Teledyne Technologies Reports Third Quarter Results

Rhea-AI Summary

Teledyne Technologies (NYSE:TDY) reported strong third quarter 2024 results with all-time record quarterly sales of $1,443.5 million, up 2.9% year-over-year. The company achieved record third quarter GAAP earnings per share of $5.54, a 31.9% increase from $4.15 in 2023. Operating margin remained stable at 18.8%, while non-GAAP operating margin was 22.5%. Cash from operations reached $249.8 million with free cash flow of $228.7 million. The company raised its full-year 2024 GAAP EPS outlook to $17.28-$17.42 and narrowed non-GAAP EPS guidance to $19.35-$19.45. Notable achievements include strong performance in defense, space, and energy businesses, with orders exceeding sales for the fourth consecutive quarter.

Positive

• Record quarterly sales of $1,443.5 million, up 2.9% YoY
• Net income increased 31.9% to $262.0 million
• Strong cash flow with $249.8 million from operations
• Raised full-year 2024 GAAP EPS guidance
• Quarter-end Consolidated Leverage Ratio improved to 1.7x
• Robust demand in defense, space, and energy businesses

Negative

• Digital Imaging segment sales decreased 1.0% to $768.4 million
• Digital Imaging operating income declined 9.1%
• Lower sales in industrial automation imaging systems and X-ray products
• Decreased electronic test and measurement instrumentation sales

Insights

Financial Analyst

Teledyne delivered a strong Q3 with $1.44B in record quarterly sales, up 2.9% YoY. The standout metrics include:

• GAAP EPS of $5.54, up 31.9% YoY
• Robust operating margin of 22.5% (non-GAAP)
• Strong cash flow with $249.8M from operations
• Significant stock buybacks of $354M YTD

The company's improved full-year guidance and healthy order backlog signal continued momentum. Defense, space and energy segments show particular strength, while commercial markets are stabilizing. The debt position remains manageable with a 1.7x leverage ratio and strong free cash flow generation of $228.7M provides financial flexibility.

Market Research Analyst

The segment performance reveals important market trends: Aerospace & Defense showed impressive growth of 9.2%, while Instrumentation grew 6.3% driven by offshore energy demand. The slight decline in Digital Imaging (-1.0%) reflects current industrial automation softness, though surveillance and infrared systems remain strong. The diverse portfolio and exposure to critical sectors provides resilience, while the stabilization in short-cycle commercial businesses suggests a potential broader market recovery ahead.

THOUSAND OAKS, Calif.--(BUSINESS WIRE)-- Teledyne Technologies Incorporated (NYSE:TDY):

• Orders exceeded sales for the fourth consecutive quarter
• All-time record quarterly sales of $1,443.5 million, an increase of 2.9% compared with last year
• Third quarter GAAP operating margin of 18.8% and third quarter non-GAAP operating margin of 22.5%
• Record third quarter GAAP diluted earnings per share of $5.54 and non-GAAP diluted earnings per share of $5.10
• Third quarter cash from operations of $249.8 million and free cash flow of $228.7 million
• Raising full year 2024 GAAP diluted earnings per share outlook to $17.28 to $17.42, compared with the prior outlook of $15.87 to $16.13, and narrowing full year 2024 non-GAAP earnings per share outlook to $19.35 to $19.45, compared with the prior outlook of $19.25 to $19.45
• Capital deployment year-to-date through October 2024 includes estimated stock repurchases of approximately $354 million
• Quarter-end Consolidated Leverage Ratio of 1.7x

