Teledyne Technologies Incorporated (NYSE:TDY):
- All-time record orders of $1,519.4 million
- All-time record sales of $1,425.0 million
- Fourth quarter GAAP operating margin of 19.1% and record
fourth quarter non-GAAP operating margin of 22.7%
- All-time record GAAP and non-GAAP diluted earnings per share
of $6.75 and $5.44, respectively
- Record full year GAAP and non-GAAP operating margin of 18.4%
and 22.0%, respectively
- Record full year GAAP and non-GAAP diluted earnings per
share of $18.49 and $19.69, respectively
- Issuing full year 2024 GAAP diluted earnings per share
outlook of $17.15 to $17.53 and full year 2024 non-GAAP earnings
per share outlook of $20.35 to $20.68
- Consolidated Leverage Ratio improved to 1.9x
Teledyne today reported fourth quarter 2023 net sales of
$1,425.0 million, compared with net sales of $1,418.2 million for
the fourth quarter of 2022, an increase of 0.5%. Net income
attributable to Teledyne was $323.1 million ($6.75 diluted earnings
per share) for the fourth quarter of 2023, compared with $226.4
million ($4.74 diluted earnings per share) for the fourth quarter
of 2022, an increase of 42.7%. The fourth quarter of 2023 included
$48.6 million of pretax acquired intangible asset amortization
expense, $3.0 million of pretax FLIR integration costs and $102.2
million of acquisition related discrete income tax benefits.
Excluding these items, non-GAAP net income attributable to Teledyne
for the fourth quarter of 2023 was $260.5 million ($5.44 diluted
earnings per share). The fourth quarter of 2022 included $47.9
million of pretax acquired intangible asset amortization expense,
$4.0 million of pretax income related to the favorable resolution
of certain pretax FLIR integration costs, and $24.1 million of
acquisition related discrete income tax expense benefits. Excluding
these items, non-GAAP net income attributable to Teledyne for the
fourth quarter of 2022 was $236.1 million ($4.94 diluted earnings
per share). Operating margin was 19.1% for the fourth quarter of
2023, compared with 19.3% for the fourth quarter of 2022. Excluding
the non-GAAP items discussed above, non-GAAP operating margin for
the fourth quarter of 2023 was 22.7%, compared with 22.4% for the
fourth quarter of 2022.
“In the fourth quarter, we achieved record sales and GAAP and
non-GAAP earnings per share,” said Robert Mehrabian, Executive
Chairman. “Sales increased primarily due to the performance of our
marine, medical and aerospace businesses, which were more than able
to compensate for the previously announced headwind in the
industrial automation and laboratory instrumentation markets.
Furthermore, overall record orders exceeded sales in every business
segment but were particularly strong in our marine and defense
businesses. Leverage declined further and our balance sheet remains
very healthy. Finally, we continue to acquire complementary
businesses as shown by the acquisition of Xena Networks in the
fourth quarter.”
Full Year
Full year sales for 2023 were $5,635.5 million, compared with
$5,458.6 million for 2022, an increase of 3.2%. Net income
attributable to Teledyne was $885.7 million ($18.49 diluted
earnings per share) for fiscal year 2023, compared with $788.6
million ($16.53 diluted earnings per share) for fiscal year 2022,
an increase of 12.3%.
Full year 2023 net sales included $99.8 million in incremental
net sales from current and prior year acquisitions. The full year
of 2023 included $196.7 million of pretax acquired intangible asset
amortization expense, $8.8 million of pretax FLIR integration costs
and $100.5 million of acquisition related net discrete income tax
benefits. Excluding these items, non-GAAP net income attributable
to Teledyne for the full year of 2023 was $943.3 million ($19.69
diluted earnings per share). The full year of 2022 included $201.7
million of pretax acquired intangible asset amortization expense,
$4.0 million of pretax income related to the favorable resolution
of certain FLIR integration costs and $72.7 million of acquisition
related net discrete income tax benefits. Excluding these items,
non-GAAP net income attributable to Teledyne for the full year of
2022 was $867.8 million ($18.19 diluted earnings per share).
