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| 8-K - 8-K - TELEFLEX INC | a10-29x20148xkreq32014earn.htm |
Exhibit 99.1
Jake Elguicze Treasurer and Vice President of Investor Relations
610-948-2836
FOR IMMEDIATE RELEASE October 29, 2014
TELEFLEX REPORTS THIRD QUARTER 2014 RESULTS
Third Quarter Revenues of $457.2 million, up 10.5% over prior year period; up 10.2% on Constant Currency Basis
Third Quarter GAAP Diluted EPS of $1.18, up 12.4% over the prior year period; Adjusted Diluted EPS of $1.57 up 18.0%
2014 Guidance Range for Constant Currency Revenue Growth Increased from 7% to 9% to 7.5% to 9%
2014 Guidance Range for Adjusted Diluted EPS Increased from $5.45 to $5.60 to $5.60 to $5.70
Wayne, PA -- Teleflex Incorporated (NYSE: TFX) (the “Company”) today announced financial results for the third quarter ended September 28, 2014.
Third quarter 2014 net revenues were $457.2 million, an increase of 10.5% over the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 10.2% over the prior year period.
Third quarter 2014 GAAP diluted earnings per share from continuing operations were $1.18, as compared to $1.05 in the prior year period, an increase of 12.4%. Third quarter 2014 adjusted diluted earnings per share from continuing operations were $1.57, as compared to $1.33 in the prior year period, an increase of 18.0%.
“Building upon our performance in the first half of the year, Teleflex once again delivered double-digit constant currency revenue and adjusted earnings per share growth,” said Benson Smith, Chairman, President and Chief Executive Officer. “In addition, during the third quarter, the Company continued to expand operating margin and made progress in the initial phases of our facility restructuring initiatives.”
Added Mr. Smith, “Based on the Company’s performance during the first nine months of 2014, and our outlook for the fourth quarter, we are increasing our full year constant currency revenue growth guidance range from 7% to 9% to 7.5% to 9%, and increasing our full year adjusted diluted earnings per share guidance range from $5.45 to $5.60 to $5.60 to $5.70.”
THIRD QUARTER NET REVENUE BY SEGMENT
Vascular North America third quarter 2014 net revenues were $63.8 million, an increase of 15.9% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 16.1% compared to the prior year period. The increase in constant currency revenue was largely due to product sales resulting from our acquisition of Vidacare, higher sales volume of existing products and new product sales.
Anesthesia/Respiratory North America third quarter 2014 net revenues were $54.7 million, an increase of 1.6% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 1.8% compared to the prior year period. The increase in constant
currency revenue was largely due to new product sales and price increases, somewhat offset by lower sales volume of existing products.
Surgical North America third quarter 2014 net revenues were $36.1 million, an increase of 5.8% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 6.2% compared to the prior year period. The increase in constant currency revenue was largely due to higher sales volume of existing products and price increases.
EMEA third quarter 2014 net revenues were $141.2 million, an increase of 6.7% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 5.6% compared to the prior year period. The increase in constant currency revenue was largely due to Vidacare product sales, higher sales volume of existing products, new product sales and price increases.
Asia third quarter 2014 net revenues were $62.0 million, an increase of 12.3% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 11.8% compared to the prior year period. The increase in constant currency revenue was largely due to product sales resulting from the acquisitions of Mayo Healthcare and Vidacare, price increases and new product sales, somewhat offset by lower sales volume of existing products.
OEM and Development Services (“OEM”) third quarter 2014 net revenues were $39.2 million, an increase of 16.0% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 15.9% compared to the prior year period. The increase in constant currency revenue was largely due to higher sales volume of existing products and new product sales, somewhat offset by lower average selling prices.
