Teleflex - 10-Q quarterly report FY

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Exchange ActRule 12b-2).

Indicate by check mark whether the registrant is a shell company (as defined inRule 12b-2of the Act).

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of October 22, 2007:

Teleflex Incorporated (the “Company”) is a diversified company specializing in the design, manufacture and distribution of specialty-engineered products. The Company serves a wide range of customers in niche segments of the commercial, medical and aerospace industries. The Company’s products include: driver controls, motion controls, power and vehicle management systems and fluid management systems for commercial industries; disposable medical products, surgical instruments, medical devices and specialty devices for hospitals and health-care providers; and repair products and services and cargo-handling systems for commercial aviation.

The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions forForm 10-QandRule 10-01ofRegulation S-X.Accordingly, they do not include all information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

The accompanying financial information is unaudited; however, in the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments and accruals) necessary for a fair statement of the financial position, results of operations and cash flows for the periods reported have been included. The results of operations for the periods reported are not necessarily indicative of those that may be expected for a full year.

This quarterly report should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2006 presented in the Company’s Current Report onForm 8-Kfiled with the Securities and Exchange Commission on October 3, 2007.

During the third quarter of 2007, the Company recorded adjustments to correct its financial statements. These adjustments increased the loss from continuing operations by $2.9 million. Based on the Company’s analysis of these matters, the Company has concluded that these matters were not material on a quantitative or qualitative basis to the current period or any previously filed financial information.

Certain reclassifications have been made to the prior year condensed consolidated financial statements to conform to current period presentation. Certain financial information is presented on a rounded basis, which may cause minor differences.

Uncertain Tax Positions:  In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109.” FIN No. 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” FIN No. 48 requires that the impact of a tax position be recognized in the financial statements if it is more likely than not that the tax position will be sustained on tax audit, based on the technical merits of the position. FIN No. 48 also provides guidance on derecognition of tax positions that do not meet the “more likely than not” standard, classification of tax assets and liabilities, interest and penalties, accounting in interim periods, disclosure and transition. The provisions of FIN No. 48 are effective for fiscal years beginning after December 15, 2006. In connection with its adoption of the provisions of FIN No. 48 on January 1, 2007, the Company recognized a charge of approximately $13.2 million to retained earnings.

See Note 11 for additional information regarding the Company’s uncertain tax positions.

Fair Value Measurements:  In September 2006, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements,” which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. SFAS No. 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior accounting pronouncements. The provisions of SFAS No. 157 are effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of SFAS No. 157 on the Company’s financial position, results of operations and cash flows.

Fair Value Option:  In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115,” which permits an entity to measure certain financial assets and financial liabilities at fair value, with unrealized gains and losses reported in earnings at each subsequent measurement date. The fair value option may be elected on aninstrument-by-instrumentbasis, as long as it is applied to the instrument in its entirety. The fair value option election is irrevocable, unless an event specified in SFAS No. 159 occurs that results in a new election date. This statement is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of SFAS No. 159 on the Company’s financial position, results of operations and cash flows.

In April 2007, the Company acquired the assets of HDJ Company, Inc. (“HDJ”) and its wholly owned subsidiary, Specialized Medical Devices, Inc. (“SMD”), a provider of engineering and manufacturing services to medical device manufacturers, for approximately $25.0 million. The results for HDJ are included in the Company’s Medical Segment.

In April 2007, the Company acquired substantially all of the assets of Southern Wire Corporation (“Southern Wire”), a wholesale distributor of wire rope cables and related hardware, for approximately $20.4 million. The results for Southern Wire are included in the Company’s Commercial Segment.

On November 8, 2006, the Company completed the acquisition of substantially all of the assets of Taut Inc. (“Taut”), a provider of instruments and devices for minimally invasive surgical procedures, particularly laparoscopic surgery, for approximately $28.0 million. The results for Taut are included in the Company’s Medical Segment.

During the first quarter of 2007, the Company finalized the purchase price allocation for the Taut acquisition. Based on the revised allocation, an additional $1.4 million and $4.0 million was allocated to inventories and intangible assets, respectively. These amounts were previously allocated to goodwill.