Operating margin was 18.4% for 2023, compared with 17.8% for 2022.
Excluding the non-GAAP items discussed above, non-GAAP operating
margin for 2023 was 22.0%, compared with 21.4% for 2022.
Full year 2023 income tax expense reflected net discrete income
tax benefits of $137.5 million compared with net discrete income
tax benefits of $86.7 million for 2022.
Review of Operations
Comparisons are with the fourth quarter of 2022, unless noted
otherwise.
Digital Imaging
The Digital Imaging segment’s fourth quarter 2023 net sales were
$802.5 million, compared with $806.7 million, a decrease of 0.5%.
Operating income was $134.3 million for the fourth quarter of 2023,
compared with $152.0 million, a decrease of 11.6%. The fourth
quarter of 2023 included $3.0 million of pretax FLIR integration
costs compared to $4.0 million of pretax income related to the
favorable resolution of certain FLIR integration costs in the
fourth quarter of 2022. Acquired intangible amortization expense
for the fourth quarter of 2023 was $44.9 million compared with
$44.1 million. Excluding these items, non-GAAP operating income for
the fourth quarter of 2023 was $182.2 million, compared with $192.1
million, a decreased of 5.2%.
The fourth quarter of 2023 net sales included $17.6 million in
incremental sales from recent acquisitions, as well as greater
sales of x-ray products and surveillance systems, offset by lower
sales of industrial imaging cameras, unmanned air systems,
micro-electro-mechanical systems (“MEMS”), and commercial maritime
products. The decrease in operating income was due to product mix
as well as higher FLIR integration costs.
Instrumentation
The Instrumentation segment’s fourth quarter 2023 net sales were
$335.2 million, compared with $326.2 million, an increase of 2.8%.
Operating income was $90.7 million for the fourth quarter of 2023,
compared with $79.0 million, an increase of 14.8%.
The fourth quarter of 2023 net sales increase resulted from
higher marine instrumentation product lines. Sales of marine
instrumentation increased $18.1 million, partially offset by an
$8.8 million decrease in sales of environmental instrumentation and
a $0.3 million decrease in sales of test and measurement
instrumentation. The increase in operating income primarily
reflected the impact of higher sales as well as improved product
margins.
Aerospace and Defense Electronics
The Aerospace and Defense Electronics segment’s fourth quarter
2023 net sales were $184.0 million, compared with $177.9 million,
an increase of 3.4%. Operating income was $50.0 million for the
fourth quarter of 2023, compared with $52.8 million, a decrease of
5.3%.
The fourth quarter of 2023 net sales reflected higher sales of
$7.6 million for aerospace electronics partially offset by lower
sales of $1.5 million for defense electronics. The decrease in
operating income primarily reflected the impact of product mix.
Engineered Systems
The Engineered Systems segment’s fourth quarter 2023 net sales
were $103.3 million, compared with $107.4 million, a decrease of
3.8%. Operating income was $12.3 million for the fourth quarter of
2023, compared with $9.3 million, an increase of 32.3%.
The fourth quarter of 2023 net sales reflected lower sales of
$4.5 million for engineered products partially offset by an
increase of $0.4 million for energy systems. The lower sales for
engineered products primarily reflected decreased sales from
maritime and other manufacturing services products partially offset
by higher revenue from space programs and electronic manufacturing
service products. The increase in operating income was primarily
driven by program mix, with the fourth quarter of 2023 having a
higher percentage of electronic manufacturing services
products.
Additional Financial Information
Cash Flow
Cash provided by operating activities was $164.4 million for the
fourth quarter of 2023 compared with $237.7 million. Depreciation
and amortization expense for the fourth quarter of 2023 was $77.4
million compared with $81.8 million. Stock-based compensation
expense for the fourth quarter of 2023 was $8.0 million compared
with $11.4 million. The IRS announcements related to the California
floods (IR-2023-33 and IR-2023-189) postponed approximately $139
million of Teledyne’s second and third quarter 2023 U.S. federal
income tax payments, which the Company paid in the fourth quarter
of 2023.
