Click here to close now.

Welcome!

News Feed Item

Teledyne Technologies Reports Second Quarter Results

Teledyne Technologies Incorporated (NYSE:TDY):

  • All-time record quarterly sales of $601.0 million
  • Record second quarter earnings per share of $1.13
  • Instrumentation segment operating profit increased 33.9%
  • Raising full year 2013 GAAP earnings outlook to $4.50 to $4.55 per share from $4.47 to $4.51

Teledyne today reported second quarter 2013 sales of $601.0 million, compared with sales of $518.5 million for the second quarter of 2012, an increase of 15.9%. Net income attributable to Teledyne was $42.9 million ($1.13 per diluted share) for the second quarter of 2013, compared with $39.5 million ($1.06 per diluted share) for the second quarter of 2012, an increase of 8.6%.

“Quarterly sales were an all-time record and increased 15.9% compared to last year. Due to record sales to commercial and international customers, we also achieved reasonable organic growth of 2.9% in the quarter,” said Robert Mehrabian, chairman, president and chief executive officer. “Largely due to recent acquisitions and charges associated with cost reduction efforts, margins declined compared to last year. However, overall operating margin increased 45 basis points sequentially from the first quarter of 2013. Quarter-end backlog remained over $1.0 billion, and free cash flow of $92.8 million was very strong. Given the challenging global economy, we remain very focused on keeping our cost structure low. Year to date, we have incurred $4.2 million in pretax charges related to severance and facility consolidations, but have been able to cover such costs with increased earnings. Finally, integration of our recent acquisitions is progressing very well. Yesterday, we announced that Teledyne LeCroy demonstrated the world’s first 100 GHz oscilloscope. The ability to capture real-time electronic signals at a bandwidth of over 100 GHz is truly an industry milestone, one of many for Teledyne LeCroy over the years.”

Review of Operations (Comparisons are with the second quarter of 2012, unless noted otherwise. The 2012 results reflect a revised segment reporting structure.)

Instrumentation

The Instrumentation segment’s second quarter 2013 sales were $257.7 million, compared with $179.6 million, an increase of 43.5%. Second quarter 2013 operating profit was $41.1 million, compared with $30.7 million, an increase of 33.9%.

The second quarter 2013 sales increase resulted from higher sales of both marine and electronic test and measurement instrumentation. The higher sales of $31.7 million for marine instrumentation reflected increased sales of marine acoustic sensors and systems, as well as interconnect systems used in offshore energy production, and also included a total of $20.7 million in incremental revenue from recent acquisitions including the March 2013 acquisition of RESON A/S (“RESON”). Sales of $46.4 million for electronic test and measurement instrumentation resulted from the August 2012 acquisition of LeCroy Corporation (“LeCroy”). Sales for environmental instrumentation were $65.7 million for both quarters. The increase in operating profit reflected the impact of higher sales, partially offset by $2.0 million in additional intangible asset amortization.

Digital Imaging

The Digital Imaging segment’s second quarter 2013 sales were $104.3 million, compared with $110.9 million, a decrease of 6.0%. Operating profit was $7.9 million for the second quarter of 2013, compared with $7.5 million, an increase of 5.3%.

The 2013 sales decrease primarily reflected lower sales of imagers for remote sensing, LIDAR systems and MEMS products, partially offset by increased sales of infrared sensors and optics. Operating profit in 2013 primarily reflected improved profitability for LIDAR systems, partially offset by $0.4 million in severance costs.

Aerospace and Defense Electronics

The Aerospace and Defense Electronics segment’s second quarter 2013 sales were $169.5 million, compared with $151.6 million, an increase of 11.8%. Operating profit was $20.6 million for the second quarter of 2013, compared with $21.8 million, a decrease of 5.5%.

The 2013 sales increase reflected higher sales of $11.3 million from microwave and interconnect systems. The increase also resulted from increased sales of $6.2 million from avionics products and electronic relays and $0.4 million of greater sales of electronic manufacturing service products. Operating profit in 2013 decreased and reflected $1.5 million for severance and facility consolidation costs associated with certain defense electronics businesses and $0.4 million in higher net pension expense, partially offset by the impact of higher sales.

Engineered Systems

The Engineered Systems segment’s second quarter 2013 sales were $69.5 million compared with $76.4 million, a decrease of 9.0%. Operating profit was $5.7 million for the second quarter 2013, compared with $7.4 million, a decrease of 23.0%.