On November 30, 2006, the Company completed the acquisition of all of the issued and outstanding capital stock of Ecotrans Technologies, Inc. (“Ecotrans”), a supplier of locomotive anti-idling and emissions reduction solutions for the railroad industry, for approximately $10.1 million. During the first nine months of 2007, the Company finalized the purchase price allocation and recognized an additional $1.0 million of goodwill. The results for Ecotrans are included in the Company’s Commercial Segment.

The amounts recognized in restructuring and impairment charges for the three months and nine months ended September 30, 2007 and September 24, 2006 consisted of the following:

In June 2006, the Company began certain restructuring initiatives that affect all three of the Company’s operating segments. These initiatives involve the consolidation of operations and a related reduction in workforce at several of the Company’s facilities in Europe and North America. The Company determined to undertake these initiatives as a means to improving operating performance and to better leverage the Company’s existing resources.

For the three months and nine months ended September 30, 2007, the charges, including changes in estimates, associated with the 2006 restructuring program by segment that are included in restructuring and impairment charges were as follows:

For the three and the nine months ended September 24, 2006, the charges associated with the 2006 restructuring program by segment that are included in restructuring and impairment charges were as follows:

Termination benefits are comprised of severance-related payments for all employees terminated in connection with the 2006 restructuring program. Contract termination costs relate primarily to the termination of leases in conjunction with the consolidation of facilities. Asset impairments relate to leasehold improvements associated with the closure of a facility. Other restructuring costs include expenses primarily related to the consolidation of operations and the reorganization of administrative functions.

At September 30, 2007, the accrued liability associated with the 2006 restructuring program consisted of the following and, except for contract termination costs, management expects these will be paid within one year:

As of September 30, 2007, the Company expects to incur the following future restructuring costs associated with the 2006 restructuring program in its Commercial, Medical and Aerospace segments through the second quarter of 2008:

During the first quarter of 2006, the Company began a restructuring activity in its Aerospace Segment. The actions related to the closure of a manufacturing facility, termination of employees and relocation of operations. Actions under this program are complete and there are no accrued liabilities at September 30, 2007.

During the fourth quarter of 2004, the Company announced and commenced implementation of a restructuring and divestiture program designed to improve future operating performance and position the Company for future earnings growth. The actions included exiting or divesting non-core or low performing businesses, consolidating manufacturing operations and reorganizing administrative functions to enable businesses to share services.

For the three and nine months ended September 30, 2007 and September 24, 2006, the charges, including changes in estimates, associated with the 2004 restructuring and divestiture program were incurred by the Company’s Medical Segment and are included in restructuring and impairment charges as follows:

Termination benefits are comprised of severance-related payments for all employees terminated in connection with the 2004 restructuring and divestiture program. Contract termination costs relate primarily to the termination of leases in conjunction with the consolidation of facilities. Asset impairments relate primarily to machinery and equipment associated with the consolidation of manufacturing facilities. Other restructuring costs include expenses primarily related to the consolidation of manufacturing operations and the reorganization of administrative functions.

At September 30, 2007, the accrued liability associated with the 2004 restructuring and divestiture program consisted of the following and, except for contract termination costs, management expects these will be paid within one year:

As of September 30, 2007, the Company does not expect to incur additional restructuring expenses associated with the 2004 restructuring and divestiture program.

During October of 2007, the Company signed a letter of intent to sell its ownership interest in one of its variable interest entities. Based on the agreed selling price, the Company determined that the carrying value of the entity’s long-lived assets was impaired and recorded a charge of approximately $3.8 million which is included in restructuring and impairment charges in 2007. During the second quarter of 2006, the Company determined that an investment in a nonconsolidated affiliate was impaired and recorded a charge of approximately $3.9 million, which is included in restructuring and impairment charges in 2006.

