Full Press Release Details
| Contact : | Jake Elguicze | |
| Treasurer and | ||
| Vice President of Investor Relations | ||
| 610-948-2836 |
TELEFLEX REPORTS FOURTH QUARTER AND FULL YEAR 2011 RESULTS
Fourth Quarter 2011 Revenues Rise 6.6%; up 6.8% Constant Currency
Fourth Quarter 2011 GAAP EPS of $1.02
Fourth Quarter 2011 Adjusted EPS of $1.07
includes $0.17 adjustment associated
with early termination of interest rate swap
Preliminary 2012 Outlook Provided
Limerick, PA Teleflex Incorporated (NYSE: TFX) today announced financial results for the fourth quarter and full year ended December 31, 2011 as
well as its preliminary outlook for 2012.
Fourth quarter 2011 net revenues were $411.7 million, an increase of 6.6% over the prior year period. Excluding the impact of foreign exchange, fourth quarter 2011 net revenues increased 6.8% over the prior year
Fourth quarter 2011 GAAP diluted earnings per share from continuing operations was $1.02, an increase of 209.1% over the prior year period.
Fourth quarter 2011 adjusted diluted earnings per share from continuing operations was $1.07, an increase of 28.9% over the prior year period. Our profitability improvement, as compared to the fourth quarter of 2010, was related to an increase in
sales volume, improved pricing, as well as a reduction in interest and income tax expenses. This was offset partially by higher manufacturing, raw material and fuel-related costs, continued investment in sales, marketing and research and
development, and the recognition for adjusted earnings per share purposes of the cost associated with the early termination of an interest rate swap.
Our solid fourth quarter performance capped off a very successful year for Teleflex, said Benson Smith, Chairman, President and CEO. Strong
revenue growth was driven by our sales organization s outstanding execution in all geographic regions, as well as improved customer service levels. Growth from all product categories and improved pricing trends in key markets contributed to the
revenue gains. At the same time, we continued to make investments in sales and marketing, and research and development to support our longer-term growth objectives. We believe that during the course of 2011 we have created a platform that allows for
sustainable and profitable growth in the future.
Added Mr. Smith, As we look ahead, we are extremely optimistic about our growth prospects for 2012.
Teleflex is well positioned as a medical device leader to capitalize on our growth opportunities and deliver superior shareholder value.
FOURTH QUARTER NET REVENUE BY PRODUCT GROUP
fourth quarter 2011 net revenues were $268.2 million, an increase of 4.1% over the prior year period on an as reported basis. Excluding the impact of foreign exchange, fourth quarter 2011 net revenues increased 4.3% over the prior year period. The
increase in revenue was due to higher sales of anesthesia, urology, respiratory and vascular access products.
Surgical Care fourth quarter 2011 net
revenues were $73.5 million, an increase of 2.5% over the prior year period on an as reported basis. Excluding the impact of foreign exchange, fourth quarter 2011 net revenues increased 2.7% over the prior year period. The increase in revenue was
due to higher sales of ligation products.
Cardiac Care fourth quarter 2011 net revenues were $22.0 million, an increase of 36.9% over the prior year
period. Excluding the impact of foreign exchange, fourth quarter 2011 net revenues increased 37.7% over the prior year period. The increase in revenue was due to higher sales of intra-aortic balloon pumps and catheters, as well as the impact of a
product recall which occurred in the prior year quarter.
OEM and Development Services fourth quarter 2011 net revenues were $47.7 million, an increase
of 18.0% over the prior year period on an as reported basis. Excluding the impact of foreign exchange, fourth quarter 2011 net revenues increased 18.2% over the prior year period. The increase in revenue was due to higher sales of specialty suture
and catheter fabrication products.
| September 30, | September 30, | September 30, | September 30, | September 30, | ||||||||||||||||
| Three Months Ended | % Increase/ (Decrease) | |||||||||||||||||||
| December 31, 2011 | December 31, 2010 | Constant Currency | Foreign Currency | Total Change | ||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
| Critical Care | $ | 268.2 | $ | 257.8 | 4.3 | % | (0.2 | %) | 4.1 | % | ||||||||||
| Surgical Care | 73.5 | 71.7 | 2.7 | % | (0.2 | %) | 2.5 | % | ||||||||||||
| Cardiac Care | 22.0 | 16.1 | 37.7 | % | (0.8 | %) | 36.9 | % | ||||||||||||
| OEM | 47.7 | 40.4 | 18.2 | % | (0.2 | %) | 18.0 | % | ||||||||||||
| Other | 0.3 | 0.3 | ||||||||||||||||||
| Total | $ | 411.7 | $ | 386.3 | 6.8 | % | (0.2 | %) | 6.6 | % |
OTHER FINANCIAL INFORMATION AND PERFORMANCE METRICS
Depreciation and amortization expense of intangible assets and deferred financing costs and debt discount for the twelve months of 2011 was $99.1 million compared to $92.6 million for the prior year period.
