Teleflex Incorporated and Subsidiaries EXHIBIT 13
CONSOLIDATED STATEMENT OF INCOME
Year ended
- ---------------------------------------------------------------------------------------------------------------------------
DECEMBER 30, December 31, December 26,
2001 2000 1999
- ---------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share)
REVENUES $1,905,004 $1,764,482 $1,601,069
- ---------------------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES
Materials, labor and other product costs 1,369,713 1,274,203 1,155,879
Selling, engineering and administrative expenses 347,131 311,278 284,702
Interest expense, net 28,465 20,787 17,732
- ---------------------------------------------------------------------------------------------------------------------------
1,745,309 1,606,268 1,458,313
- ---------------------------------------------------------------------------------------------------------------------------
Income before taxes 159,695 158,214 142,756
Taxes on income 47,384 48,990 47,536
- ---------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 112,311 $ 109,224 $ 95,220
- ---------------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE
Basic $2.90 $2.86 $2.52
Diluted $2.86 $2.83 $2.47
- ---------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
Teleflex Annual Report Page 17
Teleflex Incorporated and Subsidiaries
CONSOLIDATED BALANCE SHEET
Year ended
- ---------------------------------------------------------------------------------------------------------------------------
DECEMBER 30, December 31,
2001 2000
- ---------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
ASSETS
Current assets
Cash and cash equivalents $ 46,900 $ 45,139
Accounts receivable, less allowance for doubtful
accounts, 2001 - $9,004; 2000 - $5,776 363,674 334,346
Inventories 308,775 259,845
Prepaid expenses 28,128 22,708
- ---------------------------------------------------------------------------------------------------------------------------
Total current assets 747,477 662,038
- ---------------------------------------------------------------------------------------------------------------------------
Plant assets
Land and buildings 204,915 171,776
Machinery and equipment 774,796 659,288
- ---------------------------------------------------------------------------------------------------------------------------
979,711 831,064
Less accumulated depreciation 414,016 341,561
- ---------------------------------------------------------------------------------------------------------------------------
Net plant assets 565,695 489,503
Investments in affiliates 41,493 39,515
Intangibles and other assets 280,355 210,232
- ---------------------------------------------------------------------------------------------------------------------------
$1,635,020 $1,401,288
- ---------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ 170,257 $ 97,040
Current portion of long-term borrowings 41,865 20,997
Accounts payable 122,518 119,221
Accrued expenses 129,287 116,483
Income taxes payable 31,499 30,131
- ---------------------------------------------------------------------------------------------------------------------------
Total current liabilities 495,426 383,872
Long-term borrowings 228,180 220,557
Deferred income taxes and other 133,271 106,437
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities 856,877 710,866
- ---------------------------------------------------------------------------------------------------------------------------
Shareholders' equity
Common shares, $1 par value
Issued: 2001 - 38,932,948 shares; 2000 - 38,344,427 shares 38,933 38,344
Additional paid-in capital 96,143 79,546
Retained earnings 689,269 602,544
Accumulated other comprehensive income (46,202) (30,012)
- ---------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 778,143 690,422
- ---------------------------------------------------------------------------------------------------------------------------
$1,635,020 $1,401,288
- ---------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
Page 18 [TELEFLEX LOGO]
Teleflex Incorporated and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended
- --------------------------------------------------------------------------------------------------------------------------
DECEMBER 30, December 31, December 26,
2001 2000 1999
- --------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $112,311 $109,224 $95,220
Adjustments to reconcile net income to cash flows
from operating activities:
Depreciation and amortization 92,401 77,417 67,389
Deferred income taxes 9,682 8,972 4,710
Decrease (increase) in accounts receivable 3,287 (6,620) (32,325)
(Increase) decrease in inventories (14,621) (18,150) 5,472
(Increase) decrease in prepaid expenses (4,563) 1,030 (4,710)
(Decrease) increase in accounts payable
and accrued expenses (9,497) 15,297 (4,870)
(Decrease) increase in income taxes payable (743) 2,245 3,182
- --------------------------------------------------------------------------------------------------------------------------
188,257 189,415 134,068
- --------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term borrowings 75,000 46,390 50,866
Reduction in long-term borrowings (46,304) (64,706) (46,941)
Increase in notes payable and
current borrowings 74,531 13,902 1,812
Proceeds from stock compensation plans 8,228 5,258 5,890
Dividends (25,586) (22,163) (19,126)
- --------------------------------------------------------------------------------------------------------------------------
85,869 (21,319) (7,499)
- --------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for plant assets (97,744) (80,652) (96,516)
Payments for businesses acquired (170,700) (87,846) (43,895)
Proceeds from disposition of product lines and assets -- 17,812 --
Investments in affiliates (766) (4,423) (22,377)
Other (3,155) 3,112 (1,430)
- --------------------------------------------------------------------------------------------------------------------------
(272,365) (151,997) (164,218)
- --------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,761 16,099 (37,649)
Cash and cash equivalents at the beginning of the year 45,139 29,040 66,689
- --------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at the end of the year $ 46,900 $ 45,139 $29,040
- --------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
Teleflex Annual Report Page 19
Teleflex Incorporated and Subsidiaries
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Year ended
- ---------------------------------------------------------------------------------------------------------------------------
DECEMBER 30, December 31, December 26,
2001 2000 1999
- ---------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share)
COMMON SHARES
Balance, beginning of year $ 38,344 $ 38,019 $ 37,615
Shares issued under compensation plans 589 325 404
- ---------------------------------------------------------------------------------------------------------------------------
Balance, end of year 38,933 38,344 38,019
- ---------------------------------------------------------------------------------------------------------------------------
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of year 79,546 73,786 72,080
Shares issued under compensation plans 16,597 5,760 1,706
- ---------------------------------------------------------------------------------------------------------------------------
Balance, end of year 96,143 79,546 73,786
- ---------------------------------------------------------------------------------------------------------------------------
RETAINED EARNINGS
Balance, beginning of year 602,544 515,483 439,389
Net income 112,311 109,224 95,220
Cash dividends (25,586) (22,163) (19,126)
- ---------------------------------------------------------------------------------------------------------------------------
Balance, end of year 689,269 602,544 515,483
- ---------------------------------------------------------------------------------------------------------------------------
ACCUMULATED OTHER COMPREHENSIVE INCOME
Cumulative translation adjustment (44,404) (30,012) (20,875)
Financial instruments marked to market (1,798) -- --
Unrealized loss on securities -- -- (3,849)
- ---------------------------------------------------------------------------------------------------------------------------
Balance, end of year (46,202) (30,012) (24,724)
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY $ 778,143 $ 690,422 $602,564
- ---------------------------------------------------------------------------------------------------------------------------
CASH DIVIDENDS PER SHARE $.66 $.58 $.51
- ---------------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME
Net income $112,311 $109,224 $ 95,220
Financial instruments marked to market (1,798) -- --
Cumulative translation adjustment (14,392) (9,137) (6,241)
Unrealized holding gain (loss) on securities -- 5,520 (3,849)
Reclassification for gain included in net income -- (1,671) --
- ---------------------------------------------------------------------------------------------------------------------------
Total comprehensive income $ 96,121 $103,936 $ 85,130
- ---------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
Page 20 [TELEFLEX LOGO]
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 consist of the following:
2001 2000
- ------------------------------------------------------------
Raw materials $133,364 $108,808
Work-in-process 44,530 36,065
Finished goods 130,881 114,972
- ------------------------------------------------------------
$308,775 $259,845
- ------------------------------------------------------------
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, (goodwill) are being
amortized over periods not exceeding 30 years. The company periodically reviews
the carrying value of intangible assets primarily based on an analysis of cash
flows.