Three Months Ended | % Increase/ (Decrease) | |||||||||||||
September 28, 2014 | September 29, 2013 | Constant Currency | Foreign Currency | Total Change | ||||||||||
(Dollars in millions) | ||||||||||||||
Vascular North America | $ | 63.8 | $ | 55.1 | 16.1 | % | (0.2% | ) | 15.9 | % | ||||
Anesthesia/Respiratory North America | 54.7 | 53.8 | 1.8 | % | (0.2% | ) | 1.6 | % | ||||||
Surgical North America | 36.1 | 34.1 | 6.2 | % | (0.4% | ) | 5.8 | % | ||||||
EMEA | 141.2 | 132.3 | 5.6 | % | 1.1 | % | 6.7 | % | ||||||
Asia | 62.0 | 55.3 | 11.8 | % | 0.5 | % | 12.3 | % | ||||||
OEM | 39.2 | 33.7 | 15.9 | % | 0.1 | % | 16.0 | % | ||||||
All Other | 60.2 | 49.4 | 22.3 | % | (0.6% | ) | 21.7 | % | ||||||
Total | $ | 457.2 | $ | 413.8 | 10.2 | % | 0.3 | % | 10.5 | % | ||||
OTHER FINANCIAL HIGHLIGHTS AND KEY PERFORMANCE METRICS
Depreciation expense and amortization of intangible assets and deferred financing costs for first nine months of 2014 were $96.3 million compared to $79.0 million for the prior year period.
Cash and cash equivalents at September 28, 2014 were $286.4 million compared to $432.0 million at December 31, 2013. The decline in cash and cash equivalents is primarily due to a $235 million repayment of a portion of the outstanding principal amount of borrowings under the revolving credit facility.
Net accounts receivable at September 28, 2014 were $287.2 million compared to $295.3 million at December 31, 2013.
Net inventories at September 28, 2014 were $353.2 million compared to $333.6 million at December 31, 2013.
Net debt obligations at September 28, 2014 were $818.3 million compared to $902.7 million at December 31, 2013.
2014 OUTLOOK
The Company increased its full year 2014 constant currency revenue growth guidance from a range of 7% to 9% to a range of 7.5% to 9%, and increased its full year 2014 adjusted diluted earnings per share guidance from a range of $5.45 to $5.60 to a range of $5.60 to $5.70.
FORECASTED 2014 CONSTANT CURRENCY REVENUE GROWTH RECONCILIATION
Low | High | |
Forecasted 2014 GAAP revenue growth | 7.5% | 9.0% |
Estimated impact of foreign currency fluctuations | — | — |
Forecasted 2014 constant currency revenue growth | 7.5% | 9.0% |
FORECASTED 2014 ADJUSTED EARNINGS PER SHARE RECONCILIATION
Low | High | |
Forecasted 2014 diluted earnings per share attributable to common shareholders | $3.83 | $3.88 |
Restructuring, impairment charges and special items, net of tax 1 | $0.65 | $0.70 |
Intangible amortization expense, net of tax | $0.95 | $0.95 |
Amortization of debt discount on convertible notes, net of tax | $0.17 | $0.17 |
Forecasted 2014 adjusted diluted earnings per share | $5.60 | $5.70 |
1= The reduction in restructuring, impairment charges and special items, net of tax reflects a shift in the estimated timing of certain restructuring costs from 2014 to 2015.
CONFERENCE CALL WEBCAST AND ADDITIONAL INFORMATION
As previously announced, Teleflex will comment on its financial results on a conference call to be held today at 8:00 a.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 November 5, 2014 at 11:59pm (ET), by calling 888-286-8010 (U.S./Canada) or 617-801-6888 (International), Passcode: 14097601.
ADDITIONAL NOTES
Constant currency revenue and growth exclude the impact of translating the results of international subsidiaries at different currency exchange rates from period to period.
Certain financial information is presented on a rounded basis, which may cause minor differences.
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 and in the Reconciliation of Consolidated Statement of Income Items set forth below.