The second quarter 2013 sales decrease reflected lower sales of engineered products and services of $7.0 million and lower energy systems sales of $2.6 million, partially offset by higher sales of $2.7 million related to turbine engines. Operating profit in the second quarter of 2013 reflected the impact of lower sales and $1.1 million in higher net pension expense.

Additional Financial Information

Cash Flow

Cash provided by operating activities was $112.8 million for the second quarter of 2013, compared with $69.0 million. The higher cash provided by operating activities in the second quarter of 2013 primarily reflected the timing of accounts receivable collections, cash provided from the 2012 LeCroy acquisition, partially offset by higher income tax payments. Free cash flow (cash provided by operating activities less capital expenditures) was $92.8 million for the second quarter of 2013, compared with $51.9 million and reflected higher cash provided by operating activities. At June 30, 2013, total debt was $628.1 million, which included $151.4 million drawn on the $750.0 million credit facility, $250.0 million in senior notes, $200.0 million in term loans, $13.8 million in other debt and $12.9 million in capital lease obligations. Cash and cash equivalents were $70.1 million at June 30, 2013. The company received $2.4 million from the exercise of employee stock options in the second quarter of 2013, compared with $1.7 million. Capital expenditures for the second quarter of 2013 were $20.0 million, compared with $17.1 million. Depreciation and amortization expense for the second quarter of 2013 was $22.1 million, compared with $18.1 million.

On May 8, 2013, a subsidiary of Teledyne acquired Axiom IC B.V., for an initial payment of $4.0 million, net of cash acquired, with an additional $1.3 million expected to be paid in equal installments over three years. The acquisition was funded from borrowings under the credit facility.

Free Cash Flow(a)         Second Quarter
(in millions, brackets indicate use of funds) 2013         2012
Cash provided by operating activities $ 112.8 $ 69.0
Capital expenditures for property, plant and equipment (20.0 ) (17.1 )
Free cash flow $ 92.8   $ 51.9  
(a) The company defines free cash flow as cash provided by operating activities (a measure prescribed by generally accepted accounting principles) less capital expenditures for property, plant and equipment. Adjusted free cash flow eliminates the impact of pension contributions on a net of tax basis. The company believes that this supplemental non-GAAP information is useful to assist management and the investment community in analyzing the company’s ability to generate cash flow, including the impact of voluntary and required pension contributions.

Pension

Pension expense was $4.4 million for the second quarter of 2013 compared with $1.6 million. The increase in pension expense primarily reflected the impact of using a 4.4% discount rate to determine the benefit obligation for the domestic plan in 2013 compared with a 5.5% discount rate used in 2012. Pension expense allocated to contracts pursuant to U.S. Government Cost Accounting Standards (“CAS”) was $3.6 million for the second quarter of 2013 compared with $2.7 million. Pension expense determined allowable under CAS can generally be recovered through the pricing of products and services sold to the U.S. Government.

Income Taxes

The effective tax rate for the second quarter of 2013 was 27.6% compared with 30.5%. The decrease reflected a change in the proportion of domestic and international income, as well as $0.9 million in net tax benefits for discrete items in the second quarter of 2013. Excluding the net tax benefits in the second quarter of 2013, the effective tax rate would have been 29.1%.

Stock Option Compensation Expense

For the second quarter of 2013, the company recorded a total of $2.8 million in stock option expense, of which $1.8 million was recorded in the operating segment results and $1.0 million was recorded as corporate expense. For the second quarter of 2012, the company recorded a total of $2.0 million in stock option expense, of which $1.4 million was recorded in the operating segment results and $0.6 million was recorded as corporate expense.

Other

In the second quarter of 2013, the company incurred total severance and facility consolidation costs of $2.1 million. Interest expense, net of interest income, was $5.1 million for the second quarter of 2013, compared with $4.1 million, and primarily reflected higher debt levels. Corporate expense was $10.4 million for the second quarter of 2013, compared with $7.7 million and reflected higher compensation and professional fees expense. Other income and expense was less than $0.1 million for the second quarter of 2013, compared with income of $1.4 million. Other income and expense in the second quarter of 2012 included a $0.6 million gain on the purchase of the majority interest in the parent company of Optech Incorporated.

Outlook

Based on its current outlook, the company’s management believes that third quarter 2013 earnings per diluted share will be in the range of approximately $1.10 to $1.15, inclusive of estimated pretax severance and facility consolidation costs of $3.2 million, partially offset by $1.9 million of anticipated net tax benefits. The full year 2013 earnings per diluted share outlook is expected to be in the range of approximately $4.50 to $4.55, inclusive of estimated pretax severance and facility consolidation costs during full year 2013 of $9.1 million. The company’s effective tax rate for 2013 is expected to be 29.5%, before discrete items.

