Slide 1: Teleflex Incorporated Third Quarter 2005 Earnings Conference Call
Teleflex Incorporated Third Quarter 2005 Earnings Conference Call
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: Jeff Black, President and Chief Executive Officer
Jeff Black President and Chief Executive Officer
Slide 4: Overview
Overview Continued progress YTD: Strong results and solid execution Solid core revenue growth of 4% Q3 and YTD Expanding operating margins - operating profit net of corporate expenses up 34% in Q3 and 25% YTD Some areas of focus: Marine market slowed by hurricane season Automotive industry - end of
Slide 5: Third Quarter Results
Third Quarter Results Q3 2005: Diluted EPS from continuing operations excluding special charges and gain on sale of assets: $0.87 2005 YTD: Diluted EPS from continuing operations excluding special charges and gain on sale of assets: $2.67 Medical and Aerospace segments in line with expectations, Com
Slide 6: Third Quarter Results (cont'd)
Third Quarter Results (cont'd) Continued strong cash flow: Balance sheet at pre-Hudson acquisition strength: Cash: $246 million Net debt to total capital: 26.7% 9 Mos. '05 9 Mos. '04 % Incr. Operating cash flow $231.8M $176.9M +31% Free cash flow $156.9M $114.3M +37%
Slide 7: Third Quarter Accomplishments
Third Quarter Accomplishments Continued Medical Segment operating margins in 20% range Aerospace Segment executing well in a strong market - $20 million operating profit through Q3 Completed Automotive pedal systems divestiture 580,200 shares repurchased in stock buyback program
Slide 8: Portfolio Actions
Portfolio Actions Exits and divestitures: 2Q '04: Techsonic, National Strand, Uniflex 3Q '04: IGT parts product line, auto parts product line 4Q '04: Medical product line 1Q '05: IGT services, Sermatech, industrial cables product line, medical product lines 3Q '05: Automotive pedal systems, medical
Slide 9: Summary
Summary Good progress, some setbacks: Aerospace - trends positive, major turnaround from this time last year Medical - great results through nine months, integration activities continue Commercial - changes in end-market conditions, delay in restructuring move pressuring results in Q4 Strong financi
Slide 10: Martin Headley, Executive Vice President and Chief Financial Officer
Martin Headley Executive Vice President and Chief Financial Officer
Slide 11: Three and Nine Month Summary of Continuing Operations
Three and Nine Month Summary of Continuing Operations
Slide 12: Summary Financial Performance
Summary Financial Performance
Slide 13: Q3 2005 Results Medical Segment
Q3 2005 Results Medical Segment Revenues down 3% 1% core growth: New product contribution from specialty devices and surgical Competitive pressure in urology market Operating profits: Up 28% Integration and consolidation/shared services initiatives continuing to drive operating results
Slide 14: Q3 2005 Results Commercial Segment
Q3 2005 Results Commercial Segment Revenues up 1% 2% core growth: Impact of divestitures (1%) Marine market declines on decreased demand, fuel prices, hurricanes Operating profits: Shift in mix toward industrial markets continues to adversely impact margins Absorption issues created by delay in shif
Slide 15: Q3 2005 Results Aerospace Segment
Q3 2005 Results Aerospace Segment - Revenues up 14% 15% core growth: Repair products and services Cargo loading systems (both wide body and narrow body) Increased sales of precision- machined components for aircraft engines Operating profits: Solid execution across the board Elimination of loss-maki
Slide 16: Restructuring Charges
Restructuring Charges Third Quarter Restructuring Charges ($000s): Commercial $ 1,311 Medical $ 4,465 [Aerospace |G $ 5,776
Slide 17: Restructuring Program Continues to Unlock Cash Flow
Restructuring Program Continues to Unlock Cash Flow... Amounts exclude the automotive pedals business, the Sermatech business, and two small medical businesses which are reported as discontinued operations. These discontinued operations have not historically been separately identified, consolidated,
Slide 18: While Teleflex Continues to Return Cash to Shareholders
....While Teleflex Continues to Return Cash to Shareholders Stock Buyback Program: Announced 7/26/05 Shares repurchased during third quarter: 580,200 shares $39.3 million invested $100.7 million remains authorized (Trailing 12 months, $millions)
Slide 19: Strong Balance Sheet for Future Growth
Strong Balance Sheet for Future Growth
Slide 20: Asset Velocity
Asset Velocity Asset velocity declined slightly in 3Q due to inventory build in conjunction with restructuring initiatives Note: Asset velocity is working capital (excluding cash, debt, and deferred taxes) as a percentage of annualized quarterly sales
Slide 21: Fourth Quarter Outlook
Fourth Quarter Outlook Guidance: Low end of range for diluted earnings per share from continuing operations excluding special charges and gain on sale of $3.65 to $3.80 Increased guidance for diluted earnings per share from continuing operations including special charges and gain on sale to $3.30 to
Slide 22: Fourth Quarter Plan
Complete delayed product line moves planned for Q4 on schedule and eliminate duplicate costs Monitor marine industry downturn and control costs Continue solid execution in Aerospace Segment Continue to return capital to shareholders through stock buyback program Repatriate $300 million cash under Am
Slide 23: Question and Answer Session
Question and Answer Session
Slide 24: Appendix A - Reconciliation of Net Debt to Total Capital Calculation
Appendix A - Reconciliation of Net Debt to Total Capital Calculation
Slide 25: Appendix B - Reconciliation of Trailing Twelve Month Cash Flow to Free Cash Flow
Appendix B - Reconciliation of Trailing Twelve Month Cash Flow from Continuing Operations to Trailing Twelve Month Free Cash Flow Amounts exclude the automotive pedals business, the Sermatech business, and two small medical businesses which are reported as discontinued operations. These discontinued