NOTES ON NON-GAAP FINANCIAL MEASURES
This press release includes certain non-GAAP financial measures, which include:
Adjusted diluted earnings per share. This measure excludes, depending on the period presented (i) the effect of charges associated with our restructuring programs, as well as goodwill and other asset impairment charges; (ii) losses, other charges and charge reversals, including acquisition and integration costs, charges related to facility consolidations, reversal of liabilities related to certain contingent consideration arrangements, the establishment of a litigation reserve and a litigation verdict against the Company with respect to a non-operating joint venture and reversal of a reserve related to a previously announced stock keeping unit benefit program; (iii) amortization of the debt discount on the Company’s convertible notes; (iv) intangible amortization expense; (v) loss on extinguishment of debt; and (vi) tax benefits resulting from the resolution of, or expiration of the statute of limitations with respect to, prior years’ tax matters. In addition, the calculation of diluted shares within adjusted earnings per share gives effect to the anti-dilutive impact of the Company’s convertible note hedge agreements, which reduce the potential economic dilution that otherwise would occur upon conversion of the Company’s senior subordinated convertible notes (under GAAP, the anti-dilutive impact of the convertible note hedge agreements is not reflected in diluted shares).
Constant currency revenue. This measure excludes the impact of translating the results of international subsidiaries at different currency exchange rates from period to period.
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 believes that the calculation of non-GAAP diluted shares is useful to investors because it provides insight into the offsetting economic effect of the convertible note hedge against conversions of the convertible notes. 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 generally accepted accounting principles (“GAAP”) and should not be relied upon as a substitute for GAAP financial measures. Tables reconciling historical non-GAAP measures to the most directly comparable historical GAAP measures are set forth below. Tables reconciling forecasted non-GAAP measures to the most directly comparable forecasted GAAP measures are set forth above.
RECONCILIATION OF CONSOLIDATED STATEMENT OF INCOME ITEMS
Dollars in millions, except per share amounts
Quarter Ended – September 28, 2014 | |||||||||||||||||||||||||||||
Cost of goods sold | Selling, general and administrative expenses | Research and development expenses | Restructuring and other impairment charges | Interest expense, net | Loss on extinguish-ment of debt | Income taxes | Net income (loss) attributable to common shareholders from continuing operations | Diluted earnings per share available to common shareholders | Shares used in calculation of GAAP and adjusted earnings per share | ||||||||||||||||||||
GAAP Basis | $221.0 | $138.3 | $14.9 | $1.1 | $17.0 | — | $9.7 | $55.1 | $1.18 | 46,628 | |||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||||
Restructuring and other impairment charges | — | — | — | 1.1 | — | — | 0.1 | 1.0 | $0.02 | — | |||||||||||||||||||
Losses, other charges and reversals (A) | 1.9 | (0.90) | 0.0 | — | — | — | 1.1 | — | $0.00 | — | |||||||||||||||||||
Amortization of debt discount on convertible notes | — | — | — | — | 3.1 | — | 1.1 | 2.0 | $0.04 | — | |||||||||||||||||||
Intangible amortization expense | — | 15.0 | — | — | — | — | 4.0 | 11.0 | $0.24 | — | |||||||||||||||||||
Tax adjustment (B) | — | — | — | — | — | — | — | — | $0.00 | — | |||||||||||||||||||
Shares due to Teleflex under note hedge (C) | — | — | — | — | — | — | — | — | $0.09 | (2,799) | |||||||||||||||||||
