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NewsRelease

 

 


TELEDYNE TECHNOLOGIES REPORTS
FOURTH QUARTER EARNINGS

 

 

·         Fourth quarter earnings per share from continuing operations of $0.32, excluding special charges.  Total earnings per share of $0.28.

 

·         Optoelectronics sales consistent with strategic goals.

 

·         Special charges taken in selected product lines within the Systems Engineering Solutions segment, for which the company is reviewing strategic alternatives.

 

 

 

LOS ANGELES – January 25, 2001 – Teledyne Technologies Incorporated (NYSE:TDY) today reported fourth quarter 2000 sales from continuing operations of $196.3 million, compared with sales of $191.0 million from continuing operations for the same period in 1999. 

 

Excluding special charges, net income from continuing operations was $10.4 million ($0.32 per diluted share) for the fourth quarter of 2000, compared with pro forma net income from continuing operations of $11.7 million ($0.44 per diluted share) for the fourth quarter of 1999.  The fourth quarter of 2000 included pretax special charges totaling $2.2 million for receivables and cost adjustments in selected product lines in the Systems Engineering Solutions segment.  Including these charges, earnings from continuing operations were $9.1 million ($0.28 per diluted share) for the fourth quarter of 2000.  Net income including discontinued operations and special charges was $9.2 million ($0.28 per diluted share) for the fourth quarter of 2000.  Year-over-year earnings per share comparisons for the fourth quarter reflect pretax operating expenses of $4.5 million in the fourth quarter of 2000 related to the company’s strategic growth initiatives in optoelectronics and wireless technologies and dilution resulting from the company’s public equity offering completed in the third quarter of 2000.

 


Fourth Quarter Earnings Summary

 

 

 

Millions of Dollars

 

 

Dollars per Diluted Share

 

 

 

 

 

 

Fourth

 

 

Fourth

 

 

Fourth

 

 

Fourth

 

 

 

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

Quarter

 

 

 

 

 

2000

 

 

1999(a)

 

 

2000

 

 

1999(a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        Continuing operations, excluding special charges

 

$

10.4

 

$

11.7

 

$

0.32

 

$

0.44

 

 

        Special charges

 

 

(1.3

)

 

 

 

(0.04

)

 

 

 

        Income from continuing operations

 

 

9.1

 

 

11.7

 

 

0.28

 

 

0.44

 

 

        Discontinued operations, net

 

 

0.1

 

 

 

 

 

 

 

 

        Net Income

 

$

9.2

 

$

11.7

 

$

0.28

 

$

0.44

 

(a)      On a pro forma basis

 

“Having completed our first full year as an independent company, I am pleased with the milestones we achieved,” said Robert Mehrabian, chairman, president and chief executive officer of Teledyne Technologies.  “As previously projected, we invested approximately $20 million in additional capital expenditures and operating expenses primarily targeted at our strategic growth initiatives focused on broadband communications.  In the fourth quarter, we recorded revenue from commercial optoelectronics in-line with our previously announced growth objective of a $20 million revenue run-rate by the end of 2000.

 

“In addition, year-over-year revenue growth in our overall Electronics and Communications segment increased for the fourth consecutive quarter.  We are also pleased with the performance of our Aerospace Engines and Components segment, having put the majority of last year’s piston engine recall, and the associated business disruption, behind us.

 

“Our core systems engineering, space, and information technology services businesses each performed well; however, we recorded special charges totaling $2.2 million in unrelated product lines within this segment.  These product lines, which primarily serve energy-related markets, include alternative energy generation systems, marine oil and gas exploration products, and natural gas distribution process control software.  The adjustments were taken in connection with our strategic evaluation of these businesses.  While we plan to exit the marine products and process control software businesses, we are excited about both the recent successes and the long-term opportunities in our energy systems business.  We are currently reviewing strategies aimed at creating stockholder value with this asset.”

 

Full Year 2000

Sales from continuing operations for fiscal 2000 were $795.1 million, compared with $761.4 million for fiscal 1999.  Net income from continuing operations, before product recall reserves and special charges, was $40.5 million ($1.37 per diluted share) for 2000, compared with pro forma net income before product recall reserves of $40.9 million ($1.50 per diluted share) for 1999.  The second quarters of 2000 and 1999 included pretax charges of $12 million and $3 million, respectively, for piston engine product recall reserves, and the fourth quarter of 2000 included special charges totaling $2.2 million for receivables and cost adjustments within the Systems Engineering Solutions segment.  Net income including discontinued operations, product recall reserves and special charges was $32.3 million ($1.09 per diluted share) for 2000, compared with pro forma net income of $40.9 million ($1.50 per diluted share), for 1999.  Year-over-year earnings per share comparisons for 2000 reflect pretax operating expenses of $9.3 million during 2000 related to the company’s strategic growth initiatives in optoelectronics and wireless technologies and dilution resulting from the company’s public equity offering completed in the third quarter of 2000.

