12333 West Olympic Boulevard
Los Angeles, CA 90064
TELEDYNE TECHNOLOGIES REPORTS
THIRD QUARTER RESULTS
LOS ANGELES – October 25,
2001 – Teledyne Technologies Incorporated (NYSE:TDY)
·
Revenues of $185.6 million
·
Earnings per share of $0.18
·
Cash flow from operations of
$11.2 million
·
Previously announced cost
reduction actions on track
Teledyne Technologies
Incorporated (NYSE:TDY) today reported third quarter 2001 sales of $185.6
million, compared with sales of $201.1 million for the same period in
2000. Net income for the third quarter
of 2001 was $5.7 million ($0.18 per diluted share), compared with net income of
$9.8 million ($0.32 per diluted share) for the third quarter of 2000.
“Considering the recent
tragic events and the continued softening of the economy, I am pleased with our
financial performance this quarter,” said Robert Mehrabian, chairman, president
and chief executive officer.
“Teledyne’s third quarter results reflect the impact of our aggressive
cost cutting initiatives, including workforce reductions and the closure or
sale of underperforming product lines.
So far this year we have reduced headcount by 12%, and we expect to
reach our previously announced target of 14% by year-end. These efforts will enhance our leadership
positions in the niche markets that we serve.
With the exception of the company’s aircraft piston engine business, the
September 11 tragedy is not expected to significantly impact our fiscal 2001
financial performance.”
The Electronics and
Communications segment’s third quarter 2001 sales were $91.4 million, compared
with third quarter 2000 sales of $92.8 million. Third quarter 2001 operating profit was $6.5 million, compared
with operating profit of $9.2 million in the third quarter of 2000.
Third quarter 2001 sales,
compared with the same period in 2000, had growth in military and commercial
microwave products and microelectronics.
Orders for military microwave and microelectronic products remain
strong. Sales and operating profit were
negatively impacted by continued weakness in demand for relays used in
semiconductor test equipment and communications applications, electronic
manufacturing services and other commercial electronic products.
The Systems Engineering
Solutions segment’s third quarter 2001 sales were $56.7 million, compared with
third quarter 2000 sales of $60.1 million.
Third quarter 2001 operating profit was $4.3 million, compared with operating
profit of $4.9 million in the third quarter of 2000.
Third quarter 2001 sales,
compared with the same period in 2000, reflected growth in core defense and
aerospace programs and geophysical sensors for the petroleum exploration
market, offset by reduced work for environmental programs and sales reductions
resulting from the disposition of the process control software and sodium
iodide crystals product lines.
Operating profit reflects these sales differences as well as investment
in fuel cell technology through Teledyne Energy Systems, Inc. Third quarter 2001 sales for Teledyne Energy
Systems were $3.6 million with an operating loss of $0.6 million.
The Aerospace Engines and
Components segment’s third quarter 2001 sales were $37.5 million, compared with
third quarter 2000 sales of $48.2 million.
Third quarter 2001 operating profit was $2.1 million, compared with
operating profit of $6.7 million in the third quarter of 2000.
Third quarter 2001 sales,
compared with the same period in 2000, reflected reduced volume of piston
engine products due to general weakness in the economy. Flight restrictions resulting from the
September 11 terrorist attacks have affected orders for aftermarket piston
engines and components. Turbine engine
sales were lower than the same period in 2000 due to reduced spare part sales,
reduced foreign demand for HARPOON missiles and reduced development work. Operating profit reflects the lower level of
sales partially offset by cost reductions implemented in the first quarter of
2001.
Third
quarter 2001 earnings before interest, taxes, depreciation and amortization
(EBITDA) from continuing operations were $14.7 million, compared with EBITDA
from continuing operations of $21.2 million for the same period of 2000. Net pension income for the third quarter of
2001 was $2.3 million, compared with net pension income of $2.3 million for the
same period of 2000. Third quarter 2001
cash from operating activities from continuing operations was $11.2 million,
compared with $6.3 million for the same period of 2000. Free cash flow (cash from operating
activities from continuing operations less capital expenditures) was positive
$7.7 million for the third quarter of 2001, compared with negative $1.6 million
for the same period of 2000. Capital
expenditures for the first nine months of 2001 were $20.8 million (including
$7.4 million committed in 2000), compared with $17.2 million for the first nine
months of 2000.
