Teleflex marine revenues take a hit

LIMERICK, Pa. – Teleflex Inc. (NYSE:TFX) experienced a 14-percent decline in revenues from continuing operations for the second quarter ended June 28, due in part to a decrease in OEM sales of marine products, it reported in a statement yesterday.

Revenues in its Commercial Segment, which includes its marine products, declined 25 percent in the second quarter of 2009 to $82.2 million from $109.6 million in the same period last year, 18 percent of which is due to a decline in core revenue, according to Teleflex. The core revenue decline was principally a result of a decrease in sales of marine products to OEM manufacturers for the recreational boat market and lower volumes of alternate fuel systems and rigging services, Teleflex reported. An unfavorable currency impact of 3 percent and the impact of the marine gauge business divestiture of 4 percent contributed to the decline.

During the second quarter of 2009, operating profit in the Commercial Segment declined to $3.2 million from $9.5 million in the prior year period, principally due to the lower sales volumes, higher warranty costs in the Power Systems business and the sale of higher cost inventory in the rigging services business, which more than offset the impact from the elimination of approximately $4 million of operating costs compared to the prior year quarter, according to Teleflex. Segment operating margin for the quarter was 3.9 percent versus 8.6 percent in the prior year quarter.

Overall revenues down

Teleflex revenues from continuing operations were $483.1 million compared to $559.7 million in the second quarter of 2008 due to a decrease in core revenue of 8 percent, an unfavorable currency impact of 5 percent, and a loss of revenues of 1 percent resulting from the sale of its marine gauge business, Teleflex reported.

Income from continuing operations excluding special charges increased 18 percent to $38.5 million, or $0.96 per diluted share compared to $32.7 million or $0.82 per diluted share in the prior year quarter. Income from continuing operations attributable to common shareholders including special charges declined to $6.3 million or $0.16 per diluted share compared to $28.6 million or $0.72 per diluted share in the prior year quarter. Special charges in the second quarter of 2009 included goodwill and intangible asset impairments of $33.3 million net of tax or $0.83 per diluted share, according to the company.

Income from discontinued operations attributable to common shareholders was $0.2 million, or $0.00 per diluted share compared to $6.3 million or $0.16 per diluted share in the prior year quarter, stated Teleflex. Net income attributable to common shareholders in the second quarter of 2009 was $6.5 million and diluted earnings per share available to common shareholders were $0.16 compared to $34.9 million and $0.88 per diluted share in the prior year quarter.

For the first six months of 2009, Teleflex revenues from continuing operations decreased 13 percent to $952.7 million from $1.1 billion in the first six months of 2008. Income from continuing operations excluding special charges increased 18 percent to $68.7 million or $1.72 per diluted share, compared to $58.4 million or $1.47 per diluted share in the prior year, according to Teleflex. Income from continuing operations attributable to common shareholders including special charges decreased to $32.7 million or $0.82 per diluted share compared to $43.6 million or $1.10 per diluted share in the prior year.

Income from discontinued operations attributable to common shareholders was $189.3 million or $4.74 per diluted share compared to $14.3 million or $0.36 per diluted share in the prior year, the company stated.

Net income attributable to common shareholders for the first six months of 2009 was $222.0 million and diluted earnings per share available to common shareholders were $5.56 compared to $57.9 million and $1.46 per diluted share in the prior year period, respectively, Teleflex reported.

The company raised its full year 2009 guidance for income from continuing operations to $3.40 to $3.60 per diluted share, excluding special charges, an increase of 9 percent to 15 percent compared to the prior year, according to the company. Special charges for 2009 are expected to be in the range of $1.00 to $1.05 per diluted share. This compares to the company’s previous guidance of $3.25 to $3.55 per diluted share excluding special charges, which were expected to be in the range of $0.30 to $0.40.

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