Capital expenditures for the fourth quarter of 2023 were $40.2
million compared with $34.1 million. Teledyne received $18.2
million from the exercise of stock options in the fourth quarter of
2023 compared with $5.2 million.
As of December 31, 2023, net debt was $2,596.6 million which is
calculated as total debt of $3,244.9 million, net of cash and cash
equivalents of $648.3 million. As of January 1, 2023, net debt was
$3,282.5 million representing total debt of $3,920.6 million, net
of cash and cash equivalents of $638.1 million. During 2023,
Teledyne repaid approximately $680 million of debt, including
$300.0 million of debt that matured in April 2023 and $370.0
million of floating rate debt under its term loan due May 2026 and
under its credit facility. Teledyne also repurchased and retired
$10.0 million of its Fixed Rate Senior Notes due April 2031,
recording a $1.6 million non-cash gain on the extinguishment of
this debt.
As of December 31, 2023, $1,129.1 million was available under
the $1.15 billion credit facility, after reductions of $20.9
million in outstanding letters of credit.
Fourth Quarter
Total Year
Free Cash Flow
2023
2022
2023
2022
Cash provided by operating activities
$
164.4
$
237.7
$
836.1
$
486.8
Capital expenditures for property, plant
and equipment
(40.2
)
(34.1
)
(114.9
)
(92.6
)
Free cash flow
124.2
203.6
721.2
394.2
Payment for acquisition-related tax
matter
—
—
—
296.4
Adjusted free cash flow
$
124.2
$
203.6
$
721.2
$
690.6
Income Taxes
The effective tax rate for the fourth quarter of 2023 was
negative 27.3%, compared with 10.1%. The fourth quarter of 2023
reflected net discrete income tax benefits of $123.4 million
compared with $28.9 million, primarily related to the resolution of
certain historical acquisition-related tax positions. Excluding the
net discrete income tax items in both periods, the effective tax
rates would have been 21.3% for the fourth quarter of 2023,
compared with 21.6%.
Other
Corporate expense was $15.8 million for the fourth quarter of
2023 compared with $19.3 million, with the decrease driven by lower
stock-based compensation expense and lower professional fees.
Non-service retirement benefit income was $3.1 million for the
fourth quarter of 2023 compared with $2.8 million. Interest
expense, net of interest income, was $15.6 million for the fourth
quarter of 2023 compared with $22.5 million. The decrease was due
to reduced outstanding borrowings with lower weighted average
interest rates compared to the fourth quarter of 2022.
Outlook
Based on its current outlook, the company’s management believes
that first quarter 2024 GAAP diluted earnings per share will be in
the range of $3.73 to $3.86 and full year 2024 GAAP diluted
earnings per share will be in the range of $17.15 to $17.53. The
company’s management further believes that first quarter 2024
non-GAAP diluted earnings per share will be in the range of $4.55
to $4.65 and full year 2024 non-GAAP diluted earnings per share
will be in the range of $20.35 to $20.68. The non-GAAP outlook
excludes acquired intangible asset amortization for all
acquisitions, further FLIR integration costs and
acquisition-related tax matters. The company’s annual expected tax
rate for 2024 is 22.5%, before discrete tax items.
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 stock-based compensation expense, tax rates,
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: 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 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. 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 January 1, 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 fourth quarter earnings conference
call will be held at 11:00 a.m. (Eastern) on Wednesday, January 24,
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, January 24, 2024.
