12333 West Olympic Boulevard

                                                                                                                                                                Los Angeles, CA  90064

 

NewsRelease                                  

 


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.”

 

 

Review of Operations

 

Electronics and Communications

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.


Systems Engineering Solutions

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. 

 

 

Aerospace Engines and Components

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.

 

 

Additional Financial Information

 

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).

 

EARNINGS PER SHARE OUTLOOK

(Diluted earnings per common share from continuing operations)

 

 

2002 Full Year Outlook

 

2001 Full Year Outlook

 

 

 

 

 

 

Low

 

 

High

 

 

Low

 

 

High

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (excluding net pension income and asset impairment, restructuring and other charges)

 


$


0.65

 


$


0.80

 


$


0.50

 


$


0.53

 

 

Net pension income

 

 

 

 

 

 

0.18

 

 

0.18

 

 

Earnings per share (excluding asset impairment, restructuring and other charges)

 

 


0.65

 

 


0.80

 

 


0.68

 

 


0.71

 

 

Asset impairment, restructuring and other charges

 

 

 

 

 

 

(0.48

)

 

(0.48

)

 

Earnings per share

 

$

0.65

 

$

0.80

 

$

0.20

 

$

0.23

 


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
(310) 893-1642

Robyn Choi

(310) 893-1640

 

###


 
TELEDYNE TECHNOLOGIES INCORPORATED

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
              taxes

 

 

 

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

 

 

 

2001

 

 

2000

 

 

2001

 

 

2000

 

 

 

 

 

 

 

 

 

 

        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