<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 1-5353
TELEFLEX INCORPORATED
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 23-1147939
- ------------------------ ------------------------------------
(State of Incorporation) (IRS Employer Identification Number)
630 West Germantown Pike, Suite 450
Plymouth Meeting, PA 19462
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(Address of Principal Executive Office) (Zip Code)
(610) 834-6301
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(Telephone Number Including Area Code)
None
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(Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock as of the latest practicable date.
Class Outstanding at March 31, 1996
- ----------------------------- -----------------------------
Common Stock, $1.00 Par Value 17,606,718
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Teleflex Incorporated
Condensed Consolidated Balance Sheet
(Dollars in Thousands)
Assets
<TABLE>
<CAPTION>
Mar. 31, Dec. 31,
1996 1995
-------- --------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 94,505 $ 55,654
Accounts receivable less allowance for
doubtful accounts 193,326 186,077
Inventories
Raw materials 65,740 74,281
Work-in-process 35,009 40,694
Finished goods 75,807 77,547
Prepaid expenses 8,834 11,553
-------- --------
473,221 445,806
Property, plant and equipment, at cost,
less accumulated depreciation 265,179 271,786
Investments in affiliates 14,750 13,557
Intangibles and other assets 58,755 54,022
-------- --------
$811,905 $785,171
======== ========
Liabilities and shareholders' equity
Current liabilities
Current portion of borrowings and
demand loans $ 77,531 $ 74,218
Accounts payable and accrued expenses 99,378 101,405
Estimated income taxes payable 19,988 17,532
-------- --------
196,897 193,155
Long-term borrowings 192,280 196,844
Deferred income taxes and other 53,478 39,808
-------- --------
442,655 429,807
Shareholders' equity 369,250 355,364
-------- --------
$811,905 $785,171
======== ========
</TABLE>
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Teleflex Incorporated
Condensed Consolidated Statement of Income
(Dollars and Shares in Thousands, Except Per Share)
<TABLE>
<CAPTION>
Three Months Ended
--------------------
Mar. 31, Mar. 26,
1996 1995
-------- --------
<S> <C> <C>
Revenues $234,448 $226,893
-------- --------
Cost of sales 161,110 155,119
Operating expenses 46,588 48,006
Interest expense 3,934 4,794
------- --------
211,632 207,919
------- --------
Income before taxes 22,816 18,974
Provision for taxes on income 7,964 6,641
------- -------
Net income $ 14,852 $ 12,333
======= =======
Earnings per share $0.83 $0.70
Dividends per share $0.155 $0.135
Average number of common and common
equivalent shares outstanding 17,907 17,633
</TABLE>
<PAGE> 4
Teleflex Incorporated
Condensed Consolidated Statement of Cash Flows
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three Months Ended
--------------------
Mar. 31, Mar. 26,
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $14,852 $12,333
Adjustments to reconcile net income to cash
flows from operating activities:
Depreciation and amortization 9,067 8,733
(Increase) in accounts receivable (13,137) (8,714)
Decrease (increase)in inventory 1,380 (9,149)
Decrease in prepaid expenses 2,057 3,920
(Decrease) in accounts payable
and accrued expenses (4,635) (7,305)
Increase in estimated income
taxes payable 2,611 5,052
Gain on sale of businesses and assets (2,055)
------- ------
10,140 4,870
------- -------
Cash flows from financing activities:
Proceeds from new borrowings 3,580
Reduction in long-term borrowings (2,369) (12,065)
Increase in current borrowings
and demand loans 5,766 3,663
Proceeds from stock compensation plans
and distribution of treasury shares 1,754 2,747
Dividends (2,721) (2,333)
------- -------
2,430 (4,408)
------- -------
Cash flows from investing activities:
Expenditures for plant assets 7,230 7,187
Payments for businesses acquired 3,768
Proceeds from sale of businesses and assets (32,140)
Investments in affiliates 160 127
Other (1,531) 673
------- -------
(26,281) 11,755
------- -------
Net increase (decrease) in cash
and cash equivalents 38,851 (11,293)
Cash and cash equivalents at the
beginning of the period 55,654 24,094
------- -------
Cash and cash equivalents at the
end of the period $94,505 $12,801
======= =======
</TABLE>
<PAGE> 5
Teleflex Incorporated
Notes to Condensed Consolidated Financial Statements
Note 1 The accompanying unaudited condensed consolidated financial
statements for the three months ended March 31, 1996 and March 26,
1995 contain all adjustments, consisting only of normal recurring
adjustments, which in the opinion of management are necessary to
present fairly the financial position, results of operations and cash
flows for the periods then ended in accordance with the current
requirements for Form 10-Q.
Note 2 At March 31, 1996, 1,949,232 shares of common stock were reserved for
issuance under the company's stock compensation plans.
Note 3 Business segment information:
<TABLE>
<CAPTION>
Three months ended
(000)
March 31, 1996 March 26, 1995
<S> <C> <C>
Sales
Commercial Products $111,462 $107,309
Medical Products 75,834 68,269
Aerospace Products and Services 47,152 51,315
-------- --------
Total $234,448 $226,893
======== ========
Operating Profit
Commercial Products $15,167 $17,234
Medical Products 8,554 7,639
Aerospace Products and Services 6,016 1,727
------- -------
Total $29,737 $26,600
======= =======
</TABLE>
<PAGE> 6
Management's Analysis of Quarterly Financial Data
Sale of Product Lines:
During the first quarter of 1996, the company sold two product lines in the
Aerospace Segment for $37.5 million ($32 million in cash and $5.5 million in
notes receivable) resulting in a $2 million pre-tax gain or, $.07 per share.
