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 2016 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 Thursday, February 1, 2018. 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, February 1, 2018.
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TELEDYNE TECHNOLOGIES INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED DECEMBER 31, 2017 AND JANUARY 1, 2017 (Unaudited – in millions, except per share amounts) |
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|
Fourth Quarter |
Fourth Quarter |
Twelve Months |
Twelve Months |
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| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||
| Net sales | $ | 704.4 | $ | 552.9 | $ | 2,603.8 | $ | 2,149.9 | ||||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||||||||
| Costs of sales (a) | 433.9 | 340.0 | 1,612.2 | 1,318.0 | ||||||||||||||||||||||
| Selling, general and administrative expenses (a) | 172.1 | 142.4 | 656.0 | 578.1 | ||||||||||||||||||||||
| Total costs and expenses | 606.0 | 482.4 | 2,268.2 | 1,896.1 | ||||||||||||||||||||||
| Operating income | 98.4 | 70.5 | 335.6 | 253.8 | ||||||||||||||||||||||
| Interest and debt expense, net (a) | (7.6 | ) | (6.0 | ) | (33.1 | ) | (23.2 | ) | ||||||||||||||||||
|
Other income/(expense), net (a) |
(2.5 | ) | (4.4 | ) | (15.5 | ) | 10.7 | |||||||||||||||||||
| Income before income taxes | 88.3 | 60.1 | 287.0 | 241.3 | ||||||||||||||||||||||
|
Provision for income taxes (b) |
20.7 | 7.1 | 59.8 | 50.4 | ||||||||||||||||||||||
| Net income | $ | 67.6 | $ | 53.0 | $ | 227.2 | $ | 190.9 | ||||||||||||||||||
| Diluted earnings per common share | $ | 1.84 | $ | 1.48 | $ | 6.26 | $ | 5.37 | ||||||||||||||||||
| Weighted average diluted common shares outstanding | 36.7 | 35.9 | 36.3 | 35.5 | ||||||||||||||||||||||
| (a) | 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. The fourth quarter and total year 2016 includes pretax charges of $7.9 million related to the acquisition of e2v technologies plc, of which $1.9 million was recorded to selling, general and administrative expenses, $0.5 million was recorded to interest expense and $5.5 million was recorded as other expense. Total year 2016 also includes a second quarter gain of $17.9 million on the sale of a former operating facility recorded as other income. | ||
| (b) | The fourth quarter and total year 2017 includes provisional charges of $4.7 million due to the estimated impact of the Tax Act. | ||
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This financial statement was prepared in accordance with U.S. generally accepted accounting principles. |
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TELEDYNE TECHNOLOGIES INCORPORATED SUMMARY OF SEGMENT NET SALES AND OPERATING INCOME FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED DECEMBER 31, 2017 AND JANUARY 1, 2017 (Unaudited - in millions) |
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|
Fourth Quarter |
Fourth Quarter |
% Change |
Twelve Months |
Twelve Months |
% Change |
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| 2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||||||||
| Net sales: | ||||||||||||||||||||||||||||||||||
| Instrumentation | $ | 254.8 | $ | 224.6 | 13.4 | % | $ | 953.9 | $ | 876.7 | 8.8 | % | ||||||||||||||||||||||
| Digital Imaging | 199.7 | 110.9 | 80.1 | % | 693.5 | 398.7 | 73.9 | % | ||||||||||||||||||||||||||
| Aerospace and Defense Electronics | 180.4 | 151.8 | 18.8 | % | 670.2 | 615.9 | 8.8 | % | ||||||||||||||||||||||||||
| Engineered Systems | 69.5 | 65.6 | 5.9 | % | 286.2 | 258.6 | 10.7 | % | ||||||||||||||||||||||||||
| Total net sales | $ | 704.4 | $ | 552.9 | 27.4 | % | $ | 2,603.8 | $ | 2,149.9 | 21.1 | % | ||||||||||||||||||||||
| Operating income: | ||||||||||||||||||||||||||||||||||
| Instrumentation | $ | 31.4 | $ | 30.2 | 4.0 | % | $ | 127.4 | $ | 109.8 | 16.0 | % | ||||||||||||||||||||||
| Digital Imaging (a) | 34.8 | 15.3 | 127.5 | % | 108.4 | 45.9 | 136.2 | % | ||||||||||||||||||||||||||
| Aerospace and Defense Electronics (a) | 36.9 | 28.5 | 29.5 | % | 124.9 | 112.1 | 11.4 | % | ||||||||||||||||||||||||||
| Engineered Systems | 9.7 | 9.9 | (2.0 | )% | 37.7 | 32.1 | 17.4 | % | ||||||||||||||||||||||||||
| Corporate expense (a) | (14.4 | ) | (13.4 | ) | 7.5 | % | (62.8 | ) | (46.1 | ) | 36.2 | % | ||||||||||||||||||||||
| Operating income | 98.4 | 70.5 | 39.6 | % | 335.6 | 253.8 | 32.2 | % | ||||||||||||||||||||||||||
| Interest and debt expense, net (a) | (7.6 | ) | (6.0 | ) | 26.7 | % | (33.1 | ) | (23.2 | ) | 42.7 | % | ||||||||||||||||||||||
| Other income/(expense), net (a) | (2.5 | ) | (4.4 | ) | (43.2 | )% | (15.5 | ) | 10.7 | * | ||||||||||||||||||||||||
| Income before income taxes | 88.3 | 60.1 | 46.9 | % | 287.0 | 241.3 | 18.9 | % | ||||||||||||||||||||||||||
|
Provision for income taxes (b) |
20.7 | 7.1 | 191.5 | % | 59.8 | 50.4 | 18.7 | % | ||||||||||||||||||||||||||
| Net income | $ | 67.6 | $ | 53.0 | 27.5 | % | $ | 227.2 | $ | 190.9 | 19.0 | % | ||||||||||||||||||||||
