Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - TELEFLEX INC | c13186e8vk.htm |
Exhibit 99.1
| Contact: | Jake Elguicze Vice President Investor Relations 610-948-2836 |
| FOR IMMEDIATE RELEASE | February 24, 2011 |
TELEFLEX REPORTS FOURTH QUARTER AND FULL YEAR 2010 RESULTS
Full year 2010 revenue of $1.8 billion — up 2% as reported, up 3% constant currency
Full year 2010 diluted adjusted EPS from continuing operations of $3.93
Full year 2010 diluted GAAP EPS from continuing operations of $3.09
PROVIDES 2011 OUTLOOK
Limerick, PA — Teleflex Incorporated (NYSE: TFX), a global provider of medical technology products
that enable healthcare providers to improve patient outcomes, reduce infections and support patient
and provider safety, today announced financial results for the fourth quarter and year ended
December 31, 2010.
Fourth Quarter Financial Highlights and Business Segment Commentary
Fourth quarter 2010 net revenues were $493.2 million, a 1% increase over fourth quarter revenues of
2009. Revenues for the quarter increased 3% on a constant currency basis, offset by foreign
currency fluctuations that negatively impacted sales by 1%, and the deconsolidation of an entity
that negatively impacted sales 1%.
Fourth quarter 2010 GAAP income from continuing operations attributable to common shareholders was
$28.5 million, or $0.71 per diluted share, a decrease of 38% from the prior year quarter. On an
adjusted basis, as detailed in the reconciliation tables below, fourth quarter 2010 income from
continuing operations was $40.3 million, or $1.00 per diluted share, a 6% increase over the same
period in the prior year.
Fourth quarter 2010 GAAP net income attributable to common shareholders was $81.1 million compared
to $42.7 million in the prior year quarter. These results include income from discontinued
operations of $52.6 million in the fourth quarter of 2010, and a loss from discontinued operations
of $3.2 million in the prior year quarter.
“During the fourth quarter and the first weeks of 2011, we have continued to transition Teleflex
into a global pure-play medical technology leader,” said Benson Smith, Chairman, President & CEO.
“Throughout the year we completed several transactions enabling us to exit non-medical segments and
redeploy resources to our core medical business while reducing debt.”
Added Mr. Smith, “A key objective of our future growth and profitability strategy is to bring to
market products that address infection control and prevention. During the quarter, we launched our
anti-microbial ArrowEVOLUTION™ PICC with Chlorag+ard™ technology and were awarded four group
purchasing organization contract extensions for a combination of vascular access and surgical
products.”
“As we look ahead, our Board, management and employees are dedicated to further driving and
accelerating execution of our strategy. One key goal in 2011 is to increase our medical product
revenue growth rate for the full year, as compared to 2010. We will continue to pursue
opportunities to maximize the value to our shareholders of our non-core assets, and will heighten
our new product
development focus. Through the recent acquisition of VasoNova we will be incorporating a unique
central venous catheter navigation technology into the Teleflex product line as the year
progresses. In addition, we’ll be fine tuning our strategies in order to increase returns and
capitalize on our strengths in the marketplace,” concluded Mr. Smith.
Medical Segment
Medical Segment revenues in the fourth quarter of 2010 were $386.3 million as compared to $391.2
million in the prior year period. Revenue growth of 1% on a constant currency basis was offset by
an unfavorable currency impact of 1% and impact of the deconsolidation of an entity of 1%.
Constant currency revenue increases in urology, anesthesia, surgical, and specialty products sold
to medical OEM’s were offset by a decline in cardiac care sales. The decline in cardiac care sales
was due to the voluntary recall of the 5800 Series Intra-Aortic balloon catheters that was
announced in December of 2010.
Medical Segment sales by product group were comprised of the following:
| Three Months Ended | % Increase/ (Decrease) | |||||||||||||||||||
| December 31, | December 31, | Core | Currency/ | Total | ||||||||||||||||
| 2010 | 2009 | Growth | Other* | Change | ||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
Critical Care |
$ | 257.7 | $ | 258.8 | 2 | % | (2 | %) | 0 | % | ||||||||||
Surgical |
71.7 | 68.5 | 7 | % | (2 | %) | 5 | % | ||||||||||||
Cardiac Care |
16.1 | 19.2 | (15 | %) | (1 | %) | (16 | %) | ||||||||||||
OEM |
40.4 | 40.4 | 1 | % | (1 | %) | 0 | % | ||||||||||||
Other* |
0.4 | 4.3 | (73 | %) | (18 | %) | (91 | %) | ||||||||||||
Total net sales |
$ | 386.3 | $ | 391.2 | 1 | % | (2 | %) | (1 | %) | ||||||||||
| * | “Other” represents the impact of the deconsolidation of a variable interest entity as a result of the adoption of Accounting Standards Codification topic 810 “Consolidations.” |
Segment operating profit and margins in the fourth quarter of 2010 were $63.1 million, or
16.3%, compared to $82.2 million, or 21.0%, in the prior year quarter. Fourth quarter 2010
operating profit was impacted negatively by non-recurring costs associated with the recall of our
custom IV tubing product and certain intra-aortic balloon catheters and a factory shut down
associated with the custom IV tubing product.
