Teledyne Technologies Reports Fourth Quarter Results

THOUSAND OAKS, Calif. — (BUSINESS WIRE) — February 4, 2016 — Teledyne Technologies Incorporated (NYSE: TDY):

  • Fourth quarter sales of $600.0 million
  • Fourth quarter earnings per diluted share of $1.57
  • Issued $125.0 million in aggregate principal amount of senior unsecured notes
  • Extended credit facility maturity to 2020 and lowered interest rate
  • Authorized a new stock repurchase program for an additional 3,000,000 shares

Teledyne today reported fourth quarter 2015 sales of $600.0 million, compared with sales of $622.3 million for the fourth quarter of 2014, a decrease of 3.6%. Net income attributable to Teledyne was $55.5 million ($1.57 per diluted share) for the fourth quarter of 2015, compared with $60.2 million ($1.62 per diluted share) for the fourth quarter of 2014, a decrease of 7.8%. The fourth quarter of 2015 included pretax severance charges of $2.5 million. The fourth quarter of 2015 also included $5.9 million in research and development tax credits and net discrete tax benefits of $1.3 million. The fourth quarter of 2014 included pretax severance charges of $1.8 million. The fourth quarter of 2014 included $5.6 million in research and development tax credits and net discrete tax benefits of $0.7 million.

“We ended 2015 with our strongest quarter of the year. Sales and earnings per share were significantly higher than the preceding quarters. In fact, earnings in the fourth quarter of 2015 were nearly a record, just under last year’s record results, with research and development tax credits benefiting both periods,” said Robert Mehrabian, Chairman, President and Chief Executive Officer. “Despite a very weak industrial economy and currency headwinds, full year sales declined only four percent. However, we were able to maintain GAAP operating margin in 2015 given agile cost reductions. Our balanced business portfolio is not dependent on any single product or market. While energy markets have weakened, our aerospace and defense businesses are performing well. Nevertheless, in 2016 we expect further deterioration in our offshore energy businesses, which now represent approximately 15% of total sales. We also remain cautious in other commercial markets given the challenging global economic environment, so we believe it is prudent to be measured in our outlook. Finally, we continue to generate strong cash flow and will maintain capital deployment on share repurchases and complementary acquisitions.”

Full Year 2015 (Fiscal year 2015 contained 53 weeks and fiscal year 2014 contained 52 weeks.)
Total year sales for 2015 were $2,298.1 million, compared with $2,394.0 million for 2014, a decrease of 4.0%. Net income attributable to Teledyne was $195.8 million ($5.44 per diluted share) for 2015, compared with net income attributable to Teledyne of $217.7 million ($5.75 per diluted share) for 2014, a decrease of 10.1%. Total year 2015 and 2014 reflected pretax charges totaling $8.4 million and $4.2 million, respectively, for severance charges. Net income for 2015 and 2014 also included net discrete tax benefits of $9.8 million and $8.9 million, respectively. Total year 2015 and 2014 included $5.9 million and $5.6 million in research and development tax credits, respectively.

Review of Operations (Comparisons are with the fourth quarter of 2014, unless noted otherwise. The fourth quarter of 2015 contained 14 weeks and the fourth quarter of 2014 contained 13 weeks.)

Instrumentation
The Instrumentation segment’s fourth quarter 2015 sales were $266.3 million, compared with $299.6 million, a decrease of 11.1%. Fourth quarter 2015 operating income was $44.6 million, compared with $53.4 million, a decrease of 16.5%.

The fourth quarter 2015 sales decrease resulted from lower sales of marine, electronic test and measurement and environmental instrumentation. Sales for marine instrumentation decreased by $20.5 million and primarily reflected lower sales of interconnect systems and other marine sensors and systems for energy production, partially offset by higher sales of interconnects and marine systems for U.S. Government applications. Sales of electronic test and measurement instrumentation decreased $7.1 million and sales of environmental instrumentation decreased $5.7 million. The fourth quarter of 2015 reflected $0.9 million in higher severance costs compared with 2014.

Digital Imaging
The Digital Imaging segment’s fourth quarter 2015 sales were $102.1 million, compared with $102.4 million, a decrease of 0.3%. Operating income was $11.5 million for the fourth quarter of 2015, compared with $7.8 million, an increase of 47.4%.

The fourth quarter 2015 sales reflected increased sales of commercial digital imaging systems, including sensors and systems for life sciences and industrial X-ray applications, offset by lower sales from U.S. Government research and development contracts and laser-based mapping systems. The fourth quarter 2015 sales included $3.6 million in incremental sales from a recent acquisition. The increase in operating income in the fourth quarter of 2015 reflected improved margins across a number of product categories as a result of ongoing cost reductions and improved contract performance.

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