Teledyne today reported third quarter 2024 net sales of $1,443.5 million, compared with net sales of $1,402.5 million for the third quarter of 2023, an increase of 2.9%. Net income attributable to Teledyne was $262.0 million ($5.54 diluted earnings per share) for the third quarter of 2024, compared with $198.6 million ($4.15 diluted earnings per share) for the third quarter of 2023, an increase of 31.9%. The third quarter of 2024 included $49.8 million of pretax acquired intangible asset amortization expense, $3.7 million of pretax FLIR integration costs and $61.7 million of FLIR acquisition-related discrete income tax benefits. Excluding these items, non-GAAP net income attributable to Teledyne for the third quarter of 2024 was $241.3 million ($5.10 diluted earnings per share). The third quarter of 2023 included $49.1 million of pretax acquired intangible asset amortization expense, $5.8 million of pretax FLIR integration costs and $1.0 million of FLIR acquisition-related discrete income tax expense. Excluding these items, non-GAAP net income attributable to Teledyne for the third quarter of 2023 was $241.9 million ($5.05 diluted earnings per share). Operating margin was 18.8% for both the third quarter of 2024 and 2023. Excluding pretax acquired intangible asset amortization expense and pretax FLIR integration costs, non-GAAP operating margin for the third quarter of 2024 was 22.5%, compared with 22.8% for the third quarter of 2023.

“Teledyne achieved all-time record orders and sales in the third quarter,” said Robert Mehrabian, Executive Chairman. “Revenue was sequentially greater in each segment, allowing us to report overall year-over-year growth as we expected. We continue to see robust demand in our longer cycle defense, space, and energy businesses. Furthermore, sales for most of our shorter cycle commercial businesses have stabilized or are recovering, and year-over-year comparisons have just begun to ease. We opportunistically repurchased $354 million of stock over the last several months, and we will continue to evaluate share repurchases against acquisitions, for which the pipeline has recently improved.”

Review of Operations

Comparisons are with the third quarter of 2023, unless noted otherwise.

Digital Imaging

The Digital Imaging segment’s third quarter 2024 net sales were $768.4 million, compared with $775.8 million, a decrease of 1.0%. Operating income was $123.9 million for the third quarter of 2024, compared with $136.3 million, a decrease of 9.1%. The third quarter of 2024 included $3.7 million of pretax FLIR integration costs compared with $5.8 million. Acquired intangible amortization expense for the third quarter of 2024 was $46.0 million compared with $45.4 million. Excluding these items, non-GAAP operating income for the third quarter of 2024 was $173.6 million, compared with $187.5 million, a decrease of 7.4%.

The third quarter of 2024 net sales decreased primarily due to lower sales of industrial automation imaging systems and X-ray products, partially offset by higher sales of unmanned air systems, surveillance systems, infrared detectors and commercial infrared imaging systems. The third quarter of 2024 also included $10.8 million of incremental sales from recent acquisitions. The decrease in operating income was primarily due to lower sales and unfavorable product mix, including lower industrial automation imaging systems sales.

Instrumentation

The Instrumentation segment’s third quarter 2024 net sales were $349.8 million, compared with $329.1 million, an increase of 6.3%. Operating income was $96.3 million for the third quarter of 2024, compared with $85.5 million, an increase of 12.6%.

The third quarter of 2024 net sales increase resulted from a $31.9 million increase in sales of marine instrumentation primarily due to stronger offshore energy and defense markets, partially offset by a $7.2 million decrease in sales of electronic test and measurement instrumentation as well as a $4.0 million decrease in sales of environmental instrumentation. The third quarter of 2024 also included $7.2 million of incremental sales from recent acquisitions. The increase in operating income primarily reflected the impact of higher marine instrumentation sales as well as favorable marine instrumentation product mix and improved marine instrumentation margins.

Aerospace and Defense Electronics

The Aerospace and Defense Electronics segment’s third quarter 2024 net sales were $200.2 million, compared with $183.3 million, an increase of 9.2%. Operating income was $56.3 million for the third quarter of 2024, compared with $49.4 million, an increase of 14.0%.

The third quarter of 2024 net sales reflected higher sales of $12.6 million for defense electronics and $4.3 million for aerospace electronics. The increase in operating income primarily reflected the impact of higher sales and favorable product mix.

Engineered Systems

The Engineered Systems segment’s third quarter 2024 net sales were $125.1 million, compared with $114.3 million, an increase of 9.4%. Operating income was $12.9 million for the third quarter of 2024, compared with $10.9 million, an increase of 18.3%.

