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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 26, 2004

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

(None)

     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.

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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

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

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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

      The accompanying unaudited condensed consolidated financial statements for the three and nine months ended September 26, 2004 and September 28, 2003 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. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 28, 2003.

      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 option-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 123, “Accounting for Stock-Based Compensation”:

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      The fair value for options granted in 2004 and 2003 was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

(1)	No stock options were granted in the three months ended September 28, 2003.

Note 2. New accounting standards

      Variable interest entities. In December 2003, the FASB issued Interpretation (FIN) 46R, “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51,” which replaced FASB Interpretation 46, “Consolidation of Variable Interest Entities,” and clarifies the application of Accounting Research Bulletin 51, “Consolidated Financial Statements,” to certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. The Company has adopted the provisions of the interpretation using fair value appraisals. The adoption of this interpretation had no material impact on the Company’s financial position, results of operations or cash flows. In applying the interpretation, four previously non-consolidated entities with a net investment of $10,000 were consolidated in the September 26, 2004 financial statements.

      Pension and other postretirement benefits. In December 2003, the FASB issued SFAS 132R, “Employers’ Disclosures about Pensions and Other Postretirement Benefits — an amendment of FASB Statements 87, 88, and 106,” which replaced SFAS 132, “Employers’ Disclosures about Pensions and Other Postretirement Benefits.” SFAS 132R retains the disclosure requirements of SFAS 132 and requires additional disclosures about the assets, obligations, cash flows, and net periodic benefit cost of defined benefit pension plans and other defined benefit postretirement plans. The disclosure requirements of SFAS 132R are generally effective for fiscal years ending after December 15, 2003. Disclosure of the estimated future benefit payments and certain information about foreign plans shall be effective for fiscal years ending after June 15, 2004. The interim-period disclosures required by this Statement were effective for interim periods beginning after December 15, 2003. Disclosures related to the estimated future benefit payments and foreign plans shall be incorporated into the footnotes to the Company’s 2004 financial statements. The adoption of SFAS 132R did not have a material impact on the Company’s financial position, results of operations or cash flows.

      The Company has a number of defined benefit pension and postretirement plans covering eligible U.S. and non-U.S. employees. The defined benefit pension plans are noncontributory. The benefits under these plans are based primarily on years of service and employees’ pay near retirement. The Company’s funding policy for U.S. plans is to contribute annually, at a minimum, amounts required by applicable laws and regulations. Obligations under non-U.S. plans are systematically provided for by depositing funds with trustees or by book reserves.

      The parent company and certain subsidiaries provide medical, dental and life insurance benefits to pensioners and survivors. The associated plans are unfunded and approved claims are paid from company funds.

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Note 2. New accounting standards — (continued)

      Net benefit cost of defined benefit plans consists of the following:

      The Company previously disclosed in its consolidated financial statements for the year ended December 28, 2003 that it expected to contribute $5,000 to its U.S. pension plans. Due to changes in current expected actuarial returns and current funding estimates, through September 26, 2004 the Company has contributed $8,700 to fund its U.S. pension plans. The Company has completed the funding of its U.S. pension plans for 2004. The Company anticipates contributing approximately $2,000 for its non-domestic pension plans.

      Medicare prescription drug costs. In April 2004, the FASB issued Staff Position FAS 106-2 to address the accounting and disclosure requirements related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003. The adoption of this provision had no material impact on the Company’s financial position, results of operations, or cash flows.

      American Jobs Creation Act. On October 22, 2004 President Bush signed the American Jobs Creation Act of 2004 (the Act) into law. The Act includes provisions that may materially affect the Company’s accounting for income taxes including a possible increase in its effective tax rate and changes in its deferred assets and liabilities. The Company is assessing the impact of the Act.

      Inventories consisted of the following:

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Note 4. Goodwill and intangible assets

      Changes in the carrying amount of goodwill for the nine months ended September 26, 2004, by operating segment, are as follows:

      Goodwill adjustments primarily represent final adjustments to the purchase price allocation for acquisitions completed within the last twelve months.

      The following table reflects the components of intangible assets:

      Amortization expense related to intangible assets was $4,160 and $9,531 for the three and nine months ended September 26, 2004. Amortization expense related to the above carrying amounts is estimated to be $13,855 in 2004, $15,590 in 2005, $14,651 in 2006, $13,852 in 2007 and $13,792 in 2008.

Note 5. Borrowings

      During the quarter, the Company issued $350,000 in Senior Notes at rates ranging from 5.23% to 5.85% fixed over the term of the notes. The borrowing consists of $150,000 of seven-year notes, $100,000 of ten-year notes, and $100,000 of twelve-year notes. Interest is to be paid semiannually. The notes were financed through a group of 23 financial institutions. Proceeds were used primarily to fund the Hudson acquisition.