Adjusted basis | $219.1 | $124.2 | $14.8 | — | $13.9 | — | $16.0 | $69.0 | $1.57 | 43,829 | |||||||||||||||||||
Quarter Ended – September 29, 2013 | |||||||||||||||||||||||||||||
Cost of goods sold | Selling, general and administrative expenses | Research and Development expenses | Restructuring and other impairment charges | Interest expense, net | Loss on extinguish-ment of debt | Income taxes | Net income (loss) attributable to common shareholders from continuing operations | Diluted earnings per share available to common shareholders | Shares used in calculation of GAAP and adjusted earnings per share | ||||||||||||||||||||
GAAP Basis | $209.8 | $115.2 | $15.6 | $7.1 | $13.8 | $1.3 | $5.2 | $45.5 | $1.05 | 43,264 | |||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||||
Restructuring and other impairment charges | — | — | — | 7.1 | — | — | 1.5 | 5.6 | $0.13 | — | |||||||||||||||||||
Losses, other charges and reversals (A) | 1.8 | (3.30) | — | — | — | — | 0.9 | (2.30) | ($0.050 | ) | — | ||||||||||||||||||
Amortization of debt discount on convertible notes | — | — | — | — | 2.9 | — | 1.0 | 1.8 | $0.04 | — | |||||||||||||||||||
Intangible amortization expense | — | 12.5 | — | — | — | — | 4.2 | 8.3 | $0.19 | — | |||||||||||||||||||
Loss on extinguishment of debt | — | — | — | — | — | 1.3 | 0.5 | 0.8 | $0.02 | — | |||||||||||||||||||
Tax adjustment (B) | — | — | — | — | — | — | 4.1 | (4.10) | ($0.090 | ) | — | ||||||||||||||||||
Shares due to Teleflex under note hedge (C) | — | — | — | — | — | — | — | — | $0.04 | (1,428) | |||||||||||||||||||
Adjusted basis | $208.0 | $106.0 | $15.6 | — | $10.9 | — | $17.4 | $55.6 | $1.33 | 41,836 | |||||||||||||||||||
(A) In 2014, losses, other charges and charge reversals include approximately ($1.5) million, net of tax, or ($0.03) per share, related to the reversal of contingent consideration liabilities; and approximately $1.5 million, net of tax, or $0.03 per share, related to acquisition and integration costs, and charges related to facility consolidations. In 2013, losses and other charges include approximately ($4.4) million, net of tax, or ($0.10) per share, related to the reversal of contingent consideration liabilities; approximately $2.1 million, net of tax, or $0.05 per share, related to acquisition and integration costs.
(B) The tax adjustment represents a net benefit resulting from the resolution of, or the expiration of statute of limitations with respect to various prior years’ U.S. federal, state and foreign tax matters.
(C) Adjusted diluted shares are calculated by giving effect to the anti-dilutive impact of the Company’s convertible note hedge agreements, which reduce the potential economic dilution that otherwise would occur upon conversion of our senior subordinated convertible notes. Under GAAP, the anti-dilutive impact of the convertible note hedge agreements is not reflected in diluted shares.
RECONCILIATION OF CONSOLIDATED STATEMENT OF INCOME ITEMS
Dollars in millions, except per share amounts
Nine Months Ended – September 28, 2014 | |||||||||||||||||||||||||||||
Cost of goods sold | Selling, general and administrative expenses | Research and development expenses | Restructuring and other impairment charges | Interest expense, net | Loss on extinguish-ment of debt | Income taxes | Net income (loss) attributable to common shareholders from continuing operations | Diluted earnings per share available to common shareholders | Shares used in calculation of GAAP and adjusted earnings per share | ||||||||||||||||||||
GAAP Basis | $662.4 | $425.4 | $43.8 | $16.5 | $48.2 | — | $28.2 | $138.6 | $3.00 | 46,256 | |||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||||
Restructuring and other impairment charges | — | — | — | 16.5 | — | — | 4.7 | 11.8 | $0.26 | — | |||||||||||||||||||