TELEDYNE TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
FOR THE FOURTH QUARTER AND
TWELVE MONTHS ENDED
DECEMBER 31, 2023 AND JANUARY
1, 2023
(Unaudited - in millions, except
per share amounts)
Fourth Quarter
Fourth Quarter
Twelve Months
Twelve Months
2023
2022
2023
2022
Net sales
$
1,425.0
$
1,418.2
$
5,635.5
$
5,458.6
Costs and expenses:
Costs of sales
801.9
801.3
3,196.1
3,128.3
Selling, general and administrative
303.0
295.2
1,208.3
1,156.6
Acquired intangible asset amortization
48.6
47.9
196.7
201.7
Total costs and expenses
1,153.5
1,144.4
4,601.1
4,486.6
Operating income (loss)
271.5
273.8
1,034.4
972.0
Interest and debt income (expense),
net
(15.6
)
(22.5
)
(77.3
)
(89.3
)
Gain (loss) on debt extinguishment
—
—
1.6
10.6
Non-service retirement benefit income
(expense), net
3.1
2.8
12.4
11.4
Other income (expense), net
(4.8
)
(1.8
)
(12.2
)
3.4
Income (loss) before income taxes
254.2
252.3
958.9
908.1
Provision (benefit) for income taxes
(a)
(69.3
)
25.5
72.3
119.2
Net income (loss) including noncontrolling
interest
323.5
226.8
886.6
788.9
Less: Net income (loss) attributable to
noncontrolling interest
0.4
0.4
0.9
0.3
Net income (loss) attributable to
Teledyne
$
323.1
$
226.4
$
885.7
$
788.6
Diluted earnings per common share
$
6.75
$
4.74
$
18.49
$
16.53
Weighted average diluted common shares
outstanding
47.9
47.8
47.9
47.7
(a)
The fourth quarter of 2023
includes net discrete income tax benefits of $123.4 million and the
total year of 2023 includes net discrete income tax benefits of
$137.5 million. The fourth quarter of 2022 includes net discrete
income tax benefits of $28.9 million and the total year of 2022
includes net discrete income tax benefits of $86.7 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 FOURTH QUARTER AND
TWELVE MONTHS ENDED
DECEMBER 31, 2023 AND JANUARY
1, 2023
(Unaudited - $ in millions)
Fourth Quarter
Fourth Quarter
% Change
Twelve Months
Twelve Months
% Change
2023
2022
2023
2022
Net sales:
Digital Imaging
$
802.5
$
806.7
(0.5
)%
$
3,144.1
$
3,110.9
1.1
%
Instrumentation
335.2
326.2
2.8
%
1,326.2
1,254.0
5.8
%
Aerospace and Defense Electronics
184.0
177.9
3.4
%
726.5
682.4
6.5
%
Engineered Systems
103.3
107.4
(3.8
)%
438.7
411.3
6.7
%
Total net sales
$
1,425.0
$
1,418.2
0.5
%
$
5,635.5
$
5,458.6
3.2
%
Operating income (loss):
Digital Imaging
$
134.3
$
152.0
(11.6
)%
$
517.4
$
519.3
(0.4
)%
Instrumentation
90.7
79.0
14.8
%
338.3
295.3
14.6
%
Aerospace and Defense Electronics
50.0
52.8
(5.3
)%
199.6
184.1
8.4
%
Engineered Systems
12.3
9.3
32.3
%
44.7
39.2
14.0
%
Corporate expense
(15.8
)
(19.3
)
(18.1
)%
(65.6
)
(65.9
)
(0.5
)%
Operating income (loss)
271.5
273.8
(0.8
)%
1,034.4
972.0
6.4
%
Interest and debt income (expense),
net
(15.6
)
(22.5
)
(30.7
)%
(77.3
)
(89.3
)
(13.4
)%
Gain (loss) on debt extinguishment
—
—
—
%
1.6
10.6
(84.9
)%
Non-service retirement benefit income
(expense), net
3.1
2.8
10.7
%
12.4
11.4
8.8
%
Other income (expense), net
(4.8
)
(1.8
)
166.7
%
(12.2
)
3.4
*
Income (loss) before income taxes
254.2
252.3
0.8
%
958.9
908.1
5.6
%
Provision (benefit) for income taxes
(a)
(69.3
)
25.5
*
72.3
119.2
(39.3
)%
Net income (loss) including noncontrolling
interest
323.5
226.8
42.6
%
886.6
788.9
12.4
%
Less: Net income (loss) attributable to
noncontrolling interest
0.4
0.4
—
0.9
0.3
200.0
%
Net income (loss) attributable to
Teledyne
$
323.1
$
226.4
42.7
%
$
885.7
$
788.6
12.3
%
* not meaningful
(a)
The fourth quarter of 2023
includes net discrete income tax benefits of $123.4 million and the
total year of 2023 includes net discrete income tax benefits of
$137.5 million. The fourth quarter of 2022 includes net discrete
income tax benefits of $28.9 million and the total year of 2022
includes net discrete income tax benefits of $86.7 million.