2001 Outlook
In the Electronics and Communications segment, the
company expects continued growth in its defense electronics businesses this
year. However, it will not be
sufficient to offset the deterioration in certain short-cycle electronics
businesses serving the semiconductor and communications markets. In addition, the divestitures or closure of
several non-core product lines will affect reported 2001 revenues for the
Electronics and Communications and Systems Engineering Solutions segments.
Recent FAA restrictions regarding general aviation
flights near many metropolitan areas are expected to impact the fourth quarter
2001 performance of the company’s Continental Motors aircraft piston engine
business. These restrictions, which
have severely limited the number of aircraft hours flown in many regional
areas, have reduced the demand for the company’s aftermarket aircraft engines
and components.
Based on the current level of orders for aircraft
piston engines and components, coupled with the previously announced cyclical
trends in the small turbine engine market, Teledyne Technologies forecasts a
year-over-year revenue decline of approximately 25% for its Aerospace Engines
and Components segment.
Based on its current outlook, the company now
estimates that fourth quarter and full year 2001 earnings per share from
continuing operations, excluding asset impairment, restructuring and other
charges, will be in the range of approximately $0.18 to $0.21 and $0.68 to
$0.71, respectively.
2002 Outlook
Given that approximately 75% of the company’s sales
are derived from aerospace and defense markets, the September 11 terrorist
attacks will likely impact full year 2002 financial performance. At this time, however, the financial impact,
either favorable or unfavorable, to certain defense or commercial aerospace
markets is unknown.
Full year 2001 earnings are expected to include
approximately $10 million or $0.18 per share in non-cash net pension
income. At this time, the company is
expecting no net pension income in 2002.
The reduction in net pension income reflects the completion of income
associated with FAS 87 transition asset amortization as well as the decline in
the value of the company’s pension assets during 2000 and 2001.
In connection with the company’s restructuring and
realignment actions, the company previously announced that it expected to
achieve annualized savings of approximately $25 million, of which approximately
$15 million were expected to be realized in 2001. The company anticipates that the additional cost savings expected
to be realized in 2002 will offset the reduction in non-cash net pension
income.
Based
on its current outlook, the company expects that earnings per share for 2002
will be in the range of $0.65 to $0.80.
Excluding $0.18 per share in non-cash net pension income, full year 2001
earnings per share from continuing operations are expected to be in the range
of $0.50 to $0.53 (excluding asset impairment, restructuring and other
charges).
(Diluted earnings per common
share from continuing operations)
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2002 Full Year Outlook |
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2001 Full Year Outlook |
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Low |
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High |
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Low |
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High |
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Earnings per share
(excluding net pension income and asset impairment, restructuring and other
charges) |
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Net pension income |
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— |
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— |
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0.18 |
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0.18 |
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Earnings per share
(excluding asset impairment, restructuring and other charges) |
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Asset impairment, restructuring and other charges |
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— |
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— |
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(0.48 |
) |
|
(0.48 |
) |
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Earnings
per share |
|
$ |
0.65 |
|
$ |
0.80 |
|
$ |
0.20 |
|
$ |
0.23 |
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Forward-Looking
Statements Cautionary Notice
This press release contains forward-looking
statements, as defined in the Private Securities Litigation Reform Act of 1995,
relating to earnings, cost-savings, growth opportunities, capital expenditures
and strategic plans. Actual results
could differ materially from these forward-looking statements. Many factors, including changes in demand
for products sold to the semiconductor and communications markets, timely
development of acceptable and competitive fuel cell products and systems, the
extent and timing of additional workforce reductions and facility
consolidations, funding and continuation of government programs, the outcome of
the crankshaft litigation, and economic and political conditions, could change
the anticipated results.
The September 11 terrorist attacks and resulting
subsequent events increase uncertainties associated with forward-looking
statements about our business. For example,
flight restrictions negatively impact the market for general aviation aircraft
piston engine and components. In
addition, reduced shipments of commercial aviation aircraft, as well as the
liquidity of major airlines, could negatively affect the company’s Electronics
and Communications segment. Also, the
company may not be able to sell or exit timely or on acceptable terms its
remaining non-core or under-performing product lines, particularly given the
current economic environment.
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 2000 Annual
Report on Form 10-K and its Forms 10-Q.