      In addition, the Company completed a $400,000 five-year syndicated revolving credit facility. The credit facility is available at several interest rates options. The Company expects to draw upon the revolving credit facility to refinance existing loans and to retire callable debt of Hudson.

Note 6. Earnings per share

      Basic earnings per share are computed by dividing net income by the average number of common shares outstanding during the period. Diluted earnings per share are computed in the same manner except that the weighted average number of shares is increased for dilutive securities. The difference between basic and

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diluted weighted average common shares results from the assumption that dilutive stock options were exercised. A reconciliation of basic to diluted weighted average shares outstanding is as follows:

      Weighted average stock options of 1,199 and 447 were antidilutive and were therefore not included in the calculation of earnings per share for the three months ended September 26, 2004 and September 28, 2003, respectively. Weighted average antidilutive stock options were 773 and 886 for the nine months ended September 26, 2004 and September 28, 2003, respectively.

      At September 26, 2004, 4,720 shares were reserved for issuance under the Company’s stock compensation plans.

      On July 6, 2004, the Company completed the acquisition of all of the issued and outstanding capital stock of Hudson Respiratory Care Inc. (Hudson), a provider of disposable medical products for respiratory care and anesthesia, for approximately $458,000 subject to adjustment. The results for Hudson are included in the Company’s Medical Segment.

      The acquisition has been accounted for using the purchase method of accounting in accordance with SFAS 141, “Business Combinations.” The following table presents the preliminary allocation of purchase price for the Hudson acquisition based on estimated fair values:

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Note 8.	Acquisitions — (continued)

      The amount allocated to goodwill is reflective of the benefit the Company expects to realize from expanding its presence in the health care supply market through Hudson and from expected synergies. Of the $129,400 in intangible assets, $54,000 was assigned to intangibles with estimated remaining amortizable lives of 10 years and $900 was assigned to intangibles with estimated remaining amortizable lives of 11.5 years. The remaining $74,500 was assigned to indefinite-lived intangibles other than goodwill. The deferred tax asset is a result of Hudson’s net operating loss carryforward and a difference in tax basis prior to acquisition. The Company is in the process of completing third party valuations of certain tangible and intangible assets acquired with the new business. Therefore, the allocation of purchase price to this acquisition is subject to revision.

      The following table provides pro forma results of operations for the periods noted below, as if the acquisition had been made as of the beginning of the period. The pro forma amounts are not necessarily indicative of the results that would have occurred if the acquisition had been completed at that time.

      The pro forma results of operations for the nine months ended September 26, 2004 include $25,686 of expenses, or $0.63 per share, incurred by Hudson in contemplation of the transaction. These expenses include bonus and stock option settlement expenses, professional fees, broker fees and insurance costs.

      In connection with this acquisition, the Company has formulated a plan related to the future integration of the acquired entity. The integration activities began during the due diligence process and continue for twelve months after the acquisition. The Company has accrued estimates for certain costs, related primarily to personnel reductions and facility closings and the termination of certain distribution agreements at the date of acquisition, in accordance with Emerging Issues Task Force Issue 95-3, “Recognition of Liabilities in Connection with a Purchase Business Combination.” The amount accrued for these future integration costs is $23,422. Set forth below is detail of integration costs:

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Note 8.	Acquisitions — (continued)

      Adjustments to these estimates can be made up to 12 months from the acquisition date as plans are executed. To the extent these expected amounts are not utilized for the intended purpose, the difference would be recorded as a reduction of the purchase price by reducing recorded goodwill. Costs in excess of the accrual would be expensed as incurred.

Note 9. Commitments and contingent liabilities

      Product warranty liability. The Company warrants to the original purchaser of certain of its products that it will, at its option, repair or replace, without charge, such products if they fail due to a manufacturing defect. Warranty periods vary by product. The Company has recourse provisions for certain products that would enable recovery from third parties for amounts paid under the warranty. The Company accrues for product warranties when, based on available information, it is probable that customers will make claims under warranties relating to products that have been sold, and a reasonable estimate of the costs (based on historical claims experience relative to sales) can be made. Set forth below is a reconciliation of the Company’s estimated product warranty liability for the nine months ended September 26, 2004:

      Operating leases. The Company uses various leased facilities and equipment in its operations. The terms for these leased assets vary depending on the lease agreement. The Company also has synthetic lease programs that are used primarily for plant and equipment. In connection with the synthetic and other leases, the Company has residual value guarantees in the amount of $19,959 at September 26, 2004. The Company’s future payments cannot exceed the minimum rent obligation plus the residual value guarantee amount. The guarantee amounts are tied to the unamortized lease values of the assets under synthetic lease and are due should the Company decide neither to renew these leases, nor to exercise its purchase options. At September 26, 2004, the Company had no liabilities recorded for these obligations. Any residual value guarantee amounts paid to the lessor may be recovered by the Company from the sale of the assets to a third party.

