Teledyne Technologies Reports Fourth Quarter Results

Changes in the policies of U.S. and foreign governments, including economic sanctions, could result, over time, in reductions or realignment in defense or other government spending and further changes in programs in which the company participates.

While the company’s growth strategy includes possible acquisitions, we cannot provide any assurance as to when, if or on what terms any acquisitions will be made. Acquisitions involve various inherent risks, such as, among others, our ability to integrate acquired businesses, retain customers and achieve identified financial and operating synergies. There are additional risks associated with acquiring, owning and operating businesses internationally, including those arising from U.S. and foreign policy changes and exchange rate fluctuations.

While the company believes its internal and disclosure control systems are effective, there are inherent limitations in all control systems, and misstatements due to error or fraud may occur and may not be detected.

Readers are urged to read the company’s periodic reports filed with the Securities and Exchange Commission (“SEC”) for a more complete description of the company, its businesses, its strategies and the various risks that the company faces. Various risks are identified in Teledyne’s 2017 Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. The company assumes no duty to publicly update or revise any forward-looking statements, whether as a result of new information or otherwise.

A live webcast of Teledyne’s fourth quarter earnings conference call will be held at 11:00 a.m. (Eastern) on Wednesday, January 23, 2019. To access the call, go to www.teledyne.com approximately ten minutes before the scheduled start time. A replay will also be available for one month starting at 12:00 p.m. (Eastern) on Wednesday, January 23, 2019.

             

TELEDYNE TECHNOLOGIES INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED

DECEMBER 30, 2018 AND DECEMBER 31, 2017

(Unaudited - in millions, except per share amounts)

 

Fourth
Quarter

Fourth
Quarter

Twelve
Months

Twelve
Months

2018 2017(a) 2018 2017(a)
Net sales $ 748.4 $ 704.4 $ 2,901.8 $ 2,603.8
Costs and expenses:
Costs of sales (b) 459.6 437.2 1,791.0 1,624.0
Selling, general and administrative expenses (b) 177.6   172.6   694.2   658.1  
Total costs and expenses 637.2   609.8   2,485.2   2,282.1  
Operating income 111.2 94.6 416.6 321.7
Interest and debt expense, net (b) (5.7 ) (7.6 ) (25.5 ) (33.1 )
Non-service retirement benefit income 3.4 3.8 13.5 13.9
Other expense, net (b) (1.8 ) (2.5 )   (10.7 ) (15.5 )  
Income before income taxes (c) 107.1 88.3 393.9 287.0
Provision for income taxes 16.0   20.7   60.1   59.8  
Net income $ 91.1   $ 67.6   $ 333.8   $ 227.2  
       
Diluted earnings per common share $ 2.45   $ 1.84   $ 9.01   $ 6.26  
 
Weighted average diluted common shares outstanding 37.2   36.7   37.0   36.3  
(a)  

The 2017 periods have been adjusted to reflect the adoption of ASU No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.”

(b) The fourth quarter of 2017 includes a $1.1 million reduction to estimated pretax charges recorded in 2017 related to the acquisition of e2v technologies plc, which was recorded to cost of sales. Total year 2017 includes pretax charges of $27.0 million related to the acquisition of e2v technologies plc, of which, $5.7 million was recorded to cost of sales, $13.0 million was recorded to selling, general and administrative expenses, $2.3 million was recorded to interest expense and $6.0 million was recorded as other expense.
(c) The fourth quarter and total year 2017 includes provisional charges of $4.7 million due to the estimated impact of the Tax Act. The $4.7 million provisional charge was adjusted by an additional $0.6 million in the first quarter of 2018. In the third quarter of 2018, this additional provisional charge was reversed. In the fourth quarter of 2018, the company finalized its assessment of the Tax Act, resulting in a decrease of $0.8 million to the provisional charge.
                     