In addition to the medical technology business, Teleflex also has niche businesses that serve
segments of the aerospace and commercial markets with specialty engineered products.
Aerospace Segment
Aerospace Segment revenues in the fourth quarter of 2010 increased 15% to $59.1 million from $51.6
million in the prior year period. Increases in sales of narrow-body cargo handling systems, cargo
containers and cargo spares and repair sales more than offset lower sales of wide-body cargo
handling systems, resulting in a 16% increase in core revenue during the quarter. This increase
was partly offset by an unfavorable currency impact of 1%.
Segment operating profit and margins in the fourth quarter of 2010 were $11.4 million, or 19.2%,
compared to $4.5 million, or 8.8%, in the prior year quarter.
Commercial Segment
Commercial Segment revenues in the fourth quarter of 2010 increased 10% to $47.7 million from $43.3
million in the same period last year. Core revenue growth of 10% was the result of increased
Marine OEM and aftermarket sales.
Segment operating profit and margins in the fourth quarter of 2010 were $2.3 million, or 4.9%,
compared to $3.0 million, or 7.0%, in the prior year quarter.
Balance Sheet Highlights
Cash and cash equivalents on hand at December 31, 2010 were $208.5 million compared to $188.3
million at December 31, 2009, up 11%.
Net accounts receivable at December 31, 2010 were $294.2 million compared to $265.3 million at
December 31, 2009, up 11%. Excluding the $39.7 million impact of the adoption of the amendment to
Accounting Standards Codification topic 860 “Transfers and Servicing” (“ASC 860”), net accounts
receivable declined 4%.
Net inventory at December 31, 2010 was $338.6 million compared to $360.8 million at December 31,
2009, a decline of 6%.
Net debt at December 31, 2010 was $708.7 million compared to $1,008.2 million at December 31, 2009,
a decline of 30%. Excluding the $29.7 million impact of ASC 860, net debt declined 33%.
“During the fourth quarter of 2010 we continued to improve our overall capital structure through
the prepayment of our 2004 senior notes,” stated Richard A. Meier, Executive Vice President and
Chief Financial Officer. “As a result of the capital markets transactions we completed during
2010, we have improved our ability to access additional capital to grow our core medical business
while keeping the company’s cost of capital relatively unchanged.”
2010 Financial Highlights
Net revenues for 2010 increased 2% to $1,801.7 million from $1,766.3 million in 2009. Revenues
increased 3% on a constant currency basis, while the deconsolidation of an entity accounted for a
1% decline in revenues.
GAAP income from continuing operations attributable to common shareholders for 2010 was $124.5
million, or $3.09 per diluted share, a decrease of 7% from 2009. On an adjusted basis, as detailed
in the reconciliation tables below, income from continuing operations for 2010 was $158.3 million,
or $3.93 per diluted share, an increase of 15% from 2009.
GAAP net income attributable to common shareholders for 2010 was $201.1 million compared to $303.0
million in 2009. These results included income from discontinued operations, net of tax of $76.5
million in 2010, and income from discontinued operations, net of tax of $169.3 million in 2009.
GAAP cash flow from continuing operations for 2010 was $206.6 million as compared to $172.2 million
in 2009. On an adjusted basis, as detailed in the reconciliation tables below, cash flow from
continuing operations for 2010 was $186.8 million as compared to $269.7 million in 2009. Cash flow
for 2010 was impacted by a $30 million pension contribution which the company elected to make in
the third quarter to further improve the quality of the balance sheet.
Prepayment of 2004 Senior Notes
On February 14, 2011, the company issued notice to the holders of the 2004 senior notes of its
election to prepay all of the $165.8 million in aggregate outstanding principal amount of the 2004
senior notes.
