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SECURITIES AND EXCHANGE COMMISSION

Form 10-Q

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 28, 2003

OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to                

Commission File Number 1-5353

TELEFLEX INCORPORATED

(610) 948-5100

630 West Germantown Pike, Suite 450

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

þ     Yes                              o     No

      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

þ     Yes                              o     No

      Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock as of the latest practicable date.

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEET

The accompanying notes are an integral part of the condensed consolidated financial statements.

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TELEFLEX INCORPORATED

The accompanying notes are an integral part of the condensed consolidated financial statements.

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TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

The accompanying notes are an integral part of the condensed consolidated financial statements.

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TELEFLEX INCORPORATED

STATEMENT OF COMPREHENSIVE INCOME

The accompanying notes are an integral part of the condensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1

      The accompanying unaudited condensed consolidated financial statements for the three and nine months ended September 28, 2003 and September 29, 2002 contain all adjustments, consisting only of normal recurring adjustments, which in the opinion of management are necessary to present fairly the financial position, results of operations and cash flows for the periods then ended in accordance with the current requirements for Form 10-Q. At September 28, 2003, 5,201,859 shares of common stock were reserved for issuance under the Company’s stock compensation plans.

Note 2

      In November 2002, the Financial Accounting Standards Board issued FASB Interpretation No. 45 (FIN 45), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” FIN 45 requires that certain guarantees be recognized as liabilities at fair value at their inception date and requires certain disclosures by the guarantor in its financial statements about its obligations. In the ordinary course of business, the Company provides routine letters of credit, indemnifications and other guarantees whose terms range in duration and often are not explicitly defined. Adoption of FIN 45 did not have a material impact on the results of operations or financial condition of the Company.

Note 3

      In May 2003, the FASB issued Statement No. 150 (FAS 150), “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. FAS 150 establishes standards for how an issuer classifies and measures in its statement of financial position certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances) because that financial instrument embodies an obligation of the issuer. This Statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. Adoption of FAS 150 did not have a material impact on the results of operations or financial condition of the Company.

Note 4

      In January 2003, the FASB issued Interpretation No. 46 (“FIN 46”), “Consolidation of Variable Interest Entities”. FIN 46 requires a company to consolidate a variable interest entity if it is the primary beneficiary of that entity. A variable interest entity is generally defined as an entity whose equity investors do

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not have a controlling financial interest or sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support from other parties. FIN 46 also has a disclosure requirement for all variable interest entities of a company, even if the company is not the primary beneficiary. FIN 46 is applicable to variable interest entities created after January 31, 2003. The provisions are effective for the first interim or annual period ending after December 15, 2003 for those variable interests held prior to February 1, 2003. While the Company believes this Interpretation will not have a material effect on its results of operations or financial condition, it is continuing to evaluate the effect of adoption of this Interpretation.

Note 5

      The Company has stock-based compensation plans that provide for the granting of incentive and non-qualified options to officers and key employees to purchase shares of common stock at the market price of the stock on the dates options are granted. No stock-based employee compensation cost is reflected in net income. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of FASB Statement No. 123, “Accounting for Stock-Based Compensation”:

Note 6

      Changes in the carrying amount of goodwill for the nine months ended September 28, 2003, by operating segment, are as follows:

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      The following table reflects the components of intangible assets:

      Amortization expense related to those intangible assets was $6.0 million for the nine months ended September 28, 2003. Amortization expense is estimated to be $8,332 in 2003, $9,032 in 2004, $8,269 in 2005, $7,620 in 2006 and $6,801 in 2007.

Note 7

      Inventories consisted of the following:

Note 8

      Business segment information:

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MANAGEMENT’S ANALYSIS OF QUARTERLY FINANCIAL DATA

Results of Operations:

      Revenues increased 8% in the third quarter of 2003 to $550.9 million from $508.2 million in 2002. Overall growth was a result of currency gains and acquisitions which compensated for a decline in core business. Revenue improved in the Medical and Commercial segments while Aerospace Segment sales declined slightly. The Commercial, Medical and Aerospace segments comprised 51%, 25% and 24% of the Company’s net sales, respectively.

      The gross profit margin was 25.5% in 2003 compared to 26.1% in 2002. Declines primarily in the Aerospace Segment and to a lesser extent the Commercial Segment more than offset an improvement in the Medical Segment. Operating expenses as a percentage of sales increased to 19.7% in 2003 compared with 18.3% in 2002 as all three segments’ operating expenses increased relative to sales.

      Operating profit declined 16% in the third quarter to $37.3 million in 2003 from $44.3 million in 2002 resulting from declines in the Commercial and Aerospace segments, which more than offset a gain in the Medical Segment. Operating margin declined to 6.8% in 2003 from 8.7% in 2002 as all three segments reported a lower return on sales. The Commercial, Medical and Aerospace segments comprised 43%, 56% and 1% of the Company’s operating profit, respectively.

      Interest expense increased in 2003 primarily as a result of fluctuations in exchange rates. The effective income tax rate was 28.0% in the third quarter of 2003 compared with 20.7% in 2002. The lower rate in 2002 was the result of a favorable income tax settlement of $3.1 million, or $0.08 per share. Net income and diluted earnings per share for the quarter were $18.2 million and $0.45, a 31% and 32% decline, respectively.