This condensed consolidated
financial statement was prepared in accordance with U.S. GAAP.
TELEDYNE TECHNOLOGIES
INCORPORATED
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited – in millions)
December 31, 2023
January 1, 2023
ASSETS
Cash and cash equivalents
$
648.3
$
638.1
Accounts receivable and unbilled
receivables, net
1,202.1
1,158.4
Inventories, net
917.7
890.7
Prepaid expenses and other current
assets
213.3
130.7
Total current assets
2,981.4
2,817.9
Property, plant and equipment, net
777.0
769.8
Goodwill and acquired intangible assets,
net
10,280.9
10,313.6
Prepaid pension assets
203.3
178.4
Other assets, net
285.3
274.3
Total assets
$
14,527.9
$
14,354.0
LIABILITIES AND EQUITY
Accounts payable
$
384.7
$
505.7
Accrued liabilities
781.3
717.6
Current portion of long-term debt
600.1
300.1
Total current liabilities
1,766.1
1,523.4
Long-term debt, net of current portion
2,644.8
3,620.5
Other long-term liabilities
891.2
1,037.2
Total liabilities
5,302.1
6,181.1
Redeemable noncontrolling interest
4.6
3.7
Total stockholders’ equity
9,221.2
8,169.2
Total liabilities and equity
$
14,527.9
$
14,354.0
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 FOURTH QUARTER AND
TWELVE MONTHS ENDED DECEMBER 31, 2023 AND JANUARY 1,
2023
(Unaudited - in millions, except
per share amounts)
Fourth Quarter 2023
Fourth Quarter 2022
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
$
254.2
$
323.1
$
6.75
$
252.3
$
226.4
$
4.74
Adjusted for specified items:
FLIR integration costs
3.0
2.3
0.05
(4.0
)
(3.0
)
(0.06
)
Acquired intangible asset amortization
48.6
37.3
0.77
47.9
36.8
0.77
Acquisition-related tax matters
—
(102.2
)
(2.13
)
—
(24.1
)
(0.51
)
Non-GAAP
$
305.8
$
260.5
$
5.44
$
296.2
$
236.1
$
4.94
Twelve Months 2023
Twelve Months 2022
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
$
958.9
$
885.7
$
18.49
$
908.1
$
788.6
$
16.53
Adjusted for specified items:
FLIR integration costs
8.8
6.8
0.14
(4.0
)
(3.0
)
(0.06
)
Acquired intangible asset amortization
196.7
151.3
3.16
201.7
154.9
3.24
Acquisition-related tax matters
—
(100.5
)
(2.10
)
—
(72.7
)
(1.52
)
Non-GAAP
$
1,164.4
$
943.3
$
19.69
$
1,105.8
$
867.8
$
18.19
Fourth Quarter 2023
Fourth Quarter 2022
Operating income
(loss)
Operating margin
Operating income
(loss)
Operating margin
GAAP
$
271.5
19.1
%
$
273.8
19.3
%
Adjusted for specified items:
FLIR integration costs
3.0
(4.0
)
Acquired intangible asset amortization
48.6
47.9
Non-GAAP
$
323.1
22.7
%
$
317.7
22.4
%
Twelve Months 2023
Twelve Months 2022
Operating income
(loss)
Operating margin
Operating income
(loss)
Operating margin
GAAP
$
1,034.4
18.4
%
$
972.0
17.8
%
Adjusted for specified items:
FLIR integration costs
8.8
(4.0
)
Acquired intangible asset amortization
196.7
201.7
Non-GAAP
$
1,239.9
22.0