The third quarter of 2024 net sales reflected higher sales of $10.2 million for engineered products and $0.6 million for energy systems. The higher sales for engineered products primarily reflected increased sales from electronic manufacturing services products. The increase in operating income was driven primarily by higher net sales.

Additional Financial Information

Cash Flow

Cash provided by operating activities was $249.8 million for the third quarter of 2024 compared with $278.2 million, with the decrease driven primarily by higher income tax payments in the third quarter of 2024. Depreciation and amortization expense for both the third quarter of 2024 and 2023 was $76.9 million. Stock-based compensation expense for the third quarter of 2024 was $8.7 million compared with $8.0 million.

Capital expenditures for the third quarter of 2024 were $21.1 million compared with $23.0 million. Teledyne received $5.0 million from the exercise of stock options in the third quarter of 2024 compared with $12.2 million.

During the third quarter of 2024, the Company repurchased approximately 0.3 million shares for $138.8 million, bringing the year-to-date repurchases to $332.6 million through the end of September 2024.

As of September 29, 2024, net debt was $2,237.0 million which is calculated as total debt of $2,798.0 million, net of cash and cash equivalents of $561.0 million. As of December 31, 2023, net debt was $2,596.6 million representing total debt of $3,244.9 million, net of cash and cash equivalents of $648.3 million.

As of September 29, 2024, $1,171.1 million was available under the $1.20 billion credit facility, after reductions of $28.9 million in outstanding letters of credit.

		Third Quarter
		2024				2023
Free Cash Flow
Cash provided by operating activities		$	249.8			$	278.2
Capital expenditures for property, plant and equipment			(21.1	)			(23.0	)
Free cash flow		$	228.7			$	255.2

Income Taxes

The effective tax rate for the third quarter of 2024 was negative 2.8%, compared with 19.2%. The third quarter of 2024 reflected net discrete income tax benefits of $62.3 million compared with $6.1 million, with the third quarter of 2024 benefits primarily related to the resolution of an uncertain tax position related to a pre-acquisition FLIR tax matter.

Other

Corporate expense was $18.7 million for the third quarter of 2024 compared with $17.8 million. Non-service retirement benefit income was $2.8 million for the third quarter of 2024 compared with $3.1 million. Interest expense, net of interest income, was $15.7 million for the third quarter of 2024 compared with $18.4 million, with the decrease due to reduced outstanding borrowings compared to the third quarter of 2023.

Outlook

Based on its current outlook, the company’s management believes that fourth quarter 2024 GAAP diluted earnings per share will be in the range of $4.27 to $4.41 and full year 2024 GAAP diluted earnings per share will be in the range of $17.28 to $17.42. The company’s management further believes that fourth quarter 2024 non-GAAP diluted earnings per share will be in the range of $5.13 to $5.23 and full year 2024 non-GAAP diluted earnings per share will be in the range of $19.35 to $19.45. The non-GAAP outlook excludes acquired intangible asset amortization for all acquisitions, FLIR integration costs and FLIR acquisition-related tax matters.

Use of Non-GAAP Financial Measures

We report our financial results in accordance with generally accepted accounting principles in the United States (“GAAP”). We supplement the reporting of our financial results determined under GAAP with certain non-GAAP financial measures. The non-GAAP financial measures presented provides management, financial analysts, and investors with additional useful information in evaluating the performance of the company. The non-GAAP financial measures should be considered in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP. Further details on reasons that we use non-GAAP financial measures, a reconciliation of these measures to the most directly comparable GAAP measures, and other information relating to these measures are included following our GAAP financial statements.