Losses, other charges and reversals (A) | 2.8 | (2.10) | 0.1 | — | — | — | 1.9 | (1.10) | ($0.020 | ) | — | ||||||||||||||||||
Amortization of debt discount on convertible notes | — | — | — | — | 9.1 | — | 3.3 | 5.8 | $0.12 | — | |||||||||||||||||||
Intangible amortization expense | — | 47.1 | — | — | — | — | 13.9 | 33.1 | $0.72 | — | |||||||||||||||||||
Tax adjustment (B) | — | — | — | — | — | — | 0.2 | (0.20) | ($0.010 | ) | — | ||||||||||||||||||
Shares due to Teleflex under note hedge (C) | — | — | — | — | — | — | — | — | $0.25 | (2,654) | |||||||||||||||||||
Adjusted basis | $659.6 | $380.4 | $43.7 | — | $39.1 | — | $52.3 | $187.9 | $4.31 | 43,602 | |||||||||||||||||||
Nine Months Ended – September 29, 2013 | |||||||||||||||||||||||||||||
Cost of goods sold | Selling, general and administrative expenses | Research and Development expenses | Restructuring and other impairment charges | Interest expense, net | Loss on extinguish-ment of debt | Income taxes | Net income (loss) attributable to common shareholders from continuing operations | Diluted earnings per share available to common shareholders | Shares used in calculation of GAAP and adjusted earnings per share | ||||||||||||||||||||
GAAP Basis | $631.7 | $358.4 | $47.2 | $29.2 | $42.1 | $1.3 | $19.0 | $116.3 | $2.69 | 43,246 | |||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||||
Restructuring and other impairment charges | — | — | — | 29.2 | — | — | 6.1 | 23.1 | $0.53 | — | |||||||||||||||||||
Losses, other charges and reversals (A) | 2.0 | (6.70) | — | — | — | — | 2.4 | (7.00) | ($0.160 | ) | — | ||||||||||||||||||
Amortization of debt discount on convertible notes | — | — | — | — | 8.4 | — | 3.1 | 5.3 | $0.12 | — | |||||||||||||||||||
Intangible amortization expense | — | 37.1 | — | — | — | — | 12.7 | 24.3 | $0.56 | — | |||||||||||||||||||
Loss on extinguishment of debt | — | — | — | — | — | 1.3 | 0.5 | 0.8 | $0.02 | — | |||||||||||||||||||
Tax adjustment (B) | — | — | — | — | — | — | 9.6 | (9.60) | ($0.220 | ) | — | ||||||||||||||||||
Shares due to Teleflex under note hedge (C) | — | — | — | — | — | — | — | — | $0.12 | (1,438) | |||||||||||||||||||
Adjusted basis | $629.7 | $328.0 | $47.2 | — | $33.7 | — | $53.4 | $153.1 | $3.66 | 41,808 | |||||||||||||||||||
(A) In 2014, losses, other charges and charge reversals include approximately ($8.1) million, net of tax, or ($0.18) per share, related to the reversal of contingent consideration liabilities; and approximately $7.0 million, net of tax, or $0.16 per share, related to acquisition and integration costs, and charges related to facility consolidations. In 2013, losses and other charges include approximately ($12.4) million, net of tax, or ($0.29) per share, related to the reversal of contingent consideration liabilities; approximately $0.8 million, net of tax, or $0.02 per share, related to a litigation verdict against the Company with respect to a non-operating joint venture; $5.0 million, net of tax, or $0.12 per share, related to acquisition and integration costs; and ($0.4) million, net of tax, or ($0.01) per share, related to reversal of a reserve with respect to a previously announced stock keeping unit (“SKU”) rationalization charge.
(B) The tax adjustment represents a net benefit resulting from the resolution of, or the expiration of statute of limitations with respect to various prior years’ U.S. federal, state and foreign tax matters.
(C) Adjusted diluted shares are calculated by giving effect to the anti-dilutive impact of the Company’s convertible note hedge agreements, which reduce the potential economic dilution that otherwise would occur upon conversion of our senior subordinated convertible notes. Under GAAP, the anti-dilutive impact of the convertible note hedge agreements is not reflected in diluted shares.