Effective in 2002, goodwill and other intangible assets with indefinite
lives will no longer be amortized but will instead be tested for impairment
annually. The amount of amortization expense that will cease in 2002 is
approximately $14,000.
Assets and liabilities of non-domestic 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.
Investments in companies in which ownership interests range from 20% to 50%
and the company exercises significant influence over operating and financial
policies are accounted for using the equity method.
Revenues are recognized when the earnings process is complete. This
generally occurs when products are shipped in accordance with terms of
agreements, title and risk of loss transfers to customers, collection is
probable, and pricing is fixed and determinable.
ACQUISITIONS
In February 2001, the company acquired Morse Controls for $135,000 in cash.
Morse Controls is a supplier of industrial and marine products with annual sales
of $130,000. Also, during 2001 and 2000, the company acquired a number of
smaller businesses across several markets for $35,700 and $87,846 in cash,
respectively.
For 2001 and 2000, liabilities of $45,945 and $39,237 were assumed in
connection with the acquisitions. The assets, liabilities and operating results
of these businesses are included in the company's financial statements from
their dates of acquisition. A total of $73,400, representing the excess of
acquisition cost in 2001 over the fair value of the acquired businesses' net
assets, is being amortized over periods from 15 to 30 years. Financial position
and results of operation would not have been materially different had the
acquisitions occurred at the beginning of the years acquired.
BORROWINGS AND LEASES
2001 2000
- -----------------------------------------------------------
Senior Notes at an average
fixed rate of 7.2%, due in
installments through 2008 $ 76,000 $ 83,500
Term loan notes, primarily
Euro, at an average fixed
rate of 5.4%, with an average
maturity of three years 159,198 120,602
Other debt, mortgage notes
and capital lease obligations,
at interest rates ranging
from 3% to 9% 34,847 37,452
- -----------------------------------------------------------
270,045 241,554
Current portion of borrowings (41,865) (20,997)
- -----------------------------------------------------------
$228,180 $220,557
- -----------------------------------------------------------
The various senior note agreements provide for the maintenance of certain
financial ratios and limit the repurchase of the company's stock and payment of
cash dividends. Under the most restrictive of these provisions, $204,000 of
retained earnings was available for dividends at December 30, 2001.
Notes payable consists of demand loans due to banks of $95,257 at an
average interest rate of 4.1% and a $75,000 loan secured by certain accounts
receivable at an interest rate of 2.3%. In addition, the Company has
approximately $250,000 available under several interest rate alternatives in
unused lines of credit.
Interest expense in 2001, 2000 and 1999 did not differ materially from
interest paid, nor did the carrying value of year end long-term borrowings
differ materially from fair value.
The aggregate amounts of debt, including capital leases, maturing in each
of the four years after 2002 are as follows: 2003 - $53,127; 2004 - $79,397;
2005 - $47,982; 2006 - $16,882.
The company has entered into certain operating leases which require minimum
annual payments as follows: 2002 - $35,377; 2003 - $28,376; 2004 - $25,887; 2005
- - $23,816; 2006 - $17,069. The total rental expense for all operating leases was
$33,934, $29,640 and $25,608 in 2001, 2000 and 1999, respectively.
Teleflex Annual Report Page 21
Teleflex Incorporated and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share)
FINANCIAL INSTRUMENTS
The company uses forward rate contracts to manage currency transaction exposure
and interest rate swaps for exposure to interest rate changes. The Financial
Accounting Standards Board issued Statement of Financial Accounting Standard No.
133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS No.
133) which became effective on January 1, 2001. All derivative financial
instruments are recorded on the balance sheet at fair market value and
subsequent changes in value are recognized in the statement of income or as part
of comprehensive income. The cumulative effect of adopting SFAS No. 133 at
January 1, 2001 was ($200). Approximately $100 of the amount in accumulated
other comprehensive income would be reclassified as an expense to the statement
of income during 2002 should foreign currency exchange rates and interest rates
remain at December 30, 2001 levels.
The following table provides financial instruments activity included as part of
accumulated other comprehensive income in 2001:
Balance at January 1, 2001 $ (200)
Additions and revaluations (5,675)
Clearance of hedge results to income 4,077
- -----------------------------------------------------------
Balance at December 30,2001 $(1,798)
- -----------------------------------------------------------
SHAREHOLDERS' EQUITY AND STOCK COMPENSATION PLANS
The authorized capital of the company is comprised of 100,000,000 common shares,
$1 par value, and 500,000 preference shares. No preference shares were
outstanding during the last three years.
