Attached files
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| 8-K - FORM 8-K - TELEFLEX INC | d265839d8k.htm |
Exhibit 99.1
TELEFLEX INCORPORATED AND SUBSIDIARIES
UNAUDITED PRO FORMA FINANCIAL INFORMATION
On December 2, 2011, Teleflex Incorporated (the “Company”) completed the sale of its business units that design, engineer and manufacture on-board baggage and cargo handling systems for widebody, narrowbody and regional aircraft and air cargo containers and pallets (collectively, the “Business”) to AAR International, Inc. an Illinois corporation (the “Buyer”), for a purchase price of $280.0 million in cash.
The cash portion of the purchase price is subject to possible upward or downward adjustment based on certain provisions in the Purchase Agreement relating to the working capital and indebtedness of the Business, measured as of the open of business on the closing date.
The foregoing description of the transaction is qualified in its entirety by reference to the full text of the Purchase Agreement, dated October 20, 2011, by and among the Company, the Buyer and AAR CORP, which was filed as Exhibit 2.1 to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission (“SEC”).
The Business, which was previously reported as the Aerospace Segment of the Company’s operations, meets the criteria for reporting as a discontinued operation.
The unaudited pro forma consolidated statements of income present the income statements as originally reported in the Current Report on Form 8-K filed with the SEC on June 1, 2011, which presented the cargo container business as a discontinued operation, and adjust the three years ended December 31, 2010 to eliminate the results of operations of the cargo systems business as if the disposition occurred January 1, 2008. In addition, the pro forma adjustments for the 2010 statement of income include entries to reduce interest expense as a reflection of using a portion of the proceeds from the sale of the Business as if such portion were used to prepay a portion of the outstanding principal amount of the Company’s senior notes issued in 2004 (the “2004 Senior Notes”) (which were prepaid in their entirety during the first quarter of 2011); these adjustments eliminate the amortization of deferred financing fees related to the 2004 Senior Notes and record the related tax effects for the adjustments. The pro forma adjustments for 2010 do not include an estimated $14.7 million pre-tax, non-recurring adjustment for the make whole fees on prepayment of the 2004 Senior Notes.
The unaudited pro forma consolidated financial statements described above should be read in conjunction with the historical financial statements of the Company and the related notes thereto. The unaudited pro forma information is not necessarily indicative of the financial position or results of operations that may have actually occurred had the transaction taken place on the dates noted, or the future financial position or operating results of the Company.
TELEFLEX INCORPORATED AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
| Year Ended December 31, 2010 | ||||||||||||||
| As Reported | Disposition | Pro Forma | ||||||||||||
| (Dollars and shares in thousands, except per share) | ||||||||||||||
| Net revenues |
$ | 1,561,319 | $ | (128,037 | ) | A | $ | 1,433,282 | ||||||
| Cost of goods sold |
828,897 | (84,086 | ) | A | 744,811 | |||||||||
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| Gross profit |
732,422 | (43,951 | ) | A | 688,471 | |||||||||
| Selling, general and administrative expenses |
431,104 | (21,180 | ) | A | 409,924 | |||||||||
| Research and development expenses |
42,621 | — | 42,621 | |||||||||||
| Restructuring and other impairment charges |
2,875 | — | 2,875 | |||||||||||
| Net gain on sales of businesses and assets |
(341 | ) | — | (341 | ) | |||||||||
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| Income from continuing operations before interest, loss on extinguishments of debt and taxes |
256,163 | (22,771 | ) | A | 233,392 | |||||||||
| Interest expense |
79,875 | (86 | ) | A | ||||||||||
| (13,766 | ) | B | 66,023 | |||||||||||
| Interest income |
(725 | ) | 6 | A | (719 | ) | ||||||||
| Loss on extinguishments of debt |
46,630 | — | 46,630 | |||||||||||
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| Income from continuing operations before taxes |
130,383 | (8,925 | ) | 121,458 | ||||||||||
| Taxes on income from continuing operations |
25,225 | (7,223 | ) | A | ||||||||||
| 5,008 | C |
23,010 | ||||||||||||
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| Income from continuing operations |
105,158 | (6,710 | ) | 98,448 | ||||||||||
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| Less: Net income attributable to noncontrolling interest |
1,361 | 500 | A | 861 | ||||||||||
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| Net income attributable to common shareholders from continuing operations |
$ | 103,797 | $ | (6,210 | ) | $ | 97,587 | |||||||
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| Earnings per share from continuing operations available to common shareholders: |
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| Basic |
$ | 2.60 | $ | (0.16 | ) | $ | 2.45 | |||||||
| Diluted |
$ | 2.58 | $ | (0.15 | ) | $ | 2.42 | |||||||
| Weighted average common shares outstanding: |
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| Basic |
39,906 | 39,906 | 39,906 | |||||||||||
| Diluted |
40,280 | 40,280 | 40,280 | |||||||||||
Notes to the December 31, 2010 Unaudited Pro Forma Consolidated Statements of Income
(Dollars in thousands)
| Note A | Reflects the elimination of the operations of the cargo systems business |
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| Note B | To remove the interest expense and the amortization of debt financing costs related to the prepayment of a portion of the 2004 Senior Notes from the proceeds on the sale of the Business | |||||
| Lower interest expense |
$ | 13,334 | ||||
| Lower amortization of debt issuance costs |
432 | |||||
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| Total interest expense |
$ | 13,766 | ||||
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| Note C | Reflects the tax effect on the adjustments to interest in Note B. |
$ | 5,008 | |||
The 2010 pro forma entries do not include an estimated $14.7 million pre-tax, non-recurring adjustment for the make whole fees on prepayment of the 2004 Senior Notes.