TELEDYNE TECHNOLOGIES INCORPORATED

SUMMARY OF SEGMENT NET SALES AND OPERATING INCOME

FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED

DECEMBER 30, 2018 AND DECEMBER 31, 2017

(Unaudited - in millions)

 

Fourth
Quarter

Fourth
Quarter

%
Change

Twelve
Months

Twelve
Months

%
Change

2018 2017(a) 2018 2017(a)
Net sales:
Instrumentation $ 263.4 $ 254.8 3.4 % $ 1,021.2 $ 953.9 7.1 %
Digital Imaging 225.9 206.7 9.3 % 885.2 717.7 23.3 %
Aerospace and Defense Electronics 178.3 173.4 2.8 % 696.5 646.0 7.8 %
Engineered Systems 80.8   69.5   16.3 % 298.9   286.2   4.4 %
Total net sales $ 748.4   $ 704.4   6.2 % $ 2,901.8   $ 2,603.8   11.4 %
Operating income:
Instrumentation $ 43.0 $ 30.7 40.1 % $ 147.4 $ 126.0 17.0 %
Digital Imaging (b) 37.1 35.9 3.3 % 157.3 110.4 42.5 %
Aerospace and Defense Electronics (b) 36.5 34.1 7.0 % 135.2 116.3 16.3 %
Engineered Systems 8.8 8.3 6.0 % 32.7 32.0 2.2 %
Corporate expense (b) (14.2 ) (14.4 )   (1.4 )% (56.0 ) (63.0 )   (11.1 )%
Operating income 111.2 94.6 17.5 % 416.6 321.7 29.5 %
Interest and debt expense, net (b) (5.7 ) (7.6 ) (25.0 )% (25.5 ) (33.1 ) (23.0 )%
Non-service retirement benefit income 3.4 3.8 (10.5 )% 13.5 13.9 (2.9 )%
Other expense, net (b) (1.8 ) (2.5 )   (28.0 )% (10.7 ) (15.5 )   (31.0 )%
Income before income taxes (c) 107.1 88.3 21.3 % 393.9 287.0 37.2 %
Provision for income taxes 16.0   20.7   (22.7 )% 60.1   59.8   0.5 %
Net income $ 91.1   $ 67.6   34.8 % $ 333.8   $ 227.2   46.9 %
(a)  

The 2017 periods have been adjusted to reflect the adoption of ASU No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.”

(b)

The fourth quarter of 2017 includes a $1.1 million reduction to estimated pretax charges recorded in 2017 related to the acquisition of e2v, which was recorded in the Digital Imaging segment. Total year 2017 includes pretax charges of $27.0 million related to the acquisition of e2v, of which, $8.0 million was recorded in the Digital Imaging segment, $0.3 million in the Aerospace and Defense Electronics segment, $10.4 million was recorded to corporate expense, $2.3 million was recorded to interest expense and $6.0 million was recorded as other expense. In the second quarter of 2018, we realigned the reporting structure for certain of our microwave product groupings. These products acquired with the acquisition of e2v were formerly reported as part of the Aerospace and Defense Electronics segment and are now reported as part of the Digital Imaging segment. Previously reported segment data has been adjusted to reflect this change. Total sales for these products were $24.2 million for fiscal year 2017.

(c) The fourth quarter and total year 2017 includes provisional charges of $4.7 million due to the estimated impact of the Tax Act. The $4.7 million provisional charge was adjusted by an additional $0.6 million in the first quarter of 2018. In the third quarter of 2018, this additional provisional charge was reversed. In the fourth quarter of 2018, the company finalized its assessment of the Tax Act, resulting in a decrease of $0.8 million to the provisional charge.
     

TELEDYNE TECHNOLOGIES INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited – in millions)

 

December 30, 2018

December 31, 2017

ASSETS
Cash $ 142.5 $ 70.9
Accounts receivable, net 561.8 478.1
Inventories, net 364.3 400.2
Prepaid expenses and other current assets 45.8   62.7
Total current assets 1,114.4 1,011.9
Property, plant and equipment, net 442.6 442.8
Goodwill and acquired intangible assets, net 2,079.5 2,175.6
Prepaid pension asset 88.2 127.2
Other assets, net 84.6   88.9
Total assets $ 3,809.3   $ 3,846.4
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable $ 227.8 $ 191.7
Accrued liabilities 354.7 345.3
Current portion of long-term debt, capital lease obligations and other debt 138.3   3.6
Total current liabilities 720.8 540.6
Long-term debt and capital lease obligations 612.3 1,069.3
Other long-term liabilities 246.5   289.2
Total liabilities 1,579.6 1,899.1
Total stockholders’ equity 2,229.7   1,947.3
Total liabilities and stockholders’ equity $ 3,809.3   $ 3,846.4
 

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