Options to purchase common stock are awarded at market price on the date of
grant and expire no later than 10 years after that date. No compensation expense
has been recognized for stock option plans. Diluted earnings per share would
have been reduced $.04 or less in 2001, 2000 and 1999 had compensation expense
for stock options been determined based on the fair value at the grant date. The
fair value of options granted during 2001, 2000 and 1999 of $14.51, $10.56 and
$16.50, respectively, was estimated using the Black-Scholes option-pricing
model. Officers and key employees held options for the purchase of 2,036,194
shares of common stock at prices ranging from $14.13 to $47.25 per share with an
average exercise price of $33.65 per share and an average remaining contractual
life of 7 years. Such options are presently exercisable with respect to 894,799
shares at an average exercise price of $28.85. Options to purchase 514,150,
464,550 and 447,750 shares of common stock were granted at average exercise
prices of $42.43, $29.20 and $40.97, in 2001, 2000 and 1999, respectively.
Options exercised were 371,290, 282,576 and 517,690 at average exercise prices
of $22.01, $16.27 and $13.96 in 2001, 2000 and 1999, respectively.
Basic earnings per share is computed by dividing net income by the weighted
average number of common shares outstanding during the period. Diluted earnings
per share is computed in the same manner except that the weighted average number
of common shares is increased for dilutive securities. The difference between
basic and diluted weighted average common shares results from the assumption
that dilutive stock options were exercised.
INCOME TAXES
The provision for income taxes consisted of the following:
2001 2000 1999
- ------------------------------------------------------------
Current
Federal $25,415 $27,842 $33,978
State 2,902 3,269 3,335
Foreign 9,385 8,907 5,513
Deferred 9,682 8,972 4,710
- ------------------------------------------------------------
$47,384 $48,990 $47,536
- ------------------------------------------------------------
The deferred income taxes provided and the balance sheet amounts of $60,785
in 2001 and $50,722 in 2000 related substantially to the methods of accounting
for depreciation. Income taxes paid were $36,170, $36,961 and $39,923 in 2001,
2000 and 1999, respectively.
2001 2000 1999
- ----------------------------------------------------------
Tax at U.S. statutory rate 35.0% 35.0% 35.0%
State income taxes 1.2 1.3 1.6
Foreign income taxes (4.6) (3.9) (1.8)
Export sales benefit (1.7) (1.5) (1.5)
Other (.2) .1 --
- ----------------------------------------------------------
Effective income tax rate 29.7% 31.0% 33.3%
- ----------------------------------------------------------
BUSINESS SEGMENTS AND OTHER INFORMATION
The company has determined that its reportable segments are Commercial, Medical
and Aerospace. This assessment reflects the aggregation of businesses which have
similar products and services, manufacturing processes, customers and
distribution channels and is consistent with both internal management reporting
and resource and budgetary allocations. Reference is made to pages 24 and 25 for
a summary of operations by business segment.
A summary of revenues, identifiable assets and operating profit relating to
the company's non-domestic operations, substantially European, and export sales
is as follows:
2001 2000 1999
- ------------------------------------------------------------
Revenues $752,579 $675,787 $642,827
Identifiable assets $652,924 $580,756 $539,282
Operating profit $ 66,907 $ 60,132 $ 50,552
Export sales $234,800 $196,500 $181,500
- ------------------------------------------------------------
PENSION AND OTHER POSTRETIREMENT BENEFITS
The company provides defined benefit pension and postretirement benefit plans to
eligible employees. Assumptions used in determining pension expense and benefit
obligations reflect a weighted average discount rate of 7.5% in 2001 and 2000,
an investment rate of 9% and a salary increase of 5%.
Page 22 [TELEFLEX LOGO]
Assumptions used in determining other postretirement expense and benefit
obligations include a weighted average discount rate of 7.7% in 2001 and 7.6% in
2000 and an initial health care cost trend rate of 7.5% declining to 4.5% over
four years. Increasing the trend rate by 1% would increase the benefit
obligation by $1,631 and would increase the 2001 benefit expense by $153.
Decreasing the trend rate by 1% would decrease the benefit obligation by $1,395
and would decrease the 2001 benefit expense by $128.
The following tables provide net benefit cost, a reconciliation of benefit
obligations, plan assets and funded status of the plans:
Pension Other Benefits
- ----------------------------------------------------------------
2001 2000 2001 2000
- ----------------------------------------------------------------
Service cost $ 4,303 $ 4,237 $ 276 $ 331
Interest cost 7,648 6,639 1,095 1,030
Actual return (2,282) (9,649) -- --
Net amortization
and deferral (5,560) 2,103 357 348
Foreign plans 933 1,269 -- --
- ----------------------------------------------------------------
Net benefit cost $ 5,042 $ 4,599 $ 1,728 $ 1,709
- ----------------------------------------------------------------
Benefit obligations,
beginning of year $ 98,505 $ 90,089 $ 16,418 $ 14,911
Service cost 4,303 4,237 276 331
Interest cost 7,648 6,639 1,095 1,030
Amendments (70) 107 (752) 225
Actuarial (gain) loss (3,122) 975 5,540 910
Acquisitions 6,032 1,012 1,375 --
Currency translation (831) (1,034) -- --
Benefits paid (5,344) (4,789) (1,162) (989)
Foreign plans 933 1,269 -- --
- ----------------------------------------------------------------
Benefit obligations,
end of year 108,054 98,505 22,790 16,418
- ----------------------------------------------------------------
Fair value of plan
assets, beginning
of year 84,694 76,226 -- --
Actual return 2,282 9,649 -- --
Acquisitions 9,484 446 -- --
Contributions 2,771 2,525 -- --
Benefits paid (5,002) (4,152) -- --
- ----------------------------------------------------------------
Fair value of plan
assets, end of year 94,229 84,694 -- --
- ----------------------------------------------------------------
Funded status (13,825) (13,811) (22,790) (16,418)
Unrecognized transition
(asset) obligation (666) (834) 4,603 5,022
Unrecognized net
actuarial (gain) loss (5,810) (10,444) 5,202 (370)
Unrecognized prior