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, acquisitions and product synergies, integration costs, tax matters 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 relating to sales, sales growth, stock-based compensation expense, tax rates, anticipated capital expenditures, stock repurchases, 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: changes in relevant tax and other laws; foreign currency exchange risks; rising interest rates; risks associated with indebtedness, as well as our ability to reduce indebtedness and the timing thereof; the impact of semiconductor and other supply chain shortages; higher inflation, including wage competition and higher shipping costs; labor shortages and competition for skilled personnel; 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; disruptions in the global economy; the ongoing conflict in Israel and neighboring regions, including related protests, attacks on defense contractors and suppliers and the disruption to global shipping routes; the ongoing conflict between Russia and Ukraine, including the impact to energy prices and availability, especially in Europe; 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 inflation, rising interest costs, and economic conditions; impacts from the United Kingdom’s exit from the European Union; uncertainties related to the 2024 U.S. Presidential election; the imposition and expansion of, and responses to, trade sanctions and tariffs; the continuing review and resolution of FLIR’s trade compliance and tax matters; escalating economic and diplomatic tension between China and the United States; threats to the security of our confidential and proprietary information, including cybersecurity threats; risks related to artificial intelligence; natural and man-made disasters, including those related to or intensified by climate change; and our ability to achieve emission reduction targets and decrease our carbon footprint. 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 those implemented in response to climate change, could further negatively affect our businesses that supply the oil and gas industry. Weakness in the commercial aerospace industry negatively affects the markets of our commercial aviation businesses. The recent machinist strike at Boeing as well as the ongoing issues with Boeing’s 737 MAX product line could result in manufacturing delays and lower sales of our products to Boeing. 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.

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 key management and 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 government policy changes or actions and exchange rate fluctuations.

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 31, 2023, as well as subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, 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.

All forward-looking statements speak only as of the date they are made and are based on information available at that time. Teledyne assumes no 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.

A live webcast of Teledyne’s third quarter earnings conference call will be held at 11:00 a.m. (Eastern) on Wednesday, October 23, 2024. To access the call, go to www.teledyne.com/investors/events-and-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, October 23, 2024.

TELEDYNE TECHNOLOGIES INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 29, 2024 AND OCTOBER 1, 2023 (Unaudited - in millions, except per share amounts)
		Third Quarter				Third Quarter				Nine Months				Nine Months
		2024				2023				2024				2023
Net sales		$	1,443.5			$	1,402.5			$	4,167.7			$	4,210.5
Costs and expenses:
Costs of sales			823.9				797.2				2,375.6				2,394.2
Selling, general and administrative			299.1				291.9				891.8				905.3
Acquired intangible asset amortization			49.8				49.1				148.3				148.1
Total costs and expenses			1,172.8				1,138.2				3,415.7				3,447.6
Operating income (loss)			270.7				264.3				752.0				762.9
Interest and debt income (expense), net			(15.7	)			(18.4	)			(44.2	)			(61.7	)
Gain (loss) on debt extinguishment			—				—				—				1.6
Non-service retirement benefit income (expense), net			2.8				3.1				8.2				9.3
Other income (expense), net			(2.7	)			(2.9	)			(3.7	)			(7.4	)
Income (loss) before income taxes			255.1				246.1				712.3				704.7
Provision (benefit) for income taxes (a)			(7.1	)			47.3				90.7				141.6
Net income (loss) including noncontrolling interest			262.2				198.8				621.6				563.1
Less: Net income (loss) attributable to noncontrolling interest			0.2				0.2				0.9				0.5
Net income (loss) attributable to Teledyne		$	262.0			$	198.6			$	620.7			$	562.6
Diluted earnings per common share		$	5.54			$	4.15			$	13.01			$	11.75
Weighted average diluted common shares outstanding			47.3				47.9				47.7				47.9

(a)		The third quarter of 2024 includes net discrete income tax benefits of $62.3 million and the first nine months of 2024 includes net discrete income tax benefits of $67.4 million. The third quarter of 2023 includes net discrete income tax benefits of $6.1 million and the first nine months of 2023 includes net discrete income tax benefits of $14.1 million.
This condensed consolidated financial statement was prepared in accordance with U.S. GAAP