%
$
1,169.7
21.4
%
TELEDYNE TECHNOLOGIES
INCORPORATED
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(Unaudited - in millions)
Fourth Quarter 2023
GAAP Operating Income
(loss)
Acquired intangible asset
amortization
FLIR integration costs
Non-GAAP Operating Income
(loss)
Digital Imaging
$
134.3
$
44.9
$
3.0
$
182.2
Instrumentation
90.7
3.5
—
94.2
Aerospace and Defense Electronics
50.0
0.2
—
50.2
Engineered Systems
12.3
—
—
12.3
Corporate expense
(15.8
)
—
—
(15.8
)
Total
$
271.5
$
48.6
$
3.0
$
323.1
Fourth Quarter 2022
GAAP Operating Income
(loss)
Acquired intangible asset
amortization
FLIR integration costs
Non-GAAP Operating Income
(loss)
Digital Imaging
$
152.0
$
44.1
$
(4.0
)
$
192.1
Instrumentation
79.0
3.6
—
82.6
Aerospace and Defense Electronics
52.8
0.2
—
53.0
Engineered Systems
9.3
—
—
9.3
Corporate expense
(19.3
)
—
—
(19.3
)
Total
$
273.8
$
47.9
$
(4.0
)
$
317.7
Twelve Months 2023
GAAP Operating Income
(loss)
Acquired intangible asset
amortization
FLIR integration costs
Non-GAAP Operating Income
(loss)
Digital Imaging
$
517.4
$
181.7
$
8.8
$
707.9
Instrumentation
338.3
14.2
—
352.5
Aerospace and Defense Electronics
199.6
0.8
—
200.4
Engineered Systems
44.7
—
—
44.7
Corporate expense
(65.6
)
—
—
(65.6
)
Total
$
1,034.4
$
196.7
$
8.8
$
1,239.9
Twelve Months 2022
GAAP Operating Income
(loss)
Acquired intangible asset
amortization
FLIR integration costs
Non-GAAP Operating Income
(loss)
Digital Imaging
$
519.3
$
183.7
$
(4.0
)
$
699.0
Instrumentation
295.3
17.2
—
312.5
Aerospace and Defense Electronics
184.1
0.8
—
184.9
Engineered Systems
39.2
—
—
39.2
Corporate expense
(65.9
)
—
—
(65.9
)
Total
$
972.0
$
201.7
$
(4.0
)
$
1,169.7
TELEDYNE TECHNOLOGIES
INCORPORATED
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(Unaudited - in millions)
December 31, 2023
January 1, 2023
Current portion of long-term debt
$
600.1
$
300.1
Long-term debt
2,644.8
3,620.5
Total debt - non-GAAP
3,244.9
3,920.6
Less cash and cash equivalents
(648.3
)
(638.1
)
Net debt - non-GAAP
$
2,596.6
$
3,282.5
First Quarter 2024
Total Year 2024
Low
High
Low
High
GAAP Diluted Earnings Per Common Share
Outlook
$
3.73
$
3.86
$
17.15
$
17.53
Adjusted for specified items:
FLIR integration costs
0.01
—
0.02
0.01
Acquired intangible asset amortization
0.81
0.79
3.18
3.14
Acquisition-related tax matters
—
—
—
—
Non-GAAP Diluted Earnings Per Common
Share Outlook
$
4.55
$
4.65
$
20.35
$
20.68
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 first 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
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.
- 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/20240124263142/en/
Jason VanWees (805) 373-4542
Teledyne Technologies (NYSE:TDY)
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