service cost 3,637 4,129 (85) 638
- -----------------------------------------------------------------
Accrued benefit cost $(16,664) $(20,960) $(13,070) $(11,128)
- -----------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS [PricewaterhouseCoopers Logo]
To the Board of Directors and Shareholders
Teleflex Incorporated
In our opinion, the consolidated financial statements appearing on pages 17
through 23 of this Annual Report present fairly, in all material respects, the
financial position of Teleflex Incorporated and its subsidiaries at December 30,
2001 and December 31, 2000 and the results of their operations and cash flows
for each of the three years in the period ended December 30, 2001, in conformity
with generally accepted accounting principles in the United States. 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
auditing standards generally accepted in the United States, 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 our opinion.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 13, 2002
- -----------------------------------------------------------
Quarterly data (unaudited)
- -----------------------------------------------------------
2001 First Second Third Fourth
- -----------------------------------------------------------
Revenues $470,734 $503,004 $466,014 $465,252
Gross profit 135,233 143,535 128,592 127,931
Net income 29,981 31,061 22,102 29,167
Basic earnings per share .78 .80 .57 .75
Diluted earnings per share .77 .79 .56 .74
- -----------------------------------------------------------
2000 First Second Third Fourth
- -----------------------------------------------------------
Revenues $427,590 $465,553 $420,405 $450,934
Gross profit 121,412 133,713 114,336 120,818
Net income 26,814 29,324 21,722 31,364
Basic earnings per share .70 .77 .57 .82
Diluted earnings per share .70 .76 .56 .81
- -----------------------------------------------------------
Teleflex Annual Report Page 23
Teleflex Incorporated and Subsidiaries
SELECTED FINANCIAL AND BUSINESS SEGMENT DATA
2001 2000 1999
- ---------------------------------------------------------------------------------------------------
Revenues
Commercial $ 908,183 $ 860,201 $ 757,720
Medical 429,338 411,815 372,282
Aerospace 567,483 492,466 471,067
Other income(a) -- -- --
- ---------------------------------------------------------------------------------------------------
$ 1,905,004 $ 1,764,482 $ 1,601,069
- ---------------------------------------------------------------------------------------------------
Operating profit
Commercial $ 83,774 $ 86,911 $ 75,823
Medical 62,689 56,483 49,551
Aerospace 60,337 53,115 52,940
- ---------------------------------------------------------------------------------------------------
206,800 196,509 178,314
Interest expense, net 28,465 20,787 17,732
Corporate expenses, net of other income 18,640 17,508 17,826
- ---------------------------------------------------------------------------------------------------
Income before taxes 159,695 158,214 142,756
Taxes on income 47,384 48,990 47,536
- ---------------------------------------------------------------------------------------------------
Net income $ 112,311 $ 109,224 $ 95,220
- ---------------------------------------------------------------------------------------------------
Basic earnings per share $ 2.90 $ 2.86 $ 2.52
Diluted earnings per share $ 2.86 $ 2.83 $ 2.47
Cash dividends per share $ .66 $ .58 $ .51
Average common shares outstanding 38,752 38,203 37,857
Average shares, assuming dilution 39,280 38,633 38,525
Net income as a percent of revenues 5.9% 6.2% 5.9%
Average number of employees 16,927 15,986 13,980
Identifiable assets
Commercial $ 683,188 $ 513,217 $ 451,389
Medical $ 442,648 $ 424,183 $ 388,430
Aerospace $ 405,315 $ 360,123 $ 332,109
Capital expenditures
Commercial $ 40,768 $ 35,528 $ 43,623
Medical $ 20,688 $ 19,592 $ 17,751
Aerospace $ 35,681 $ 24,815 $ 33,523
Depreciation and amortization
Commercial $ 37,825 $ 28,359 $ 24,875
Medical $ 27,025 $ 24,748 $ 20,574
Aerospace $ 26,720 $ 23,435 $ 21,132
Long-term borrowings $ 228,180 $ 220,557 $ 246,191
Shareholders' equity $ 778,143 $ 690,422 $ 602,564
Book value per share $ 19.99 $ 18.01 $ 15.85
Return on average shareholders' equity 15.3% 16.9% 16.7%
- ---------------------------------------------------------------------------------------------------
Page 24 [TELEFLEX LOGO]
1998 1997 1996 1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------------------
(Dollars and shares in thousands, except per share and employee data)
$ 649,644 $ 497,366 $ 422,443 $ 403,637 $ 356,708 $ 284,106 $ 210,464 $ 168,598
338,305 323,114 307,555 293,341 253,020 180,623 179,376 130,540
449,629 325,293 201,185 215,711 202,944 202,067 177,292 180,399
-- -- -- -- -- -- 3,206 3,472
- -------------------------------------------------------------------------------------------------------------------------------
$1,437,578 $1,145,773 $ 931,183 $ 912,689 $ 812,672 $ 666,796 $ 570,338 $ 483,009
- -------------------------------------------------------------------------------------------------------------------------------
$ 62,010 $ 61,562 $ 57,849 $ 59,719 $ 53,324 $ 37,794 $ 25,754 $ 19,996
41,879 35,466 34,630 30,237 32,386 21,486 25,463 19,900
55,163 38,787 21,007 12,683 5,367 14,906 16,100 21,722
- -------------------------------------------------------------------------------------------------------------------------------
159,052 135,815 113,486 102,639 91,077 74,186 67,317 61,618
17,054 14,435 13,876 18,632 18,361 14,466 15,482 13,765
17,238 14,975 12,831 10,407 9,725 7,410 3,185 2,519
- -------------------------------------------------------------------------------------------------------------------------------
124,760 106,405 86,779 73,600 62,991 52,310 48,650 45,334
42,210 36,333 29,617 24,730 21,795 18,624 16,638 15,527
- -------------------------------------------------------------------------------------------------------------------------------
$ 82,550 $ 70,072 $ 57,162 $ 48,870 $ 41,196 $ 33,686 $ 32,012(b) $ 29,807
- -------------------------------------------------------------------------------------------------------------------------------
$ 2.21 $ 1.91 $ 1.61 $ 1.40 $ 1.20 $ .99 $ .95(b) $ .90
$ 2.15 $ 1.86 $ 1.58 $ 1.37 $ 1.17 $ .98 $ .93(b) $ .88
$ .45 $ .39 $ .34 $ .30 $ .26 $ .23 $ .21 $ .20
37,347 36,759 35,482 34,885 34,373 33,958 33,557 33,062