The gain has been reported as a reduction in operating expenses in the
Statement of Income and is included in the Aerospace Segment operating profit.
The product lines had combined sales and operating profit in the first quarter
of 1995 of $13 million and $1 million, respectively.
Results of Operations:
Revenues increased 3% in the first quarter of 1996 to $234.4 million from
$226.9 million in 1995. The increase resulted from gains in the Medical and
Commercial segments which offset a decline in the Aerospace Segment. The
increase was the result of internal growth in the company's core businesses and
1995 acquisitions primarily in the Commercial Segment, offset partially by the
decline from the sale of two Aerospace product lines in the first quarter of
1996. The increase in sales excluding the 1995 results of the product lines
sold was nearly 10%. Foreign currency exchange rates had a negligible impact
on the overall revenue growth of the company. The Commercial, Medical and
Aerospace segments comprised 48%, 32% and 20% of the company's net sales,
respectively.
Gross profit margin declined to 31.3% in 1996 compared with 31.6% in 1995. An
increase in the gross profit margin in the Aerospace Segment was offset by
declines in the Medical and Commercial segments. Excluding the gain, operating
expenses as a percentage of sales declined slightly from 21.2% in 1995 to 20.7%
in 1996 as all three segments improved.
Operating profit increased 12% in the first quarter of 1996 from $26.6 million
to $29.7 million and operating margin increased from 11.7% of sales to 12.7%.
Operating profit and operating margin increases in the Aerospace and Medical
segments offset a decline in the Commercial Segment. Excluding the gain,
overall operating profit increased 4% and operating margin increased
fractionally.
Industry Segment Review:
Sales in the Commercial Segment increased 4% from $107.3 million in 1995 to
$111.5 million in 1996. Increases in the Automotive product line, primarily
from a 1995 acquisition, and the
<PAGE> 7
Industrial product line offset a decline in the Marine product line. Operating
profit declined 12% from $17.2 million to $15.2 million and operating margin
declined from 16.1% to 13.6%. Operating profit and operating margin declined
in all product lines with the exception of the Industrial product line which
reported a slight increase in operating profit.
The Medical Segment sales increased 11% from $68.3 million to $75.8 million in
the first quarter of 1996 compared with 1995. The majority of the increase was
the result of improved sales of hospital supply products in European and Asian
markets. Operating profit increased 12% from $7.6 million in 1995 to $8.6
million in 1996 and operating margin improved slightly from 11.2% to 11.3%.
The increases were the result of improvements in the hospital supply product
line.
The Aerospace Segment sales declined 8% from $51.3 million in 1995 to $47.2
million in 1996. The decline resulted from the sale of two product lines in
the first quarter of 1996 which had combined revenues and operating profit of
approximately $13 million and $1 million, respectively, in the first quarter of
1995. Excluding the dispositions, sales increased nearly 20% from growth in
core Aerospace product lines, primarily the Sermatech coatings, repairs and
blade manufacturing businesses. Operating profit increased 248% from $1.7
million in 1995 to $6.0 million in 1996 and operating margin increased from
3.4% to 12.8% of sales. Excluding the $2 million gain in 1996, and the results
of product lines sold, operating profit increased over 400% and operating
margin increased from 1.9% in 1995 to 8.4% in 1996. The gains were primarily
the result of the higher volume in the Sermatech product lines.
Cash flow from operations increased $5.3 million in the first quarter of 1996
compared with 1995. The gain was primarily the result of improvements in
inventory levels which declined in 1996 compared with the increase in 1995.
The increase in the cash balance resulted from the $32 million cash proceeds
from the sale of two Aerospace product lines. Working capital increased from
$252.7 million at December 31, 1995, to $276.3 million at March 31, 1996. The
ratio of current assets to current liabilities was 2.4 to 1 at March 31, 1996
compared with 2.3 to 1 at December 31, 1995. Long-term borrowings decreased by
$4.5 million from $196.8 million at December 31, 1995, to $192.3 million at
March 31, 1996. The decline was due equally to the effects of lower foreign
currency translation rates and repayments on long-term borrowings. The
combination of the decline in long-term borrowings and the increase in
shareholders' equity resulted in an improvement in the ratio of long- term
borrowings to total capitalization from 36% at December 31, 1995 to 34% at
March 31, 1996.
<PAGE> 8
Teleflex Incorporated
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K
(A) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter.
<PAGE> 9
Teleflex Incorporated
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TELEFLEX INCORPORATED
/s/ Harold L. Zuber, Jr.
-------------------------------------
Harold L. Zuber, Jr.
(Principal Financial and
Accounting Officer)
/s/ Steven K. Chance
------------------------------------
Steven K. Chance
(Vice President)
May 8, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 94,505
<SECURITIES> 0
<RECEIVABLES> 193,326
<ALLOWANCES> 0
<INVENTORY> 176,556
<CURRENT-ASSETS> 473,221
<PP&E> 265,179
<DEPRECIATION> 0
<TOTAL-ASSETS> 811,905
<CURRENT-LIABILITIES> 196,897
<BONDS> 192,280
0
0
<COMMON> 17,607
<OTHER-SE> 351,643
<TOTAL-LIABILITY-AND-EQUITY> 811,905
<SALES> 234,448
<TOTAL-REVENUES> 234,448
<CGS> 161,110
<TOTAL-COSTS> 161,110
<OTHER-EXPENSES> 46,588
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,934
<INCOME-PRETAX> 22,816
<INCOME-TAX> 7,964
<INCOME-CONTINUING> 14,852
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,852
<EPS-PRIMARY> .83
<EPS-DILUTED> .83
</TABLE>