In connection with this prepayment election, on February 23, 2011, the company prepaid $101.8
million in aggregate principal amount of the 2004 senior notes. This consisted of $45.8 million of
6.66% senior notes due in 2011, $26.5 million of 7.14% senior notes due in 2014, and $29.5 million
of 7.46% senior notes due in 2016. The company used available cash and borrowings under its
revolving credit facility to prepay the notes, which included $9.1 million in accrued interest and
make whole premiums.
The remaining $64.0 million in aggregate principal amount will be prepaid on March 16, 2011,
together with the applicable accrued interest and make whole premiums. The company expects to use
further borrowings under its revolving credit facility and available cash to fund the prepayment of
the 2004 senior notes that remain outstanding.
Business Outlook for 2011
The company’s financial estimates for 2011 are as follows:
| • | Revenue between $1.81 billion and $1.84 billion |
| • | Adjusted cash earnings per share in the range of $4.95 to $5.15 |
| Low | High | |||||||
Diluted earnings per share attributable to common shareholders |
$ | 3.65 | $ | 3.85 | ||||
Special items, net of tax |
$ | 0.45 | $ | 0.45 | ||||
Diluted earnings per share excluding special items |
$ | 4.10 | $ | 4.30 | ||||
Intangible amortization expense, net of tax |
$ | 0.70 | $ | 0.70 | ||||
Amortization of debt discount on convertible notes, net of tax |
$ | 0.15 | $ | 0.15 | ||||
Adjusted cash earnings per share |
$ | 4.95 | $ | 5.15 | ||||
Longer-Term Growth and Profitability Objectives
With the portfolio transition to healthcare largely complete, we have increased our focus on
delivering long-term growth and profitability. As such, we are targeting the achievement of the
following objectives within the next five years:
| • | Consolidated annual organic revenue growth of approximately 5% |
| • | Consolidated gross margins of approximately 55% |
| • | Consolidated research and development expense of approximately 5% |
| • | Consolidated operating margins of approximately 25% |
We believe revenue growth will be achieved through the introduction of new products and product
line extensions, expansion of our geographic reach, leveraging our existing distribution channels,
further investment in our global sales and marketing groups and select acquisitions that enhance or
expedite our development initiatives and our ability to increase our market share. We anticipate
that margin expansion will be achieved through various initiatives which may include: consolidation
of distribution facilities; efficiencies gained from the reduction of third-party vendors;
consolidation and productivity improvements of manufacturing locations and customer service; and
further initiatives to realize increased efficiencies with respect to general and administrative
expenses. We expect that some of these benefits to be offset by increases in spending in research
and development.
Conference Call Webcast and Additional Information
As previously announced, Teleflex will comment on its fourth quarter and year-end 2010 results and
its 2011 Outlook on a conference call to be held today at 5:00 p.m. (ET). The call will be
available live and archived on the company’s website at www.teleflex.com and the
accompanying presentation will be posted prior to the call. An audio replay will be available
until March 1, 2011, 12:00pm (ET), by calling 888-286-8010 (U.S./Canada) or 617-801-6888
(International), Passcode: 84161006.
Additional Notes
Core revenue and growth include activity of a purchased company beyond the initial twelve months
after the date of acquisition. Core revenue and growth exclude the impact of translating the
results of international subsidiaries at different currency exchange rates from period to period,
and the activity of companies that have been divested within the most recent twelve month period.
Certain financial information is presented on a rounded basis, which may cause minor differences.
Segment operating profit includes a segment’s net revenues reduced by its materials, labor and
other product costs along with the segment’s research and development, selling, general and
administrative expenses and non-controlling interest. Unallocated corporate expenses, gains or
losses on sales of assets, restructuring and impairment charges, interest income and expense and
taxes on income are excluded from the measure.
Segment results and commentary exclude the impact of discontinued operations, items included in
restructuring and impairment charges, and losses and other charges set forth in the condensed
consolidated statements of income.
Notes on Non-GAAP Financial Measures
This press release includes financial measures which exclude the effect of charges associated with
our restructuring programs and asset impairments, losses and other charges related to refinancing
transactions, factory shut down costs, charges related to the Arrow acquisition, certain tax
adjustments, (gain)/loss on sale of assets and other charges, the impact of changes in accounting
rules, an income tax refund related to gains on a business divestiture, and intangible amortization
expense. Adjusted cash earnings per share from continuing operations is defined as adjusted
earnings per share from continuing operations plus intangible amortization expense and the
amortization of debt discount on convertible notes. Management believes these measures are useful
to investors because they eliminate items that do not reflect Teleflex’s day-to-day operations. In
addition, management uses these financial measures for internal managerial purposes, when publicly
providing guidance on possible future results, and to assist in our evaluation of period-to-period
comparisons. These financial measures are presented in addition to results presented in accordance
with GAAP and should not be relied upon as a substitute for GAAP financial measures. Tables
reconciling these non-GAAP measures to the most directly comparable GAAP measures are set forth
below.