Inventories consisted of the following:

Changes in the carrying amount of goodwill, by operating segment, for the nine months ended September 30, 2007 are as follows:

Intangible assets consisted of the following:

Amortization expense related to intangible assets was approximately $3.9 million and $10.8 million for the three and nine months ended September 30, 2007, respectively, and approximately $3.4 million and $10.0 million for the three and nine months ended September 24, 2006, respectively. Estimated annual amortization expense for each of the five succeeding years is as follows (dollars in thousands):

The following table summarizes the components of comprehensive income:

Set forth below is a reconciliation of the Company’s issued common shares:

On June 14, 2007, the Company’s Board of Directors authorized the repurchase of up to $300 million of outstanding Company common stock. Repurchases of Company stock under the program may be made from time to time in the open market and may include privately-negotiated transactions as market conditions warrant and subject to regulatory considerations. The stock repurchase program has no expiration date and the Company’s ability to execute on the program will depend on, among other factors, cash requirements for acquisitions, cash generation from operations, debt repayment obligations, market conditions and regulatory requirements. In addition under the senior loan agreements entered into October 1, 2007, the Company is subject to certain restrictions relating to its ability to repurchase shares in the event the Company’s consolidated leverage ratio exceeds certain levels, which may further limit the Company’s ability to repurchase shares under this program. Through September 30, 2007, no shares have been purchased under this plan.

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed in the same manner except that the weighted average number of shares is increased for dilutive securities. The difference between basic and diluted weighted average common shares results from the assumption that dilutive stock options were exercised. A reconciliation of basic to diluted weighted average shares outstanding is as follows:

Weighted average stock options that were antidilutive and therefore not included in the calculation of earnings per share were approximately 666 thousand and 442 thousand for the three and nine months ended September 30, 2007, respectively, and 693 thousand and 389 thousand for the three and nine months ended September 24, 2006, respectively.

The Company has a stock-based compensation plan that provides for the granting of incentive and non-qualified options and restricted stock units to directors, officers and key employees. Under the plan, the Company is authorized to issue up to 4 million shares of common stock, but no more than 800,000 of those shares may be issued as restricted stock. Options granted under the plan have an exercise price equal to the average of the high and low sales prices of the Company’s common stock on the date of the grant, rounded to the nearest $0.25. Generally, options granted under the plan are exercisable three to five years after the date of the grant and expire no more than ten years after the grant. Outstanding restricted stock units generally vest in two to three years.

During the first nine months of 2007, the Company granted incentive and non-qualified options to purchase 329,694 shares of common stock and granted restricted stock units representing 92,839 shares of common stock.

The Company has a number of defined benefit pension and postretirement plans covering eligible U.S. andnon-U.S. employees.The defined benefit pension plans are noncontributory. The benefits under these plans are based primarily on years of service and employees’ pay near retirement. The Company’s funding policy for U.S. plans is to contribute annually, at a minimum, amounts required by applicable laws and regulations. Obligations undernon-U.S. plansare systematically provided for by depositing funds with trustees or by book reserves.

The Company and certain of its subsidiaries provide medical, dental and life insurance benefits to pensioners and survivors. The associated plans are unfunded and approved claims are paid from Company funds.

Net benefit cost of pension and postretirement benefit plans consisted of the following:

Product warranty liability:  The Company warrants to the original purchaser of certain of its products that it will, at its option, repair or replace, without charge, such products if they fail due to a manufacturing defect. Warranty periods vary by product. The Company has recourse provisions for certain products that would enable recovery from third parties for amounts paid under the warranty. The Company accrues for product warranties when, based on available information, it is probable that customers will make claims under warranties relating to products that have been sold, and a reasonable estimate of the costs (based on historical claims experience relative to sales) can be made. Set forth below is a reconciliation of the Company’s estimated product warranty liability for the nine months ended September 30, 2007 (dollars in thousands):

Operating leases:  The Company uses various leased facilities and equipment in its operations. The terms for these leased assets vary depending on the lease agreement. In connection with these operating leases, the Company had residual value guarantees in the amount of approximately $3.6 million at September 30, 2007. The Company’s future payments cannot exceed the minimum rent obligation plus the residual value guarantee amount. The guarantee amounts are tied to the unamortized lease values of the assets under lease, and are due should the Company decide neither to renew these leases, nor to exercise its purchase option. At September 30, 2007, the Company had no liabilities recorded for these obligations. Any residual value guarantee amounts paid to the lessor may be recovered by the Company from the sale of the assets to a third party.

