Teleflex Incorporated · NYSE:TFX
Teleflex — FY2006 Earnings Presentation
27 slides from Teleflex's earnings presentation, Mar 1, 2007
Slide 1: Teleflex Incorporated 2006 Financial Results 2007 Outlook
Teleflex Incorporated 2006 Financial Results 2007 Outlook March 1, 2007
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation and our discussion contain forward-looking information and statements including, but not limited to, such matters as business strategies, market trends, future financial performance, forecast of diluted earnings per share, forecast of cash flow from opera
Slide 3: Conference Call Logistics
Conference Call Logistics The release, accompanying slides, and replay webcast available online at www.teleflex.com (click on "Investors") Telephone replay available by dialing 888-286-8010 or for international calls, 617-801-6888, pass code number 98533145
Slide 4: Jeff Black, Chairman and Chief Executive Officer
Jeff Black Chairman and Chief Executive Officer
Slide 5: Full Year 2006 Highlights
Full Year 2006 Highlights Continuing operations deliver multiple financial records: Revenues Cash flow from operations Asset velocity Strong balance sheet Dividend increases 14% Completed $140 million stock buyback Businesses benefiting from 2004 restructuring plan New product launches, new markets
Slide 6: Fourth Quarter 2006 Highlights
Fourth Quarter 2006 Highlights Strong quarter for Aerospace and Medical Medical: Revenues up 11% Core growth 8% Operating profits up 42% Operating margins 21.7% Aerospace: Revenues up 4% Operating profits up 16% Operating margins 10.8% Commercial Revenues up 6% (Power Systems, Industrial) Operating
Slide 7: 2006 Goals vs. Results
2006 Goals vs. Results Record cash flow from operations Maintain strong balance sheet Continue track record of core growth Expand operating margins Create opportunities for future growth $344 million 18.5% net debt to capital 5% core growth Operating margins up 50 basis points Excellent momentum on
Slide 8: 2007 Revenue Growth Trends
2007 Revenue Growth Trends Growth Segment Expectations Aerospace Medical Commercial Key 2007 Assumptions Strong backlog in cargo systems and precision-machined components tempered by full year of repairs insourcing Growth driven by new product launches and expanding presence in Asian markets Growth
Slide 9: 2007 Outlook
2007 Outlook Low High Earnings per share from continuing operations before special charges $4.15 $4.35 Special charges $(0.16) $(0.11) Earnings per share from continuing operations including special charges $3.99 $4.24
Slide 10: Martin Headley, Executive Vice President and Chief Financial Officer
Martin Headley Executive Vice President and Chief Financial Officer
Slide 11: YTD 2006 Summary Financial Results
YTD 2006 Summary Financial Results Revenue growth driven by growth in Aerospace and Commercial power systems Pro forma options expense in 2005: $3.2 million after-tax or $0.08 per share Medical restructuring issues suppressed profitability in 1st half Margin pressure in automotive
Slide 12: Q4 2006 Summary Financial Results
Q4 2006 Summary Financial Results Positive core growth in all three business segments Pro forma options expense in Q4 2005: $0.8 million after-tax or $0.02 per share Double digit operating margin expansion in Aerospace and Medical Margin pressure in automotive impacts Commercial Segment
Slide 13: Financial Results - Commercial Segment
Financial Results - Commercial Segment + Continued momentum for alternative fuel systems and auxiliary power units + New products keep marine ahead of weak market + Excluding automotive, 4Q core growth = 11% Push-outs and customer price reductions in automotive Commodity costs negatively impact mari
Slide 14: Financial Results - Medical Segment
Financial Results - Medical Segment + 2006 revenue growth driven by impact of new products in respiratory care/sleep therapy, specialty medical devices + Second half operating margin recovers to 21.5% First half impacted by restructuring issues IT consolidation costs reduced operating profits by $10
Slide 15: Financial Results - Aerospace Segment
Financial Results - Aerospace Segment + Strong core growth for wide body cargo systems and ultralight containers + Productivity improvement + Margin benefit from consolidation of production facilities under the 2004 restructuring program Customer insourcing initiative impact on repairs business in s
Slide 16: Asset Velocity
Asset Velocity Asset velocity reaches long term target of 15% at year end. Note: Asset velocity defined as net working capital less cash, deferred taxes, and net assets held for sale plus current portion of long term debt divided by annualized quarterly sales
Slide 17: Cash Flow
Cash Flow Record operating cash flow in Q4 and YTD periods Strong working capital management
Slide 18: Fourth Quarter Cash Flow Conversion
Fourth Quarter Cash Flow Conversion Adjusted operating income defined as income from continuing operations excluding special charges CAPEX Amounts: Q4 2005: $24.2 million Q4 2006: $20.9 million ($ mil) 160% 248%
Slide 19: YTD Cash Flow Conversion
YTD Cash Flow Conversion ($ mil) Adjusted operating income defined as income from continuing operations excluding special charges CAPEX Amounts: YTD 2005: $69.9 million YTD 2006: $63.2 million 177% 184%
Slide 20: Strong Balance Sheet for Future Growth
Strong Balance Sheet for Future Growth Strong, well capitalized balance sheet provides debt capacity for potential acquisitions
Slide 21: 2007 Forecast
2007 Forecast Operating cash flow in excess of $300 million for third consecutive year Low High Earnings per share from continuing operations before special charges $4.15 $4.35 Special charges $(0.16) $(0.11) Earnings per share from continuing operations including special charges $3.99 $4.24
Slide 22: 2007 Outlook Assumptions
2007 Outlook Assumptions External Assumptions Relatively stable economic conditions Modest weakening of US Dollar Stable interest rates and commodity pricing Internal Assumptions Mid single digit core growth Aerospace and Medical +++ Commercial flat - automotive market down, power systems up Overall
Slide 23: Summary
Summary Teleflex: Outstanding fundamentals Solid core growth Expanding margins Profitable businesses Sound working capital management Minimal debt Strong cash flow and cash flow conversion Investing for growth Technology and new product development Commitment to international markets Active acquisit
Slide 24: Question and Answer Session
Question and Answer Session
Slide 25: Appendix A - Summary from Continuing Operations, 2006
Appendix A - Summary from Continuing Operations, 2006
Slide 26: Appendix B - Summary from Continuing Operations, 2005
Appendix B - Summary from Continuing Operations, 2005
Slide 27: Appendix C - Reconciliation of Net Debt to Total Capital
Appendix C - Reconciliation of Net Debt to Total Capital