Fourth Quarter and Full Year Reconciliation of Income from Continuing Operations
| Three Months | Three Months | Twelve Months | Twelve Months | |||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||
| Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2010 | Dec. 31, 2009 | |||||||||||||
| (Dollars in thousands, except per share) | ||||||||||||||||
Income and diluted earnings per share attributable
to common shareholders |
$ | 28,513 | $ | 45,885 | $ | 124,545 | $ | 133,692 | ||||||||
| $ | 0.71 | $ | 1.15 | $ | 3.09 | $ | 3.35 | |||||||||
Restructuring and impairment charges |
1,196 | 1,644 | 2,875 | 18,472 | ||||||||||||
Tax benefit |
(360 | ) | (349 | ) | (1,012 | ) | (3,266 | ) | ||||||||
Restructuring and impairment charges, net of tax |
836 | 1,295 | 1,863 | 15,206 | ||||||||||||
| $ | 0.02 | $ | 0.03 | $ | 0.05 | $ | 0.38 | |||||||||
Losses and other charges (A) |
22,048 | 703 | 54,790 | 5,052 | ||||||||||||
Tax benefit |
(8,126 | ) | (261 | ) | (19,992 | ) | (1,871 | ) | ||||||||
Losses and other charges net of tax |
13,922 | 442 | 34,798 | 3,181 | ||||||||||||
| $ | 0.35 | $ | 0.01 | $ | 0.86 | $ | 0.08 | |||||||||
Tax adjustments (B) |
(2,939 | ) | (9,404 | ) | (2,939 | ) | (14,802 | ) | ||||||||
| $ | (0.07 | ) | $ | (0.24 | ) | $ | (0.07 | ) | $ | (0.37 | ) | |||||
Income and diluted earnings per share excluding
restructuring and impairment charges, losses and other
charges, and tax adjustments |
$ | 40,332 | $ | 38,218 | $ | 158,267 | $ | 137,277 | ||||||||
| $ | 1.00 | $ | 0.96 | $ | 3.93 | $ | 3.44 | |||||||||
Amortization of debt discount on convertible notes, net |
1,465 | — | 2,444 | — | ||||||||||||
| $ | 0.04 | — | $ | 0.06 | — | |||||||||||
Intangible amortization expense, net |
6,883 | 7,528 | 27,822 | 28,131 | ||||||||||||
| $ | 0.17 | $ | 0.19 | $ | 0.69 | $ | 0.70 | |||||||||
Cash income and diluted earnings per share excluding
restructuring and impairment charges, losses and other
changes, and tax adjustments |
$ | 48,680 | $ | 45,746 | $ | 188,533 | $ | 165,408 | ||||||||
| $ | 1.21 | $ | 1.14 | $ | 4.68 | $ | 4.14 | |||||||||
| (A) | In 2010, losses and other charges principally related to the prepayment of Teleflex’s outstanding senior notes issued in 2004 and 2007, and related transaction fees and expenses; factory shut down costs associated with the custom IV tubing product. In 2009, losses and other charges principally related to the loss on sale of assets and restructuring related costs associated with the Arrow acquisition. | |
| (B) | The tax adjustments represents a benefit from the net reduction in income tax reserves and discrete tax benefits related primarily to the resolution of various uncertain tax provisions; the settlement of tax audits; and other adjustments to taxes recorded with respect to prior years, principally resulting from changes to tax law and adjustments to previously filed income tax returns. |
Full Year Reconciliation of Cash Flow from Operations
| Twelve Months Ended | Twelve Months Ended | |||||||
| Dec. 31, 2010 | Dec. 31, 2009 | |||||||
| (Dollars in thousands) | ||||||||
Cash flow from operations as reported |
$ | 206,585 | $ | 172,189 | ||||
Add: Impact of the adoption of the amendment to
Accounting Standards Codification topic 860
“Transfers and Servicing” |
39,700 | — | ||||||
Add: Tax payments on gain on sale of ATI business |
— | 97,536 | ||||||
Less: Tax refund on sale of ATI business |
59,499 | — | ||||||
Adjusted cash flow from operations |
$ | 186,786 | $ | 269,725 | ||||
Net Debt Reconciliation
| Twelve Months Ended | Twelve Months Ended | |||||||
| Dec. 31, 2010 | Dec. 31, 2009 | |||||||
| (Dollars in thousands) | ||||||||
Note payable and current portion
of long-term borrowings |
$ | 103,711 | $ | 4,008 | ||||
Long term borrowings |
813,409 | 1,192,491 | ||||||
Total debt |
917,120 | 1,196,499 | ||||||
Less: cash and cash equivalents |
208,452 | 188,305 | ||||||
Net Debt |
$ | 708,668 | $ | 1,008,194 | ||||
About Teleflex Incorporated
Teleflex is a global provider of medical technology products that enable healthcare providers to
improve patient outcomes, reduce infections and support patient and provider safety. Teleflex,
which employs approximately 12,500 people worldwide, also has niche businesses that serve segments
of the aerospace and commercial markets with specialty engineered products. Additional information
about Teleflex can be obtained from the company’s website at www.teleflex.com.