TELEFLEX INCORPORATED AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
| Year Ended December 31, 2009 | ||||||||||||||
| As Reported | Disposition | Pro Forma | ||||||||||||
| (Dollars and shares in thousands, except per share) | ||||||||||||||
| Net revenues |
$ | 1,559,348 | $ | (124,463 | ) | A | $ | 1,434,885 | ||||||
| Cost of goods sold |
838,135 | (88,791 | ) | A | 749,344 | |||||||||
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| Gross profit |
721,213 | (35,672 | ) | A | 685,541 | |||||||||
| Selling, general and administrative expenses |
410,140 | (21,859 | ) | A | 388,281 | |||||||||
| Research and development expenses |
36,685 | — | 36,685 | |||||||||||
| Restructuring and other impairment charges |
10,347 | — | 10,347 | |||||||||||
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| Income from continuing operations before interest and taxes |
264,041 | (13,813 | ) | A | 250,228 | |||||||||
| Interest expense |
89,250 | (107 | ) | A | 89,143 | |||||||||
| Interest income |
(2,484 | ) | 4 | A | (2,480 | ) | ||||||||
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| Income from continuing operations before taxes |
177,275 | (13,710 | ) | A | 163,565 | |||||||||
| Taxes on income from continuing operations |
40,683 | (3,707 | ) | A | 36,976 | |||||||||
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| Income from continuing operations |
136,592 | (10,003 | ) | A | 126,589 | |||||||||
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| Less: Net income attributable to noncontrolling interest |
1,157 | (525 | ) | A | 632 | |||||||||
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| Net income attributable to common shareholders from continuing operations |
$ | 135,435 | $ | (9,478 | ) | A | $ | 125,957 | ||||||
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| Earnings per share from continuing operations available to common shareholders: |
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| Basic |
$ | 3.41 | $ | (0.24 | ) | A | $ | 3.17 | ||||||
| Diluted |
$ | 3.39 | $ | (0.24 | ) | A | $ | 3.15 | ||||||
| Weighted average common shares outstanding: |
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| Basic |
39,718 | 39,718 | 39,718 | |||||||||||
| Diluted |
39,936 | 39,936 | 39,936 | |||||||||||
Notes to the December 31, 2009 Unaudited Pro Forma Consolidated Statements of Income
| Note A | Reflects the elimination of the operations of the cargo systems business. |
TELEFLEX INCORPORATED AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
| Year Ended December 31, 2008 | ||||||||||||||
| As Reported | Disposition | Pro Forma | ||||||||||||
| (Dollars and shares in thousands, except per share) | ||||||||||||||
| Net revenues |
$ | 1,625,073 | $ | (149,452 | ) | A | $ | 1,475,621 | ||||||
| Cost of goods sold |
886,076 | (105,907 | ) | A | 780,169 | |||||||||
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| Gross profit |
738,997 | (43,545 | ) | A | 695,452 | |||||||||
| Selling, general and administrative expenses |
455,412 | (26,224 | ) | A | 429,188 | |||||||||
| Research and development expenses |
32,598 | — | 32,598 | |||||||||||
| Restructuring and other impairment charges |
24,946 | — | 24,946 | |||||||||||
| Net gain on sales of businesses and assets |
(296 | ) | — | (296 | ) | |||||||||
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| Income from continuing operations before interest and taxes |
226,337 | (17,321 | ) | A | 209,016 | |||||||||
| Interest expense |
121,244 | (27 | ) | A | 121,217 | |||||||||
| Interest income |
(2,029 | ) | 52 | A | (1,977 | ) | ||||||||
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| Income from continuing operations before taxes |
107,122 | (17,346 | ) | A | 89,776 | |||||||||
| Taxes on income from continuing operations |
33,745 | (4,852 | ) | A | 28,893 | |||||||||
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| Income from continuing operations |
73,377 | (12,494 | ) | A | 60,883 | |||||||||
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| Less: Net income attributable to noncontrolling interest |
747 | (306 | ) | A | 441 | |||||||||
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| Net income attributable to common shareholders from continuing operations |
$ | 72,630 | $ | (12,188 | ) | A | $ | 60,442 | ||||||
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| Earnings per share from continuing operations available to common shareholders: |
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| Basic |
$ | 1.83 | $ | (0.31 | ) | A | $ | 1.53 | ||||||
| Diluted |
$ | 1.82 | $ | (0.31 | ) | A | $ | 1.52 | ||||||
| Weighted average common shares outstanding: |
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| Basic |
39,584 | 39,584 | 39,584 | |||||||||||
| Diluted |
39,832 | 39,832 | 39,832 | |||||||||||
Notes to the December 31, 2008 Unaudited Pro Forma Consolidated Statements of Income
| Note A | Reflects the elimination of the operations of the cargo systems business. |