Teleflex Reports Second Quarter 2003 Results; Revenues Increased 6% to $578 Million
PLYMOUTH MEETING, Pa.--July 16, 2003--Teleflex Incorporated today reported that revenues for the second quarter ended June 29, 2003, were $577.9 million, a 6 percent increase compared to revenues of $546.3 million for the same period last year. Net income in the quarter was $31.8 million, 5 percent lower than the comparable period in 2002, and diluted earnings per share were 80 cents.Revenues in the first six months of 2003 increased 7 percent to $1.12 billion compared to $1.05 billion last year. Net income was $61.1 million in the first six months compared with $64.0 million for the same period a year ago. Diluted earnings per share were $1.54 compared with $1.61 per share for the same period in 2002.
"In the second quarter, Teleflex produced solid revenue growth and strong cash flow," said Jeffrey P. Black, president and chief executive officer. "Our Commercial Segment businesses performed well and the Medical Segment recorded double-digit gains in sales and operating profit. However, Aerospace Segment sales and earnings declined as we continued to address lower volumes and weakness in the commercial aerospace and industrial gas turbine markets."
Mr. Black added, "We are positioning ourselves for improved performance in the Aerospace Segment. The steps we are taking to adjust to market conditions should provide us with a stronger foundation for long-term growth. Given these trends and current economic conditions, we anticipate that Teleflex's earnings for the full year 2003 will be in the range of $3.05 to $3.20 per share."
The Commercial Segment reported sales of $318.2 million for the quarter, a 9 percent increase over second quarter 2002. Sales increased across all three Commercial product lines, Automotive, Marine and Industrial. Automotive sales increased as a result of new products, including increased sales of shifters and pedal systems and a positive currency impact. Marine sales overall were up slightly, although unseasonable weather adversely affected sales of marine aftermarket products. Industrial sales increased primarily as a result of acquisitions. Overall operating profit for the Commercial Segment increased compared to the same period last year, generally as a result of higher volumes.
Medical Segment sales for the quarter increased to $129.7 million, a 14 percent increase compared to second quarter 2002. Health Care Supply sales and profit benefited from increased volume and favorable currency effects. Surgical Devices sales and profit increased primarily due to an acquisition.
Aerospace Segment sales for the quarter were $130.1 million, an 8 percent decline from the second quarter of 2002. Sales increased in the Repair Services product line but decreased in each of the other three Aerospace businesses, Cargo Systems, Manufactured Components, and Industrial Gas Turbine Services. Operating profit for the Aerospace Segment fell sharply as a result of pricing pressure and significantly lower volume in the Industrial Gas Turbine Services product line. Cargo Systems, Manufactured Components, and Repair Services all generated modest returns.
As previously announced, Teleflex will comment on second quarter 2003 results on a conference call to be held Thursday, July 17th, at 11:15 a.m. (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)
Percent
Three Months Ended June 29, 2003 June 30, 2002 Change
Sales
Commercial Products $318,205,000 $291,648,000 9%
Medical Products 129,679,000 113,473,000 14%
Aerospace Products 130,061,000 141,185,000 (8%)
------------ ------------
Total $577,945,000 $546,306,000 6%
Operating Profit
Commercial Products $32,905,000 $29,684,000 11%
Medical Products 21,576,000 18,394,000 17%
Aerospace Products 1,940,000 10,888,000 (82%)
------------ ------------
Total $56,421,000 $58,966,000 (4%)
Less:
Interest expense 6,610,000 6,239,000 6%
Corporate expenses 4,981,000 4,613,000 8%
------------ ------------
Income before taxes 44,830,000 48,114,000 (7%)
Taxes on income 12,995,000 14,578,000 (11%)
------------ ------------
Net income $31,835,000 $33,536,000 (5%)
============ ============
Earnings per share
Basic $.81 $.85 (5%)
Diluted $.80 $.84 (5%)
Average shares
outstanding
Basic 39,539,000 39,241,000
Diluted 39,837,000 39,968,000
Percent
Six Months Ended June 29, 2003 June 30, 2002 Change
Sales
Commercial Products $618,016,000 $557,400,000 11%
Medical Products 247,824,000 220,776,000 12%
Aerospace Products 258,326,000 276,526,000 (7%)
------------ ------------
Total $1,124,166,000 $1,054,702,000 7%
Operating Profit
Commercial Products $62,032,000 $55,388,000 12%
Medical Products 40,623,000 35,761,000 14%
Aerospace Products 3,853,000 22,317,000 (83%)
------------ ------------
Total $106,508,000 $113,466,000 (6%)
Less:
Interest expense 13,175,000 12,275,000 7%
Corporate expenses 10,036,000 9,183,000 9%
Non-operating gain (3,068,000) -- --
------------ ------------
Income before taxes 86,365,000 92,008,000 (6%)
Taxes on income 25,289,000 28,054,000 (10%)
------------ ------------
Net income $61,076,000 $63,954,000 (5%)
============ ============
Earnings per share
Basic $1.55 $1.63 (5%)
Diluted $1.54 $1.61 (4%)
Average shares
outstanding
Basic 39,493,000 39,140,000
Diluted 39,769,000 39,803,000
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
June 29, 2003 December 29, 2002
Assets
Current assets
Cash and cash equivalents $59,586,000 $44,494,000
Accounts receivable, net 449,829,000 401,888,000
Inventories 395,523,000 365,535,000
Prepaid expenses 24,571,000 25,978,000
-------------- --------------
929,509,000 837,895,000
Property, plant and
equipment, net 622,625,000 604,241,000
Goodwill 281,805,000 257,999,000
Intangibles and other assets 75,223,000 68,810,000
Investments in affiliates 38,418,000 44,439,000
-------------- --------------
$1,947,580,000 $1,813,384,000
============== ==============
Liabilities and
shareholders' equity
Current liabilities
Current borrowings $207,032,000 $182,776,000
Accounts payable and
accrued expenses 293,636,000 276,938,000
Income taxes payable 46,712,000 38,769,000
-------------- --------------
547,380,000 498,483,000
Long-term borrowings 226,053,000 240,123,000
Deferred income taxes and
other 177,000,000 162,497,000
-------------- --------------
950,433,000 901,103,000
Shareholders' equity 997,147,000 912,281,000
-------------- --------------
$1,947,580,000 $1,813,384,000
============== ==============
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended June 29, 2003 June 30, 2002
Cash flows from operating
activities $102,175,000 $85,218,000
Cash flows from financing
activities:
Reduction in long-term
borrowings (11,621,000) (14,910,000)
Increase in current
borrowings and demand
loans 2,461,000 2,490,000
Stock compensation plans 1,051,000 8,120,000
Dividends (15,007,000) (13,690,000)
-------------- --------------
(23,116,000) (17,990,000)
-------------- --------------
Cash flows from investing
activities:
Expenditures for plant
assets (44,462,000) (42,687,000)
Payments for businesses
acquired (22,916,000) (27,807,000)
Proceeds from the sale of
businesses and other 3,411,000 2,128,000
-------------- --------------
(63,967,000) (68,366,000)
-------------- --------------
Net increase (decrease) in
cash and cash equivalents 15,092,000 (1,138,000)
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 $59,586,000 $45,762,000
============== ==============
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.