Caution Concerning Forward-looking Information
This press release contains forward-looking statements, including, but not limited to, statements
relating to our intentions to increase our medical product revenue growth rate for the full year,
as compared to 2010; the heightening of our focus on new product development; the incorporation of
VasoNova’s technology into the Teleflex product line; efforts to increase returns and capitalize on
our strengths in the marketplace; forecasted 2011 total revenue; adjusted total cash earnings per
share; our longer-term growth and profitability objectives with respect to consolidated annual
organic revenue growth, consolidated gross margins, consolidated research and development expense
and consolidated operating margins; our expectations that revenue growth will be achieved through
the introduction of new products and product line extensions, expansion of our geographic reach,
leveraging our existing distribution channels, further investment in our global sales and marketing
groups and select acquisitions that enhance or expedite our development initiatives and our ability
to increase our market share; our anticipation that margin expansion will be achieved through
various
initiatives which may include: consolidation of distribution facilities; efficiencies gained from
the reduction of third-party vendors; consolidation and productivity improvements of manufacturing
locations and customer service; and further initiatives to realize increased efficiencies with
respect to general and administrative expenses; and our expectation that increased spending in
research and development will offset some of the benefits we expect to achieve. Actual results
could differ materially from those in the forward-looking statements due to, among other things,
conditions in the end markets we serve, customer reaction to new products and programs, our ability
to achieve sales growth, price increases or cost reductions; changes in the reimbursement practices
of third party payors; our ability to realize efficiencies and to execute on our strategic
initiatives; changes in material costs and surcharges; market acceptance and unanticipated
difficulties in connection with the introduction of new products and product line extensions;
product recalls; unanticipated difficulties in connection with the consolidation of manufacturing
and administrative functions; unanticipated difficulties, expenditures and delays in complying with
government regulations applicable to our businesses, including unanticipated costs and difficulties
in connection with the resolution of issues related to the FDA corporate warning letter issued to
Arrow; the impact of government healthcare reform legislation; our ability to meet our debt
obligations; changes in general and international economic conditions; and other factors described
in our filings with the Securities and Exchange Commission, including our Annual Report on Form
10-K.
###
TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| Three Months Ended | ||||||||
| December 31, | December 31, | |||||||
| 2010 | 2009 | |||||||
| (Dollars and shares in thousands, | ||||||||
| except per share) | ||||||||
Net revenues |
$ | 493,158 | $ | 486,171 | ||||
Cost of goods sold |
284,415 | 277,368 | ||||||
Gross profit |
208,743 | 208,803 | ||||||
Selling, general and administrative expenses |
131,547 | 119,913 | ||||||
Research and development expenses |
12,451 | 11,271 | ||||||
Restructuring and other impairment charges |
1,196 | 1,645 | ||||||
Net gain on sales of businesses and assets |
(158 | ) | — | |||||
Income from continuing operations before interest, loss on
extinguishments of debt and taxes |
63,707 | 75,974 | ||||||
Interest expense |
21,321 | 20,993 | ||||||
Interest income |
(224 | ) | (634 | ) | ||||
Loss on extinguishments of debt |
16,276 | — | ||||||
Income from continuing operations before taxes |
26,334 | 55,615 | ||||||
(Benefit) taxes on income from continuing operations |