38,425 37,661 36,197 35,574 35,061 34,533 34,264 33,701
5.7% 6.1% 6.1% 5.4% 5.1% 5.1% 5.6% 6.2%
12,603 10,830 9,373 9,553 8,740 7,920 6,920 6,160
$ 405,347 $ 351,345 $ 227,594 $ 201,808 $ 184,971 $ 158,206 $ 142,041 $ 101,187
$ 361,282 $ 333,698 $ 320,699 $ 331,349 $ 311,547 $ 266,239 $ 206,562 $ 194,609
$ 324,532 $ 276,708 $ 194,305 $ 183,636 $ 188,348 $ 202,130 $ 142,523 $ 141,104
$ 26,243 $ 22,570 $ 12,821 $ 15,445 $ 13,489 $ 7,967 $ 7,386 $ 7,505
$ 13,943 $ 10,611 $ 10,421 $ 12,107 $ 7,029 $ 7,361 $ 5,316 $ 7,138
$ 28,561 $ 40,992 $ 16,767 $ 2,794 $ 4,538 $ 8,865 $ 6,384 $ 5,585
$ 23,353 $ 14,335 $ 11,907 $ 11,446 $ 9,930 $ 9,251 $ 6,262 $ 5,633
$ 18,044 $ 18,459 $ 16,267 $ 15,087 $ 11,694 $ 8,030 $ 6,505 $ 4,725
$ 17,852 $ 14,440 $ 9,827 $ 10,471 $ 10,771 $ 10,176 $ 8,002 $ 7,366
$ 275,581 $ 237,562 $ 195,945 $ 196,844 $ 190,499 $ 183,504 $ 134,600 $ 119,370
$ 534,450 $ 463,753 $ 409,176 $ 355,364 $ 309,024 $ 269,790 $ 240,467 $ 211,702
$ 14.21 $ 12.49 $ 11.30 $ 10.13 $ 8.94 $ 7.90 $ 7.12 $ 6.37
16.5% 16.1% 15.0% 14.7% 14.2% 13.2% 14.2% 14.9%
- -------------------------------------------------------------------------------------------------------------------------------
(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 $.03 per share as a
result of a change in accounting for income taxes.
Teleflex Annual Report Page 25
1
2001 FINANCIAL REVIEW
CRITICAL ACCOUNTING POLICIES
Accounting policies that management believes are most critical to the company's
financial condition and operating results pertain to the valuation of accounts
receivable, inventory, goodwill and revenue recognition. In developing estimates
management considered available information and used judgment.
OVERVIEW
The company's major financial objectives are to achieve a 15% to 20% average
annual growth rate in revenues and net income, to generate a 20% return on
average shareholders' equity and to pay dividends of 20% of trailing twelve
months' earnings. Over the last five years revenues and net income have grown at
a compounded rate of 15% and 14%, respectively. Return on average shareholders'
equity declined to 15.3% in 2001 from 16.9% in 2000 after seven consecutive
years of improvement. Over the past five years, dividends paid have increased at
a compounded rate of 14% and in 2001 the annualized quarterly dividend rate was
increased 13% to 68 cents per share.
[REVENUES BAR GRAPH]
The company is committed to maintaining a balance among its three segments:
Commercial, Medical, and Aerospace. Balance among the three segments reduces the
company's risk of changes in the business cycle of any one segment, thus
enabling the company to consistently achieve its growth objectives.
Diversification gives the company the opportunity to invest in all stages of a
segment's market cycle and provides a broader base of markets in which to grow.
The company also diversifies within each segment by entering into new geographic
areas and different sectors within a market and by extending products to
additional markets. As a result, despite cyclical downturns within each of the
segments, the company's total operating profit has continued to increase.
The company intends to achieve its growth objectives through a combination of
core growth, development of new products and new markets for existing products,
and acquisitions. Over the past five years, the company's core growth has
accounted for approximately one-third of its overall growth. During the same
time, the company has invested more than $400 million for acquisitions. These
acquisitions fit strategically within the company's businesses and bring new
technologies, capabilities and market opportunities that will supplement future
core growth. During 2000 and 2001, the company purchased twenty businesses with
annualized sales of approximately $300 million, $201 million of which is
included in 2001 revenues. Acquisitions, while adding initially to revenues, may
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. Additionally, many of the
acquisitions include new technologies and products that require incremental
investment to enhance their growth prospects.
The company has maintained a conservative capital structure with total debt
ranging from 30% to 40% of total capitalization. This provides the flexibility
to increase borrowings should growth opportunities arise. Under these
circumstances, it is conceivable that debt for a period of time may be in the
range of 50% of total capitalization. The use of debt financing enables the
company to maintain a lower cost of capital thus further enhancing value for
shareholders. The company finances non-domestic operations primarily in their
local currencies, thus reducing exposure to exchange rate fluctuations.
Historically, operations have generated sufficient cash flow to finance the
company's core growth while borrowings have been incurred largely to finance
acquisitions. Over the past five years, cash flow from operations has totaled
over $700 million. This operating cash flow is reinvested in the company's core
businesses, provides for the payment of dividends and enables the company to
continue to upgrade and expand its plant and equipment. The company, while not
particularly capital intensive, has spent approximately 5% of sales annually on
plant and equipment.
RESULTS OF OPERATIONS
2001 VS. 2000:
Revenues increased 8% in 2001 to $1.90 billion from $1.76 billion in 2000 due to
gains in each of the company's three segments. An increase in sales from
acquisitions was offset by declines from core sales, the impact of currency
exchange rates and product line dispositions. Core sales declined because of
weakness in the automotive and pleasure marine markets and, after the events of
September 11, in the aerospace market. Non-domestic operations comprised 40% of
the company's revenues and gained 11% over 2000 from acquisitions and core
sales, despite a decline from currency exchange rates. For 2001, the Commercial,
Medical and Aerospace segments comprised 48%, 22% and 30% of the company's net
sales, respectively.
In 2001, gross profit margin increased slightly resulting from gains in the
Aerospace and Medical segments, which more than offset a decline in the
Commercial Segment. Selling, engineering and administrative expenses as a
percentage of sales increased in 2001 as a reduction in the Medical Segment was
more than offset by increases in the Commercial and Aerospace segments.
