Teledyne Technologies Reports Fourth Quarter Results

THOUSAND OAKS, Calif. — (BUSINESS WIRE) — February 2, 2017 — Teledyne Technologies Incorporated (NYSE: TDY):

  • Fourth quarter sales from continuing operations of $552.9 million
  • Fourth quarter GAAP earnings per diluted share from continuing operations of $1.49
  • Announced pending acquisition of e2v technologies plc
  • Excluding pretax charges of $7.9 million ($0.16 per share) related to the e2v transaction, fourth quarter earnings per share of $1.65, a non-GAAP measure
  • Acquired Hanson Research and assets of IN USA

Teledyne today reported fourth quarter 2016 sales from continuing operations of $552.9 million, compared with sales from continuing operations of $594.7 million for the fourth quarter of 2015, a decrease of 7.0%. Net income from continuing operations was $53.4 million ($1.49 per diluted share) for the fourth quarter of 2016, compared with $56.2 million ($1.59 per diluted share) for the fourth quarter of 2015, a decrease of 5.0%. The fourth quarter of 2016 includes $7.9 million in acquisition related costs for the pending acquisition of e2v technologies plc (“e2v”). The fourth quarter earnings outlook issued by the company’s management on November 3, 2016, did not include charges related to the e2v transaction announced on December 12, 2016. Net income attributable to Teledyne was $53.0 million ($1.48 per diluted share) for the fourth quarter of 2016, compared with $55.5 million ($1.57 per diluted share) for the fourth quarter of 2015, a decrease of 4.5%. The fourth quarter of 2016 contained 13 weeks and the fourth quarter of 2015 contained 14 weeks.

“We concluded 2016 with our strongest quarter of the year. Furthermore, we generated record full year cash from operations,” said Robert Mehrabian, Chairman, President and Chief Executive Officer. “Most of our commercial businesses are now growing, marine instrumentation comparisons will ease significantly in 2017, and our government businesses have begun to recover. Our year-end backlog was approximately $120 million greater than last year. We closed two bolt-on acquisitions in the fourth quarter, and we were pleased to announce the pending acquisition of e2v, our largest transaction to date. I am personally very excited about the pending acquisition of e2v, as every business in its portfolio is complementary to Teledyne. From industrial machine vision to space-based imaging, microwave devices spanning radar to radiotherapy, and specialty semiconductors through micro electro-mechanical systems, our respective capabilities and engineering-centric cultures are truly a great fit.”

Full Year 2016

Total year sales from continuing operations for 2016 were $2,139.8 million, compared with $2,281.5 million for 2015, a decrease of 6.2%. Net income from continuing operations was $192.9 million ($5.43 per diluted share) for fiscal year 2016, compared with $198.0 million ($5.51 per diluted share) for fiscal year 2015, a decrease of 2.6%. Net income attributable to Teledyne was $190.9 million ($5.37 per diluted share) for 2016, compared with $195.8 million ($5.44 per diluted share) for 2015, a decrease of 2.5%. Total year 2016 and 2015 reflected pretax charges totaling $14.1 million and $8.4 million, respectively, for severance charges, facility consolidation and asset impairment charges. Net income for 2016 and 2015 also included net discrete tax benefits of $10.9 million and $9.8 million, respectively. The 2016 amount included tax benefits of $8.5 million due to the early adoption of Financial Accounting Standards Board’s Accounting Standards Update (“ASU”) 2016-19 related to share-based accounting. Fiscal year 2016 contained 52 weeks and fiscal year 2015 contained 53 weeks.

Review of Operations (Comparisons are with the fourth quarter of 2015, unless noted otherwise.) The results reflect the classification of our Printed Circuit Technology (“PCT”) business as a discontinued operation, which was sold in the third quarter of 2016, for $9.3 million in cash, resulting in no gain or loss. The PCT business was previously reported as part of the Aerospace and Defense Electronics segment.

Instrumentation

The Instrumentation segment’s fourth quarter 2016 sales were $224.6 million, compared with $266.3 million, a decrease of 15.7%. Fourth quarter 2016 operating income was $30.2 million, compared with $44.6 million, a decrease of 32.3%.

The fourth quarter 2016 sales decrease primarily resulted from lower sales of marine instrumentation partially offset by increased sales of electronic test and measurement and environmental instrumentation. Sales for marine instrumentation decreased $51.8 million and primarily reflected lower sales of interconnect systems and other marine sensors for energy exploration and production. Sales of test and measurement instrumentation increased $6.3 million and included $5.2 million in incremental sales from recent acquisitions. Sales of environmental instrumentation increased $3.8 million and included $2.4 million in incremental sales from recent acquisitions. The decrease in operating income was due to the impact of lower sales and lower margins for marine instrumentation, partially offset by greater sales and margins for environmental and test and measurement instrumentation.

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