(2,537 | ) | 9,416 | |||||
Income from continuing operations |
28,871 | 46,199 | ||||||
Operating loss from discontinued operations |
78,164 | 3,314 | ||||||
Taxes on income from discontinued operations |
25,599 | 6,498 | ||||||
Income (loss) from discontinued operations |
52,565 | (3,184 | ) | |||||
Net income |
81,436 | 43,015 | ||||||
Less: Net income attributable to noncontrolling interest |
358 | 314 | ||||||
Net income attributable to common shareholders |
$ | 81,078 | $ | 42,701 | ||||
Earnings per share available to common shareholders: |
||||||||
Basic: |
||||||||
Income from continuing operations |
$ | 0.71 | $ | 1.15 | ||||
Income (loss) from discontinued operations |
$ | 1.31 | $ | (0.08 | ) | |||
Net income |
$ | 2.03 | $ | 1.07 | ||||
Diluted: |
||||||||
Income from continuing operations |
$ | 0.71 | $ | 1.15 | ||||
Income (loss) from discontinued operations |
$ | 1.30 | $ | (0.08 | ) | |||
Net income |
$ | 2.01 | $ | 1.07 | ||||
Dividends per share |
$ | 0.34 | $ | 0.34 | ||||
Weighted average common shares outstanding: |
||||||||
Basic |
39,987 | 39,740 | ||||||
Diluted |
40,313 | 40,013 | ||||||
Amounts attributable to common shareholders: |
||||||||
Income from continuing operations, net of tax |
$ | 28,513 | $ | 45,885 | ||||
Income (loss) from discontinued operations, net of tax |
52,565 | (3,184 | ) | |||||
Net income |
$ | 81,078 | $ | 42,701 | ||||
TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| Twelve Months Ended | ||||||||
| December 31, | December 31, | |||||||
| 2010 | 2009 | |||||||
| (Dollars and shares in | ||||||||
| thousands, | ||||||||
| except per share) | ||||||||
Net revenues |
$ | 1,801,705 | $ | 1,766,329 | ||||
Cost of goods sold |
1,007,636 | 994,179 | ||||||
Gross profit |
794,069 | 772,150 | ||||||
Selling, general and administrative expenses |
475,321 | 454,233 | ||||||
Research and development expenses |
42,621 | 36,685 | ||||||
Goodwill impairment |
— | 6,728 | ||||||
Restructuring and other impairment charges |
2,875 | 15,057 | ||||||
Net (gain) loss on sales of businesses and assets |
(341 | ) | 2,597 | |||||
Income from continuing operations before interest, loss on extinguishments of
debt and taxes |
273,593 | 256,850 | ||||||
Interest expense |
80,031 | 89,463 | ||||||
Interest income |
(861 | ) | (2,535 | ) | ||||
Loss on extinguishments of debt |
46,630 | — | ||||||
Income from continuing operations before taxes |
147,793 | 169,922 | ||||||
Taxes on income from continuing operations |
21,887 | 35,073 | ||||||
Income from continuing operations |
125,906 | 134,849 | ||||||
Operating income from discontinued operations (including gain on disposal of
$114,702 in 2010 and $272,307 in 2009) |
125,626 | 282,146 | ||||||
Taxes on income from discontinued operations |
49,077 | 102,984 | ||||||
Income from discontinued operations |
76,549 | 179,162 | ||||||
Net income |
202,455 | 314,011 | ||||||
Less: Net income attributable to noncontrolling interest |
1,361 | 1,157 | ||||||
Income from discontinued operations attributable to noncontrolling interest |
— | 9,860 | ||||||
Net income attributable to common shareholders |
$ | 201,094 | $ | 302,994 | ||||
Earnings per share available to common shareholders: |
||||||||
Basic: |
||||||||
Income from continuing operations |
$ | 3.12 | $ | 3.37 | ||||
Income from discontinued operations |
$ | 1.92 | $ | 4.26 | ||||
Net income |
$ | 5.04 | $ | 7.63 | ||||
Diluted: |
||||||||
Income from continuing operations |
$ | 3.09 | $ | 3.35 | ||||
Income from discontinued operations |
$ | 1.90 | $ | 4.24 | ||||
Net income |
$ | 4.99 | $ | 7.59 | ||||
Dividends per share |
$ | 1.36 | $ | 1.36 | ||||
Weighted average common shares outstanding: |
||||||||
Basic |
39,906 | 39,718 | ||||||
Diluted |
40,280 | 39,936 | ||||||
Amounts attributable to common shareholders: |
||||||||
Income from continuing operations, net of tax |
$ | 124,545 | $ | 133,692 | ||||
Income from discontinued operations, net of tax |
76,549 | 169,302 | ||||||
