Teledyne Technologies Benefits from Favorable IRS
Ruling and Comments on Earnings Outlook
LOS ANGELES - July 13, 2000 - Teledyne Technologies Incorporated (NYSE:TDY) today announced that the Internal Revenue Service has agreed to a modification of the tax ruling issued in connection with the November 29, 1999, spin-off of Teledyne Technologies from Allegheny Technologies Incorporated.
The original Internal Revenue Service ruling required Teledyne Technologies to complete a public offering of common stock to raise approximately $125 million in gross proceeds by November 29, 2000. The IRS revised its ruling to require Teledyne Technologies to complete a smaller public offering of 15-18% of its outstanding common stock. At current market prices such an offering would raise approximately $70 - $85 million.
"We are pleased with the modification and are confident of our ability to satisfy this requirement." said Robert Mehrabian, president and chief executive officer of Teledyne Technologies. "We plan to make significant capital and R&D investments over the next year in a number of strategic initiatives. The proceeds of our public offering will be used, in part, to fund these initiatives, which are principally focused on broadband communications, including fiber optic, wireless and satellite communication applications.
"We are planning additional capital expenditures and research and development expenses of approximately $20 million in the latter half of this year, and we expect profitability in the third and fourth quarters to be impacted by these expenses. However, we are comfortable with expectations for the second quarter, adjusting for the effect of the previously announced charge related to our aerospace business.
"These investments are an important part of our strategy to expand our product and service offerings beyond our existing markets," said Mehrabian. Teledyne Technologies previously announced multiyear agreements to supply wireless power amplifiers for Adaptive Broadband's AB-Access system and Hughes Network Systems' Very Small Aperture Terminal and DirecPC“ systems. Teledyne is currently qualifying new automated equipment to provide manufacturing services of fiber optic components for commercial telecommunication applications.
Teledyne Technologies (www.teledyne.com) 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.
This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from these forward-looking statements. Market conditions and other factors could affect our ability to complete timely the required public offering. The extent and timing of our investments and capital expenditures are dependent upon many factors, including the extent and level of customer orders. Other factors affecting forward-looking statements are contained in Teledyne Technologies' periodic filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K.
This press release does not constitute an offer to sell any securities of Teledyne Technologies.