 

Teledyne Technologies was spun off from Allegheny Technologies Incorporated effective November 29, 1999.  Pro forma adjustments in 1999 reflect the estimated expense impacts (primarily interest expense and corporate expenses) that would have been incurred had Teledyne Technologies operated as a separate company and as capitalized at the time of the spin-off for the 1999 periods presented.  Net income, before pro forma adjustments, was $13.1 million ($0.49 per diluted share) for the fourth quarter of 1999 and $49.0 million ($1.79 per diluted share) for fiscal 1999.

 

Sale of Assets

In the fourth quarter of 2000, Teledyne Technologies completed the sale of its Cast Parts business.  Discontinued operations for the fourth quarter include an after-tax gain on sale offset by operating losses.

 

Review of Operations

 

Electronics and Communications

The Electronics and Communications segment’s fourth quarter sales were $90.6 million, up 10.5 percent from 1999 fourth quarter sales of $82.0 million.  Fourth quarter 2000 operating profit was $9.1 million, compared with $11.3 million in the fourth quarter of 1999.

 

Fourth quarter sales, compared with the same period in 1999, grew significantly in relay products, business and commuter aircraft communications equipment, optoelectronics and wireless products.  Sales from wireless products grew as a result of new orders from military and commercial customers.  Relay products reported continued strong quarterly sales driven by demand from the communications and semiconductor test equipment markets.  Sales of medical and military microelectronics were down from the same period last year.  Operating profit reflected growth in sales, which was more than offset by increased spending on optoelectronics and wireless initiatives and reduced margins on electronic manufacturing services.

 

 


Systems Engineering Solutions

The Systems Engineering Solutions segment’s fourth quarter sales were $56.5 million, compared with 1999 fourth quarter sales of $60.0 million.  Operating profit for the fourth quarter of 2000 was $4.8 million, excluding special charges totaling $2.2 million for receivables and cost adjustments, compared with $6.9 million in the same period last year.

 

Fourth quarter performance reflected sales growth in systems engineering, space programs, information technology and environmental programs.  These sales increases were more than offset by lower sales in energy systems, marine products and control applications in the fourth quarter of 2000.  Operating profit prior to special charges reflected lower sales in energy systems, marine products and control applications.

 

 

Aerospace Engines and Components

The Aerospace Engines and Components segment’s fourth quarter sales were $49.2 million, compared with $49.0 million in the 1999 fourth quarter.  Operating profit for the fourth quarter of 2000 was $7.1 million, compared with operating profit of $6.1 million for the same period of 1999.

 

Strong sales for piston engines reflected higher OEM and service sales, partially offset by lower rebuilt engines and after market new engine sales.  Favorable operating profit for piston engines resulted from strong sales, as well as product mix shifts.  Sales and operating profit in the turbine engine business were lower due to reduced sales and increased product development expenses on new turbine engine programs.  In addition, as previously anticipated, no new J69 turbine engines were sold in the fourth quarter of 2000 versus $2.1 million in the same period last year, however, this was partially offset by increased sales of J69 spare parts.

 

 

Additional Financial Information

Net pension income for the fourth quarter of 2000 was $2.3 million, compared with $1.8 million for the same period of 1999.  Capital expenditures from continuing operations for 2000 were $30.7 million, compared with $28.3 million for 1999.  At year-end 2000, the company had committed approximately $7.4 million for additional capital expenditures, with $2.5 million related to its strategic growth initiatives.

 

 


Outlook

Although the company is cautious with the increasing economic uncertainty, Teledyne Technologies’ participation in a variety of niche markets and the diversity of its customer base help cushion the company from the negative effects of a softening economy.  The current level of economic uncertainty affects the company’s outlook for certain commercial electronic markets, such as relays used in semiconductor and wireless test equipment, where the company has limited revenue visibility.  However, Teledyne Technologies’ outlook for the majority of other electronics and communications businesses remains unchanged.  The company remains optimistic about the prospects for its strategic growth businesses, especially optoelectronics.  The size of the optoelectronics market, the market’s growth rate and Teledyne Technologies’ success to date continue to support the company’s investments in this area.  Expenditures in this area are expected to continue and will negatively impact operating profit for the Electronics and Communications segment, especially during the first half of 2001.  The outlook for the company’s core Systems Engineering Solutions businesses and its Aerospace Engines and Components segment, which primarily serve aerospace and defense customers, remains unchanged.

 

The company forecasts year-over-year revenue growth in 2001 of between 10% and 12% for its Electronics and Communications segment, revenue growth of between 3% and 5% in its Systems Engineering Solutions segment, and flat revenue to a 5% decline for its Aerospace Engines and Components segment.  Teledyne Technologies expects that full year 2001 earnings per share will be in-line with previous forecasts.

 

Teledyne Technologies expects overall first quarter 2001 revenue to be comparable to the fourth quarter of 2000.  However, the company expects first quarter 2001 profit in its Electronics and Communications segment to decline somewhat from the fourth quarter of 2000.  This decline will result from continued development costs and additional depreciation expense related to the company’s strategic growth initiatives, combined with a weaker market for certain commercial electronics products, such as relays.  In addition, the previously announced events in the turbine engine market are expected to begin negatively impacting results for the Aerospace Engines and Components segment in the first quarter of 2001.  Until the company divests its marine products and control applications businesses, the continued weakness in these unrelated product lines is expected to unfavorably impact profitability in the Systems Engineering Solutions segment.  Following the first quarter of 2001, Teledyne Technologies expects that revenues and earnings will generally increase over the preceding quarters.

 


Forward-Looking Statements Notice

This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, relating to earnings, growth opportunities, capital expenditures and strategic plans.  Actual results could differ materially from these forward-looking statements.  Many factors, including the extent and timing of acceptance of fiber optic products by customers (including service providers), continued outsourced manufacturing of optoelectronic products, funding and continuation of government programs and economic and political conditions, as well as the outcome of the crankshaft investigation, could change the anticipated results.  Additional information concerning factors that could cause actual results to differ materially from those projected in the forward-looking statements is contained in Teledyne Technologies’ periodic filings with the Securities and Exchange Commission, including its 1999 Annual Report on Form 10-K, as well as the registration statement filed in connection with the public offering.

 

Teledyne Technologies is a leading provider of sophisticated electronics and communication products, systems engineering solutions and aerospace engines and components.  Teledyne Technologies has operations in the United States, the United Kingdom and Mexico.  For more information, visit Teledyne Technologies’ website at www.teledyne.com.

 

A live webcast of Teledyne Technologies’ fourth quarter earnings conference call will be held at 11:00 a.m. (Eastern) on Thursday, January 25.  To access the call, go to www.streetfusion.com or www.teledyne.com approximately five minutes before the scheduled start time.  A replay will also be available at these same sites from Thursday, January 25, 2:00 p.m. (Eastern) until Thursday, February 1, 11:59 p.m. (Eastern).

 

Investor Contact:

 

 

Media Contact:

Jason VanWees
(310) 551-4342

Robyn Choi

(310) 551-4340

 

 

###


 

TELEDYNE TECHNOLOGIES INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

ACTUAL RESULTS FOR THE THREE MONTHS AND YEAR ENDED DECEMBER 31, 2000

AND PRO FORMA RESULTS FOR THE THREE MONTHS AND YEAR ENDED JANUARY 2, 2000(a)(b)

(Unaudited - In millions, except per share amounts)

 

 

 

Fourth

 

 

Fourth

 

 

Total

 

 

Total

 

 

 

Quarter

 

 

Quarter

 

 

Year

 

 

Year

 

 

 

2000

 

 

1999

 

 

2000

 

 

1999

 

 

 

 

 

 

 

 

 

 

        Net sales

 

$

196.3

 

$

191.0

 

$

795.1

 

$

761.4

        Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

             Costs of sales

 

 

146.8

 

 

137.1

 

 

579.6

 

 

552.1

             Selling, general and administrative expenses

 

 

34.2

 

 

33.5

 

 

158.4

 

 

136.8

        Income before other income and expense and taxes

 

 

15.3

 

 

20.4

 

 

57.1

 

 

72.5

             Other income

 

 

0.2

 

 

0.3

 

 

1.1

 

 

1.0

             Interest expense, net

 

 

0.4

 

 

2.1

 

 

5.3

 

 

8.1

        Income before taxes

 

 

15.1

 

 

18.6

 

 

52.9

 

 

65.4

             Provision for taxes

 

 

6.0

 

 

6.9

 

 

21.0

 

 

26.3

        Income from continuing operations

 

 

9.1

 

 

11.7

 

 

31.9

 

 

39.1

                Discontinued operations, net

 

 

0.1

 

 

 

 

0.4

 

 

1.8

        Net Income

 

$

9.2

 

$

11.7

 

$

32.3

 

