/ JOHN H. REMER /s/ JAMES W. STRATTON
- ----------------- ---------------------
John H. Remer James W. Stratton
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> DEC-26-1994
<PERIOD-END> DEC-31-1995
<CASH> 55,654
<SECURITIES> 0
<RECEIVABLES> 186,077
<ALLOWANCES> 0
<INVENTORY> 192,522
<CURRENT-ASSETS> 445,806
<PP&E> 448,510
<DEPRECIATION> 176,724
<TOTAL-ASSETS> 785,171
<CURRENT-LIABILITIES> 193,155
<BONDS> 196,844
0
0
<COMMON> 17,537
<OTHER-SE> 337,827
<TOTAL-LIABILITY-AND-EQUITY> 785,171
<SALES> 912,689
<TOTAL-REVENUES> 912,689
<CGS> 628,027
<TOTAL-COSTS> 628,027
<OTHER-EXPENSES> 192,430
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,632
<INCOME-PRETAX> 73,600
<INCOME-TAX> 24,730
<INCOME-CONTINUING> 48,870
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 48,870
<EPS-PRIMARY> 2.75
<EPS-DILUTED> 2.75
</TABLE>
