Exhibit 99.1
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| | | Julie McDowell
Vice President, Corporate Communications
610-948-2836 |
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| FOR IMMEDIATE RELEASE | | October15, 2003 |
TELEFLEX REPORTS THIRD QUARTER 2003 RESULTS:
REVENUES INCREASED 8% IN THE QUARTER
Limerick, PA — Teleflex Incorporated (NYSE: TFX) today reported revenues in the third quarter ended September 28, 2003 increased 8 percent to $550.9 million compared to $508.2 million for the year-ago quarter. Net income in the quarter was $18.2 million, a 31 percent decline from $26.3 million in the prior year and diluted earnings per share were 45 cents compared to 66 cents in the prior year. In 2002, third quarter results included a benefit from income tax settlements which contributed $3.1 million to net income, or 8 cents per diluted share.
Revenues in the first nine months of 2003 were $1.7 billion, a 7 percent increase compared to $1.6 billion last year. Net income in the first nine months was $79.3 million compared to $90.2 million for the same period in 2002. Diluted earnings per share were $1.99 compared to $2.27 per share for the same period a year ago.
Commenting on results and the current outlook, Jeffrey P. Black, president and chief executive officer, said, “While results for the third quarter were disappointing, Teleflex maintains solid fundamentals – a strong balance sheet and good cash flow. Teleflex overall continued to grow revenues and our Medical Segment again delivered double-digit growth in sales and operating profit. Results were negatively impacted by weakness in some of our end markets and the performance of our Aerospace Segment.”
“During the remainder of the year we will continue to focus on improving operational efficiency, capitalizing on new products and acquisitions, and positioning our businesses for future growth. At this time, we expect the fourth quarter to improve from an operating profit standpoint when compared with the fourth quarter a year ago. However, we expect fourth quarter earnings per share to be lower than the prior year. In 2002, fourth quarter earnings per share included non-operating gains of $10 million, or 16 cents per share after tax. We now anticipate earnings for the full year 2003 to be at the lower end of our previously announced range of $2.75 to $2.90.”
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The Commercial Segment reported sales of $279.2 million in the quarter, a 7 percent increase with gains in both the Automotive and Industrial product lines. Automotive sales increased as a result of core growth from new products and programs in Europe and Asia and favorable currency rates. Industrial sales increased largely as a result of acquisitions. Marine product line sales fell slightly as a result of weaker demand in the marine aftermarket. Operating profit for the segment declined 16 percent due to expenses related to the curtailment of manufacturing at an automotive site in North America, a decline of higher-margin sales in the marine product lines, and a decline in the demand for alternative fuel vehicles in North America.
Medical Segment sales were $139.6 million in the third quarter, a 24 percent increase over the prior year. Both product lines, Health Care Supply and Surgical Devices, reported double-digit gains in revenue and operating profit. Health Care Supply sales and operating profit improved due to positive currency effects and new product sales. Surgical Devices sales and operating profit increased due to acquisitions. Operating profit for the segment improved 19 percent as a result of acquisitions, core growth, and currency, although acquisitions served to lower margins for this segment overall.
Aerospace Segment sales declined 1 percent in the quarter to $132.0 million. Declines in sales for the Industrial Gas Turbine Services, Cargo Systems and Manufactured Components product lines were partially offset by an increase in Repair Services. The increase in Repair Services can be attributed to additional sales of lower margin service offerings. Operating profit declined over 90 percent due largely to losses in the Industrial Gas Turbine Services product line. Weaker demand and pricing constraints in the aerospace and power generation markets continued to impact this segment.
As previously announced, Teleflex will comment on third quarter 2003 results on a conference call to be held Thursday, October 16th, at 11:00 a.m. (EDT). The call will be archived and available on the company’s website atwww.teleflex.com.