Industry Segment Review:

      Commercial Segment sales gained 7% from $262.1 million in 2002 to $279.2 million on gains in the Automotive and Industrial product lines. Automotive sales increased on stronger foreign currencies and core improvement in Europe and Asia which more than compensated for a decline in North America as a result of pricing pressure and lower volume. Industrial product line sales benefited from the current year acquisitions of a designer and manufacturer of electronic and electromechanical products for the automotive, marine and industrial markets and an alternative fuels systems and component supplier in Europe. Marine sales declined modestly from the comparable quarter of 2002 due to lower marine aftermarket sales and weaker demand for certain non-marine products. Commercial Segment operating profit declined from $18.7 million in 2002 to $15.8 million in 2003 and as a result operating margin decreased to 5.7% from 7.2%. Automotive operating profit was relatively flat as volume gains were offset by costs to curtail a facility in North America. Marine operating profit fell primarily due to adverse product mix. Industrial operating profit declined as a result of lower core volume and costs associated with the start up of a new program in the alternative fuels group, which were offset in part by gains due to acquisitions.

      Sales in the Medical Segment increased 24% to $139.6 million in 2003 from $112.2 million in 2002. Both product lines, Health Care Supply and Surgical Devices, reported double-digit gains. Acquisitions, including the current quarter purchase of a cardiothoracic devices business and an orthopedic instrument manufacturer in 2002, accounted for over two-thirds of this Segment’s growth. Also contributing to top line improvement were favorable currency rates and to a lesser extent new products. Operating profit increased to $21.0 million in 2003 from $17.6 million in 2002. In Health Care Supply volume improvement and cost reduction efforts led to higher operating profit. Surgical Devices operating profit increased as a result of acquisitions. Operating margin declined from 15.7% in 2002 to 15.0% in 2003 as a result of a lower contribution from acquired businesses.

      Aerospace Segment sales declined 1% to $132.0 million in 2003 from $133.9 million in 2002. Double-digit sales declines in Cargo Systems and Manufactured Components were offset in part by an increase in Repair Services. The increase in Repair Services can be attributed to additional sales of low margin service offerings. Industrial Gas Turbine (IGT) Services sales declined slightly. Weaker demand and pricing

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Cash Flows from Operations and Liquidity:

      Cash flows from operating activities in the first nine months of 2003 were $155.4 million, up modestly from the prior year period of $150.6 million. Reduced working capital demand, particularly in the Aerospace segment, and higher depreciation compensated for lower net income. Total borrowings increased by $29.0 million to $451.9 million at September 28, 2003 as compared to $422.9 million at December 29, 2002. The increase was due to borrowings incurred to finance acquisitions and from currency exchange rate changes offset by debt repayments. The ratio of total debt to total capitalization decreased to 31% at September 28, 2003 from 32% at December 29, 2002.

Forward-Looking Statements:

      This quarterly report includes the Company’s current plans and expectations and is based on information available to it. It relies on a number of assumptions and estimates which could be inaccurate and which are subject to risks and uncertainties.

      The Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports will be made available free of charge through the Investor Relations section of the Company’s Internet website (http://www.teleflex.com) as soon as practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission.

      As of the end of the quarter ended September 28, 2003, our Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures, which included inquiries made to certain other of our employees. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have each concluded that our disclosure controls and procedures provide reasonable assurance that we record, process, summarize, and report information required to be disclosed by us in our periodic reports filed under the Securities Exchange Act within the time periods specified by the Securities and Exchange Commission’s rules and forms. Subsequent to the date of their evaluation, there have not been any significant changes in our internal controls or in other factors that could significantly affect these controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II OTHER INFORMATION

      1.     Exhibits:

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      2.     During the quarter ended September 28, 2003, the Company filed the following reports on Form 8-K:

		On July 1, 2003 Teleflex Incorporated filed a report on Form 8-K dated July 1, 2003 to file as an exhibit a press release announcing the purchase of the cardiothoracic devices business from Genzyme Corporation.

	On July 10, 2003 Teleflex Incorporated filed a report on Form 8-K dated July 7, 2003 to file as an exhibit a press release announcing the acquisition of Koltec-Necam B.V.
	On July 17, 2003 Teleflex Incorporated filed a report on Form 8-K dated July 16, 2003, to file as an exhibit a press release announcing earnings for the quarter ended June 29, 2003.
	On August 12, 2003 Teleflex Incorporated filed a report on Form 8-K dated August 12, 2003 to file as an exhibit the certifications of the Company’s Chief Executive Officer and Chief Financial Officer required pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	On September 10, 2003 Teleflex Incorporated filed a report on Form 8-K dated September 9, 2003 to file as an exhibit a press release announcing anticipated earnings for the Company’s third quarter and fiscal year 2003.

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TELEFLEX INCORPORATED

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TELEFLEX INCORPORATED
	/s/ HAROLD L. ZUBER, JR.
	Harold L. Zuber, Jr.
	Executive Vice President and Chief Financial Officer
	(principal financial officer) and duly authorized officer

November 11, 2003

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EXHIBIT INDEX