Accounts receivable securitization program:  The Company uses an accounts receivable securitization program to gain access to enhanced credit markets and reduce financing costs. As currently structured, the Company sells certain trade receivables on a non-recourse basis to a consolidated special purpose entity, which in turn sells an interest in those receivables to a commercial paper conduit. The conduit issues notes secured by that interest to third party investors. The assets of the special purpose entity are not available to satisfy the obligations of the Company. In accordance with the provisions of SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” transfers of assets under the program qualify as sales of

Environmental:  The Company is subject to contingencies as a result of environmental laws and regulations that in the future may require the Company to take further action to correct the effects on the environment of prior disposal practices or releases of chemical or petroleum substances by the Company or other parties. Much of this liability results from the U.S. Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), often referred to as Superfund, the U.S. Resource Conservation and Recovery Act (“RCRA”) and similar state laws. These laws require the Company to undertake certain investigative and remedial activities at sites where the Company conducts or once conducted operations or at sites where Company-generated waste was disposed.

Remediation activities vary substantially in duration and cost from site to site. These activities, and their associated costs, depend on the mix of unique site characteristics, evolving remediation technologies, diverse regulatory agencies and enforcement policies, as well as the presence or absence of other potentially responsible parties. At September 30, 2007, the Company’s condensed consolidated balance sheet included an accrued liability of approximately $7.9 million relating to these matters. Considerable uncertainty exists with respect to these costs and, if adverse changes in circumstances occur, potential liability may exceed the amount accrued as of September 30, 2007. The time frame over which the accrued amounts may be paid out, based on past history, is estimated to be15-20 years.

Regulatory matters:  On October 11, 2007, the Company’s subsidiary, Arrow International, Inc. (“Arrow”), received a corporate warning letter from the U.S. Food and Drug Administration (FDA). The letter cites three site-specific warning letters issued by the FDA in 2005 and subsequent inspections performed from June 2005 to February 2007 at Arrow’s facilities in the United States. The letter expresses concerns with Arrow’s quality systems, including complaint handling, corrective and preventive action, process and design validation, inspection and training procedures. It also advises that Arrow’s corporate-wide program to evaluate, correct and prevent quality system issues has been deficient. Limitations on pre-market approvals and certificates of foreign goods had previously been imposed on Arrow based on prior inspections and the corporate warning letter does not impose additional sanctions that are expected to have a material financial impact on the Company.

Arrow has been actively working to address the FDA’s findings and has been conducting a thorough review of its quality systems. Ongoing updates have been provided to the FDA outlining corrective and preventive actions. In connection with its acquisition of Arrow, completed on October 1, 2007, the Company has developed an integration plan that includes the commitment of significant resources to correct these previously-identified regulatory issues and further improve overall quality systems. The Company intends to promptly respond to the warning letter.

While we believe we can remediate these issues in an expeditious manner, there can be no assurances regarding the length of time or cost it will take us to resolve these issues to the satisfaction of the FDA. If our remedial actions are not satisfactory to the FDA, we may have to devote additional financial and human resources to our efforts, and the FDA may take further regulatory actions against us, including, but not limited to, seizing our product inventory, obtaining a court injunction against further marketing of our products or assessing civil monetary penalties.

Litigation:  The Company is a party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims include actions involving product liability, intellectual property, employment and environmental matters. Based on information currently available, advice of counsel, established reserves and other resources, the Company does not believe that any such actions are likely to be, individually or in the aggregate, material to its business, financial condition, results of operations or liquidity. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to the Company’s business, financial condition, results of operations or liquidity. Legal costs such as outside counsel fees and expenses are charged to expense in the period incurred.

