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Teleflex Completes Sale of Airfoil Technologies International Singapore Pte. Ltd. to General Electric Company

March 23, 2009

LIMERICK, Pa.--(BUSINESS WIRE)--Mar. 23, 2009-- Teleflex Incorporated (“Teleflex”) has completed the previously announced sale of its 51 percent share of Airfoil Technologies International - Singapore Pte. Ltd., a joint venture between General Electric Company (“GE”) and Teleflex, to GE.

The divested business was part of the Teleflex Aerospace Segment and had annual revenues of approximately $250 million comprised of both repair and replacement component revenues. The cash transaction was valued at $300 million and is expected to result in an after tax gain on sale of approximately $195 million or $4.89 per diluted share. Approximately $190 million of after tax proceeds are expected to be used to repay currently outstanding borrowings.

As a result of ATI being reclassified to discontinued operations and the current outlook for the continuing businesses, the Company anticipates diluted earnings per share from continuing operations for the full year 2009 before special charges to be in the range of $3.25 to $3.55 per diluted share. Special charges for the year are expected to be in the range of $0.30 to $0.40 per diluted share. The previously provided guidance for cash flow from continuing operations is expected to be reduced by approximately $70 million to a range of $210 million to $220 million as a result of the ATI sale. The estimated impact of the divestiture on 2009 free cash flow¹ is a reduction of approximately $30 million including the elimination of minority interest dividends to GE.

“In light of the economy we expect challenges to the initial revenue growth targets that we set for the year, however we are implementing cost containment measures expected to offset the bottom line impact,” stated Jeffrey P. Black, chairman and chief executive officer.

Said Black, “The completion of this transaction allows us to further reduce our outstanding debt and provides additional financial flexibility to support future growth. We greatly appreciate the contributions that the ATI employees have made to Teleflex over the years and are pleased to transition the businesses to GE, a well respected industry leader.”

“I am also pleased to announce that John Suddarth, President of the Aerospace segment since 2004, will also assume management responsibility of the Commercial segment, as its President,” commented Black.

Simpson Thacher & Bartlett LLP acted as legal advisor to Teleflex on this transaction.

About Teleflex Incorporated

Teleflex (NYSE:TFX) is a diversified company that designs, manufactures and distributes quality engineered products and services for the medical, aerospace and commercial markets worldwide. Teleflex employs approximately 13,700 people worldwide who focus on providing innovative solutions for customers. Additional information about Teleflex can be obtained from the company's website at www.teleflex.com.

About GE Aviation

GE Aviation, an operating unit of General Electric Company (NYSE:GE), is a world-leading provider of commercial and military jet engines and components as well as integrated digital, electric power, and mechanical systems for aircraft. GE Aviation also has a global service network to support these offerings. For more information, visit us at www.ge.com/aviation.

Additional Notes

Filed with this press release are schedules which reconcile previously reported 2008 Segment Results of Operations to reflect Discontinued Operations, and Income from Continuing Operations and Diluted Earnings Per Share to reflect Discontinued Operations.

Forward-looking information

This press release contains forward-looking statements, including, but not limited to, statements relating to the expected gain on sale, net of tax, for the ATI transaction; our expected use of the proceeds from the ATI transaction; 2009 forecast of diluted earnings per share from continuing operations before special charges; the expected range of special charges for 2009; the expected impact of the ATI transaction on the range of cash flow from continuing operations expected for 2009; the expected impact of the divestiture on free cash flow; and expected challenges to initial revenue growth targets for 2009. 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; our ability to realize efficiencies; changes in material costs and surcharges; unanticipated difficulties in connection with consolidation of manufacturing and administrative functions; unanticipated difficulties, expenditures and delays in connection with the integration of Arrow International, including delays in the implementation of integration programs and adverse customer and shareholder reaction; unanticipated difficulties, expenditures and delays in complying with government regulations applicable to our businesses, including unanticipated costs and difficulties in connection with the resolution of issues related to the FDA corporate warning letter issued to Arrow; our ability to meet our debt obligations; changes in general and international economic conditions; and other factors described in Teleflex's filings with the Securities and Exchange Commission, including our Annual Report on Form 10K.

¹ Free cash flow is defined as Cash Flow from Continuing Operations less capital expenditures and dividends paid.

 
TELEFLEX INCORPORATED AND SUBSIDIARIES
Full Year 2009 Adjusted Diluted Earnings Per Share Guidance
To Reflect Discontinued Operations
               
          Low         High

Previous 2009 earnings per share from continuing operations before special charges guidance

        $4.10         $4.40

Less: impact of ATI divestiture, net of reduced interest expense

        ($0.85)         ($0.85)

Revised 2009 earnings per share from continuing operations before special charges guidance

        $3.25         $3.55
 
 
TELEFLEX INCORPORATED AND SUBSIDIARIES
Adjusted Segment Results of Operations
To Reflect Discontinued Operations
(Unaudited)
                           
2008 Quarters 2008 Year to Date
3/30 6/29 9/28 12/31 6 MTHS

6/29

9 MTHS

9/28

12 MTHS

12/31

(Dollars and shares in thousands, except per share)
Medical $ 374,057 $ 384,335 $ 367,327 $ 373,390 $ 758,392 $ 1,125,719 $ 1,499,109
Aerospace 66,288 65,733 62,105 59,692 132,021 194,126 253,818
Commercial   101,765   109,610   101,628   97,591   211,375   313,003   410,594
Net revenues $ 542,110 $ 559,678 $ 531,060 $ 530,673 $ 1,101,788 $ 1,632,848 $ 2,163,521
 