Forward-Looking Statements Cautionary Notice

This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, relating to earnings, growth opportunities, product sales, capital expenditures, pension matters, stock option compensation expense, interest expense, severance and facility consolidation costs, taxes, and strategic plans. Forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “believes,” or “expect,” that convey the uncertainty of future events or outcomes. All statements made in this press release that are not historical in nature should be considered forward-looking.

Actual results could differ materially from these forward-looking statements. Many factors could change the anticipated results, including: disruptions in the global economy; changes in demand for products sold to the defense electronics, instrumentation, digital imaging, energy exploration and production, commercial aviation, semiconductor and communications markets; funding, continuation and award of government programs; and cuts to defense spending resulting from future deficit reduction measures, including potential automatic cuts to defense spending that have been triggered by the Budget Control Act of 2011. Increasing fuel costs could negatively affect the markets of our commercial aviation businesses. Lower oil and natural gas prices, as well as instability in the Middle East or other oil producing regions, and new regulations or restrictions relating to energy production, including with respect to hydraulic fracturing, could negatively affect the company’s businesses that supply the oil and gas industry. In addition, financial market fluctuations affect the value of the company’s pension assets.

Changes in the policies of U.S. and foreign governments could result, over time, in reductions and 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 2012 Annual Report on Form 10-K and subsequent Quarterly 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 second quarter earnings conference call will be held at 11:00 a.m. (Eastern) on Thursday, July 25, 2013. 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 Thursday, July 25, 2013.

 

TELEDYNE TECHNOLOGIES INCORPORATED

CONSOLIDATED STATEMENTS OF INCOME

FOR THE SECOND QUARTER AND SIX MONTHS ENDED

JUNE 30, 2013 AND JULY 1, 2012

(Unaudited, - in millions, except per share amounts)

 
      Second       Second       Six       Six
Quarter Quarter Months Months
2013 2012 2013 2012
Net sales $ 601.0 $ 518.5 $ 1,170.4 $ 1,012.5
Costs and expenses:
Costs of sales 383.6 343.0 749.0 671.1
Selling, general and administrative expenses 152.5   115.8   297.6   226.2  
Total costs and expenses 536.1   458.8   1,046.6   897.3  
Income before other expense and income taxes 64.9 59.7 123.8 115.2
Other income/(expense), net 1.4 (0.5 ) 1.0
Interest and debt expense, net (5.1 ) (4.1 ) (10.5 ) (8.1 )
Income before income taxes 59.8 57.0 112.8 108.1
Provision for income taxes 16.5   17.4   29.7   32.9  
Net income 43.3 39.6 83.1 75.2
Noncontrolling interest (0.4 ) (0.1 ) 0.2    
Net income attributable to Teledyne $ 42.9   $ 39.5   $ 83.3   $ 75.2  
       
Diluted earnings per common share $ 1.13   $ 1.06   $ 2.20   $ 2.02  
Weighted average diluted common shares outstanding 38.0   37.3   37.9   37.3  
 
 
 

TELEDYNE TECHNOLOGIES INCORPORATED

SUMMARY OF SEGMENT NET SALES AND OPERATING PROFIT (a)

FOR THE SECOND QUARTER AND SIX MONTHS ENDED

JUNE 30, 2013 AND JULY 1, 2012

(Unaudited, - in millions)

 
     

Second
Quarter

     

Second
Quarter

     

% Change

     

Six
Months

     