Income taxes:  Taxes on income from continuing operations of $105.7 million during the third quarter of 2007 include discrete income tax charges incurred in anticipation of the Arrow acquisition. Specifically, in connection with funding the acquisition of Arrow, the Company (i) repatriated approximately $197.0 million of cash from foreign subsidiaries which had previously been deemed to be permanently reinvested in the respective foreign jurisdictions; and (ii) changed its position with respect to certain additional previously untaxed foreign earnings to treat these earnings as no longer permanently reinvested. These items resulted in a discrete income tax charge in the third quarter of 2007 of approximately $90.2 million.

Uncertain tax positions:  The total amount of unrecognized tax benefits as of January 1, 2007, the date of adoption of FIN No. 48, is approximately $53.0 million. Of this amount, the total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is approximately $28.7 million. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits from its global operations in income tax expense. Accordingly, at January 1, 2007, approximately $6.2 million of accrued interest and penalties is included as a component of the total unrecognized tax benefit recorded on the condensed consolidated balance sheet. During the nine months ended September 30, 2007, the Company recognized approximately $2.2 million in potential interest associated with unrecognized tax benefits.

The taxable years that remain subject to examination by major tax jurisdictions are as follows:

As a result of the outcome of ongoing or future examinations, or due to the expiration of statutes of limitation for certain jurisdictions, it is reasonably possible that the related unrecognized tax benefits for tax positions taken could materially change from those recorded as liabilities at September 30, 2007. Based on the status of various examinations by the relevant federal, state and foreign tax authorities, the Company anticipates that certain examinations may be concluded within twelve months of the reporting date of the Company’s condensed consolidated financial statements, the most significant of which are in Germany. Management does not anticipate the resolution of such examinations or the impact of the expiration of statutes of limitation for certain jurisdictions will have a material impact on previously recorded unrecognized tax benefits.

Other:  The Company has various purchase commitments for materials, supplies and items of permanent investment incident to the ordinary conduct of business. On average, such commitments are not at prices in excess of current market.

Information about continuing operations by business segment is as follows:

On June 29, 2007, the Company completed the sale of Teleflex Aerospace Manufacturing Group (“TAMG”), a precision-machined components business in its Aerospace Segment for approximately $133.9 million, and recognized a gain of approximately $48.6 million, net of taxes of approximately $26.6 million. For financial statement purposes, the results of operations and cash flows of this business have been segregated from those of continuing operations and are presented in the Company’s condensed consolidated financial statements as discontinued operations.

Revenues of discontinued operations were $0 million and approximately $34.7 million for the three months ended September 30, 2007 and September 24, 2006, respectively, and approximately $68.4 million and $101.9 million for the nine months ended September 30, 2007 and September 24, 2006, respectively. Operating income from discontinued operations was $0 million and approximately $2.4 million for the three months ended September 30, 2007 and September 24, 2006, respectively, and approximately $5.3 million and $7.3 million for the nine months ended September 30, 2007 and September 24, 2006, respectively.

During the first nine months of 2007 and 2006 the Company disposed of assets that met the criteria for held for sale classification, and recognized gains of approximately $0.8 million and $1.1 million in 2007 and 2006, respectively.

Assets held for sale are comprised of the following:

On October 1, 2007, the Company acquired all of the outstanding capital stock of Arrow International, Inc. (“Arrow”) for approximately $2.0 billion. Arrow is a global provider of catheter-based access and therapeutic products for critical and cardiac care. The transaction was financed with cash, borrowings under a new senior secured syndicated bank loan and proceeds received through the issuance of privately placed notes. The syndicated bank loan agreement includes a $1.4 billion term loan and a $400 million revolving line of credit, both of which carry initial interest rates of LIBOR + 150 basis points. The Company executed an interest rate swap for $600 million of the term loan from a floating rate to a fixed rate of 6.25%. The obligations under the bank loan agreement have been guaranteed by certain of the Company’s domestic subsidiaries and have been secured pursuant to a pledge of certain of the equity interests in the Company’s subsidiaries held by the Company and the subsidiary guarantors. In addition, the Company amended its existing private placement notes and issued $200 million in new private placement notes. The new notes were issued in series as follows: (i) $130,000,000 7.62% Series A Senior Notes due October 1, 2012; (ii) $40,000,000 7.94% Series B Senior Notes due October 1, 2014; and (iii) $30,000,000 Floating Rate Series C Senior Notes due October 1, 2012. The amended notes include the following: (i) $150,000,000Series 2004-1Tranche A Senior Notes due 2011; (ii) $100, 000,000Series 2004-1Tranche B Senior Notes due 2014; (iii) $100,000,000Series 2004-1Tranche C Senior Notes due 2016; and (iv) $50,000,000 Senior Notes due October 25, 2012. The interest rates payable on the amended notes were also modified in connection with the foregoing transactions. Effective October 1, 2007, (a) the 2004 Notes will bear interest on the outstanding principal amount at the following rates: (i) 7.66% in respect of theSeries 2004-1Tranche A Senior Notes due 2011; (ii) 8.14% in respect of theSeries 2004-1Tranche B Senior Notes due 2014; and (iii) 8.46% in respect of theSeries 2004-1Tranche C Senior Notes due 2016; and (b) the 2002 Notes will bear interest on the outstanding principal amount at the rate of 7.82% per annum. These initial rates will be reduced by 0.25% after the Company’s ratio of Consolidated Total Indebtedness to Consolidated Actual EBITDA (as those terms are defined in the amendments) is less than 3.50 to 1.00 for two consecutive quarters, and by an additional 0.75% after such ratio is less than 3.00 to 1.00 for two consecutive quarters. The existing private placement notes and new notes rank pari passu in right of repayment with the Company’s obligations under the bank loan agreement, are secured and guaranteed in the same manner as the obligations under the bank loan agreement and otherwise include terms that are substantially similar to those set forth in the bank loan agreement.

On October 14, 2007, the Company and Kongsberg Automotive Holding ASA (“Kongsberg”) entered into a Purchase Agreement (the “Purchase Agreement”) pursuant to which Kongsberg will acquire the Company’s business units that design and manufacture automotive and industrial driver controls, motion systems and fluid handling systems (the “Business”) for $560 million in cash (the “Sale”). The purchase price is subject to possible upward or downward adjustment based on certain provisions in the Purchase Agreement relating to the working capital of the Business, measured at the closing date of the Sale. Completion of the Sale is subject to customary closing conditions. The Sale is not subject to any financing condition, and is expected to close by the end of 2007. The accompanying financial information includes the operations of the business as a component of continuing operations as the requirements for discontinued operations treatment were not met at September 30, 2007. Revenues for this business were $652 million and $614 million for the first nine months of 2007 and 2006, respectively.

All statements made in this Quarterly Report onForm 10-Q,other than statements of historical fact, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “should,” “guidance,” “potential,” “continue,” “project,” “forecast,” “confident,” “prospects,” and similar expressions typically are used to identify forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about our business and the industry and markets in which we operate. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements due to a number of factors, including changes in business relationships with and purchases by or from major customers or suppliers, including delays or cancellations in shipments; demand for and market acceptance of new and existing products; our ability to integrate acquired businesses into our operations, realize planned synergies and operate such businesses profitably in accordance with expectations; our ability to effectively execute our restructuring programs; competitive market conditions and resulting effects on revenues and pricing; increases in raw material costs that cannot be recovered in product pricing; and global economic factors, including currency exchange rates and interest rates; difficulties entering new markets; and general economic conditions. For a further discussion of the risks relating to our business, see Item 1A of our Annual Report onForm 10-Kfor the fiscal year ended December 31, 2006. We expressly disclaim any obligation to update these forward-looking statements, except as otherwise specifically stated by us or as required by law or regulation.

We are focused on achieving consistent and sustainable growth through the continued development of our core businesses and carefully selected acquisitions. Our internal growth initiatives include the development of new products, moving existing products into adjacent markets and expanding market share. Our core revenue grew approximately 3% in the third quarter of 2007 as compared to the same period in 2006, excluding the impacts of currency, acquisitions and divestitures, reflecting core revenue growth in all three segments.