Net cash provided by operating activities from continuing operations for the twelve months of 2011 was $103.1 million compared to $151.6 million for
the prior year period.
Cash and cash equivalents at December 31, 2011 were $584.1 million.
Net accounts receivable at December 31, 2011 were $286.2 million.
Net inventories at December 31, 2011 were $298.8 million.
Net debt obligations at December 31, 2011 were $445.9 million.
The Company finds that comparisons to the December 31, 2010 balance sheet amounts are not meaningful because several businesses were sold during 2011.
TWELVE MONTH RESULTS
Net revenues for the
twelve months of 2011 were $1.53 billion, an increase of 6.7% over the prior year period. Excluding the impact of foreign exchange, net revenues for the twelve months of 2011 increased 4.3% over the prior year period.
GAAP diluted earnings per share from continuing operations for the twelve months of 2011 was $2.96, an increase of 33.9% over the prior year period. Adjusted
diluted earnings per share from continuing operations for the twelve months of 2011 was $3.93, an increase of 4.2% over the prior year period. The increase in adjusted diluted earnings per share is related to an increase in sales volume and reduced
interest and income tax expenses. This was somewhat offset by higher manufacturing, raw material and fuel-related freight costs, unfavorable product mix, the continued investment in sales, marketing and research and development, and the acceleration
of expense due to the early termination of an interest rate swap.
The Company s financial estimates for 2012 are as follows:
Constant currency revenue growth between 4.0% and
6.0% for full year 2012.
Adjusted earnings per share in the range of $4.25 to $4.45.
2012 OUTLOOK EARNINGS PER SHARE RECONCILIATION
| September 30, | September 30, | |||||||
| Low | High | |||||||
| Diluted earnings per share attributable to common shareholders | $ | 3.18 | $ | 3.38 | ||||
| Special items, net of tax | $ | 0.25 | $ | 0.25 | ||||
| Intangible amortization expense, net of tax | $ | 0.66 | $ | 0.66 | ||||
| Amortization of debt discount on convertible notes, net of tax | $ | 0.16 | $ | 0.16 | ||||
| Adjusted earnings per share | $ | 4.25 | $ | 4.45 |
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 February 28, 2012, 12:00pm (ET), by calling 888-286-8010 (U.S./Canada) or 617-801-6888 (International),
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
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, charges related to product rationalizations, 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; provided, however, that a reconciliation of forecasted constant currency revenue growth
has not been provided as management is unable to forecast trends in foreign currency exchange rates.
RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS
| September 30, | September 30, | |||||||
| Three Months Ended December 31, 2011 | Three Months Ended December 31, 2010 | |||||||
| (Dollars in thousands, except per share) | ||||||||
| Income and diluted earnings per share attributable to common | $ | 41,664 | $ | 13,404 | ||||
| shareholders | $ | 1.02 | $ | 0.33 | ||||
| Intangible amortization expense | 10,917 | 10,456 | ||||||
| Tax benefit | (4,051 | ) | (3,840 | ) | ||||
| Intangible amortization expense, net of tax | 6,866 | 6,616 | ||||||
| $ | 0.17 | $ | 0.16 | |||||
| Amortization of debt discount on convertible notes | 2,487 | 2,303 | ||||||
| Tax benefit | (909 | ) | (838 | ) | ||||
| Amortization of debt discount on convertible notes, net of tax | 1,578 | 1,465 | ||||||
| $ | 0.04 | $ | 0.04 | |||||
| Restructuring and impairment charges | 4,058 | 1,196 | ||||||
| Tax benefit | (1,540 | ) | (360 | ) | ||||
| Restructuring and impairment charges, net of tax | 2,518 | 836 | ||||||
| $ | 0.06 | $ | 0.02 | |||||
| Losses and other charges (A) | 2,554 | 22,048 | ||||||
| Tax benefit | (791 | ) | (8,126 | ) | ||||
| Losses and other charges, net of tax | 1,763 | 13,922 | ||||||
| $ | 0.04 | $ | 0.35 | |||||
| Early termination of interest rate swap (B) | (11,056 | ) | ||||||
| Tax expense | 4,024 | |||||||
| Early termination of interest rate swap, net of tax | (7,032 | ) | ||||||
| ($ | 0.17 | ) | ||||||
| Tax Adjustments (C) | (3,334 | ) | (2,939 | ) | ||||
| ($ | 0.08 | ) | ($ | 0.07 | ) | |||
| Adjusted income and diluted earnings per share | $ | 44,023 | $ | 33,304 | ||||
| $ | 1.07 | $ | 0.83 |
RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS
| September 30, | September 30, | |||||||
| Twelve Months Ended December 31, 2011 | Twelve Months Ended December 31, 2010 | |||||||
| (Dollars in thousands, except per share) | ||||||||
| Income and diluted earnings per share attributable to common | $ | 120,682 | $ | 88,829 | ||||
| shareholders | $ | 2.96 | $ | 2.21 | ||||
| Intangible amortization expense | 44,113 | 42,244 | ||||||
| Tax benefit | (16,168 | ) | (15,378 | ) | ||||
| Intangible amortization expense, net of tax | 27,945 | 26,866 | ||||||
| $ | 0.68 | $ | 0.67 | |||||
| Amortization of debt discount on convertible notes | 9,699 | 3,839 | ||||||
| Tax benefit | (3,530 | ) | (1,395 | ) | ||||
| Amortization of debt discount on convertible notes, net of tax | 6,169 | 2,444 | ||||||
| $ | 0.15 | $ | 0.06 | |||||
| Restructuring and impairment charges | 4,768 | 2,875 | ||||||
| Tax benefit | (1,790 | ) | (1,012 | ) | ||||
| Restructuring and impairment charges, net of tax | 2,978 | 1,863 | ||||||
| $ | 0.07 | $ | 0.05 | |||||
| Losses and other charges (A) | 23,467 | 54,790 | ||||||
| Tax benefit | (8,392 | ) | (19,992 | ) | ||||
| Losses and other charges, net of tax | 15,075 | 34,798 | ||||||
| $ | 0.37 | $ | 0.86 | |||||
| Early termination of interest rate swap (B) | (11,056 | ) | ||||||
| Tax expense | 4,024 | |||||||
| Early termination of interest rate swap, net of tax | (7,032 | ) | ||||||
| $ | (0.17 | ) | ||||||
| Tax adjustments (C) | (5,499 | ) | (2,939 | ) | ||||
| $ | (0.13 | ) | $ | (0.07 | ) | |||
| Adjusted income and diluted earnings per share | $ | 160,318 | $ | 151,861 | ||||
| $ | 3.93 | $ | 3.77 |
RECONCILIATION OF NET DEBT OBLIGATIONS
| September 30, | September 30, | |||||||
| December 31, 2011 | December 31, 2010 | |||||||
| (Dollars in thousands) | ||||||||
| Note payable and current portion of long-term borrowings | $ | 4,986 | $ | 103,711 | ||||
| Long term borrowings | 954,809 | 813,409 | ||||||
| Unamortized debt discount | 70,191 | 79,891 | ||||||
| Total debt obligations | 1,029,986 | 997,011 | ||||||
| Less: cash and cash equivalents | 584,088 | 208,452 | ||||||
| Net debt obligations | $ | 445,898 | $ | 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 11,500 people worldwide and serves healthcare providers in more than 130 countries. For additional information about Teleflex please refer to
CAUTION CONCERNING FORWARD-LOOKING INFORMATION
This press release contains forward-looking statements, including, but not limited to, statements relating to forecasted 2012 constant currency revenue growth and adjusted 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; 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.