      Accounts receivable securitization program. The Company uses an accounts receivable securitization program to gain access to enhanced credit markets and reduce financing costs. As currently structured, the Company sells certain trade receivables on a non-recourse basis to a consolidated company, which in turn sells an interest in those receivables to a commercial paper conduit. The conduit issues notes secured by that interest to third party investors. These notes are secured by a 364-day liquidity facility provided by a bank. At September 26, 2004, $69,983 was recorded in demand loans under this program.

      Environmental. The Company is also subject to contingencies pursuant to environmental laws and regulations that in the future may require the Company to take further action to correct the effects on the environment of prior disposal practices or releases of chemical or petroleum substances by the Company or other parties. Much of this liability results from the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, often referred to as Superfund), the Resource Conservation and Recovery Act (RCRA), and similar state laws. These laws require the Company to undertake certain investigative and

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Note 9.         Commitments and contingent liabilities — (continued)

remedial activities at sites where the Company conducts or once conducted operations or at sites where company-generated waste was disposed.

      Remediation activities vary substantially in duration and cost from site to site. These activities, and their associated costs, depend on the mix of unique site characteristics, evolving remediation technologies, diverse regulatory agencies and enforcement policies, as well as the presence or absence of potentially responsible parties. At September 26, 2004, the Company’s consolidated balance sheet included an accrued liability of $4,455 relating to these matters. Considerable uncertainty exists with respect to these costs and, under adverse changes in circumstances, potential liability may exceed the amount accrued as of September 26, 2004. The time frame over which the accrued or presently unrecognized amounts may be paid out, based on past history, is estimated to be 15-20 years.

      Litigation. The Company is a party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims include actions involving product liability contracts, intellectual property, employment practices and environmental matters. The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the final outcome of these lawsuits and claims in the opinion of company counsel. However, while the ultimate liabilities resulting from such lawsuits and claims may be significant to results of operations in the period recognized, management does not anticipate they will have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity.

      On February 13, 2004, the Company was notified that a jury sitting in the Federal District Court for the Northern District of Georgia had rendered a verdict against one of its subsidiaries, Rüsch, Inc., in a trademark infringement case in the amount of $2,600 as “reasonable royalty” and an additional $32,200 as “unjust enrichment.” Judgment was not entered on the verdict, and the trial judge held a hearing on February 25, 2004 on the issue of what judgment would be entered by the court. The judge reserved judgment at that hearing pending further briefing by the parties. Under applicable Federal trademark law, the trial judge has the discretion to determine whether and in what amount an award for unjust enrichment should be made. As of the filing date of the Company’s September 26, 2004 Form 10-Q, no judgment had been entered on this matter.

      Rüsch, Inc., a manufacturer of health care supply products, is a co-defendant in this case with Medical Marketing Group, Inc. (MMG). This case involves a common law trademark claim arising under 1988 and 1997 contracts between MMG and the plaintiff, which were terminated in 1999. Rüsch, Inc. acquired the business of MMG in February 2000. In connection with the acquisition, the Company escrowed a portion of the purchase price, the balance of which approximates the reasonable royalty found by the jury.

      The Company cannot predict when judgment will be entered in this case, nor predict what amount, if any, may be awarded for unjust enrichment. Accordingly, other than the amount provided in the escrow noted above, no accrual has been recorded in the accompanying consolidated financial statements.

      Other. The Company has various purchase commitments for materials, supplies, and items of permanent investment incident to the ordinary conduct of business. In the aggregate, such commitments are not at prices in excess of current market. In addition, in the normal course of business the Company periodically enters into agreements that incorporate indemnification provisions. While the amount to which the Company may be liable under such agreements cannot be estimated, it is the opinion of management that any potential indemnification is not expected to have a material adverse effect on the consolidated financial position, results of operations or liquidity.

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      During the third quarter of 2004, the Company sold two non-strategic businesses, which represented nearly $5,000 in annual revenues. The divestitures included a non-core component of an automotive business in the Commercial Segment and assets of a business which manufactured and repaired components for industrial gas turbines. These divestitures resulted in a pre-tax loss of $563, or $0.01 per share after tax.

      During the second quarter of 2004, the Company sold three non-strategic businesses, which represented nearly $100,000 in annual revenues. The divestitures included a consumer marine electronics manufacturer, a mechanical cable manufacturer for the automotive industry, and a producer of stranded cable for industrial applications. All three businesses were part of the Company’s Commercial Segment. The divestitures resulted in a pre-tax gain of $5,083, or $0.07 per share after tax.