Segment operating profit declined, however, approximately 2% in the third quarter of 2007 compared to the same period in 2006. This decline was due primarily to provisions for warranty and other costs related to prior generation auxiliary power units sold to the North American truck market, increased engineering expense in advance of new product launches in businesses serving the marine, automotive and industrial markets, continued customer price reductions in automotive markets and increased commodity costs, production inefficiencies related to lower volume for cargo container and actuator products, which offset the effects of improved cost and operational efficiencies, higher volumes and improved sales mix in the Medical Segment.

On June 29, 2007, the Company completed the sale of Teleflex Aerospace Manufacturing Group (“TAMG”), a precision-machined components business in its Aerospace Segment for $133.9 million, and recognized a gain of $48.6 million, net of taxes of $26.6 million. For the first nine months of 2007 and the comparable period of 2006, the TAMG business has been presented in our condensed consolidated financial statements as a discontinued operation.

On October 1, 2007, the Company acquired all of the outstanding capital stock of Arrow International, Inc. (“Arrow”) for approximately $2.0 billion including fees and expenses. Arrow is a leading global provider of catheter-based access and therapeutic products for critical and cardiac care. The transaction has been financed with cash, a senior secured syndicated bank loan and issuance of private placement notes. The syndicated bank loan agreement includes a $1.4 billion term loan and a $400 million revolving line of credit, both of which carry initial interest rates of LIBOR + 150 basis points. The company executed an interest rate swap for $600 million of the term loan from floating to a fixed rate of 6.25%. In addition, Teleflex amended its existing private placement notes and issued $200 million in new private placement notes with a blended interest rate of under 8% and terms substantially similar to the syndicated bank agreement. For additional information regarding the terms of our financing arrangements, including terms relating to interest rates, see Note 14 to our condensed consolidated financial statements included in this Quarterly Report onForm 10-Q.As a result of this acquisition, the Company’s interest

On October 14, 2007, the Company and Kongsberg Automotive Holding ASA (“Kongsberg”) entered into a Purchase Agreement (the “Purchase Agreement”) pursuant to which Kongsberg will acquire the Company’s business units that design and manufacture automotive and industrial driver controls, motion systems and fluid handling systems (the “Business”) for $560 million in cash (the “Sale”). The purchase price is subject to possible upward or downward adjustment based on certain provisions in the Purchase Agreement relating to the working capital of the Business, measured at the closing date of the Sale. Completion of the Sale is subject to customary closing conditions. The Sale is not subject to any financing condition, and is expected to close by the end of 2007.

Discussion of growth from acquisitions reflects the impact of a purchased company up to twelve months beyond the date of acquisition. Activity beyond the initial twelve months is considered core growth. Core growth excludes the impact of translating the results of international subsidiaries at different currency exchange rates from year to year and the comparable activity of divested companies within the most recent twelve-month period. The following comparisons exclude the impact of the TAMG business and a small medical business, which have been presented in our condensed consolidated financial results as discontinued operations.

Revenues increased approximately 8% in the third quarter of 2007 to $656.1 million from $605.5 million in the third quarter of 2006. This increase was due to core growth, currency movements and acquisitions of 3%, 3% and 2%, respectively. Revenues increased approximately 8% in the first nine months of 2007 to $2.0 billion from $1.86 billion in the first nine months of 2006. This increase was due to an increase of 3% from core growth, 3% from currency movements and 2% from acquisitions. The Commercial, Medical and Aerospace segments comprised 48%, 35% and 17% of our revenues, respectively, for the three months ended September 30, 2007 and comprised 49%, 34% and 17% of our revenues, respectively, for the first nine months of 2007.