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’ third
quarter earnings conference call will be
held at 11:00 a.m. (Eastern) on Thursday, October 25. To access the call, go to www.companyboardroom.com or www.teledyne.com
approximately ten minutes before the scheduled start time. A replay will also be available for one
month at these same sites starting at 1:00 p.m. (Eastern) on Thursday, October
25.
|
Investor Contact: Media Contact: |
Jason VanWees Robyn Choi (310) 893-1640 |
###
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001
AND FOR THE THREE AND NINE MONTHS ENDED OCTOBER 1, 2000
(Unaudited - In millions,
except per share amounts)
|
|
|
|
Third |
|
|
Third |
|
|
Nine |
|
|
Nine |
|
|
|
|
Quarter |
|
|
Quarter |
|
|
Months |
|
|
Months |
|
|
|
|
2001 |
|
|
2000 |
|
|
2001(a) |
|
|
2000(b) |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Net sales |
|
$ |
185.6 |
|
$ |
201.1 |
|
$ |
559.3 |
|
$ |
598.8 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of sales |
|
|
141.1 |
|
|
145.4 |
|
|
435.3 |
|
|
432.8 |
|
Selling, general and
administrative expenses |
|
|
34.8 |
|
|
38.8 |
|
|
108.0 |
|
|
124.2 |
|
Asset impairment charge |
|
|
— |
|
|
— |
|
|
7.4 |
|
|
— |
|
Restructuring and other charges |
|
|
— |
|
|
— |
|
|
8.7 |
|
|
— |
|
Income (loss) before other income and
expense and |
|
|
9.7 |
|
|
16.9 |
|
|
(0.1 |
) |
|
41.8 |
|
Other income |
|
|
0.2 |
|
|
0.5 |
|
|
2.1 |
|
|
0.9 |
|
Interest expense, net |
|
|
0.4 |
|
|
1.3 |
|
|
1.5 |
|
|
4.9 |
|
Income before taxes |
|
|
9.5 |
|
|
16.1 |
|
|
0.5 |
|
|
37.8 |
|
Provision for taxes |
|
|
3.8 |
|
|
6.4 |
|
|
0.2 |
|
|
15.0 |
|
Income from continuing operations |
|
|
5.7 |
|
|
9.7 |
|
|
0.3 |
|
|
22.8 |
|
Discontinued operations, net |
|
|
— |
|
|
0.1 |
|
|
(0.2 |
) |
|
0.3 |
|
Net income |
|
$ |
5.7 |
|
$ |
9.8 |
|
$ |
0.1 |
|
$ |
23.1 |
|
Diluted
earnings per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
0.18 |
|
$ |
0.32 |
|
$ |
0.01 |
|
$ |
0.81 |
|
Discontinued operations, net |
|
|
— |
|
|
— |
|
|
(0.01 |
) |
|
0.01 |
|
Diluted
earnings per common share |
|
$ |
0.18 |
|
$ |
0.32 |
|
$ |
— |
|
$ |
0.82 |
|
Weighted average diluted common shares outstanding |
|
|
32.5 |
|
|
30.2 |
|
|
32.6 |
|
|
28.3 |
|
|
|
|
|
|
|
|
|
|
|
|||
|
EBITDA-continuing operations(c) |
|
$ |
14.7 |
|
$ |
21.2 |
|
$ |
43.4 |
|
$ |
66.3 |
(a)
The
first nine months of 2001 results include second quarter pretax charges of
$26.4 million for asset impairments and restructuring and other charges, of
which a pretax charge of $0.3 million is included in discontinued
operations.
(b)
The
first nine months of 2000 results include second quarter pretax charges of $12
million for product recall reserves.
(c)
The
first nine months of 2001 results exclude second quarter pretax charges of
$26.1 million for asset impairments and restructuring and other charges. The first nine months of 2000 exclude second
quarter pretax charges of $12 million for product recall reserves.