The figures are as follows:
COMPARATIVE SUMMARY OF REVENUES AND EARNINGS
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | Percent |
| Three Months Ended | | September 28, 2003 | | September 29, 2002 | | Change |
| Sales | | | | | | | | | | | | |
| | Commercial Products | | $ | 279,241,000 | | | $ | 262,116,000 | | | | 7 | % |
| | Medical Products | | | 139,644,000 | | | | 112,223,000 | | | | 24 | % |
| | Aerospace Products | | | 131,965,000 | | | | 133,899,000 | | | | (1 | %) |
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| | | | Total | | $ | 550,850,000 | | | $ | 508,238,000 | | | | 8 | % |
| Operating Profit | | | | | | | | | | | | |
| | Commercial Products | | $ | 15,815,000 | | | $ | 18,742,000 | | | | (16 | %) |
| | Medical Products | | | 20,992,000 | | | | 17,617,000 | | | | 19 | % |
| | Aerospace Products | | | 469,000 | | | | 7,954,000 | | | | (94 | %) |
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| | | | Total | | $ | 37,276,000 | | | $ | 44,313,000 | | | | (16 | %) |
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COMPARATIVE SUMMARY OF REVENUES AND EARNINGS (continued)
(Unaudited)
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| | | | | | | | | | | | | | Percent |
| Three Months Ended | | September 28, 2003 | | September 29, 2002 | | Change |
| Less: | | | | | | | | | | | | |
| | | Interest expense | | | 6,580,000 | | | | 6,280,000 | | | | 5 | % |
| | | Corporate expenses | | | 5,387,000 | | | | 4,893,000 | | | | 10 | % |
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| Income before taxes | | | 25,309,000 | | | | 33,140,000 | | | | (24 | %) |
| Taxes on income | | | 7,087,000 | | | | 6,860,000 | | | | 3 | % |
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| Net income | | $ | 18,222,000 | �� | | $ | 26,280,000 | | | | (31 | %) |
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| Earnings per share | | | | | | | | | | | | |
| | | Basic | | $ | .46 | | | $ | .67 | | | | (31 | %) |
| | | Diluted | | $ | .45 | | | $ | .66 | | | | (32 | %) |
| Average shares outstanding | | | | | | | | | | | | |
| | | Basic | | | 39,655,000 | | | | 39,341,000 | | | | | |
| | | Diluted | | | 40,072,000 | | | | 39,820,000 | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Percent |
| Nine Months Ended | | September 28, 2003 | | September 29, 2002 | | Change |
| Sales | | | | | | | | | | | | |
| | Commercial Products | | $ | 897,257,000 | | | $ | 819,516,000 | | | | 9 | % |
| | Medical Products | | | 387,468,000 | | | | 332,999,000 | | | | 16 | % |
| | Aerospace Products | | | 390,291,000 | | | | 410,425,000 | | | | (5 | %) |
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| | | | Total | | $ | 1,675,016,000 | | | $ | 1,562,940,000 | | | | 7 | % |
| Operating Profit | | | | | | | | | | | | |
| | Commercial Products | | $ | 77,847,000 | | | $ | 74,130,000 | | | | 5 | % |
| | Medical Products | | | 61,615,000 | | | | 53,378,000 | | | | 15 | % |
| | Aerospace Products | | | 4,322,000 | | | | 30,271,000 | | | | (86 | %) |
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| | | | | Total | | $ | 143,784,000 | | | $ | 157,779,000 | | | | (9 | %) |
| Less: | | | | | | | | | | | | |
| | Interest expense | | | 19,755,000 | | | | 18,555,000 | | | | 6 | % |
| | Corporate expenses | | | 15,423,000 | | | | 14,076,000 | | | | 10 | % |
| | Non-operating gain | | | (3,068,000 | ) | | | — | | | | — | |
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| Income before taxes | | | 111,674,000 | | | | 125,148,000 | | | | (11 | %) |
| Taxes on income | | | 32,376,000 | | | | 34,914,000 | | | | (7 | %) |
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| Net income | | $ | 79,298,000 | | | $ | 90,234,000 | | | | (12 | %) |
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| Earnings per share | | | | | | | | | | | | |
| | | Basic | | $ | 2.01 | | | $ | 2.30 | | | | (13 | %) |
| | | Diluted | | $ | 1.99 | | | $ | 2.27 | | | | (12 | %) |
| Average shares outstanding | | | | | | | | | | | | |
| | | Basic | | | 39,547,000 | | | | 39,207,000 | | | | | |
| | | Diluted | | | 39,870,000 | | | | 39,809,000 | | | | | |
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
| | | | | | | | | | | |
| | | | | September 28, 2003 | | December 29, 2002 |
Assets | | | | | | | | |
| Current assets | | | | | | | | |
| | Cash and cash equivalents | | $ | 46,553,000 | | | $ | 44,494,000 | |
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CONDENSED CONSOLIDATED BALANCE SHEET (continued)