Operating profit increased 5% in 2001 to $206.8 million from $196.5 million
in 2000. The increase was due to gains in the Medical and Aerospace segments
which compensated for a decline in the Commercial Segment. Operating margin
declined to 10.9% from
Page 26 [TELEFLEX LOGO]
11.1% as an increase in Medical was offset by declines in Commercial and
Aerospace. Expenses associated with the company's cost reduction programs
contributed to the decline in operating margin. For 2001 the Commercial, Medical
and Aerospace segments represented 41%, 30% and 29% of the company's operating
profit, respectively.
Interest expense increased as a result of additional borrowings incurred to
finance acquisitions offset by lower interest rates. Interest expense as a
percentage of sales increased to 1.5% in 2001 from 1.2% in 2000. The effective
income tax rate declined to 29.7% in 2001 from 31.0% in 2000 because a higher
proportion of income was earned in countries with relatively lower tax rates,
including tax holidays.
Net income in 2001 increased 3% to $112.3 million while diluted earnings per
share increased 1% to $2.86. Basic earnings per share increased 1% to $2.90.
[NET INCOME BAR GRAPH]
The Financial Accounting Standards Board approved Statement of Financial
Accounting Standard (SFAS) No. 141, "Business Combinations" and No. 142,
"Goodwill and Other Intangible Assets." SFAS No. 141 requires business
combinations to be accounted for using the purchase method of accounting. SFAS
No. 142 requires goodwill and other intangible assets to be subject to an annual
determination of their continuing value (an impairment test) rather than be
amortized annually. While the company is still analyzing the effects of SFAS No.
142, it is not expected to record an impairment loss upon initial adoption in
the first quarter of 2002. The amortization expense for goodwill that will cease
in 2002 will contribute $14 million to operating profit, or, 24 cents per
diluted share.
2000 VS. 1999:
Revenues increased 10% in 2000 to $1.76 billion from $1.60 billion in 1999
resulting from gains in each of the company's three segments. Acquisitions
accounted for half of the company's increase in revenue. Non-domestic operations
comprised 38% of the company's revenues and increased 5% over 1999. The
company's overall revenues were reduced as a result of weaker foreign
currencies, mainly in the Medical Segment. The Commercial, Medical and Aerospace
segments accounted for 49%, 23% and 28% of the company's revenues, respectively.
Gross profit margin remained at 27.8% in 2000 resulting from increases in the
Commercial and Aerospace segments which offset a decline in the Medical Segment.
Selling, administrative and engineering expenses as a percentage of sales
declined slightly in 2000 to 17.6% resulting from a reduction in the Medical
Segment which offset increases in the Commercial and Aerospace segments.
Operating profit increased 10% to $196.5 million from $178.3 million as all
three segments gained. Operating margin remained at 11.1% resulting from a
higher Medical Segment offsetting a lower Aerospace Segment while the Commercial
Segment remained flat. The Commercial, Medical and Aerospace segments
represented 44%, 29%, and 27% of the company's operating profit, respectively.
Interest expense increased from higher interest rates and lower invested cash
balances, as total borrowings declined slightly. Interest expense as a
percentage of sales increased to 1.2% in 2000 from 1.1% in 1999. The effective
income tax rate declined to 31.0% in 2000 compared with 33.3% in 1999 due to a
higher proportion of income earned in 2000 in countries with relatively lower
tax rates. In addition, for 2000 the company's effective tax rate was lower from
a decrease in deferred taxes resulting from a reduction in the German statutory
tax rate enacted in the fourth quarter.
Net income increased 15% in 2000 to $109.2 million from $95.2 million and
diluted earnings per share also increased 15% to $2.83. Basic earnings per share
increased 13% to $2.86.
COMMERCIAL SEGMENT
The Commercial Segment designs and manufactures proprietary mechanical and
electrical controls for the automotive market; mechanical, electronic and
hydraulic controls, and electronic products for the pleasure marine market; and
proprietary products for fluid transfer and industrial applications.
Products in the Commercial Segment generally are produced in higher unit
volume than those of the company's other two segments. They are manufactured for
broad distribution as well as custom fabricated to meet individual customer
needs. For the most part consumer spending patterns influence the market trends
for these products.
2001 VS. 2000:
Sales in the Commercial Segment increased 6% in 2001 to $908.2 million from
$860.2 million in 2000. This Segment's overall increase in sales resulted from
acquisitions, as core volume was lower from the recession-driven weakness in the
automotive and marine markets. An increase in sales of the Marine and Industrial
product lines offset a decline in the Automotive product line. The gain in
Marine resulted from the acquisition of Morse Controls, which offset a decline
in core sales from lower consumer demand in the marine market. The increase in
the Industrial product line resulted from an acquisition of a manufacturer of
fluid handling systems and from new applications for light-duty cables. The
decline in the Automotive product line was the result of lower vehicle
production and pricing pressures in the North American automotive industry,
which was partially offset by increased sales of the adjustable pedal system.
Teleflex Annual Report Page 27
2001 FINANCIAL REVIEW (CONTINUED)
Operating profit declined 4% in 2001 to $83.8 million from $86.9 million in
2000 and operating margin dropped to 9.2% from 10.1%. In Marine, an increase in
operating profit resulted from the acquisition of Morse Controls while
additional development expenses for integrated electronic engine systems and a
new line of fishfinders reduced operating margin. In Industrial, operating
profit and margin increased from the additional volume of light-duty cables. The
decline in North American build rate reduced operating profit and margin in the
Automotive product line.
Total assets in this Segment grew as a result of acquisitions. Return on
average assets decreased in 2001 to 14.0% from 18.0% in 2000 due to the lower
operating profits in the Automotive product line.
[OPERATING PROFIT BAR CHART]
2000 VS. 1999:
Sales in the Commercial Segment increased 14% in 2000 to $860.2 million from
$757.7 million in 1999. All three product lines, Automotive, Marine and
Industrial, reported sales gains with approximately one-half the growth coming
from acquisitions. The increase in the Automotive product line was the result of
a strong automotive market in North America and increased sales of new products
including the adjustable pedal system. Within the Marine product line the
increase was largely due to sales of new products. Sales in the Industrial
product line benefited from acquisitions and new applications for light-duty
cables.