TELEDYNE TECHNOLOGIES INCORPORATED SUMMARY OF SEGMENT NET SALES AND OPERATING INCOME FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 29, 2024 AND OCTOBER 1, 2023 (Unaudited - $ in millions)
		Third Quarter				Third Quarter				% Change			Nine Months				Nine Months				% Change
		2024				2023							2024				2023
Net sales:
Digital Imaging		$	768.4			$	775.8			(1.0	)%		$	2,248.6			$	2,341.6			(4.0	)%
Instrumentation			349.8				329.1			6.3	%			1,013.7				991.0			2.3	%
Aerospace and Defense Electronics			200.2				183.3			9.2	%			580.3				542.5			7.0	%
Engineered Systems			125.1				114.3			9.4	%			325.1				335.4			(3.1	)%
Total net sales		$	1,443.5			$	1,402.5			2.9	%		$	4,167.7			$	4,210.5			(1.0	)%
Operating income (loss):
Digital Imaging		$	123.9			$	136.3			(9.1	)%		$	351.2			$	383.1			(8.3	)%
Instrumentation			96.3				85.5			12.6	%			269.5				247.6			8.8	%
Aerospace and Defense Electronics			56.3				49.4			14.0	%			165.3				149.6			10.5	%
Engineered Systems			12.9				10.9			18.3	%			23.1				32.4			(28.7	)%
Corporate expense			(18.7	)			(17.8	)		5.1	%			(57.1	)			(49.8	)		14.7	%
Operating income (loss)			270.7				264.3			2.4	%			752.0				762.9			(1.4	)%
Interest and debt income (expense), net			(15.7	)			(18.4	)		(14.7	)%			(44.2	)			(61.7	)		(28.4	)%
Gain (loss) on debt extinguishment			—				—			—	%			—				1.6			(100.0	)%
Non-service retirement benefit income (expense), net			2.8				3.1			(9.7	)%			8.2				9.3			(11.8	)%
Other income (expense), net			(2.7	)			(2.9	)		(6.9	)%			(3.7	)			(7.4	)		(50.0	)%
Income (loss) before income taxes			255.1				246.1			3.7	%			712.3				704.7			1.1	%
Provision (benefit) for income taxes (a)			(7.1	)			47.3			(115.0	)%			90.7				141.6			(35.9	)%
Net income (loss) including noncontrolling interest			262.2				198.8			31.9	%			621.6				563.1			10.4	%
Less: Net income (loss) attributable to noncontrolling interest			0.2				0.2			—	%			0.9				0.5			80.0	%
Net income (loss) attributable to Teledyne		$	262.0			$	198.6			31.9	%		$	620.7			$	562.6			10.3

(a)		The third quarter of 2024 includes net discrete income tax benefits of $62.3 million and the first nine months of 2024 includes net discrete income tax benefits of $67.4 million. The third quarter of 2023 includes net discrete income tax benefits of $6.1 million and the first nine months of 2023 includes net discrete income tax benefits of $14.1 million.
This condensed consolidated financial statement was prepared in accordance with U.S. GAAP.

TELEDYNE TECHNOLOGIES INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited – in millions)
		September 29, 2024			December 31, 2023
ASSETS
Cash and cash equivalents		$	561.0		$	648.3
Accounts receivable and unbilled receivables, net			1,261.1			1,202.1
Inventories, net			964.8			917.7
Prepaid expenses and other current assets			203.3			213.3
Total current assets			2,990.2			2,981.4
Property, plant and equipment, net			758.3			777.0
Goodwill and acquired intangible assets, net			10,279.3			10,280.9
Prepaid pension assets			215.6			203.3
Other assets, net			287.5			285.3
Total assets		$	14,530.9		$	14,527.9
LIABILITIES AND EQUITY
Accounts payable		$	445.7		$	384.7
Accrued liabilities			900.6			781.3
Current portion of long-term debt			150.1			600.1
Total current liabilities			1,496.4			1,766.1
Long-term debt, net of current portion			2,647.9			2,644.8
Other long-term liabilities			786.9			891.2
Total liabilities			4,931.2			5,302.1
Redeemable noncontrolling interest			5.5			4.6
Total stockholders’ equity			9,594.2			9,221.2
Total liabilities and equity		$	14,530.9		$	14,527.9

This condensed consolidated financial statement was prepared in accordance with U.S. GAAP.

TELEDYNE TECHNOLOGIES INCORPORATED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 29, 2024 AND OCTOBER 1, 2023 (Unaudited - $ in millions, except per share amounts)
	Third Quarter 2024											Third Quarter 2023
	Income (loss) before income taxes			Net (loss) income attributable to Teledyne				Diluted earnings per common share				Income (loss) before income taxes			Net (loss) income attributable to Teledyne			Diluted earnings per common share
GAAP	$	255.1		$	262.0			$	5.54			$	246.1		$	198.6		$	4.15
Adjusted for specified items:
FLIR integration costs		3.7			2.8				0.06				5.8			4.5			0.09
Acquired intangible asset amortization		49.8			38.2				0.80				49.1			37.8			0.79
FLIR acquisition-related tax matters		—			(61.7	)			(1.30	)			—			1.0			0.02
Non-GAAP	$	308.6		$	241.3			$	5.10			$	301.0		$	241.9		$	5.05
	Nine Months 2024											Nine Months 2023
	Income (loss) before income taxes			Net (loss) income attributable to Teledyne				Diluted earnings per common share				Income (loss) before income taxes			Net (loss) income attributable to Teledyne			Diluted earnings per common share
GAAP	$	712.3		$	620.7			$	13.01			$	704.7		$	562.6		$	11.75
Adjusted for specified items:
FLIR integration costs		6.9			5.3				0.11				5.8			4.5			0.09
Acquired intangible asset amortization		148.3			113.5				2.38				148.1			114.0			2.37
FLIR acquisition-related tax matters		—			(61.2	)			(1.28	)			—			1.7			0.04
Non-GAAP	$	867.5		$	678.3			$	14.22			$	858.6		$	682.8		$	14.25

		Third Quarter 2024						Third Quarter 2023
		Operating income (loss)			Operating margin			Operating income (loss)			Operating margin
GAAP		$	270.7		18.8	%		$	264.3		18.8	%
Adjusted for specified items:
FLIR integration costs			3.7						5.8
Acquired intangible asset amortization			49.8						49.1
Non-GAAP		$	324.2		22.5	%		$	319.2		22.8	%
		Nine Months 2024						Nine Months 2023
		Operating income (loss)			Operating margin			Operating income (loss)			Operating margin
GAAP		$	752.0		18.0	%		$	762.9		18.1	%
Adjusted for specified items:
FLIR integration costs			6.9						5.8
Acquired intangible asset amortization			148.3						148.1
Non-GAAP		$	907.2		21.8	%		$	916.8		21.8	%

TELEDYNE TECHNOLOGIES INCORPORATED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited - in millions)
	Third Quarter 2024
	GAAP Operating Income (loss)				Acquired intangible asset amortization			FLIR integration costs			Non-GAAP Operating Income (loss)
Digital Imaging	$	123.9			$	46.0		$	3.7		$	173.6
Instrumentation		96.3				3.6			—			99.9
Aerospace and Defense Electronics		56.3				0.2			—			56.5
Engineered Systems		12.9				—			—			12.9
Corporate expense		(18.7	)			—			—			(18.7	)
Total	$	270.7			$	49.8		$	3.7		$	324.2

	Third Quarter 2023
	GAAP Operating Income (loss)				Acquired intangible asset amortization			FLIR integration costs			Non-GAAP Operating Income (loss)
Digital Imaging	$	136.3			$	45.4		$	5.8		$	187.5
Instrumentation		85.5				3.5			—			89.0
Aerospace and Defense Electronics		49.4				0.2			—			49.6
Engineered Systems		10.9				—			—			10.9
Corporate expense		(17.8	)			—			—			(17.8	)
Total	$	264.3			$	49.1		$	5.8		$	319.2

	Nine Months 2024
	GAAP Operating Income (loss)				Acquired intangible asset amortization			FLIR integration costs			Non-GAAP Operating Income (loss)
Digital Imaging	$	351.2			$	137.2		$	6.9		$	495.3
Instrumentation		269.5				10.5			—			280.0
Aerospace and Defense Electronics		165.3				0.6			—			165.9
Engineered Systems		23.1				—			—			23.1
Corporate expense		(57.1	)			—			—			(57.1	)
Total	$	752.0			$	148.3		$	6.9		$	907.2