Gross profit as a percentage of revenues declined to 29.5% in the third quarter of 2007 from 29.8% in the third quarter of 2006 largely due to approximately $4 million in provisions for warranty and other costs related to prior generation auxiliary power units sold to the North American truck market and to approximately $0.8 million of one-time purchase accounting adjustments in the Commercial Segment. Selling, engineering and administrative expenses (operating expenses) as a percentage of revenues were 19.7% for the first nine months of 2007 compared to 19.5% for the first nine months of 2006, and were 19.3% of revenues in the third quarter of 2007 compared to 18.6% during the same period of a year ago. Higher operating expenses were primarily attributable to engineering expense in advance of new product launches in businesses serving the marine, automotive and industrial markets, startup costs of a Medical Segment European Shared Services center, quality assurance investments made in the Medical Segment and the impact of acquisitions and currency movements.

Interest expense declined slightly in the third quarter and first nine months of 2007 principally as a result of lower debt balances. Interest income increased in the third quarter and first nine months of 2007 primarily due to higher amounts of invested funds. The higher effective tax rate for the three and nine months ending September 30, 2007, reflected discrete income tax charges incurred in anticipation of the Arrow acquisition. Specifically, in connection with funding the acquisition of Arrow, the Company (i) repatriated approximately $197.0 million of cash from foreign subsidiaries which had previously been deemed to be permanently reinvested in the respective foreign jurisdictions; and (ii) changed its position with respect to certain additional previously untaxed foreign earnings to treat these earnings as no longer permanently reinvested. These items resulted in a discrete income tax charge in the third quarter of 2007 of approximately $90.2 million. Also, the Company remeasured certain deferred tax assets and liabilities as a result of changes in enacted tax rates, resulting in the recognition of a tax benefit of approximately $2.8 million during the third quarter of 2007. Minority interest in consolidated subsidiaries increased $1.1 million and $4.2 million in the third quarter and first nine months of 2007, respectively, due to increased profits from consolidated entities that are not wholly-owned. Loss from continuing operations for the third quarter of 2007 was $56.8 million, compared to income from continuing operations of $34.7 million for the third quarter of 2006,

We adopted the provisions of FASB Interpretation, or FIN, No. 48 “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” on January 1, 2007. FIN No. 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with Statement of Financial Accounting Standards, or SFAS, No. 109, “Accounting for Income Taxes.” FIN No. 48 requires that the impact of a tax position be recognized in the financial statements if it is more likely than not that the tax position will be sustained on tax audit, based on the technical merits of the position. FIN No. 48 also provides guidance on derecognition of tax positions that do not meet the “more likely than not” standard, classification of tax assets and liabilities, interest and penalties, accounting in interim periods, disclosure and transition. In connection with our adoption of the provisions of FIN No. 48, we recognized a charge of approximately $13.2 million to retained earnings.

For additional information regarding our uncertain tax positions, see Note 11 to our condensed consolidated financial statements included in this Quarterly Report onForm 10-Q.

In June 2006, we began certain restructuring initiatives that affect all three of our operating segments. These initiatives involve the consolidation of operations and a related reduction in workforce at several of our facilities in Europe and North America. We have determined to undertake these initiatives as a means to improving operating performance and to better leverage our existing resources. The charges, including changes in estimates, associated with the 2006 restructuring program that are included in restructuring and impairment charges during the first nine months of both 2007 and 2006 approximated $2.6 million, respectively. As of September 30, 2007, we expect to incur future restructuring costs associated with our 2006 restructuring program of between $3.0 million and $4.0 million in our Commercial, Medical and Aerospace segments through the second quarter of 2008.

During the first quarter of 2006, we began a restructuring activity in our Aerospace Segment. The actions related to the closure of a manufacturing facility, termination of employees and relocation of operations. No charges associated with this activity were included in restructuring and impairment charges during the third quarter and first nine months of 2007. The charges, including changes in estimates, associated with this activity that are included in restructuring and impairment charges during the third quarter first nine months of 2006 totaled $0.3 million and $0.6 million, respectively. We do not expect to incur any additional restructuring costs associated with this activity.

For additional information regarding our restructuring programs, see Note 4 to our condensed consolidated financial statements included in this Quarterly Report onForm 10-Q.

The percentage increases or (decreases) in revenues during the three and nine months ended September 30, 2007 compared to the respective periods ending September 24, 2006 were due to the following factors: