LIMERICK, Pa. – Teleflex Incorporated (NYSE: TFX) reported first quarter revenues from continuing operations were $632.2 million, up 1 percent from $623.6 million in the first quarter of 2005. Also, during the period, which ended March 26, 2006, core growth of 4 percent was substantially offset by currency translation.
The company reported that income from continuing operations for the first quarter was $29.0 million or 71 cents per diluted share, an increase of 17 percent when compared to $24.9 million or 61 cents per diluted share in the prior year quarter. Excluding special charges, gain on sale of assets and stock option expense, income from continuing operations for the first quarter was $32.9 million or 81 cents per diluted share. This compares with income from continuing operations, excluding special charges, in the first quarter of 2005 of $31.1 million or 76 cents per diluted share.
“While the Aerospace Segment outperformed and the Commercial Segment was in line with expectations, it was a tough first quarter for the Medical Segment,” said Jeffrey P. Black, president and chief executive officer of Teleflex. “Business performance was impacted by operational issues created by unanticipated order patterns and the latter phases of our consolidation plans, combined with investment made for future growth. We expect improved business performance from the Medical Segment in the second quarter and remainder of the year as we better align capacity and orders and benefit from the impact of consolidations already completed.
“We remain comfortable with our view of earnings performance set earlier this year. For the year we continue to expect margin improvement year-over-year in all three segments, an increase in earnings, and continued strong cash flow from operations.”
The company expects diluted earnings per share from continuing operations before special charges and options expense for the full year 2006 to be in the range of $4.05 to $4.25. Special charges related to the 2004 restructuring plan are now expected to be in the range of 20 cents to 23 cents. Non-cash expense related to accounting for stock options is expected to be in the range of 12 cents to 14 cents. The company now expects cash flow from operations for the full year 2006 will approach $300 million.
First quarter business segment commentary
The following segment discussion excludes the impact of discontinued operations and items included in restructuring costs as disclosed in the condensed consolidated statements of income.
Total revenue during the first quarter of 2006 was $632.2 million, up 1 percent from $623.6 million in the first quarter of 2005. Revenue growth consisted of 4 percent from core growth offset by a 3 percent decline from currency exchange rates.
The commercial segment, which includes the marine business, increased its revenues in the first quarter $0.7 million to $304.5 million from $303.8 million in the first quarter of 2005. The increase, the company says, resulted from a 3-percent increase in core growth, offset by a 3 percent decrease from currency translation.
The segment benefited from sales of new products for the marine market including steering and engine controls, sales of alternative fuel systems and auxiliary power systems and sales of heavy-duty rigging and cable used in marine construction and the securing of oil platforms. This was partially offset by a decline in sales of Tier 1 automotive driver controls in the European market when compared to the prior year.
The Commercial Segment operating profit declined, as the company said it anticipated, by 18 percent in the first quarter of 2006 to $20.4 million from $24.8 million in the first quarter of 2005. The company says that this decline reflects the impact of costs related to new product production for driver control products in the marine and industrial markets and the mix impact created by a wind down in sales and production of power sources used by the military and an increase in volume for lower-margin industrial and automotive products.
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