	Nine Months 2023
	GAAP Operating Income (loss)				Acquired intangible asset amortization			FLIR integration costs			Non-GAAP Operating Income (loss)
Digital Imaging	$	383.1			$	136.8		$	5.8		$	525.7
Instrumentation		247.6				10.7			—			258.3
Aerospace and Defense Electronics		149.6				0.6			—			150.2
Engineered Systems		32.4				—			—			32.4
Corporate expense		(49.8	)			—			—			(49.8	)
Total	$	762.9			$	148.1		$	5.8		$	916.8

TELEDYNE TECHNOLOGIES INCORPORATED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited - in millions, except per share amounts)
		September 29, 2024				December 31, 2023
Current portion of long-term debt		$	150.1			$	600.1
Long-term debt			2,647.9				2,644.8
Total debt - non-GAAP			2,798.0				3,244.9
Less cash and cash equivalents			(561.0	)			(648.3	)
Net debt - non-GAAP		$	2,237.0			$	2,596.6

		Fourth Quarter 2024						Twelve Months 2024
		Low			High			Low				High
GAAP Diluted Earnings Per Common Share Outlook		$	4.27		$	4.41		$	17.28			$	17.42
Adjusted for specified items:
FLIR integration costs		$	0.04		$	0.02		$	0.15			$	0.13
Acquired intangible asset amortization		$	0.82		$	0.80		$	3.20			$	3.18
FLIR acquisition-related tax matters		$	—		$	—		$	(1.28	)		$	(1.28	)
Non-GAAP Diluted Earnings Per Common Share Outlook		$	5.13		$	5.23		$	19.35			$	19.45

Explanation of Non-GAAP Financial Measures

We report our financial results in accordance with GAAP. However, management believes that, in order to more fully understand our short-term and long-term financial and operational trends, and to aid in comparability with our competitors, investors and financial analysts may wish to consider the impact of certain items resulting from our acquisitions which have an infrequent or non-recurring impact on operations or assist in understanding our operations pre-acquisition. Accordingly, we present non-GAAP financial measures as a supplement to the financial measures we present in accordance with GAAP. These non-GAAP financial measures provide management, investors and financial analysts with additional means to understand and evaluate the operating results and trends in our ongoing business by adjusting for certain expenses and benefits. Management believes these non-GAAP financial measures also provide additional means of evaluating period-over-period operating performance. In addition, management understands that some investors and financial analysts find this information helpful in analyzing our financial and operational performance and comparing this performance to our peers and competitors. The company’s diluted earnings per common share outlook guidance is also presented on a non-GAAP basis.

The non-GAAP financial measures are not meant to be considered superior to, or a substitute for, our financial statements prepared in accordance with GAAP. There are material limitations associated with non-GAAP financial measures because they exclude charges that have an effect on our reported results and, therefore, should not be relied upon as the sole financial measures by which to evaluate our financial results. Management compensates and believes that investors should compensate for these limitations by viewing the non-GAAP financial measures in conjunction with the GAAP financial measures. In addition, the non-GAAP financial measures included in this earnings announcement may be different from, and therefore may not be comparable to, similar measures used by other companies. The non-GAAP financial measures are also used by our management to evaluate our operating performance and benchmark our results against our historical performance and the performance of our peers.

Our non-GAAP measures are as follows:

Non-GAAP income before income taxes, net income and diluted earnings per common share

These non-GAAP measures provided a supplemental view of income before taxes, net income, and diluted earnings per common share. These non-GAAP measures exclude certain FLIR acquisition integration-related costs, acquired intangible asset amortization, the remeasurement of deferred taxes related to acquired intangible assets due to changes in tax laws, and the tax benefits or costs related to the settlement or other resolution of the FLIR tax reserves. We also adjust for any post-acquisition interest on certain income tax reserves related to FLIR. We adjust for any income tax impact related to these items to take into account the tax treatment and related tax rate and changes in tax rates that apply to each adjustment in the applicable tax jurisdiction. Generally, this results in the tax impact at the U.S. marginal tax rate for certain adjustments, including the majority of amortization of intangible assets, whereas the tax impact of other adjustments, including transaction expenses, depend on whether the amounts are deductible in the respective tax jurisdictions and the applicable tax rates in those jurisdictions. We believe these measures provide investors and management with additional means to understand and evaluate the operating results of our business by adjusting for certain expenses and benefits and present an alternative view of our performance compared to prior periods.

