Teledyne Technologies Reports Fourth Quarter Results
Teledyne Technologies reported fourth quarter 2020 sales of $809.3 million, down 3.0% from the previous year, but achieved an all-time record GAAP diluted EPS of $3.48, up 13.7%. The company also reached a record GAAP operating margin of 17.8%. Cash from operations hit $236.4 million for the quarter and $618.9 million for the year. Teledyne announced a pending acquisition of FLIR Systems for approximately $8.0 billion. Despite a decrease in total year sales to $3,086.2 million, net income remained steady at $401.9 million.
- Record GAAP diluted EPS of $3.48, a 13.7% increase year-over-year.
- All-time record GAAP operating margin of 17.8%, up 173 bps from last year.
- Record cash from operations of $236.4 million for Q4 and $618.9 million for the full year.
- Pending acquisition of FLIR Systems, expected to enhance product and customer portfolio.
- Q4 sales decreased by 3.0% compared to Q4 2019.
- Total annual sales declined to $3,086.2 million, down 2.4% from 2019.
- Operating income for Aerospace and Defense Electronics segment fell 29.3% due to lower sales.
Teledyne Technologies Incorporated (NYSE:TDY):
-
Fourth quarter sales of
$809.3 million -
All-time record GAAP diluted earnings per share of
$3.48 , an increase of13.7% compared with last year -
All-time record GAAP operating margin of
17.8% , an increase of 173 bps from last year -
Record quarterly and full year cash from operations of
$236.4 million and$618.9 million , respectively -
Announced pending acquisition of FLIR Systems, Inc. for approximately
$8.0 billion -
Issuing full year 2021 diluted earnings per share outlook of
$11.25 t o$11.45 , which does not reflect the pending acquisition of FLIR and related acquisition and financing costs
Teledyne today reported fourth quarter 2020 net sales of
“We concluded 2020 with the best earnings, operating margin and cash flow in the company’s history,” said Robert Mehrabian, Executive Chairman. “Given record quarterly and full year free cash flow of
Full Year 2020
Total year sales for 2020 were
Total year 2020 and 2019 also reflected pretax charges totaling
Review of Operations
Comparisons are with the fourth quarter of 2019, unless noted otherwise. The fourth quarter of 2020 contained 14 weeks and the fourth quarter of 2019 contained 13 weeks.
Instrumentation
The Instrumentation segment’s fourth quarter 2020 net sales were
The fourth quarter 2020 net sales decrease resulted from lower sales of marine instrumentation and environmental instrumentation, partially offset by higher sales of test and measurement instrumentation. Sales of marine instrumentation decreased
Digital Imaging
The Digital Imaging segment’s fourth quarter 2020 net sales were
The fourth quarter 2020 net sales primarily reflected lower sales of X-ray detectors for dental and medical imaging, partially offset by greater sales of infrared and visible detectors for space applications. The increase in operating income in the fourth quarter of 2020 primarily reflected improved margins across most product categories.
Aerospace and Defense Electronics
The Aerospace and Defense Electronics segment’s fourth quarter 2020 net sales were
The fourth quarter 2020 net sales reflected
Engineered Systems
The Engineered Systems segment’s fourth quarter 2020 net sales were
The fourth quarter 2020 net sales primarily reflected higher sales of
Additional Financial Information
Cash Flow
Cash provided by operating activities was
Teledyne and FLIR Systems, Inc. (“FLIR”) have entered into a definitive agreement under which Teledyne will acquire FLIR in a cash and stock transaction valued at approximately
As part of the transaction, Teledyne has arranged a
Free Cash Flow (a) |
|
Fourth Quarter |
|
Total Year |
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(in millions, brackets indicate use of funds) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||||||
Cash provided by operating activities |
|
$ |
236.4 |
|
|
|
$ |
167.9 |
|
|
|
$ |
618.9 |
|
|
|
$ |
482.1 |
|
|
Capital expenditures for property, plant and equipment |
|
(19.4 |
) |
|
|
(23.9 |
) |
|
|
(71.4 |
) |
|
|
(88.4 |
) |
|
||||
Free cash flow |
|
$ |
217.0 |
|
|
|
$ |
144.0 |
|
|
|
$ |
547.5 |
|
|
|
$ |
393.7 |
|
|
(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. 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.
Income Taxes
The effective tax rate for the fourth quarter of 2020 was
Other
Stock option expense was
Outlook
Based on its current outlook, the company’s management believes that first quarter 2021 diluted earnings per share will be in the range of
Forward-Looking Statements Cautionary Notice
This earnings release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, with respect to management’s beliefs about the financial condition, results of operations and businesses of Teledyne in the future. Forward-looking statements involve risks and uncertainties, are based on the current expectations of the management of Teledyne and are subject to uncertainty and changes in circumstances. The forward-looking statements contained herein may include statements about the expected effects on Teledyne of the proposed acquisition of FLIR, the anticipated timing and scope of the proposed transaction, anticipated earnings enhancements, estimated cost savings and other synergies related to the proposed transaction, costs to be incurred in achieving synergies, anticipated capital expenditures and product developments, and other strategic options. Forward-looking statements generally are accompanied by words such as “projects”, “intends”, “expects”, “anticipates”, “targets”, “estimates”, “will” and words of similar import that convey the uncertainty of future events or outcomes. All statements made in this communication that are not historical in nature should be considered forward-looking. By its nature, forward-looking information is not a guarantee of future performance or results and involves risks and uncertainties because it relates to events and depends on circumstances that will occur in the future.
Actual results could differ materially from these forward-looking statements. Many factors could change anticipated results, including ongoing challenges and uncertainties posed by the COVID-19 pandemic for businesses and governments around the world; the occurrence of any event, change or other circumstances that could give rise to the right of Teledyne or FLIR or both to terminate the Merger Agreement; the outcome of any legal proceedings that may be instituted against Teledyne or FLIR in connection with the Merger Agreement; the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction) or stockholder approvals or to satisfy any of the other conditions to the proposed transaction on a timely basis or at all; the failure to obtain the debt portion of the financing for the proposed transaction; the inability to complete the acquisition and integration of FLIR successfully, to retain customers and key employees and to achieve operating synergies, including the possibility that the anticipated benefits of the proposed transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Teledyne and FLIR do business; the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; changes in relevant tax and other laws; the inability to develop and market new competitive products; inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements and the providing of estimates of financial measures, in accordance with U.S. GAAP and related standards; operating results of FLIR being lower than anticipated; disruptions in the global economy; the spread of the COVID-19 virus resulting in production, supply, contractual and other disruptions, including facility closures and furloughs and travel restrictions; customer and supplier bankruptcies; 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; cuts to defense spending resulting from existing and future deficit reduction measures or changes to U.S. and foreign government spending and budget priorities triggered by the COVID-19 pandemic; impacts from the United Kingdom’s exit from the European Union; uncertainties related to the policies of the new U.S. Presidential Administration; the imposition and expansion of, and responses to, trade sanctions and tariffs; escalating economic and diplomatic tension between China and the United States; and threats to the security of our confidential and proprietary information, including cyber security threats. 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 further negatively affect our businesses that supply the oil and gas industry. Disruptions from the production delay of Boeing’s 737 Max aircraft and continued weakness in the commercial aerospace industry will negatively affect the markets of our commercial aviation businesses. In addition, financial market fluctuations affect the value of the company's pension assets.
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.
Additional factors that could cause results to differ materially from those described above can be found in Teledyne’s Annual Report on Form 10-K for the year ended December 29, 2019, and its Quarterly Reports on Form 10-Q for the periods ended March 29, 2020, June 28, 2020 and September 27, 2020, all of which are on file with the SEC and available in the “Investors” section of Teledyne’s website, teledyne.com, under the heading “Investor Information” and in other documents Teledyne files with the SEC, and in FLIR’s Annual Report on Form 10-K for the year ended December 31, 2019, and its Quarterly Reports on Form 10-Q for the periods ended March 31, June 30 and September 30, 2020, all of which are on file with the SEC and available on the “Investor Relations” page of FLIR’s website, flir.com, under the heading “Filings and Financials” and in other documents FLIR files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Teledyne nor FLIR assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Additional Information and Where to Find It
In connection with the proposed transaction between Teledyne Technologies Incorporated (“Teledyne”) and FLIR Systems, Inc. (“FLIR”), Teledyne will file with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4 that will include a joint proxy statement of Teledyne and FLIR and a prospectus of Teledyne, as well as other relevant documents concerning the proposed transaction. The proposed transaction involving Teledyne and FLIR will be submitted to Teledyne’s stockholders and FLIR’s stockholders for their consideration. Stockholders of Teledyne and stockholders of FLIR are urged to read the registration statement and the joint proxy statement/prospectus regarding the transaction when they become available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information.
Stockholders will be able to obtain a free copy of the definitive joint proxy statement/prospectus, as well as other filings containing information about Teledyne and FLIR, without charge, at the SEC’s website (http://www.sec.gov). Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to Teledyne, Attn: Investor Relations, 1049 Camino Dos Rios, Thousand Oaks, California 91360, or to FLIR, Attn: Corporate Secretary, 1201 S Joyce St, Arlington, Virginia 22202.
Participants in the Solicitation
Teledyne, FLIR and certain of their respective directors, executive officers and employees may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction. Information regarding Teledyne’s directors and executive officers is available in its definitive proxy statement for its 2020 Annual Meeting, which was filed with the SEC on March 10, 2020, its Annual Report on Form 10-K for the year ended December 28, 2019, which was filed with the SEC on February 24, 2020, and certain of its Current Reports on Form 8-K. Information regarding FLIR’s directors and executive officers is available in its definitive proxy statement, which was filed with the SEC on March 11, 2020, and certain of its Current Reports on Form 8-K. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials filed with the SEC. Free copies of this document may be obtained as described in the preceding paragraph.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to sell or an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933.
A live webcast of Teledyne’s fourth quarter earnings conference call will be held at 11:00 a.m. (Eastern) on Wednesday, January 27, 2021. To access the call, go to www.teledyne.com/investors/presentations 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 Wednesday, January 27, 2021.
TELEDYNE TECHNOLOGIES INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED (a) JANUARY 3, 2021 AND DECEMBER 29, 2019 (Unaudited - in millions, except per share amounts) |
||||||||||||||||||||
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|
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|
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||||||||||||
|
|
Fourth Quarter |
|
Fourth Quarter |
|
Twelve Months |
|
Twelve Months |
||||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||||||
Net sales |
|
$ |
809.3 |
|
|
|
$ |
834.2 |
|
|
|
$ |
3,086.2 |
|
|
|
$ |
3,163.6 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
||||||||||||
Costs of sales |
|
493.6 |
|
|
|
505.1 |
|
|
|
1,905.3 |
|
|
|
1,920.3 |
|
|
||||
Selling, general and administrative expenses |
|
171.9 |
|
|
|
195.3 |
|
|
|
700.8 |
|
|
|
751.6 |
|
|
||||
Total costs and expenses |
|
665.5 |
|
|
|
700.4 |
|
|
|
2,606.1 |
|
|
|
2,671.9 |
|
|
||||
Operating income |
|
143.8 |
|
|
|
133.8 |
|
|
|
480.1 |
|
|
|
491.7 |
|
|
||||
Interest and debt expense, net |
|
(3.4 |
) |
|
|
(4.7 |
) |
|
|
(15.3 |
) |
|
|
(21.0 |
) |
|
||||
Non-service retirement benefit income |
|
3.2 |
|
|
|
1.9 |
|
|
|
12.1 |
|
|
|
8.0 |
|
|
||||
Other expense, net |
|
(2.5 |
) |
|
|
(1.5 |
) |
|
|
(7.2 |
) |
|
|
(5.0 |
) |
|
||||
Income before income taxes |
|
141.1 |
|
|
|
129.5 |
|
|
|
469.7 |
|
|
|
473.7 |
|
|
||||
Provision for income taxes |
|
9.0 |
|
|
|
13.8 |
|
|
|
67.8 |
|
|
|
71.4 |
|
|
||||
Net income |
|
$ |
132.1 |
|
|
|
$ |
115.7 |
|
|
|
$ |
401.9 |
|
|
|
$ |
402.3 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted earnings per common share |
|
$ |
3.48 |
|
|
|
$ |
3.06 |
|
|
|
$ |
10.62 |
|
|
|
$ |
10.73 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average diluted common shares outstanding |
|
38.0 |
|
|
|
37.8 |
|
|
|
37.9 |
|
|
|
37.5 |
|
|
||||
(a) Fiscal year 2020 contained 53 weeks and fiscal year 2019 contained 52 weeks. The fourth quarter of 2020 contained 14 weeks and the fourth quarter of 2019 contained 13 weeks.
TELEDYNE TECHNOLOGIES INCORPORATED SUMMARY OF SEGMENT NET SALES AND OPERATING INCOME FOR THE FOURTH QUARTER AND TWELVE MONTHS ENDED JANUARY 3, 2021 AND DECEMBER 29, 2019 (Unaudited - in millions) |
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||||||||||||||
|
|
Fourth Quarter |
|
Fourth Quarter |
|
% Change |
|
Twelve Months |
|
Twelve Months |
|
% Change |
||||||||||||||
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
|
||||||||||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Instrumentation |
|
$ |
282.8 |
|
|
|
$ |
301.6 |
|
|
|
(6.2 |
)% |
|
$ |
1,094.5 |
|
|
|
$ |
1,105.1 |
|
|
|
(1.0 |
)% |
Digital Imaging |
|
262.0 |
|
|
|
268.1 |
|
|
|
(2.3 |
)% |
|
986.0 |
|
|
|
992.9 |
|
|
|
(0.7 |
)% |
||||
Aerospace and Defense Electronics |
|
145.2 |
|
|
|
170.4 |
|
|
|
(14.8 |
)% |
|
589.4 |
|
|
|
690.1 |
|
|
|
(14.6 |
)% |
||||
Engineered Systems |
|
119.3 |
|
|
|
94.1 |
|
|
|
26.8 |
% |
|
416.3 |
|
|
|
375.5 |
|
|
|
10.9 |
% |
||||
Total net sales |
|
$ |
809.3 |
|
|
|
$ |
834.2 |
|
|
|
(3.0 |
)% |
|
$ |
3,086.2 |
|
|
|
$ |
3,163.6 |
|
|
|
(2.4 |
)% |
Operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Instrumentation |
|
$ |
63.2 |
|
|
|
$ |
59.5 |
|
|
|
6.2 |
% |
|
$ |
213.2 |
|
|
|
$ |
200.4 |
|
|
|
6.4 |
% |
Digital Imaging |
|
56.7 |
|
|
|
47.1 |
|
|
|
20.4 |
% |
|
192.8 |
|
|
|
176.5 |
|
|
|
9.2 |
% |
||||
Aerospace and Defense Electronics |
|
23.2 |
|
|
|
32.8 |
|
|
|
(29.3 |
)% |
|
80.8 |
|
|
|
143.4 |
|
|
|
(43.7 |
)% |
||||
Engineered Systems |
|
15.4 |
|
|
|
10.5 |
|
|
|
46.7 |
% |
|
50.1 |
|
|
|
36.5 |
|
|
|
37.3 |
% |
||||
Corporate expense |
|
(14.7 |
) |
|
|
(16.1 |
) |
|
|
(8.7 |
)% |
|
(56.8 |
) |
|
|
(65.1 |
) |
|
|
(12.7 |
)% |
||||
Operating income |
|
143.8 |
|
|
|
133.8 |
|
|
|
7.5 |
% |
|
480.1 |
|
|
|
491.7 |
|
|
|
(2.4 |
)% |
||||
Interest and debt expense, net |
|
(3.4 |
) |
|
|
(4.7 |
) |
|
|
(27.7 |
)% |
|
(15.3 |
) |
|
|
(21.0 |
) |
|
|
(27.1 |
)% |
||||
Non-service retirement benefit income |
|
3.2 |
|
|
|
1.9 |
|
|
|
68.4 |
% |
|
12.1 |
|
|
|
8.0 |
|
|
|
51.3 |
% |
||||
Other expense, net |
|
(2.5 |
) |
|
|
(1.5 |
) |
|
|
66.7 |
% |
|
(7.2 |
) |
|
|
(5.0 |
) |
|
|
44.0 |
% |
||||
Income before income taxes |
|
141.1 |
|
|
|
129.5 |
|
|
|
9.0 |
% |
|
469.7 |
|
|
|
473.7 |
|
|
|
(0.8 |
)% |
||||
Provision for income taxes |
|
9.0 |
|
|
|
13.8 |
|
|
|
(34.8 |
)% |
|
67.8 |
|
|
|
71.4 |
|
|
|
(5.0 |
)% |
||||
Net income |
|
$ |
132.1 |
|
|
|
$ |
115.7 |
|
|
|
14.2 |
% |
|
$ |
401.9 |
|
|
|
$ |
402.3 |
|
|
|
(0.1 |
)% |
(a) Fiscal year 2020 contained 53 weeks and fiscal year 2019 contained 52 weeks. The fourth quarter of 2020 contained 14 weeks and the fourth quarter of 2019 contained 13 weeks.
TELEDYNE TECHNOLOGIES INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited – in millions) |
||||||||
|
|
January 3, 2021 |
|
December 29, 2019 |
||||
ASSETS |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
673.1 |
|
|
$ |
199.5 |
|
Accounts receivable, net |
|
624.1 |
|
|
660.9 |
|
||
Inventories, net |
|
347.3 |
|
|
393.4 |
|
||
Prepaid expenses and other current assets |
|
78.1 |
|
|
59.9 |
|
||
Total current assets |
|
1,722.6 |
|
|
1,313.7 |
|
||
Property, plant and equipment, net |
|
489.3 |
|
|
487.9 |
|
||
Goodwill and acquired intangible assets, net |
|
2,559.7 |
|
|
2,481.3 |
|
||
Prepaid pension asset |
|
51.7 |
|
|
71.8 |
|
||
Other assets, net |
|
245.3 |
|
|
225.1 |
|
||
Total assets |
|
$ |
5,068.6 |
|
|
$ |
4,579.8 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||||
Accounts payable |
|
$ |
229.1 |
|
|
$ |
271.1 |
|
Accrued liabilities |
|
434.2 |
|
|
391.5 |
|
||
Current portion of long-term debt and other debt |
|
97.6 |
|
|
100.6 |
|
||
Total current liabilities |
|
760.9 |
|
|
763.2 |
|
||
Long-term debt |
|
680.9 |
|
|
750.0 |
|
||
Other long-term liabilities |
|
398.2 |
|
|
351.9 |
|
||
Total liabilities |
|
1,840.0 |
|
|
1,865.1 |
|
||
Total stockholders’ equity |
|
3,228.6 |
|
|
2,714.7 |
|
||
Total liabilities and stockholders’ equity |
|
$ |
5,068.6 |
|
|
$ |
4,579.8 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210127005239/en/
FAQ
What were Teledyne's fourth quarter sales in 2020?
What is the GAAP diluted EPS for Teledyne in Q4 2020?
What is the pending acquisition amount for FLIR Systems by Teledyne?
What were the total year sales for Teledyne in 2020?
What is Teledyne's full year 2021 EPS outlook?