(Unaudited)
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| | | | | September 28, 2003 | | December 29, 2002 |
| | | Accounts receivable, net | | | 452,336,000 | | | | 401,888,000 | |
| | | Inventories | | | 430,355,000 | | | | 365,535,000 | |
| | | Prepaid expenses | | | 23,462,000 | | | | 25,978,000 | |
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| | | | 952,706,000 | | | | 837,895,000 | |
| Property, plant and equipment, net | | | 635,700,000 | | | | 604,241,000 | |
| Goodwill | | | 278,275,000 | | | | 257,999,000 | |
| Intangibles and other assets | | | 105,242,000 | | | | 68,810,000 | |
| Investments in affiliates | | | 35,962,000 | | | | 44,439,000 | |
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| | | $ | 2,007,885,000 | | | $ | 1,813,384,000 | |
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Liabilities and shareholders’ equity | | | | | | | | |
| Current liabilities | | | | | | | | |
| | Current borrowings | | $ | 234,952,000 | | | $ | 182,776,000 | |
| | Accounts payable and accrued expenses | | | 317,599,000 | | | | 276,938,000 | |
| | Income taxes payable | | | 48,780,000 | | | | 38,769,000 | |
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| | | | 601,331,000 | | | | 498,483,000 | |
| Long-term borrowings | | | 216,990,000 | | | | 240,123,000 | |
| Deferred income taxes and other | | | 178,644,000 | | | | 162,497,000 | |
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| | | | 996,965,000 | | | | 901,103,000 | |
| Shareholders’ equity | | | 1,010,920,000 | | | | 912,281,000 | |
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| | | $ | 2,007,885,000 | | | $ | 1,813,384,000 | |
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
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| Nine Months Ended | | September 28, 2003 | | September 29, 2002 |
| Cash flows from operating activities | | $ | 155,365,000 | | | $ | 150,588,000 | |
| Cash flows from financing activities: | | | | | | | | |
| | | Proceeds from new borrowings | | | — | | | | 1,457,000 | |
| | | Reduction in long-term borrowings | | | (21,109,000 | ) | | | (23,796,000 | ) |
| | | Increase in current borrowings and demand loans | | | 28,288,000 | | | | 4,857,000 | |
| | | Stock compensation plans | | | 3,786,000 | | | | 9,696,000 | |
| | | Dividends | | | (22,937,000 | ) | | | (20,771,000 | ) |
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| | | | (11,972,000 | ) | | | (28,557,000 | ) |
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| Cash flows from investing activities: | | | | | | | | |
| | Expenditures for plant assets | | | (67,476,000 | ) | | | (66,563,000 | ) |
| | Payments for businesses acquired | | | (74,436,000 | ) | | | (49,863,000 | ) |
| | Proceeds from the sale of businesses and other | | | 578,000 | | | | 1,924,000 | |
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| | | | (141,334,000 | ) | | | (114,502,000 | ) |
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
(Unaudited)
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| Nine Months Ended | | September 28, 2003 | | September 29, 2002 |
| Net increase in cash and cash equivalents | | | 2,059,000 | | | | 7,529,000 | |
| Cash and cash equivalents at the beginning of the period | | | 44,494,000 | | | | 46,900,000 | |
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| Cash and cash equivalents at the end of the period | | $ | 46,553,000 | | | $ | 54,429,000 | |
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Teleflex At A Glance:
Teleflex is a diversified industrial company with annual revenues of more than $2 billion. The company designs, manufactures and distributes quality engineered products and services for the aerospace, medical, automotive, marine and industrial markets worldwide. Teleflex employs more than 18,000 people worldwide who focus on providing innovative solutions for customers. Additional information about Teleflex, including a recent archived conference call with analysts and investors, can be obtained from the company’s website on the Internet atwww.teleflex.com.
Forward-looking information:
Statements in this news release, other than historical data, are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks and uncertainties that may cause actual results to differ from those contemplated in the statements. These factors are discussed in the company’s Securities and Exchange Commission filings.
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