Dépêches

Teleflex Reports Second Quarter 2011 Results

Dépèche transmise le 27 juillet 2011 par Business Wire

Teleflex Reports Second Quarter 2011 Results

Teleflex Reports Second Quarter 2011 Results

LIMERICK, Pa.--(BUSINESS WIRE)--Teleflex Incorporated (NYSE: TFX) today announced financial results for the second quarter and six months ended June 26, 2011.

“Our revenue growth of four percent was driven by a combination of market share gains, selected price increases and improved traction of recently introduced products.”

Second quarter 2011 net revenues were $391.3 million, an increase of 9.2% over the prior year period. Excluding the impact of foreign exchange, second quarter 2011 net revenues increased 4.0% over the prior year period.

Second quarter 2011 GAAP diluted earnings per share from continuing operations was $0.77, a decrease of 3.8% over the prior year period. Second quarter 2011 adjusted diluted earnings per share from continuing operations was $0.94, a decrease of 3.1% over the prior year period. The decline in adjusted diluted earnings per share is related to higher manufacturing, raw material and fuel-related freight costs, unfavorable product mix and the continued investment in sales, marketing and research and development expenses. This was somewhat offset by an increase in sales volume, improved pricing, as well as a reduction in interest expense.

Net revenues for the first six months of 2011 were $745.3 million, an increase of 6.2% over the prior year period. Excluding the impact of foreign exchange, net revenues for the first six months of 2011 increased 3.5% over the prior year period.

GAAP diluted earnings per share from continuing operations for the first six months of 2011 was $1.11, a decrease of 31.1% over the prior year period. Adjusted diluted earnings per share from continuing operations for the first six months of 2011 was $1.82, a decrease of 6.7% over the prior year period. The decline in adjusted diluted earnings per share is related to higher manufacturing, raw material and fuel-related freight costs, unfavorable product mix and the continued investment in sales, marketing and research and development expenses. This was somewhat offset by an increase in sales volume and reduced interest expense.

“Teleflex generated solid revenue results during the second quarter 2011, which reflect further progress toward achieving our longer-term growth objectives," said Benson Smith, Chairman, President & CEO. “Our revenue growth of four percent was driven by a combination of market share gains, selected price increases and improved traction of recently introduced products.”

Added Mr. Smith, "We resolved the FDA corporate warning letter related to our Arrow International subsidiary, and we completed the transformation from a cyclical, diversified-industrial conglomerate to a pure-play medical technology company. In addition, we refinanced our debt to improve Teleflex’s long-term capital structure and increase our financial flexibility to pursue unique, late-stage technology and strategic acquisitions to drive future growth. At the same time, we strengthened our competitive position during the quarter with new group purchasing organization contracts that include our VasoNova® Vascular Positioning System and Rusch laryngoscope products.”

SECOND QUARTER NET REVENUE BY PRODUCT GROUP

Critical Care second quarter 2011 net revenues were $253.6 million, an increase of 8.5% over the prior year period on an as reported basis. Excluding the impact of foreign exchange, second quarter 2011 net revenues increased 3.2% over the prior year period. The increase in revenue was due to higher sales across all product lines.

Surgical Care second quarter 2011 net revenues were $72.9 million, an increase of 10.1% over the prior year period on an as reported basis. Excluding the impact of foreign exchange, second quarter 2011 net revenues increased 4.3% over the prior year period. The increase in revenue was due to higher sales of ligation products in Europe and Asia/Latin America.

Cardiac Care second quarter 2011 net revenues were $22.1 million, an increase of 17.6% over the prior year period. Excluding the impact of foreign exchange, second quarter 2011 net revenues increased 10.5% over the prior year period. The increase in revenue was due to higher sales of intra-aortic balloon pumps and catheters.

OEM and Development Services second quarter 2011 net revenues were $42.4 million, an increase of 8.7% over the prior year period on an as reported basis. Excluding the impact of foreign exchange, second quarter 2011 net revenues increased 6.8% over the prior year period. The increase in revenue was due to higher sales of specialty and orthopedic products.