TELEFLEX INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
| September 30, | September 30, | |||||||
| Three Months Ended | ||||||||
| December 31, 2011 | December 31, 2010 | |||||||
| (Dollars and shares in thousands, except per share) | ||||||||
| Net revenues | $ | 411,730 | $ | 386,277 | ||||
| Cost of goods sold | 219,699 | 209,482 | ||||||
| Gross profit | 192,031 | 176,795 | ||||||
| Selling, general and administrative expenses | 111,924 | 112,963 | ||||||
| Research and development expenses | 12,913 | 12,451 | ||||||
| Restructuring and other impairment charges | 3,494 | 1,196 | ||||||
| Net loss (gain) on sales of businesses and assets | 582 | (158 | ) | |||||
| Income from continuing operations before interest, loss on extinguishments of debt and taxes | 63,118 | 50,343 | ||||||
| Interest expense | 19,209 | 21,288 | ||||||
| Interest income | (584 | ) | (144 | ) | ||||
| Loss on extinguishments of debt | 16,276 | |||||||
| Income from continuing operations before taxes | 44,493 | 12,923 | ||||||
| Taxes (benefit) on income from continuing operations | 2,578 | (685 | ) | |||||
| Income from continuing operations | 41,915 | 13,608 | ||||||
| Operating income from discontinued operations (including gain on disposal of $218,365 and $76,140, respectively) | 216,932 | 91,575 | ||||||
| Taxes on income from discontinued operations | 90,626 | 23,747 | ||||||
| Income from discontinued operations | 126,306 | 67,828 | ||||||
| Net income | 168,221 | 81,436 | ||||||
| Less: Income from continuing operations attributable to noncontrolling interest | 251 | 204 | ||||||
| Income from discontinued operations attributable to noncontrolling interest | 174 | 154 | ||||||
| Net income attributable to common shareholders | $ | 167,796 | $ | 81,078 | ||||
| Earnings per share available to common shareholders: | ||||||||
| Basic: | ||||||||
| Income from continuing operations | $ | 1.02 | $ | 0.34 | ||||
| Income from discontinued operations | 3.10 | 1.69 | ||||||
| Net income | $ | 4.12 | $ | 2.03 | ||||
| Diluted: | ||||||||
| Income from continuing operations | $ | 1.02 | $ | 0.33 | ||||
| Income from discontinued operations | 3.08 | 1.68 | ||||||
| Net income | $ | 4.10 | $ | 2.01 | ||||
| Dividends per common share | $ | 0.34 | $ | 0.34 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 40,727 | 39,987 | ||||||
| Diluted | 40,965 | 40,313 | ||||||
| Amounts attributable to common shareholders: | ||||||||
| Income from continuing operations, net of tax | $ | 41,664 | $ | 13,404 | ||||
| Income from discontinued operations, net of tax | 126,132 | 67,674 | ||||||
| Net income | $ | 167,796 | $ | 81,078 |
TELEFLEX INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
| September 30, | September 30, | |||||||
| Twelve Months Ended | ||||||||
| December 31, 2011 | December 31, 2010 | |||||||
| (Dollars and shares in thousands, except per share) | ||||||||
| Net revenues | $ | 1,528,911 | $ | 1,433,282 | ||||
| Cost of goods sold | 810,070 | 744,811 | ||||||
| Gross profit | 718,841 | 688,471 | ||||||
| Selling, general and administrative expenses | 429,262 | 409,924 | ||||||
| Research and development expenses | 48,732 | 42,621 | ||||||
| Restructuring and other impairment charges | 7,092 | 2,875 | ||||||
| Net loss (gain) on sales of businesses and assets | 582 | (341 | ) | |||||
| Income from continuing operations before interest, loss on extinguishments of debt and taxes | 233,173 | 233,392 | ||||||
| Interest expense | 70,317 | 79,789 | ||||||
| Interest income | (1,260 | ) | (719 | ) | ||||
| Loss on extinguishments of debt | 15,413 | 46,630 | ||||||
| Income from continuing operations before taxes | 148,703 | 107,692 | ||||||
| Taxes on income from continuing operations | 27,000 | 18,002 | ||||||
| Income from continuing operations | 121,703 | 89,690 | ||||||
| Operating income from discontinued operations (including gain on disposal of $270,630 and $114,702, respectively) | 289,080 | 165,727 | ||||||