Net income |
$ | 201,094 | $ | 302,994 | ||||
TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, | December 31, | |||||||
| 2010 | 2009 | |||||||
| (Dollars in thousands) | ||||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 208,452 | $ | 188,305 | ||||
Accounts receivable, net |
294,196 | 265,305 | ||||||
Inventories, net |
338,598 | 360,843 | ||||||
Prepaid expenses and other current assets |
28,831 | 21,872 | ||||||
Income taxes receivable |
3,888 | 100,733 | ||||||
Deferred tax assets |
39,309 | 58,010 | ||||||
Assets held for sale |
7,959 | 8,866 | ||||||
Total current assets |
921,233 | 1,003,934 | ||||||
Property, plant and equipment, net |
287,705 | 317,499 | ||||||
Goodwill |
1,442,411 | 1,459,441 | ||||||
Intangibles assets, net |
918,522 | 971,576 | ||||||
Investments in affiliates |
4,899 | 12,089 | ||||||
Deferred tax assets |
358 | 336 | ||||||
Other assets |
68,027 | 74,130 | ||||||
Total assets |
$ | 3,643,155 | $ | 3,839,005 | ||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities |
||||||||
Notes payable |
$ | 31,211 | $ | 3,997 | ||||
Current portion of long-term debt |
72,500 | 11 | ||||||
Accounts payable |
84,846 | 94,983 | ||||||
Accrued expenses |
117,488 | 97,274 | ||||||
Payroll and benefit-related liabilities |
71,418 | 70,537 | ||||||
Derivative liabilities |
15,634 | 16,709 | ||||||
Accrued interest |
18,347 | 22,901 | ||||||
Income taxes payable |
4,886 | 30,695 | ||||||
Deferred tax liabilities |
4,433 | — | ||||||
Total current liabilities |
420,763 | 337,107 | ||||||
Long-term borrowings |
813,409 | 1,192,491 | ||||||
Deferred tax liabilities |
370,819 | 398,923 | ||||||
Pension and postretirement benefit liabilities |
141,769 | 164,726 | ||||||
Noncurrent liability for uncertain tax positions |
62,602 | 109,912 | ||||||
Other liabilities |
46,515 | 50,772 | ||||||
Total liabilities |
1,855,877 | 2,253,931 | ||||||
Commitments and contingencies |
||||||||
Common shareholders’ equity |
||||||||
Common shares, $1 par value Issued: 2010 —
42,245 shares; 2009 — 42,033 shares |
42,245 | 42,033 | ||||||
Additional paid-in capital |
349,156 | 277,050 | ||||||
Retained earnings |
1,578,913 | 1,431,878 | ||||||
Accumulated other comprehensive income (loss) |
(51,880 | ) | (34,120 | ) | ||||
| 1,918,434 | 1,716,841 | |||||||
Less: Treasury stock, at cost |
135,058 | 136,600 | ||||||
Total common shareholders’ equity |
1,783,376 | 1,580,241 | ||||||
Noncontrolling interest |
3,902 | 4,833 | ||||||
Total equity |
1,787,278 | 1,585,074 | ||||||
Total liabilities and equity |
$ | 3,643,155 | $ | 3,839,005 | ||||
TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Twelve Months Ended | ||||||||
| December 31, | December 31, | |||||||
| 2010 | 2009 | |||||||
| (Dollars in thousands) | ||||||||
Cash Flows from Operating Activities of Continuing Operations: |
||||||||
Net income |
$ | 202,455 | $ | 314,011 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Income from discontinued operations |
(76,549 | ) | (179,162 | ) | ||||
Depreciation expense |
48,372 | 53,631 | ||||||
Amortization expense of intangible assets |
43,817 | 44,197 | ||||||
Amortization expense of deferred financing costs |
7,750 | 5,511 | ||||||
Loss on extinguishments of debt |
46,630 | — | ||||||
Gain on call options and warrants |
(407 | ) | — | |||||
Debt modification costs |
2,843 | — | ||||||
Stock-based compensation |
9,621 | 8,789 | ||||||
Net (gain) loss on sales of businesses and assets |
(341 | ) | 2,597 | |||||
Impairment of long-lived assets |
— | 5,788 | ||||||
Impairment of goodwill |
— | 6,728 | ||||||
Deferred income taxes, net |
1,327 | 12,761 | ||||||
Other |
(26,456 | ) | 3,062 | |||||
Changes in operating assets and liabilities, net of effects of acquisitions and disposals: |
||||||||
Accounts receivable |
(56,296 | ) | 4,184 | |||||
Inventories |
(3,688 | ) | 28,229 | |||||
Prepaid expenses and other current assets |
(8,093 | ) | 170 | |||||
Accounts payable and accrued expenses |