RECONCILIATION OF NET DEBT OBLIGATIONS
September 28, 2014 | December 31, 2013 | ||||
(Dollars in thousands) | |||||
Note payable and current portion of long term borrowings | $ | 365,356 | $ | 356,287 | |
Long term borrowings | 700,000 | 930,000 | |||
Unamortized debt discount | 39,335 | 48,413 | |||
Total debt obligations | 1,104,691 | 1,334,700 | |||
Less: cash and cash equivalents | 286,382 | 431,984 | |||
Net debt obligations | $ | 818,309 | $ | 902,716 | |
ABOUT TELEFLEX INCORPORATED
Teleflex is a leading global provider of specialty medical devices for a range of procedures in critical care and surgery. Our mission is to provide solutions that enable healthcare providers to improve outcomes and enhance patient and provider safety. Headquartered in Wayne, PA, Teleflex employs approximately 11,500 people worldwide and serves healthcare providers in more than 150 countries. For additional information about Teleflex please refer to www.teleflex.com.
CAUTION CONCERNING FORWARD-LOOKING INFORMATION
This press release contains forward-looking statements, including, but not limited to, forecasted 2014 GAAP and constant currency revenue growth and GAAP and adjusted diluted earnings per share. 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, including as a result of difficulties with various employees, labor representatives or regulators; the loss of skilled employees in connection with such initiatives; unanticipated difficulties, expenditures and delays in complying with government regulations applicable to our businesses; 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 or incorporated in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2013.
TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended | ||||||
September 28, 2014 | September 29, 2013 | |||||
(Dollars and shares in thousands, except per share) | ||||||
Net revenues | $ | 457,173 | $ | 413,796 | ||
Cost of goods sold | 221,007 | 209,804 | ||||
Gross profit | 236,166 | 203,992 | ||||
Selling, general and administrative expenses | 138,252 | 115,228 | ||||
Research and development expenses | 14,871 | 15,638 | ||||
Restructuring and other impairment charges | 1,108 | 7,084 | ||||
Income from continuing operations before interest, loss on extinguishments of debt and taxes | 81,935 | 66,042 | ||||
Interest expense | 17,184 | 13,948 | ||||
Interest income | (161) | (144) | ||||
Loss on extinguishments of debt | — | 1,250 | ||||
Income from continuing operations before taxes | 64,912 | 50,988 | ||||
Taxes on income from continuing operations | 9,684 | 5,209 | ||||
Income from continuing operations | 55,228 | 45,779 | ||||
Operating income (loss) from discontinued operations | (247) | 38 | ||||
Taxes (benefit) on income (loss) from discontinued operations | 24 | (991) | ||||
Income (loss) from discontinued operations | (271) | 1,029 | ||||
Net income | 54,957 | 46,808 | ||||
Less: Income from continuing operations attributable to noncontrolling interest | 126 | 234 | ||||
Net income attributable to common shareholders | $ | 54,831 | $ | 46,574 | ||
Earnings per share available to common shareholders: | ||||||
Basic: | ||||||
Income from continuing operations | $ | 1.33 | $ | 1.11 | ||
Income (loss) from discontinued operations | (0.01) | 0.02 | ||||
Net income | $ | 1.32 | $ | 1.13 | ||
Diluted: | ||||||
Income from continuing operations | $ | 1.18 | $ | 1.05 | ||
Income from discontinued operations | — | 0.03 | ||||
Net income | $ | 1.18 | $ | 1.08 | ||
Dividends per share | $ | 0.34 | $ | 0.34 | ||
Weighted average common shares outstanding: | ||||||
Basic | 41,399 | 41,132 | ||||
Diluted | 46,628 | 43,264 | ||||
Amounts attributable to common shareholders: | ||||||