TELEDYNE TECHNOLOGIES INCORPORATED
SUMMARY OF SEGMENT NET SALES AND OPERATING PROFIT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001
AND FOR THE THREE AND NINE MONTHS ENDED OCTOBER 1, 2000
(Unaudited - In millions of
dollars)
|
|
|
|
Third |
|
|
Third |
|
|
Nine |
|
|
Nine |
|
|
|
|
Quarter |
|
|
Quarter |
|
|
Months |
|
|
Months |
|
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|
|
2001 |
|
|
2000 |
|
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2001 |
|
|
2000 |
|
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|
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|||
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Net Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronics and
Communications |
|
$ |
91.4 |
|
$ |
92.8 |
|
$ |
267.6 |
|
$ |
269.9 |
|
Systems Engineering Solutions |
|
|
56.7 |
|
|
60.1 |
|
|
177.0 |
|
|
178.3 |
|
Aerospace
Engines and Components |
|
|
37.5 |
|
|
48.2 |
|
|
114.7 |
|
|
150.6 |
|
Total Net Sales |
|
$ |
185.6 |
|
$ |
201.1 |
|
$ |
559.3 |
|
$ |
598.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronics and
Communications(a) |
|
$ |
6.5 |
|
$ |
9.2 |
|
$ |
16.3 |
|
$ |
29.6 |
|
Systems Engineering Solutions(b) |
|
|
4.3 |
|
|
4.9 |
|
|
12.5 |
|
|
15.3 |
|
Aerospace
Engines and Components(c) |
|
|
2.1 |
|
|
6.7 |
|
|
7.0 |
|
|
20.7 |
|
Total
Operating Profit |
|
$ |
12.9 |
|
$ |
20.8 |
|
$ |
35.8 |
|
$ |
65.6 |
(a) The first nine months of 2001 results exclude second quarter pretax charges of $15.9 million for asset impairments and restructuring and other charges.
(b) The first nine months of 2001 results exclude second quarter pretax charges of $9.7 million for asset impairments and restructuring and other charges.
(c) The first nine months of 2001 results exclude second quarter pretax charges of $342 thousand for employee termination costs. The first nine months of 2000 results exclude second quarter pretax charges of $12 million for product recall reserves.
TELEDYNE TECHNOLOGIES INCORPORATED
BALANCE SHEETS AS OF
SEPTEMBER 30, 2001 AND DECEMBER 31, 2000
(Current period unaudited -
In millions of dollars)
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
September 30, |
December
31, |
|
||||||
|
|
|
|
2001 |
|
|
2000 |
|
|
|||
|
|
|
|
|
|
|
||||||
|
ASSETS |
|
|
|
|
|
|
|
|
|||
|
Cash and cash equivalents |
|
$ |
6.9 |
|
$ |
14.9 |
|
|
|||
|
Accounts receivable, net |
|
|
115.5 |
|
|
118.5 |
|
|
|||
|
Inventories, net |
|
|
65.0 |
|
|
65.2 |
|
|
|||
|
Deferred income taxes, net |
|
|
17.8 |
|
|
16.9 |
|
|
|||
|
Prepaid income taxes,
expenses and other assets |
|
|
32.6 |
|
|
7.3 |
|
|
|||
|
Total Current Assets |
|
|
237.8 |
|
|
222.8 |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
Property, plant and equipment, net |
|
|
79.4 |
|
|
74.0 |
|
|
|||
|
Deferred income taxes, net |
|
|
15.0 |
|
|
27.0 |
|
|
|||
|
Goodwill, net |
|
|
6.3 |
|
|
7.6 |
|
|
|||
|
Other assets |
|
|
24.1 |
|
|
19.5 |
|
|
|||
|
Total Assets |
|
$ |
362.6 |
|
$ |
350.9 |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|||
|
Accounts payable |
|
$ |
45.0 |
|
$ |
58.7 |
|
|
|||
|
Accrued liabilities |
|
|
60.3 |
|
|
56.5 |
|
|
|||
|
Total Current Liabilities |
|
|
105.3 |
|
|
115.2 |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
Long-term debt |
|
|
31.9 |
|
|
— |
|
|
|||
|
Other long-term liabilities |
|
|
59.6 |
|
|
72.6 |
|
|
|||
|
Total Liabilities |
|
|
196.8 |
|
|
187.8 |
|
|
|||
|
|
|
|
|
|
|
||||||
|
Total Stockholders’ Equity |
|
|
165.8 |
|
|
163.1 |
|
|
|||
|
|
|
|
|
|
|
||||||
|
Total Liabilities and
Stockholders’ Equity |
|
$ |
362.6 |
|
$ |
350.9 |
|
|
|||