(1,331 | ) | (21,249 | ) | ||||
Income taxes receivable and payable, net |
16,931 | (117,058 | ) | |||||
Net cash provided by operating activities from continuing operations |
206,585 | 172,189 | ||||||
Cash Flows from Investing Activities of Continuing Operations: |
||||||||
Expenditures for property, plant and equipment |
(33,537 | ) | (28,668 | ) | ||||
Payments for businesses and intangibles acquired, net of cash acquired |
(82 | ) | (643 | ) | ||||
Proceeds from sales of businesses and assets, net of cash sold |
181,550 | 314,513 | ||||||
Proceeds from (investments in) affiliates |
476 | — | ||||||
Net cash provided by investing activities from continuing operations |
148,407 | 285,202 | ||||||
Cash Flows from Financing Activities of Continuing Operations: |
||||||||
Proceeds from long-term borrowings |
490,000 | 10,018 | ||||||
Reduction in long-term borrowings |
(716,570 | ) | (357,608 | ) | ||||
Debt and equity issuance and amendment costs |
(65,226 | ) | — | |||||
Increase (decrease) in notes payable and current borrowings |
29,398 | (1,452 | ) | |||||
Proceeds from stock compensation plans |
10,657 | 1,553 | ||||||
Payments to noncontrolling interest shareholders |
(1,974 | ) | (702 | ) | ||||
Dividends |
(54,312 | ) | (54,022 | ) | ||||
Purchase of call options |
(88,000 | ) | — | |||||
Proceeds from sale of warrants |
59,400 | — | ||||||
Net cash used in financing activities from continuing operations |
(336,627 | ) | (402,213 | ) | ||||
Cash Flows from Discontinued Operations: |
||||||||
Net cash provided by operating activities |
6,517 | 31,982 | ||||||
Net cash used in investing activities |
(605 | ) | (4,001 | ) | ||||
Net cash used in financing activities |
— | (11,075 | ) | |||||
Net cash provided by discontinued operations |
5,912 | 16,906 | ||||||
Effect of exchange rate changes on cash and cash equivalents |
(4,130 | ) | 8,946 | |||||
Net increase (decrease) in cash and cash equivalents |
20,147 | 81,030 | ||||||
Cash and cash equivalents at the beginning of the year |
188,305 | 107,275 | ||||||
Cash and cash equivalents at the end of the year |
$ | 208,452 | $ | 188,305 | ||||
Information about continuing operations by business segment is as follows:
| Three Months Ended | ||||||||
| December 31, | December 31, | |||||||
| 2010 | 2009 | |||||||
| (Dollars in thousands) | ||||||||
Segment data: |
||||||||
Medical |
$ | 386,277 | $ | 391,246 | ||||
Aerospace |
59,134 | 51,644 | ||||||
Commercial |
47,747 | 43,281 | ||||||
Segment net revenues |
$ | 493,158 | $ | 486,171 | ||||
Medical |
$ | 63,133 | $ | 82,244 | ||||
Aerospace |
11,351 | 4,544 | ||||||
Commercial |
2,324 | 3,011 | ||||||
Segment operating profit |
76,808 | 89,799 | ||||||
Corporate expenses |
12,421 | 12,494 | ||||||
Restructuring and other impairment charges |
1,196 | 1,645 | ||||||
Net gain on sales of businesses and assets |
(158 | ) | — | |||||
Noncontrolling interest |
(358 | ) | (314 | ) | ||||
Income from continuing operations
before interest, loss
on extinguishments
of debt and taxes |
$ | 63,707 | $ | 75,974 | ||||
| Twelve Months Ended | ||||||||
| December 31, | December 31, | |||||||
| 2010 | 2009 | |||||||
| (Dollars in thousands) | ||||||||
Segment data: |
||||||||
Medical |
$ | 1,433,282 | $ | 1,434,885 | ||||
Aerospace |
173,518 | 163,318 | ||||||
Commercial |
194,905 | 168,126 | ||||||
Segment net revenues |
$ | 1,801,705 | $ | 1,766,329 | ||||
Medical |
$ | 276,145 | $ | 302,607 | ||||
Aerospace |
22,542 | 9,667 | ||||||
Commercial |
17,947 | 10,751 | ||||||
Segment operating profit |
316,634 | 323,025 | ||||||
Corporate expenses |
41,868 | 42,950 | ||||||
Goodwill impairment |
— | 6,728 | ||||||
Restructuring and other impairment charges |
2,875 | 15,057 | ||||||
Net (gain) loss on sales of businesses and assets |
(341 | ) | 2,597 | |||||
Noncontrolling interest |
(1,361 | ) | (1,157 | ) | ||||
Income from continuing operations before
interest, loss on extinguishments of debt and
taxes |
$ | 273,593 | $ | 256,850 | ||||