Income from continuing operations, net of tax | $ | 55,102 | $ | 45,545 | ||
Income (loss) from discontinued operations, net of tax | (271) | 1,029 | ||||
Net income | $ | 54,831 | $ | 46,574 | ||
TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Nine Months Ended | ||||||
September 28, 2014 | September 29, 2013 | |||||
(Dollars and shares in thousands, except per share) | ||||||
Net revenues | $ | 1,363,824 | $ | 1,245,732 | ||
Cost of goods sold | 662,411 | 631,730 | ||||
Gross profit | 701,413 | 614,002 | ||||
Selling, general and administrative expenses | 425,392 | 358,431 | ||||
Research and development expenses | 43,803 | 47,169 | ||||
Restructuring and other impairment charges | 16,511 | 29,205 | ||||
Income from continuing operations before interest, loss on extinguishments of debt and taxes | 215,707 | 179,197 | ||||
Interest expense | 48,650 | 42,566 | ||||
Interest income | (494) | (458) | ||||
Loss on extinguishments of debt | — | 1,250 | ||||
Income from continuing operations before taxes | 167,551 | 135,839 | ||||
Taxes on income from continuing operations | 28,224 | 18,958 | ||||
Income from continuing operations | 139,327 | 116,881 | ||||
Operating loss from discontinued operations | (1,866) | (1,746) | ||||
Tax benefit on loss from discontinued operations | (345) | (1,547) | ||||
Loss from discontinued operations | (1,521) | (199) | ||||
Net income | 137,806 | 116,682 | ||||
Less: Income from continuing operations attributable to noncontrolling interest | 765 | 629 | ||||
Net income attributable to common shareholders | $ | 137,041 | $ | 116,053 | ||
Earnings per share available to common shareholders: | ||||||
Basic: | ||||||
Income from continuing operations | $ | 3.35 | $ | 2.83 | ||
Loss from discontinued operations | (0.04) | (0.01) | ||||
Net income | $ | 3.31 | $ | 2.82 | ||
Diluted: | ||||||
Income from continuing operations | $ | 3.00 | $ | 2.69 | ||
Loss from discontinued operations | (0.04) | (0.01) | ||||
Net income | $ | 2.96 | $ | 2.68 | ||
Dividends per share | $ | 1.02 | $ | 1.02 | ||
Weighted average common shares outstanding: | ||||||
Basic | 41,347 | 41,087 | ||||
Diluted | 46,256 | 43,246 | ||||
Amounts attributable to common shareholders: | ||||||
Income from continuing operations, net of tax | $ | 138,562 | $ | 116,252 | ||
Loss from discontinued operations, net of tax | (1,521) | (199) | ||||
Net income | $ | 137,041 | $ | 116,053 | ||
TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 28, 2014 | December 31, 2013 | ||||
(Dollars in thousands) | |||||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ | 286,382 | $ | 431,984 | |
Accounts receivable, net | 287,179 | 295,290 | |||
Inventories, net | 353,227 | 333,621 | |||
Prepaid expenses and other current assets | 43,283 | 39,810 | |||
Prepaid taxes | 51,319 | 36,504 | |||
Deferred tax assets | 48,141 | 52,917 | |||
Assets held for sale | 7,672 | 10,428 | |||
Total current assets | 1,077,203 | 1,200,554 | |||
Property, plant and equipment, net | 347,233 | 325,900 | |||
Goodwill | 1,352,045 | 1,354,203 | |||
Intangible assets, net | 1,208,252 | 1,255,597 | |||
Investments in affiliates | 1,079 | 1,715 | |||
Deferred tax assets | 1,706 | 943 | |||
Other assets | 70,274 | 70,095 | |||
Total assets | $ | 4,057,792 | $ | 4,209,007 | |
LIABILITIES AND EQUITY | |||||
Current liabilities | |||||
Current borrowings | $ | 365,356 | $ | 356,287 | |
Accounts payable | 71,034 | 71,967 | |||
Accrued expenses | 77,333 | 74,868 | |||
Current portion of contingent consideration | 2,957 | 4,131 | |||
Payroll and benefit-related liabilities | 76,781 | 73,090 | |||
Accrued interest | 13,848 | 8,725 | |||
Income taxes payable | 26,735 | 23,821 | |||