$

40.9

Diluted earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

        Income from continuing operations

 

 

0.28

 

 

0.44

 

 

1.08

 

 

1.44

        Discontinued operations, net

 

 

 

 

 

 

0.01

 

 

0.06

Diluted earnings per common share

 

$

0.28

 

$

0.44

 

$

1.09

 

$

1.50

Weighted average diluted common shares outstanding

 

 

32.8

 

 

26.8

 

 

29.5

 

 

27.3

 

 

 

 

 

 

 

 

 

 

EBITDA-continuing operations(c)

 

$

20.9

 

$

23.4

 

$

87.2

 

$

87.8

(a)      Restated to reflect Teledyne Cast Parts as a discontinued operation.

(b)      The total year results include pretax charges of $12 million and $3 million recorded in the second quarters of 2000 and 1999, respectively, for product recall reserves and pretax charges totaling $2.2 million in the fourth quarter of 2000 for receivables and cost adjustments.

(c)      The total year results exclude pretax charges of $12 million and $3 million recorded in the second quarters of 2000 and 1999, respectively, for product recall reserves and pretax charges totaling $2.2 million in the fourth quarter of 2000 for receivables and cost adjustments.

The pro forma financial information has been presented for informational purposes only and may not reflect the results of operations or financial position of Teledyne Technologies that would have occurred had Teledyne Technologies operated as a separate, independent company for the 1999 periods presented.  The pro forma financial information should not be relied upon as being indicative of future results. Pro forma adjustments reflect the estimated expense impacts (primarily interest expense and corporate expenses) that would have been incurred had Teledyne Technologies been operated as a separate company as of the beginning of the 1999 fiscal year and as capitalized at the time of the spin-off for the 1999 periods presented.  As part of the spin-off, Teledyne Technologies incurred $100 million in long-term debt and Allegheny Technologies (its former parent) retained the proceeds.  Pro forma income includes pro forma interest expense on the long-term debt as if it was outstanding for the 1999 periods presented.  Pro forma income adjusts corporate expenses to an annual level of $15 million from the amount previously allocated, which was lower.

 


TELEDYNE TECHNOLOGIES INCORPORATED

HISTORICAL CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2000

AND JANUARY 2, 2000(a)(b)

(Unaudited - In millions, except per share amounts)

 

 

 

Fourth

 

 

Fourth

 

 

Total

 

 

Total

 

 

 

Quarter

 

 

Quarter

 

 

Year

 

 

Year

 

 

 

2000

 

 

1999

 

 

2000

 

 

1999

 

 

 

 

 

 

 

 

 

 

        Net sales

 

$

196.3

 

$

191.0

 

$

795.1

 

$

761.4

        Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

             Costs of sales

 

 

146.8

 

 

137.1

 

 

579.6

 

 

552.1

             Selling, general and administrative expenses

 

 

34.2

 

 

32.4

 

 

158.4

 

 

130.5

        Income before other income and expense and taxes

 

 

15.3

 

 

21.5

 

 

57.1

 

 

78.8

             Other income

 

 

0.2

 

 

0.3

 

 

1.1

 

 

1.0

             Interest expense, net

 

 

0.4

 

 

0.8

 

 

5.3

 

 

0.8

        Income before taxes

 

 

15.1

 

 

21.0

 

 

52.9

 

 

79.0

             Provision for taxes

 

 

6.0

 

 

7.9

 

 

21.0

 

 

31.8

        Income from continuing operations

 

 

9.1

 

 

13.1

 

 

31.9

 

 

47.2

                Discontinued operations, net

 

 

0.1

 

 

 

 

0.4

 

 

1.8

        Net Income

 

$

9.2

 

$

13.1

 

$

32.3

 

$

49.0

Diluted earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

        Income from continuing operations

 

 

0.28

 

 

0.49

 

 

1.08

 

 

1.73

        Discontinued operations, net

 

 

 

 

 

 

0.01

 

 

0.06

Diluted earnings per common share

 

$

0.28

 

$

0.49

 

$

1.09

 

$

1.79

Weighted average diluted common shares outstanding

 

 

32.8

 

 

26.8

 

 

29.5

 

 

27.3

 

 

 

 

 

 

 

 

 

 

EBITDA-continuing operations(c)

 

$

20.9

 

$

23.7

 

$

87.2

 

$

93.3

(a)      Restated to reflect Teledyne Cast Parts as a discontinued operation.

(b)      The total year results include pretax charges of $12 million and $3 million recorded in the second quarters of 2000 and 1999, respectively, for product recall reserves and pretax charges totaling $2.2 million in the fourth quarter of 2000 for receivables and cost adjustments.

