Teleflex Announces First Quarter 2003 Results; Revenues Increased 7% to $546 Million
PLYMOUTH MEETING, Pa.--April 16, 2003--Teleflex Incorporated announced today that revenues for the first quarter ended March 30, 2003 increased 7% to $546.2 million compared to $508.4 million for the prior year. Net income in the quarter was $29.2 million and diluted earnings per share were 74 cents compared with 77 cents for the same period a year ago. During the quarter, the company completed the sale of an investment resulting in a pre-tax gain of $3.1 million, or 5 cents per share after tax."Teleflex produced increased revenues for the first quarter based on strong performances in our Commercial and Medical businesses," stated Jeffrey P. Black, president and chief executive officer. "Our Commercial Segment increased revenues and operating profit across all three product lines with solid increases in sales of Automotive and Industrial products and our Medical Segment continued to grow with strong demand for Health Care Supply products. At the same time, our Aerospace businesses addressed difficult market conditions and results were negatively impacted by facility closures and sharply reduced volumes in the Industrial Gas Turbine product lines."
Mr. Black added, "Overall, Teleflex businesses executed well in a tough environment. We continue to expect revenues and earnings will increase at a single digit percentage rate in 2003 with improved performance as new products are launched during the year."
For the quarter, Commercial Segment sales increased 13% over last year with gains across the Automotive, Industrial and Marine product lines. Automotive and Industrial product lines reported double digit sales increases, while Marine sales increased modestly. Automotive sales benefited from a stronger Euro and increased volume in the adjustable pedal line. Industrial sales increased primarily as a result of acquisitions. Marine sales improved slightly with increased sales to original equipment manufacturers and of non-marine products. Commercial operating profit was up 13% with all three product lines reporting improvement. Operating profit improved primarily on volume increases in all three product lines and prior year cost and capacity reduction efforts in the Automotive product line.
Medical Segment sales and operating profit rose 10% in the first quarter. Health Care Supply reported higher sales due largely to currency effects and, to a lesser extent, increased volumes for anesthesia products. Surgical Devices sales improved slightly as a result of an acquisition. In Health Care Supply, operating profit and margin improved in the quarter as a result of higher volumes and the continuing shift to manufacturing in lower cost countries. Operating profit in Surgical Devices was relatively flat and margins declined as a result of product mix.
Aerospace Segment sales declined 5% in the quarter and operating profit decreased over 80% as the commercial aerospace and power generation markets remained under pressure. Lower sales in Industrial Gas Turbine Services were partially offset by gains in Repair Services and Cargo Systems. Operating profit declined on the significantly lower volume in Industrial Gas Turbine Services and costs related to the closing of three facilities.
Cash flow from operations in the first quarter was $27.2 million compared to $28.3 million a year ago. The balance sheet continues to provide a strong foundation for growth with total debt to capitalization of 32%.
As previously announced, Teleflex will comment on first quarter 2003 results on a conference call to be held Thursday, April 17th, at 11:15 AM (ET). The call will be archived and available on the company's website, www.teleflex.com.
The figures are as follows:
COMPARATIVE SUMMARY OF REVENUES AND EARNINGS
(Unaudited)
March 30, March 31, Percent
Three Months Ended 2003 2002 Change
Sales
Commercial $299,811,000 $265,752,000 13%
Medical 118,145,000 107,303,000 10%
Aerospace 128,265,000 135,341,000 (5%)
-------------- --------------
Total $546,221,000 $508,396,000 7%
Operating profit
Commercial $29,127,000 $25,704,000 13%
Medical 19,047,000 17,367,000 10%
Aerospace 1,913,000 11,429,000 (83%)
-------------- --------------
Total $50,087,000 $54,500,000 (8%)
Less:
Interest expense 6,565,000 6,036,000 9%
Corporate expenses 5,055,000 4,570,000 11%
Non-operating gain (3,068,000) -- --
-------------- --------------
Income before taxes 41,535,000 43,894,000 (5%)
Taxes on income 12,294,000 13,476,000 (9%)
-------------- --------------
Net income $29,241,000 $30,418,000 (4%)
============== ==============
Earnings per share:
Basic $.74 $.78 (5%)
Diluted $.74 $.77 (4%)
Average common shares
outstanding:
Basic 39,446,000 39,038,000
Diluted 39,700,000 39,638,000
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
March 30, December 29,
2003 2002
Assets
Current assets
Cash and cash equivalents $43,102,000 $44,494,000
Accounts receivable, net 444,576,000 401,888,000
Inventories 394,037,000 365,535,000
Prepaid expenses 27,329,000 25,978,000
-------------- --------------
909,044,000 837,895,000
Property, plant and
equipment, net 611,605,000 604,241,000
Goodwill 276,873,000 257,999,000
Intangibles and other
assets 76,592,000 68,810,000
Investments in affiliates 37,674,000 44,439,000
-------------- --------------
$1,911,788,000 $1,813,384,000
============== ==============
Liabilities and
shareholders' equity
Current liabilities
Current borrowings $220,817,000 $182,776,000
Accounts payable and
accrued expenses 293,640,000 276,938,000
Income taxes payable 49,088,000 38,769,000
-------------- --------------
563,545,000 498,483,000
Long-term borrowings 226,810,000 240,123,000
Deferred income taxes and
other 171,757,000 162,497,000
-------------- --------------
962,112,000 901,103,000
Shareholders' equity 949,676,000 912,281,000
-------------- --------------
$1,911,788,000 $1,813,384,000
============== ==============
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended March 30, March 31,
2003 2002
Cash flows from operating
activities $27,177,000 $28,300,000
Cash flows from financing
activities:
Reduction in long-term
borrowings (6,292,000) (9,933,000)
Increase in current
borrowings and demand
loans 25,206,000 21,481,000
Stock compensation plans 476,000 5,951,000
Dividends (7,100,000) (6,627,000)
-------------- --------------
12,290,000 10,872,000
-------------- --------------
Cash flows from investing
activities:
Expenditures for plant
assets (21,831,000) (22,523,000)
Payments for businesses
acquired (22,916,000) (9,742,000)
Proceeds from the sale of
businesses and other 3,888,000 (1,990,000)
-------------- --------------
(40,859,000) (34,255,000)
-------------- --------------
Net (decrease) increase in
cash and cash equivalents (1,392,000) 4,917,000
Cash and cash equivalents
at the beginning of the
period 44,494,000 46,900,000
-------------- --------------
Cash and cash equivalents
at the end of the period $43,102,000 $51,817,000
============== ==============
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 at www.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 could cause actual results to differ from those contemplated in the statements. These factors are discussed in the company's Securities and Exchange Commission filings.