Operating profit rose 15% in 2000 to $86.9 million from $75.8 million while
operating margin increased from 10.0% to 10.1%. Operating profit and margin
increased in the Automotive product line from the additional volume despite
product development expenses and plant start up for the adjustable pedal system.
Within Industrial, operating profit increased on the additional volume but
operating margin declined from lower margins of the acquired businesses and
expenses associated with their integration. Marine operating profit and margin
were lower from new product development expenses for integrated electronic
engine systems and the adjustable pedal for the truck and bus market.
Assets increased in 2000 due to acquisitions in the Industrial product line.
Return on average assets increased to 18.0% in 2000 from 17.7% in 1999 as
operating profit gains in the Automotive product line offset a lower return from
acquisitions.
MEDICAL SEGMENT
The Medical Segment manufactures and distributes a broad range of invasive
disposable and reusable devices for the urology, gastroenterology,
anesthesiology and respiratory care markets worldwide. It also designs and
manufactures a variety of specialty surgical products, and provides instrument
management services.
Products in the Medical Segment generally are required to meet exacting
standards of performance and have long product life cycles. Economic influences
on sales relate primarily to spending patterns in the worldwide medical devices
and supply market.
2001 VS. 2000:
In 2001 Medical Segment sales increased 4% to $429.3 million from $411.8 million
in 2000 as a result of gains in both product lines, Hospital Supply and Surgical
Devices. Within Hospital Supply, core growth and acquisitions more than offset
declines from the divestiture of two product lines and weaker foreign
currencies. In Surgical Devices, an increase in closure systems core products,
new products such as the Hem-o-lok clips and a gain in instrument management
services compensated for a decline in instruments.
Operating profit grew 11% in 2001 to $62.7 million from $56.5 million in 2000
and operating margin increased to 14.6% from 13.7%. In Hospital Supply increased
sales volume contributed to the gain in operating profit and margin. The
disposition of two lower-margin product lines, the addition of direct
distribution in Europe and the elimination of a distribution site also improved
operating margin. In Surgical Devices the gains were due primarily to increased
volume of closure products.
Assets increased in 2001 as a result of the acquisitions, which offset the
negative effects of currency translation. Return on average assets increased to
14.5% from 13.9% due to the higher operating profit combined with a relatively
smaller increase in the asset base.
2000 VS. 1999:
In 2000, Medical Segment sales increased by 11% to $411.8 million from $372.3
million in 1999 resulting from gains in both the Hospital Supply and Surgical
Devices product lines. Excluding a decline in currency exchange rates, sales
would have gained another 6%. The increase in the Hospital Supply product line
resulted from core growth and the acquisition of a manufacturer of urological
products and an Italian distributor. Within the Surgical Devices product line,
growth from sales of new closure and instrument products resulted in the sales
increase.
Operating profit increased 14% in 2000 to $56.5 million and
operating margin improved to 13.7% from 13.3%. The increases in operating profit
and margin are the result of the volume gains in both Hospital Supply and
Surgical Devices. Within Hospital Supply, the operating margin improvement
resulted from the shift of production to low cost manufacturing facilities and
increased sales of higher margin products.
Page 28 [TELEFLEX LOGO]
Assets increased due to the acquisitions and additional capital
expenditures within Surgical Devices related to instrument management services.
Return on average assets increased to 13.9% in 2000 from 13.2% in 1999 resulting
from the gain in operating profit, which more than offset the increase in
assets.
[CAPITAL EXPENDITURES BAR CHART]
AEROSPACE SEGMENT
The Aerospace Segment serves the commercial aerospace, industrial
turbo-machinery markets and, to a lesser extent, the military market. Its
businesses design and manufacture cargo handling systems and containers for
aviation; provide surface treatments, repair services and manufactured
components for users of both flight and ground-based turbine engines. Sales are
both to original equipment manufacturers (OEMs) and to the aftermarket.
These products and services, many of which are proprietary, require a high
degree of engineering sophistication, and are often custom-designed. Economic
influences on these products and services relate primarily to spending patterns
in the worldwide aerospace industry and to demand for power generation.
2001 VS. 2000:
Sales in the Aerospace Segment grew 15% in 2001 to $567.5 million from $492.5
million in the prior year. Sales increases in cargo handling systems from both
wide and narrow body products, in industrial gas turbine (IGT) services from an
acquisition and a strong market, and in repair services, offset a decline in
manufactured components. A portion of the Aerospace Segment's sales were
negatively impacted in the fourth quarter by September 11, particularly repair
services that are dependent on airline flight hours.
Operating profit increased 14% in 2001 to $60.3 million from $53.1 million in
2000 while operating margin decreased to 10.6% from 10.8%. The higher operating
profit is the result of the additional volumes in cargo handling systems, repair
services and IGT services. The lower operating margin resulted from the sharp
decline in fourth quarter volume, particularly in repair services; additional
expenses associated with the start up of several IGT services facilities and,
lower margins of acquired businesses.
Assets increased in 2001 from the start up of several IGT facilities, from
acquisitions and from inventory in the cargo handling systems product line
related to volume. Return on average assets increased to 15.8% in 2001 from
15.3% in 2000 due to the gain in operating profit.
2000 VS. 1999:
Sales in the Aerospace Segment increased 5% in 2000 to $492.5
million from $471.1 million in 1999. Sales increases in cargo handling systems
due to increased market share, in IGT services due to a strong market and in
repair services offset a decline in manufactured components. The acquisition of
a manufacturer of containers for aircraft added to the growth in cargo handling
systems and the purchase of an engineering services firm contributed to the
increase in IGT services. The decline in the build rate for aircraft resulted in
reduced manufactured component sales.
Operating profit increased slightly to $53.1 million in 2000 from $52.9
million in 1999 while operating margin declined to 10.8% in 2000 from 11.2% in
1999. Operating profit gains due to the sales increases in cargo handling
systems, IGT services and repair services offset a decline from manufactured
components. Expenses associated with the combination of facilities in both cargo
handling systems and IGT services and the closing of two component manufacturing
plants lowered operating margin in 2000.
The increase in assets in 2000 was due to the acquisitions. Return on average
assets declined to 15.3% from 16.1% due to lower component manufacturing
operating profit and a reduced return from acquisitions.