(c)      The total year results exclude pretax charges of $12 million and $3 million recorded in the second quarters of 2000 and 1999, respectively, for product recall reserves and pretax charges totaling $2.2 million in the fourth quarter of 2000 for receivables and cost adjustments.



TELEDYNE TECHNOLOGIES INCORPORATED

SUMMARY OF SEGMENT NET SALES AND OPERATING PROFIT

FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2000

AND JANUARY 2, 2000

(Unaudited - In millions of dollars)

 

 

 

Fourth

 

 

Fourth

 

 

Total

 

 

Total

 

 

 

Quarter

 

 

Quarter

 

 

Year

 

 

Year

 

 

 

2000

 

 

1999

 

 

2000

 

 

1999

 

 

 

 

 

 

 

 

 

 

        Net Sales:

 

 

 

 

 

 

 

 

 

 

 

 

        Electronics and Communications

 

$

90.6

 

$

82.0

 

$

360.5

 

$

340.7

        Systems Engineering Solutions

 

 

56.5

 

 

60.0

 

 

234.8

 

 

226.5

        Aerospace Engines and Components(a)

 

 

49.2

 

 

49.0

 

 

199.8

 

 

194.2

             Total Net Sales

 

$

196.3

 

$

191.0

 

$

795.1

 

$

761.4

 

 

 

 

 

 

 

 

 

 

        Operating Profit:

 

 

 

 

 

 

 

 

 

 

 

 

        Electronics and Communications

 

$

9.1

 

$

11.3

 

$

38.7

 

$

42.6

        Systems Engineering Solutions(b)

 

 

4.8

 

 

6.9

 

 

20.1

 

 

20.2

        Aerospace Engines and Components(a)(c)

 

 

7.1

 

 

6.1

 

 

27.8

 

 

27.8

             Total Operating Profit

 

$

21.0

 

$

24.3

 

$

86.6

 

$

90.6

(a)      Restated to reflect Teledyne Cast Parts as a discontinued operation.

(b)      The fourth quarter and total year results exclude pretax charges totaling $2.2 million for receivables and cost adjustments in the fourth quarter of 2000.

(c)      The total year results exclude pretax charges of $12.0 million and $3.0 million recorded in the second quarters of 2000 and 1999, respectively, for product recall reserves.


 

TELEDYNE TECHNOLOGIES INCORPORATED

BALANCE SHEET FOR THE FISCAL YEARS ENDED

DECEMBER 31, 2000 AND JANUARY 2, 2000(a)

(Current period unaudited - In millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

January 2,

 

 

 

 

2000

 

 

2000

 

 

 

 

 

 

 

 

        ASSETS

 

 

 

 

 

 

 

 

        Cash and cash equivalents

 

$

14.9

 

$

7.1

 

 

        Accounts receivable, net

 

 

118.5

 

 

109.1

 

 

        Inventories, net

 

 

65.2

 

 

51.4

 

 

        Deferred income taxes, net

 

 

16.9

 

 

21.7

 

 

        Prepaid expenses and other current assets

 

 

7.3

 

 

4.5

 

 

             Total Current Assets

 

 

222.8

 

 

193.8

 

 

 

 

 

 

 

 

 

 

 

        Property, plant and equipment, net

 

 

74.0

 

 

56.0

 

 

        Deferred income taxes, net

 

 

27.0

 

 

25.6

 

 

        Cost in excess of net assets acquired, net

 

 

7.6

 

 

8.2

 

 

        Other assets

 

 

19.5

 

 

16.9

 

 

        Net assets of discontinued operation

 

 

 

 

12.9

 

 

             Total Assets

 

$

350.9

 

$

313.4

 

 

 

 

 

 

 

 

 

 

 

        LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

        Accounts payable

 

$

58.7

 

$

44.2

 

 

        Accrued liabilities

 

 

56.5

 

 

47.3

 

 

        Income taxes payable

 

 

 

 

3.8

 

 

             Total Current Liabilities

 

 

115.2

 

 

95.3

 

 

 

 

 

 

 

 

 

 

 

        Long-term debt

 

 

 

 

97.0

 

 

        Other long-term liabilities

 

 

72.6

 

 

76.6

 

 

             Total Liabilities

 

 

187.8

 

 

268.9

 

 

 

 

 

 

 

 

             Total Stockholders’ Equity

 

 

163.1

 

 

44.5

 

 

 

 

 

 

 

 

              Total Liabilities and Stockholders’ Equity

 

$

350.9

 

$

313.4

 

 

(a)      Restated to reflect Teledyne Cast Parts as a discontinued operation.