Six
Months

      % Change
2013 2012 2013 2012
Net sales:
Instrumentation $ 257.7 $ 179.6 43.5 % $ 490.4 $ 354.8 38.2 %
Digital Imaging 104.3 110.9 (6.0 )% 206.7 205.1 0.8 %
Aerospace and Defense Electronics 169.5 151.6 11.8 % 332.6 301.8 10.2 %
Engineered Systems 69.5   76.4   (9.0 )% 140.7   150.8   (6.7 )%
Total net sales $ 601.0   $ 518.5   15.9 % $ 1,170.4   $ 1,012.5   15.6 %
Operating profit and other segment income:
Instrumentation $ 41.1 $ 30.7 33.9 % $ 77.7 $ 66.3 17.2 %
Digital Imaging 7.9 7.5 5.3 % 13.1 11.8 11.0 %
Aerospace and Defense Electronics 20.6 21.8 (5.5 )% 40.8 40.7 0.2 %
Engineered Systems 5.7   7.4   (23.0 )% 12.1   13.6   (11.0 )%
Segment operating profit and other segment income 75.3 67.4 11.7 % 143.7 132.4 8.5 %
Corporate expense (10.4 ) (7.7 ) 35.1 % (19.9 ) (17.2 ) 15.7 %
Other income/(expense), net 1.4 (100.0 )% (0.5 ) 1.0 *
Interest and debt expense, net (5.1 ) (4.1 ) 24.4 % (10.5 ) (8.1 ) 29.6 %
Income before income taxes 59.8 57.0 4.9 % 112.8 108.1 4.3 %
Provision for income taxes 16.5   17.4   (5.2 )% 29.7   32.9   (9.7 )%
Net income 43.3 39.6 9.3 % 83.1 75.2 10.5 %
Noncontrolling interest (0.4 ) (0.1 ) 300.0 % 0.2     *
Net income attributable to Teledyne $ 42.9   $ 39.5   8.6 % $ 83.3   $ 75.2   10.8 %

*

     

not meaningful

(a) Our previously reported 2012 fiscal year segment data has been restated to reflect a revised segment reporting structure adopted in the second quarter of 2013.
 
 
TELEDYNE TECHNOLOGIES INCORPORATED
CONSOLIDATED CONDENSED BALANCE SHEETS
(Current period unaudited – in millions)
 
      June 30, 2013       December 30, 2012
ASSETS
Cash and cash equivalents $ 70.1 $ 45.8
Accounts receivable, net 346.7 350.3
Inventories, net 293.7 281.2
Deferred income taxes, net 33.9 39.8
Prepaid expenses and other assets 33.9   27.7
Total current assets 778.3 744.8
Property, plant and equipment, net 354.4 349.5
Goodwill and acquired intangible assets, net 1,277.2 1,255.9
Other assets, net 104.2   56.2
Total assets $ 2,514.1   $ 2,406.4
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable $ 156.5 $ 148.6
Accrued liabilities 244.5 256.7
Current portion of long-term debt and capital leases 1.9   2.0
Total current liabilities 402.9 407.3
Long-term debt and capital lease obligations 626.2 556.2
Other long-term liabilities 204.4   239.5
Total liabilities 1,233.5 1,203.0
Total stockholders’ equity 1,280.6   1,203.4
Total liabilities and stockholders’ equity $ 2,514.1   $ 2,406.4
 
 
 
TELEDYNE TECHNOLOGIES INCORPORATED
SUMMARY OF QUARTERLY SEGMENT NET SALES AND OPERATING PROFIT
FOR FISCAL YEARS 2012 AND 2011
REFLECTS THE REVISED SEGMENT REPORTING STRUCTURE(a)
(Unaudited, - in millions)
 
      First Quarter       Second       Third Quarter       Fourth       Total Year
2012       Quarter 2012       2012       Quarter 2012       2012
Net sales:
Instrumentation $ 175.2 $ 179.6 $ 206.3 $ 243.6 $ 804.7
Digital Imaging 94.2 110.9 108.1 102.7 415.9
Aerospace and Defense Electronics 150.2 151.6 151.7 151.8 605.3
Engineered Systems 74.4         76.4         81.3        

69.3

        301.4
Total Net Sales $ 494.0         $ 518.5         $ 547.4         $ 567.4         $ 2,127.3
 
Operating profit and other segment income:
Instrumentation $ 35.6 $ 30.7 $ 31.8 $ 47.9 $ 146.0
Digital Imaging 4.3 7.5 7.6 5.4 24.8
Aerospace and Defense Electronics 18.9 21.8 22.2 17.6 80.5
Engineered Systems 6.2         7.4         8.3         6.6         28.5
Segment operating profit and other segment income $ 65.0         $ 67.4         $ 69.9         $ 77.5         $ 279.8
 
 
 
 
First Quarter Second Third Quarter Fourth Total Year
2011       Quarter 2011       2011       Quarter 2011       2011
Net sales:
Instrumentation $ 165.2 $ 160.9 $ 165.4 $ 156.7 $ 648.2
Digital Imaging 66.2 96.2 95.0 92.5 349.9
Aerospace and Defense Electronics 159.6 161.4 162.9 155.3 639.2
Engineered Systems 77.1         84.4         73.1         70.0         304.6
Total Net Sales $ 468.1         $ 502.9         $ 496.4         $ 474.5         $ 1,941.9
 