LIQUIDITY, MARKET RISK AND CAPITAL RESOURCES
Cash flows from operating activities were $188.3 million compared to $189.4
million in 2000 and $134.1 million in 1999. In 2001 higher net income and
depreciation and amortization were offset by additional working capital
requirements, primarily related to the timing of accounts payable. Both accounts
receivable and inventories have increased relative to sales in 2001. Accounts
receivable collections were hampered by the recession-related weakness in
Commercial Segment markets and the slow down in the aerospace market while
inventories were increased in part from the integration of Morse Controls. In
2000 the increase resulted from higher net income and depreciation and
amortization and from improvements in working capital. In addition to the cash
generated from operations the company has approximately $130 million in
committed and $120 million in uncommitted unused lines of credit. The
availability of the lines of credit is dependent upon the company maintaining
its strong financial condition including its continued compliance with bank
covenants.
[DIVIDENDS PER SHARE BAR CHART]
Teleflex Annual Report Page 29
2001 FINANCIAL REVIEW (CONTINUED)
Various senior note agreements provide for the maintenance of certain financial
ratios and limit the repurchase of the company's stock and payment of cash
dividends. Under the most restrictive of these provisions, $204 million of
retained earnings was available for dividends at December 30, 2001. For 2001
total borrowings increased $102 million as the financing of the Morse Controls
acquisition was partially offset by declines from currency exchange rates and by
scheduled repayments.
[CASH FLOW FROM OPERATIONS BAR CHART]
Total debt to total capitalization increased from 33% to 36% as a result of the
additional borrowings. Approximately 50% of the company's total borrowings of
$440 million are denominated in currencies other than the U.S. dollar,
principally the Euro, providing a natural hedge against fluctuations in the
value of non-domestic assets. For 2000, total borrowings for the company
decreased $6 million and total debt to total capitalization declined from 36% to
33%. The declines were the result of repayments and currency exchange rate
changes offset by additional borrowings to finance acquisitions.
Contractual obligations at December 30, 2001 are summarized as follows:
Payments Due by Period
Less than 1-3 4-5 After
Total 1 year years years 5 years
- --------------------------------------------------------------------------------
Long-term
borrowings $270 $42 $133 $65 $30
- --------------------------------------------------------------------------------
Operating lease
obligations $166 $35 $ 54 $41 $36
In summary, the company's financial condition remains strong. The company
believes that its cash flows from operations and the ability to access
additional funds through the credit facilities will enable it to fund its
operating requirements, capital expenditures and additional acquisition
opportunities.
CONTINGENCIES AND 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 including training, auditing and monitoring to ensure compliance
with such laws and regulations. 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.
The company is a party to lawsuits and claims arising out of the normal
course of business. In the opinion of management, there are no pending claims or
litigation the outcome of which would have a material effect on the company's
consolidated financial position or results of operations.
[CAPITALIZATION BAR CHART]
Page 30 [TELEFLEX LOGO]
Teleflex Incorporated and Subsidiaries
INVESTOR INFORMATION
ANNUAL MEETING
The Annual Meeting of shareholders will take place on April 26, 2002 at the:
Jefferson House Restaurant (in the Ballroom)
2519 DeKalb Pike (Rte. 202)
Norristown, Pennsylvania
The meeting will convene at 10:00 a.m. All shareholders are cordially invited to
attend.
[TFX LISTED NYSE LOGO]
MARKET AND OWNERSHIP OF COMMON STOCK
New York Stock Exchange Trading Symbol: TFX
As of December 30, 2001, the company's fiscal year end, the approximate number
of shareholders of record was 1,186.
INVESTOR RELATIONS
Investors, analysts and others seeking information about the company should
contact:
Janine Dusossoit
Vice President, Investor Relations
(610) 834-6301
Financial and product information about Teleflex may be obtained on the
company's Web site at www.teleflex.com.
A copy of the Annual Report as filed with the Securities and Exchange Commission
on Form 10-K and interim reports on Form 10-Q can be accessed on the company's
Web site or can be mailed upon request to:
Communications Department
Teleflex Incorporated
155 South Limerick Road
Limerick, Pennsylvania 19468
(610) 948-2811
e-mail: pcarr@teleflex.com
TRANSFER AGENT AND REGISTRAR
Questions concerning transfer requirements, lost certificates, dividends,
duplicate mailings, change of address, or other stockholder matters should be
addressed to the Transfer Agent:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
(800) 937-5449
DIVIDENDS
Quarterly dividends customarily are mailed to reach shareholders on or about
the 15th of March, June, September and December.
Shareholders may have dividends deposited directly into their savings or
checking account.
Teleflex Incorporated offers a dividend reinvestment and direct stock
purchase and sale plan. Contact American Stock Transfer & Trust Company for
further information.
PRICE RANGE AND DIVIDENDS OF COMMON STOCK
2001 High Low Last Dividends
- --------------------------------------------------------------------------------
First Quarter $44.81 $38.38 $40.95 $ 0.15
Second Quarter $50.99 $39.80 $44.00 $ 0.17
Third Quarter $50.31 $34.00 $37.39 $ 0.17
Fourth Quarter $47.70 $37.10 $47.70 $ 0.17
2000 High Low Last Dividends
- --------------------------------------------------------------------------------
First Quarter $36.13 $26.13 $35.50 $ 0.13
Second Quarter $38.94 $32.94 $35.75 $ 0.15
Third Quarter $39.50 $32.88 $34.38 $ 0.15
Fourth Quarter $45.38 $31.81 $44.19 $ 0.15
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
FORWARD-LOOKING STATEMENTS
In accordance with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, the Company notes that certain statements
contained in this report are forward-looking in nature. These forward-looking
statements include matters such as business strategies, market potential, future
financial performance, product deployments and other future-oriented matters.
Such matters inherently involve many risks and uncertainties (including risks
and uncertainties associated with changes in competitive and market conditions,
changes in regulation and technology, policies of suppliers and customer
acceptance of new products), which can cause actual results to differ materially
from those projected in the forward-looking statements. For additional
information, please refer to the Company's Securities and Exchange Commission
filings including its most recent Form 10-K.
Teleflex Annual Report Page 31