Non-GAAP operating income and operating margin

We define non-GAAP operating margin as non-GAAP operating income divided by net sales. These non-GAAP measures exclude certain FLIR acquisition integration-related costs and acquired intangible asset amortization. We believe these measures provide investors and management with additional means to understand and evaluate the operating results of our business by adjusting for certain expenses and other items and present an alternative view of our performance compared to prior periods.

Non-GAAP total debt and net debt

We define non-GAAP total debt as the sum of current portion of long-term debt and other debt and long-term debt. We define net debt as the difference between non-GAAP total debt less cash and cash equivalents. The company believes that this non-GAAP information is useful to assist investors and management in analyzing the company’s liquidity.

Non-GAAP diluted earnings per common share outlook

These non-GAAP measures represent our earnings per common share outlook for the third quarter of 2024 and total year 2024 on a fully diluted basis, excluding certain FLIR integration costs, acquired intangible asset amortization for all acquisitions and FLIR acquisition-related tax matters.

Non-GAAP cash provided by operations and free cash flow

We define free cash flow as cash provided by operating activities (a measure prescribed by GAAP) less capital expenditures for property, plant and equipment. We believe that this non-GAAP information is useful to assist management and the investment community in analyzing the company’s ability to generate cash flow.

Non-GAAP line items used in tables

Management excludes the effect of each of the acquisition related items identified below to arrive at the applicable non-GAAP financial measure referenced in the tables for the reasons set forth below with respect to that item:

• Acquired intangible asset amortization – We believe that excluding the amortization of acquired intangible assets, which primarily represents purchased technology and customer relationships, as well as purchase order and contract backlog, provides an alternative way for investors to compare our operations pre-acquisition to those post-acquisition and to those of our competitors that have pursued internal growth strategies. However, we note that companies that grow internally will incur costs to develop intangible assets that will be expensed in the period incurred, which may make a direct comparison more difficult.

• FLIR integration costs – Included in our GAAP presentation of cost of sales and selling, general and administrative expenses are expenses (or benefits) incurred in connection with further integration-related costs related to the FLIR acquisition such as facility consolidation costs, facility lease impairments and employee separation costs. We exclude these costs from our non-GAAP measures because we believe it does not reflect our ongoing financial performance.

• FLIR acquisition-related tax matters – Included in our tax provision is post-acquisition interest on certain income tax reserves related to FLIR, as well as the tax benefits or costs related to the settlement or other resolution of the FLIR tax reserves. We exclude these impacts from our non-GAAP measures because we believe it does not reflect our ongoing financial performance.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241023909530/en/

Jason VanWees

(805) 373-4542

Source: Teledyne Technologies Incorporated

FAQ

What was Teledyne's (TDY) revenue in Q3 2024?

Teledyne reported all-time record quarterly sales of $1,443.5 million in Q3 2024, representing a 2.9% increase from Q3 2023.

What is Teledyne's (TDY) earnings per share guidance for 2024?

Teledyne raised its full-year 2024 GAAP EPS guidance to $17.28-$17.42 and narrowed non-GAAP EPS guidance to $19.35-$19.45.

How much cash did Teledyne (TDY) generate from operations in Q3 2024?

Teledyne generated $249.8 million in cash from operations and $228.7 million in free cash flow during Q3 2024.

What was Teledyne's (TDY) stock repurchase activity in Q3 2024?

Teledyne repurchased approximately 0.3 million shares for $138.8 million in Q3 2024, with year-to-date repurchases totaling $332.6 million through September 2024.