Medical $ 70,912 $ 70,652 $ 71,388 $ 73,378 $ 141,564 $ 212,952 $ 286,330
Aerospace 4,928 7,657 7,309 6,173 12,585 19,894 26,067
Commercial   2,847   9,460   7,067   8,083   12,307   19,374   27,457
Segment operating profit (1) 78,687 87,769 85,764 87,634 166,456 252,220 339,854
Corporate expenses 13,008 11,157 11,228 10,527 24,165 35,393 45,920

Restructuring and other impairment charges

8,856 2,591 470 15,784 11,447 11,917 27,701

Loss (gain) on sales of businesses and assets

18 — — (314 ) 18 18 (296 )

Minority interest in consolidated subsidiaries

  (187 )   (259 )   (196 )   (105 )   (446 )   (642 )   (747 )

Income from continuing operations before interest, taxes and minority interest

56,992 74,280 74,262 61,742 131,272 205,534 267,276
Interest expense, net   30,122   30,930   28,501   29,758   61,052   89,553   119,311

Income from continuing operations before taxes and minority interest

26,870 43,350 45,761 31,984 70,220 115,981 147,965

Taxes on income from continuing operations

 

11,662

 

14,477

 

13,406

 

10,545

 

26,139

 

39,545

 

50,090

Income from continuing operations before minority interest

15,208

28,873

32,355

21,439

44,081

76,436

97,875

Minority interest in consolidated subsidiaries, net of tax

  187   259   196   105   446   642   747

Income from continuing operations

15,021

28,614

32,159

21,334

43,635

75,794

97,128

 

Operating income from discontinued operations

7,908 4,912 10,338 6,272 12,820 23,158 29,430

Taxes (benefit) on income from discontinued operations

 

(14

)  

(1,417

)  

178

 

8,037

 

(1,431

)  

(1,253

)  

6,784

Income (loss) from discontinued operations

 

7,922

 

6,329

 

10,160

 

(1,765

)

 

14,251

 

24,411

 

22,646

Net income $ 22,943 $ 34,943 $ 42,319 $ 19,569 $ 57,886 $ 100,205 $ 119,774
 
Earnings per share:
Basic:

Income from continuing operations

$

0.38

$ 0.72 $ 0.81 $

0.54

$

1.10

$

1.92

$

2.45

Income (loss) from discontinued operations

$

0.20

$ 0.16 $

0.26

$

(0.04

) $

0.36

$

0.62

$

0.57

Net income $ 0.58 $ 0.88 $ 1.07 $ 0.49 $ 1.47 $ 2.53 $ 3.03
Diluted:

Income from continuing operations

$

0.38

$ 0.72 $ 0.80 $

0.54

$

1.10

$

1.90

$

2.44

Income (loss) from discontinued operations

$

0.20

$

0.16

$ 0.25 $

(0.04

) $

0.36

$

0.61

$

0.57

Net income $ 0.58 $ 0.88 $ 1.06 $ 0.49 $ 1.46 $ 2.52 $ 3.01
 

Average number of common and common equivalent shares outstanding:

Basic 39,454 39,562 39,645 39,677 39,508 39,553 39,584
Diluted 39,709 39,831 39,970 39,819 39,770 39,837 39,832
  (1)   Segment operating profit includes a segment’s net revenues reduced by its materials, labor and other product costs along with the segment’s selling, engineering and administrative expenses and minority interest. Unallocated corporate expenses, gain on sales of businesses and assets, restructuring and other impairment charges, interest income and expense and taxes on income are excluded from the measure.
 
These discontinued operations have not historically been separately identified, consolidated and audited as presented in this schedule.
 
Certain financial information is presented on a rounded basis, which may cause minor differences.
 
 
TELEFLEX INCORPORATED AND SUBSIDIARIES
Adjusted Income from Continuing Operations and Diluted Earnings Per Share
To Reflect Discontinued Operations
(Unaudited)
     
2008 Quarters Full Year 2008
March 30     June 29     September 28     December 31 December 31
    EPS     EPS     EPS     EPS     EPS
(Dollars in thousands, except per share)
 
Income from continuing operations and diluted earnings per share $

15,021

$

0.38

$

28,614

$ 0.72 $

32,159

$ 0.80 $

21,334

$

0.54

$

97,128

$

2.44

 
Restructuring and other impairment charges, net of tax 6,034 0.15 1,747 0.04 318 0.01 9,969 0.25 18,068 0.45
 
Losses and other charges, net of tax(A) 219 0.01 2,357 0.06 1,620 0.04 488 0.01 4,684 0.12
 
Fair market value inventory adjustment, net of tax (B)   4,449       0.11   —       —   —       —   —       —   4,449       0.11
 

Income from continuing operations and diluted earnings per share excluding restructuring and impairment charges, losses and other charges and fair market value inventory adjustment

$

25,723

    $

0.65

$

32,718

    $ 0.82 $

34,097

    $ 0.85 $

31,791

    $

0.80

$

124,329

    $

3.12

 
(A) Losses and other charges principally relate to restructuring related costs associated with the Arrow acquisition.
   
(B) The fair market value inventory adjustment reflects the absorption of the residual Arrow inventory purchase price adjustment from the acquisition date.
 
Earnings per share information is presented on a rounded basis, which may cause minor differences

Source: Teleflex Incorporated

Teleflex Incorporated
Jake Elguicze
Senior Director
Investor Relations
610-948-2836

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