THOUSAND OAKS, Calif. — (BUSINESS WIRE) — February 1, 2018 — Teledyne Technologies Incorporated (NYSE: TDY):

• Record sales of $704.4 million, an increase of 27.4% compared to last year
• Fourth quarter GAAP earnings per diluted share of $1.84
• Fourth quarter adjusted earnings per diluted share of $1.95, excluding estimated after-tax charges of $4.7 million ($0.13 per share) related to U.S. tax reform and a $1.1 million ($0.02 per share) favorable adjustment related to the e2v acquisition
• Record full year sales of $2.604 billion
• Record full year GAAP earnings per diluted share of $6.26
• Record full year adjusted earnings per diluted share of $6.93, excluding pretax charges of $27.0 million ($0.54 per share) related to the e2v acquisition and estimated after-tax charges of $4.7 million ($0.13 per share) related to U.S. tax reform
• Record full year GAAP operating margin
• Record full year free cash flow
• Issuing full year 2018 GAAP earnings outlook of $7.51 to $7.61

Teledyne today reported fourth quarter 2017 sales of $704.4 million, compared with sales of $552.9 million for the fourth quarter of 2016, an increase of 27.4%. Net income was $67.6 million ($1.84 per diluted share) for the fourth quarter of 2017, compared with $53.0 million ($1.48 per diluted share) for the fourth quarter of 2016, an increase of 27.5%. The fourth quarter of 2017 included net discrete income tax benefits of $6.0 million, and also includes provisional charges of $4.7 million as a result of the Tax Cuts and Jobs Act of 2017 (“Tax Act”). The fourth quarter of 2016 includes $7.9 million in acquisition related costs for the acquisition of e2v technologies plc (“e2v”). The fourth quarter of 2016 also included net discrete income tax benefits of $9.4 million.

“Sales growth accelerated throughout 2017, and we concluded the year with record revenue of $704.4 million. In addition, each segment and major product category reported strong growth with overall organic growth exceeding nine percent in the quarter,” said Robert Mehrabian, Chairman, President and Chief Executive Officer. “Full year 2017 was, by any measure, a record year. Record sales, record earnings, record operating margin, record cash flow, and the successful acquisition and integration of Teledyne e2v, our largest acquisition to date. Furthermore, we achieved record GAAP earnings despite significant non-recurring charges associated with the acquisition of e2v and U.S. tax reform.”

Full Year 2017

Total year sales for 2017 were $2,603.8 million, compared with $2,149.9 million for 2016, an increase of 21.1%. Net income was $227.2 million ($6.26 per diluted share) for fiscal year 2017, compared with $190.9 million ($5.37 per diluted share) for fiscal year 2016, an increase of 19.0%.

Total year 2017 and 2016 reflected pretax charges totaling $27.0 million and $7.9 million, respectively, in acquisition related costs for the acquisition of e2v. Total year 2017 and 2016 also reflected pretax charges totaling $4.2 million and $17.3 million, respectively, for severance charges and facility consolidation charges. Net income for 2017 included net discrete tax benefits of $21.9 million. Net income for 2016 included net discrete tax benefits of $17.6 million, partially offset by $6.7 million in tax expense related to a gain on the sale of a former operating facility. Total year 2017 also includes provisional charges of $4.7 million for the estimated impact of the Tax Act. The 2017 and 2016 amounts included tax benefits of $8.8 million and $8.5 million, respectively, related to share-based accounting.

Review of Operations (Comparisons are with the fourth quarter of 2016, unless noted otherwise.)

Instrumentation

The Instrumentation segment’s fourth quarter 2017 net sales were $254.8 million, compared with $224.6 million, an increase of 13.4%. Fourth quarter 2017 operating income was $31.4 million, compared with $30.2 million, an increase of 4.0%.

The fourth quarter 2017 net sales increase resulted from higher sales of environmental instrumentation, marine instrumentation and test and measurement instrumentation, as well as the contribution from recent acquisitions. Sales of environmental instrumentation increased $14.4 million and primarily reflected higher sales of air monitoring instruments and $7.5 million in incremental sales from recent acquisitions. Sales of marine instrumentation increased $8.0 million and primarily reflected higher sales of sonar systems, autonomous subsea vehicles and selected interconnect systems. Sales of test and measurement instrumentation increased $7.8 million and included $2.2 million in incremental sales from recent acquisitions. The increase in operating income reflected the impact of greater sales, partially offset by lower margins for marine instrumentation.