Other current liabilities | 42,272 | 22,231 | |||
Total current liabilities | 676,316 | 635,120 | |||
Long-term borrowings | 700,000 | 930,000 | |||
Deferred tax liabilities | 494,884 | 514,715 | |||
Pension and postretirement benefit liabilities | 97,007 | 109,498 | |||
Noncurrent liability for uncertain tax provisions | 56,448 | 55,152 | |||
Other liabilities | 49,221 | 48,506 | |||
Total liabilities | 2,073,876 | 2,292,991 | |||
Commitments and contingencies | |||||
Total common shareholders’ equity | 1,981,728 | 1,913,527 | |||
Noncontrolling interest | 2,188 | 2,489 | |||
Total equity | 1,983,916 | 1,916,016 | |||
Total liabilities and equity | $ | 4,057,792 | $ | 4,209,007 | |
TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended | |||||||
September 28, 2014 | September 29, 2013 | ||||||
(Dollars in thousands) | |||||||
Cash Flows from Operating Activities of Continuing Operations: | |||||||
Net income | $ | 137,806 | $ | 116,682 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Loss from discontinued operations | 1,521 | 199 | |||||
Depreciation expense | 37,409 | 30,735 | |||||
Amortization expense of intangible assets | 47,053 | 37,072 | |||||
Amortization expense of deferred financing costs and debt discount | 11,792 | 11,228 | |||||
Loss on extinguishments of debt | — | 1,250 | |||||
Impairment of long-lived assets | — | 3,354 | |||||
Changes in contingent consideration | (7,670) | (12,927) | |||||
Stock-based compensation | 9,125 | 8,426 | |||||
Deferred income taxes, net | (2,808) | (1,286) | |||||
Other | (4,310) | (8,223) | |||||
Changes in operating assets and liabilities, net of effects of acquisitions and disposals: | |||||||
Accounts receivable | 2,442 | (12,395) | |||||
Inventories | (23,084) | (23,576) | |||||
Prepaid expenses and other current assets | (4,087) | (5,420) | |||||
Accounts payable and accrued expenses | 14,258 | 1,573 | |||||
Income taxes receivable and payable, net | (10,649) | (10,820) | |||||
Net cash provided by operating activities from continuing operations | 208,798 | 135,872 | |||||
Cash Flows from Investing Activities of Continuing Operations: | |||||||
Expenditures for property, plant and equipment | (48,220) | (54,640) | |||||
Proceeds from sales of assets and investments | 5,251 | — | |||||
Payments for businesses and intangibles acquired, net of cash acquired | (28,535) | (40,450) | |||||
Investment in affiliates | (40) | (50) | |||||
Net cash used in investing activities from continuing operations | (71,544) | (95,140) | |||||
Cash Flows from Financing Activities of Continuing Operations: | |||||||
Proceeds from long-term borrowings | 250,000 | 382,000 | |||||
Repayment of long-term borrowings | (480,009) | (375,000) | |||||
Debt extinguishment, issuance and amendment fees | (3,689) | (6,365) | |||||
Proceeds from share based compensation plans and the related tax impacts | 2,936 | 4,740 | |||||
Payments to noncontrolling interest shareholders | (1,094) | (736) | |||||
Payments for contingent consideration | — | (16,367) | |||||
Dividends | (42,174) | (41,915) | |||||
Net cash used in financing activities from continuing operations | (274,030) | (53,643) | |||||
Cash Flows from Discontinued Operations: | |||||||
Net cash used in operating activities | (1,946) | (2,167) | |||||
Net cash used in discontinued operations | (1,946) | (2,167) | |||||
Effect of exchange rate changes on cash and cash equivalents | (6,880) | 4,476 | |||||
Net decrease in cash and cash equivalents | (145,602) | (10,602) | |||||
Cash and cash equivalents at the beginning of the period | 431,984 | 337,039 | |||||
Cash and cash equivalents at the end of the period | $ | 286,382 | $ | 326,437 | |||