| Taxes on income from discontinued operations | 85,816 | 52,962 | ||||||
| Income from discontinued operations | 203,264 | 112,765 | ||||||
| Net income | 324,967 | 202,455 | ||||||
| Less: Income from continuing operations attributable to noncontrolling interest | 1,021 | 861 | ||||||
| Income from discontinued operations attributable to noncontrolling interest | 617 | 500 | ||||||
| Net income attributable to common shareholders | $ | 323,329 | $ | 201,094 | ||||
| Earnings per share available to common shareholders: | ||||||||
| Basic: | ||||||||
| Income from continuing operations | $ | 2.98 | $ | 2.23 | ||||
| Income from discontinued operations | 5.00 | 2.81 | ||||||
| Net income | $ | 7.98 | $ | 5.04 | ||||
| Diluted: | ||||||||
| Income from continuing operations | $ | 2.96 | $ | 2.21 | ||||
| Income from discontinued operations | 4.97 | 2.79 | ||||||
| Net income | $ | 7.92 | $ | 4.99 | ||||
| Dividends per common share | $ | 1.36 | $ | 1.36 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 40,501 | 39,906 | ||||||
| Diluted | 40,801 | 40,280 | ||||||
| Amounts attributable to common shareholders: | ||||||||
| Income from continuing operations, net of tax | $ | 120,682 | $ | 88,829 | ||||
| Income from discontinued operations, net of tax | 202,647 | 112,265 | ||||||
| Net income | $ | 323,329 | $ | 201,094 |
TELEFLEX INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| September 30, | September 30, | |||||||
| December 31, 2011 | December 31, 2010 | |||||||
| (Dollars in thousands) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 584,088 | $ | 208,452 | ||||
| Accounts receivable, net | 286,226 | 294,196 | ||||||
| Inventories, net | 298,775 | 338,598 | ||||||
| Prepaid expenses and other current assets | 33,405 | 28,831 | ||||||
| Prepaid taxes | 28,846 | 3,888 | ||||||
| Deferred tax assets | 41,014 | 39,309 | ||||||
| Assets held for sale | 7,902 | 7,959 | ||||||
| Total current assets | 1,280,256 | 921,233 | ||||||
| Property, plant and equipment, net | 251,912 | 287,705 | ||||||
| Goodwill | 1,438,542 | 1,442,411 | ||||||
| Intangible assets, net | 879,787 | 918,522 | ||||||
| Investments in affiliates | 2,008 | 4,899 | ||||||
| Deferred tax assets | 278 | 358 | ||||||
| Other assets | 71,320 | 68,027 | ||||||
| Total assets | $ | 3,924,103 | $ | 3,643,155 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Notes payable | $ | 4,986 | $ | 31,211 | ||||
| Current portion of long-term debt | 72,500 | |||||||
| Accounts payable | 67,092 | 84,846 | ||||||
| Accrued expenses | 78,160 | 88,976 | ||||||
| Payroll and benefit-related liabilities | 64,386 | 71,418 | ||||||
| Derivative liabilities | 633 | 15,634 | ||||||
| Accrued interest | 10,960 | 18,347 | ||||||
| Income taxes payable | 21,084 | 4,886 | ||||||
| Current liability for uncertain tax positions | 22,656 | 28,512 | ||||||
| Deferred tax liabilities | 1,050 | 4,433 | ||||||
| Total current liabilities | 271,007 | 420,763 | ||||||
| Long-term borrowings | 954,809 | 813,409 | ||||||
| Deferred tax liabilities | 420,833 | 370,819 | ||||||
| Pension and postretirement benefit liabilities | 194,984 | 141,769 | ||||||
| Noncurrent liability for uncertain tax positions | 61,688 | 62,602 | ||||||
| Other liabilities | 37,999 | 46,515 | ||||||
| Total liabilities | 1,941,320 | 1,855,877 | ||||||
| Commitments and contingencies | ||||||||
| Common Shareholders equity | ||||||||
| Common shares, $1 par value Issued: 2011 42,923 shares; 2010 42,245 shares | 42,923 | 42,245 | ||||||
| Additional paid-in capital | 380,965 | 349,156 | ||||||
| Retained earnings | 1,847,106 | 1,578,913 | ||||||
| Accumulated other comprehensive income (loss) | (159,353 | ) | (51,880 | ) | ||||
| 2,111,641 | 1,918,434 | |||||||
| Less: Treasury stock, at cost | 131,053 | 135,058 | ||||||
| Total common shareholders equity | 1,980,588 | 1,783,376 | ||||||
| Noncontrolling interest | 2,195 | 3,902 | ||||||
| Total equity | 1,982,783 | 1,787,278 | ||||||
| Total liabilities and equity | $ | 3,924,103 | $ | 3,643,155 |