Operating profit and other segment income:
Instrumentation $ 33.5 $ 32.3 $ 33.8 $ 29.7 $ 129.3
Digital Imaging 3.9 7.6 2.3 2.3 16.1
Aerospace and Defense Electronics 20.1 22.5 23.2 21.6 87.4
Engineered Systems 6.6         8.6         6.4         6.5         28.1
Segment operating profit and other segment income $ 64.1         $ 71.0         $ 65.7         $ 60.1         $ 260.9
(a)     Our previously reported segment data has been restated to reflect a revised segment reporting structure adopted in the second quarter of 2013. Two business units that were formally part of the Aerospace and Defense Electronics segment are now reported as part of the Instrumentation segment.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
DevOps tends to focus on the relationship between Dev and Ops, putting an emphasis on the ops and application infrastructure. But that’s changing with microservices architectures. In her session at DevOps Summit, Lori MacVittie, Evangelist for F5 Networks, will focus on how microservices are changing the underlying architectures needed to scale, secure and deliver applications based on highly distributed (micro) services and why that means an expansion into “the network” for DevOps.
"We have a tagline - "Power in the API Economy." What that means is everything that is built in applications and connected applications is done through APIs," explained Roberto Medrano, Executive Vice President at Akana, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and Containers together help companies to achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of...
"AgilData is the next generation of dbShards. It just adds a whole bunch more functionality to improve the developer experience," noted Dan Lynn, CEO of AgilData, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
The Internet of Things is not only adding billions of sensors and billions of terabytes to the Internet. It is also forcing a fundamental change in the way we envision Information Technology. For the first time, more data is being created by devices at the edge of the Internet rather than from centralized systems. What does this mean for today's IT professional? In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists addressed this very serious issue of pro...
The cloud has transformed how we think about software quality. Instead of preventing failures, we must focus on automatic recovery from failure. In other words, resilience trumps traditional quality measures. Continuous delivery models further squeeze traditional notions of quality. Remember the venerable project management Iron Triangle? Among time, scope, and cost, you can only fix two or quality will suffer. Only in today's DevOps world, continuous testing, integration, and deployment upend...
"We provide a web application framework for building really sophisticated web applications that run on a browser without any installation need so we get used for biotech, defense, and banking applications," noted Charles Kendrick, CTO and Chief Architect at Isomorphic Software, in this SYS-CON.tv interview at @DevOpsSummit (http://DevOpsSummit.SYS-CON.com), held June 9-11, 2015, at the Javits Center in New York
Discussions about cloud computing are evolving into discussions about enterprise IT in general. As enterprises increasingly migrate toward their own unique clouds, new issues such as the use of containers and microservices emerge to keep things interesting. In this Power Panel at 16th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the state of cloud computing today, and what enterprise IT professionals need to know about how the latest topics and trends affect t...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at @ThingsExpo, James Kirkland, Red Hat's Chief Arch...
In the midst of the widespread popularity and adoption of cloud computing, it seems like everything is being offered “as a Service” these days: Infrastructure? Check. Platform? You bet. Software? Absolutely. Toaster? It’s only a matter of time. With service providers positioning vastly differing offerings under a generic “cloud” umbrella, it’s all too easy to get confused about what’s actually being offered. In his session at 16th Cloud Expo, Kevin Hazard, Director of Digital Content for SoftL...
"A lot of the enterprises that have been using our systems for many years are reaching out to the cloud - the public cloud, the private cloud and hybrid," stated Reuven Harrison, CTO and Co-Founder of Tufin, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.
The time is ripe for high speed resilient software defined storage solutions with unlimited scalability. ISS has been working with the leading open source projects and developed a commercial high performance solution that is able to grow forever without performance limitations. In his session at Cloud Expo, Alex Gorbachev, President of Intelligent Systems Services Inc., shared foundation principles of Ceph architecture, as well as the design to deliver this storage to traditional SAN storage co...
"Plutora provides release and testing environment capabilities to the enterprise," explained Dalibor Siroky, Director and Co-founder of Plutora, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
SYS-CON Events announced today that JFrog, maker of Artifactory, the popular Binary Repository Manager, will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based in California, Israel and France, founded by longtime field-experts, JFrog, creator of Artifactory and Bintray, has provided the market with the first Binary Repository solution and a software distribution social platform.