       
Three Months Ended % Increase/ (Decrease)
June 26, 2011     June 27, 2010

Constant

Currency

   

Foreign

Currency

   

Total

Change

(Dollars in millions)
Critical Care $ 253.6 $ 233.7 3.2 % 5.3 % 8.5 %
Surgical Care 72.9 66.2 4.3 % 5.8 % 10.1 %
Cardiac Care 22.1 18.8 10.5 % 7.1 % 17.6 %
OEM 42.4 39.0 6.8 % 1.9 % 8.7 %
Other   0.3   0.7 (62.5 %) 5.4 % (57.1 %)
Total $ 391.3 $ 358.4 4.0 % 5.2 % 9.2 %
 

OTHER FINANCIAL HIGHLIGHTS AND KEY PERFORMANCE METRICS

Depreciation and amortization expense of intangible assets and deferred financing costs and debt discount for the first six months of 2011 was $49.7 million compared to $44.6 million for the first six months of 2010.

Cash and cash equivalents at June 26, 2011 were $365.8 million.

Net accounts receivable at June 26, 2011 were $283.2 million.

Net inventories at June 26, 2011 were $293.8 million.

Net debt obligations at June 26, 2011 were $688.9 million.

December 31, 2010 balance sheet amounts were not referenced above because businesses were either sold or reclassified to discontinued operations during 2011 and the Company does not find comparisons to the December 31, 2010 balance sheet amounts to be meaningful.

2011 OUTLOOK

The Company’s financial estimates for 2011 are as follows:

Revenue in the range of $1.44 billion to $1.47 billion

Adjusted earnings per share in the range of $4.05 to $4.25

Cash flow from continuing operations in the range of $180 to $210 million. This compares to the Company’s prior expectation for full year 2011 cash flow from continuing operations of approximately $210 million. The revised cash flow from operations guidance is associated with the Company’s intention to increase inventory levels during 2011 as it continues to focus on gaining additional market share and the reduction in the amount of time it takes to fulfill a customers’ order.

       

2011 OUTLOOK EARNINGS PER SHARE RECONCILIATION

Low     High
 
Diluted earnings per share attributable to common shareholders $2.75 $2.95
 
Special items, net of tax $0.45 $0.45
 
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 earnings per share $4.05     $4.25
 

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 August 1, 2011, 12:00pm (ET), by calling 888-286-8010 (U.S./Canada) or 617-801-6888 (International), Passcode: 66816668.

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. Constant currency revenue and growth include activity of a purchased company beyond the initial twelve months after the date of acquisition.

Certain financial information is presented on a rounded basis, which may cause minor differences.

Product group 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 certain non-GAAP financial measures. These measures include (i) adjusted diluted earnings per share, which excludes the effect of charges associated with our restructuring programs and asset impairments, losses and other charges related to refinancing transactions, costs associated with severance payments and benefits to be provided to our former chief executive officer, intangible amortization expense and the amortization of debt discount on convertible notes; and (ii) constant currency revenue and growth, which exclude the impact of translating the results of international subsidiaries at different currency exchange rates from period to period. Consistent with past practice, adjusted diluted earnings per share has not been adjusted to exclude the benefit resulting from the forfeiture of equity awards. 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.

 

RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS

 
 
    Three Months Ended     Three Months Ended
June 26, 2011 June 27, 2010
(Dollars in thousands, except per share)
Income and diluted earnings per share attributable to common $ 31,329 $ 32,087
shareholders $0.77 $0.80
 
Restructuring and impairment charges 115 75
Tax benefit   (25 )   (157 )
Restructuring and impairment charges, net of tax   90     (82 )
$0.00 $0.00
 
Losses and other charges (A) 816
Tax benefit   (297 )    
Losses and other charges, net of tax   519      
$0.01

 

Amortization of debt discount on convertible notes 2,394
Tax benefit   (867 )    
Amortization of debt discount on convertible notes, net of tax   1,527      
$0.04
 
Intangible amortization expense 11,102 10,857
Tax benefit   (4,044 )   (3,917 )
Intangible amortization expense, net of tax   7,058     6,940  
$0.17 $0.17
 
Tax adjustments (B)   (2,165 )    
($0.05 )

 

Adjusted income and diluted earnings per share $ 38,358   $ 38,945  
$0.94 $0.97
 

(A) In 2011, losses and other charges include approximately $0.5 million, net of tax, or $0.01 per share, related to the loss on extinguishment of debt.

(B) The tax adjustment represents a net benefit resulting from the resolution (including the expiration of statutes of limitations) of various prior years’ U.S. federal, state and foreign tax matters.

 

RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS

 
 
    Six Months Ended     Six Months Ended
June 26, 2011 June 27, 2010
(Dollars in thousands, except per share)
Income and diluted earnings per share attributable to common $ 45,103 $ 64,664
shareholders $1.11 $1.61
 
Restructuring and impairment charges 710 538
Tax benefit   (250 )   (272 )
Restructuring and impairment charges, net of tax   460     266  
$0.01 $0.01
 
Losses and other charges (A) 20,913
Tax benefit   (7,601 )    
Losses and other charges, net of tax   13,312      
$0.33

 

Amortization of debt discount on convertible notes 4,757
Tax benefit   (1,729 )    
Amortization of debt discount on convertible notes, net of tax   3,028      
$0.07
 
Intangible amortization expense 22,115 21,385
Tax benefit   (8,063 )   (7,744 )
Intangible amortization expense, net of tax   14,052     13,641  
$0.35 $0.34
 
Tax adjustments (B)   (2,165 )    
($0.05 )
 
Adjusted income and diluted earnings per share $ 73,790   $ 78,571  
$1.82 $1.95
 

(A) In 2011, losses and other charges include approximately $9.8 million, net of tax, or $0.24 per share, related to the loss on extinguishment of debt; approximately $3.5 million, net of tax, or $0.09 per share, in charges related to severance payments and benefits to be provided to our former chief executive officer.

(B) The tax adjustment represents a net benefit resulting from the resolution (including the expiration of statutes of limitations) of various prior years’ U.S. federal, state and foreign tax matters.

 

RECONCILIATION OF CASH FLOW FROM OPERATIONS

       
Six Months Ended

June 26, 2011

Six Months Ended

June 27, 2010

(Dollars in thousands)
 
Cash flow from operations as reported $ 39,634 $ 79,736
 
Add: Impact of the adoption of the amendment to Accounting Standards Codification topic 860 “Transfers and Servicing” 39,700
 
Less: Tax refund on sale of ATI business     59,499
 
Adjusted cash flow from operations $ 39,634 $ 59,937
 
 

RECONCILIATION OF NET DEBT OBLIGATIONS

 
June 26, 2011 December 31, 2010
(Dollars in thousands)
Note payable and current portion of long-term borrowings $ 29,700 $ 103,711
 
Long term borrowings 949,866 813,409
 
Unamortized debt discount   75,134   79,891
 
Total debt obligations 1,054,700 997,011
 
Less: cash and cash equivalents   365,809   208,452
 
Net debt obligations $ 688,891 $ 788,559
 

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 Limerick, PA, Teleflex employs approximately 11,600 people worldwide and serves healthcare providers in more than 130 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, statements relating to forecasted 2011 total revenue, adjusted earnings per share and cash flow from continuing operations. 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; 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 and the disclosure incorporated into Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 26, 2011.

 
TELEFLEX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
 
    Three Months Ended
June 26,

2011

    June 27,

2010

(Dollars and shares in thousands, except per share)

 
Net revenues $ 391,286 $ 358,427
Cost of goods sold   207,254     184,126  
Gross profit 184,032 174,301
Selling, general and administrative expenses 111,751 99,768
Research and development expenses 12,456 10,288
Restructuring and other impairment charges   3,176     75  
Income from continuing operations before interest, loss on extinguishments of debt and taxes 56,649 64,170
Interest expense 15,785 19,534
Interest income (253 ) (150 )
Loss on extinguishments of debt   816      
Income from continuing operations before taxes 40,301 44,786
Taxes on income from continuing operations   8,714     12,440  
Income from continuing operations   31,587     32,346  
Operating income (loss) from discontinued operations (including gain (loss) on disposal of ($4,504) in 2011 and $28,825 in 2010, respectively) (4,360 ) 45,634
Taxes (benefit) on income from discontinued operations   (7,260 )   17,454  
Income from discontinued operations   2,900     28,180  
Net income

Business Wire

Les plus belles photos d'avions
De Havilland Canada DHC-8-402Q Dash 8 (YL-BAH) Boeing 737-783/WL (LN-RRA) Boeing 737-783/WL (LN-RRA) Airbus A319-111 (EC-JAZ) Cessna 525B Citation CJ3 (OO-FYS) Boeing 737-42C (YR-BAO)