| (a) | 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. The fourth quarter and total year 2016 includes pretax charges of $7.9 million related to the acquisition of e2v, of which $1.9 million was recorded as corporate expense, $0.5 million was recorded to interest expense and $5.5 million was recorded as other expense. Total year 2016 includes a second quarter gain of $17.9 million on the sale of a former operating facility recorded as other income. | ||
| (b) | The fourth quarter and total year 2017 includes provisional charges of $4.7 million due to the estimated impact of the Tax Act. | ||
| * | not meaningful | ||
| This financial statement was prepared in accordance with U.S. generally accepted accounting principles. | |||
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TELEDYNE TECHNOLOGIES INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited – in millions) |
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| December 31, 2017 | January 1, 2017 | ||||||||||||||||
| ASSETS | |||||||||||||||||
| Cash | $ | 70.9 | $ | 98.6 | |||||||||||||
| Accounts receivable, net | 478.1 | 383.7 | |||||||||||||||
| Inventories, net | 400.2 | 314.2 | |||||||||||||||
| Prepaid expenses and other current assets | 64.1 | 49.7 | |||||||||||||||
| Total current assets | 1,013.3 | 846.2 | |||||||||||||||
| Property, plant and equipment, net | 442.8 | 340.8 | |||||||||||||||
| Goodwill and acquired intangible assets, net (a) | 2,175.6 | 1,428.1 | |||||||||||||||
| Prepaid pension asset | 127.2 | 88.5 | |||||||||||||||
| Other assets, net | 88.9 | 70.8 | |||||||||||||||
| Total assets | $ | 3,847.8 | $ | 2,774.4 | |||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||
| Accounts payable | $ | 191.7 | $ | 138.8 | |||||||||||||
| Accrued liabilities | 338.3 | 261.0 | |||||||||||||||
| Current portion of long-term debt and capital leases and other debt | 3.6 | 102.0 | |||||||||||||||
| Total current liabilities | 533.6 | 501.8 | |||||||||||||||
| Long-term debt and capital lease obligations | 1,069.3 | 515.8 | |||||||||||||||
| Other long-term liabilities | 289.2 | 202.4 | |||||||||||||||
| Total liabilities | 1,892.1 | 1,220.0 | |||||||||||||||
| Total stockholders’ equity | 1,955.7 | 1,554.4 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 3,847.8 | $ | 2,774.4 | |||||||||||||
| (a) | The increase in goodwill and acquired intangible assets primarily reflects the estimated amounts related to the acquisition of e2v on March 28, 2017. | ||
| This financial statement was prepared in accordance with U.S. generally accepted accounting principles. | |||
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TELEDYNE TECHNOLOGIES INCORPORATED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED DECEMBER 31, 2017 AND JANUARY 1, 2017 (Unaudited – in millions, except per-share amounts) |
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| Fourth Quarter | Twelve Months | ||||||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
| Adjusted operating income: | |||||||||||||||||||||
| Operating income | $ | 98.4 | $ | 70.5 | $ | 335.6 | $ | 253.8 | |||||||||||||
| e2v transaction costs, including stamp duty, advisory, legal and other consulting fees and other costs | — |
|
1.9 |
13.0 | 1.9 | ||||||||||||||||
| e2v inventory fair value step-up amortization expense | (1.1 | ) |
|
— |
5.7 | — | |||||||||||||||
| Adjusted operating income | $ | 97.3 | $ | 72.4 | $ | 354.3 | $ | 255.7 | |||||||||||||
| Fourth Quarter | Twelve Months | ||||||||||||||||||||
| 2017 |
|
2016 |
2017 | 2016 | |||||||||||||||||
| Adjusted fully diluted earnings per share: | |||||||||||||||||||||
| Fully diluted earnings per share | $ | 1.84 |
|
$ |
1.48 |
$ | 6.26 | $ | 5.37 | ||||||||||||
| e2v transaction costs, including stamp duty, advisory, legal and other consulting fees and other costs (a) | — |
|
|
0.04 |
0.26 | 0.04 | |||||||||||||||
| e2v inventory fair value step-up amortization expense (a) | (0.02 | ) |
|
|
— |
0.12 | — | ||||||||||||||
| e2v funds-certain bank bridge facility commitment expense (a) | — |
|
|
0.01 |
0.05 | 0.01 | |||||||||||||||
| Foreign currency option contract expense to hedge the e2v purchase price (a) | — |
|
|
0.11 |
0.11 | 0.11 | |||||||||||||||
| Tax Cuts and Jobs Act repatriation tax and other impacts (b) | 0.13 |
|
|
— |
0.13 | — | |||||||||||||||
| Adjusted fully diluted earnings per share | $ | 1.95 |
|
$ |
1.64 |
$ | 6.93 | $ | 5.53 | ||||||||||||
| (a) | The adjustment to the fourth quarter and total year 2017 pretax amounts are net of income taxes of $0.01 and $0.20 per diluted share based, respectively, on a 26.8% income tax rate for total year 2017 and 24.9% for the fourth quarter of 2017. The adjustments to the fourth quarter and total year 2016 pretax amounts are net of income taxes of $0.06 per diluted share based on a 27.5% income tax rate. | ||
| (b) | The fourth quarter and total year 2017 includes provisional charges of $4.7 million due to the estimated impact of the Tax Act. | ||
