THOUSAND OAKS, Calif. - July 28, 2021 - Teledyne Technologies Incorporated (NYSE:TDY)
- Record sales of $1,121.0 million, an increase of 50.8% compared with last year
- Second quarter GAAP diluted earnings per share of $1.48
- Second quarter non-GAAP diluted earnings per share of $4.61, excluding pretax acquisition-related transaction and purchase accounting expenses of $150.7 million ($3.13 per share)
- Second quarter GAAP operating margin of 9.3% and non-GAAP operating margin of 22.8%
- Record second quarter cash flow from operations
- Issuing full year 2021 GAAP earnings outlook of $8.05 to $8.45 per share and full year 2021 non-GAAP earnings outlook of $15.25 to $15.50 per share, which excludes acquisition-related transaction and purchase accounting expenses
- Completed the acquisition of FLIR on May 14, 2021, for aggregate consideration of approximately $8.1 billion
Teledyne today reported second quarter 2021 net sales of $1,121.0 million, compared with net sales of $743.3 million for the second quarter of 2020, an increase of 50.8%. Net income was $64.7 million ($1.48 diluted earnings per share) for the second quarter of 2021, compared with $93.7 million ($2.48 diluted earnings per share) for the second quarter of 2020, a decrease of 30.9%. The second quarter of 2021 net sales included $301.4 million in incremental net sales from the acquisition of FLIR Systems, Inc. ("FLIR"). In connection with the FLIR acquisition, Teledyne incurred pretax expenses of $140.7 million, which included $42.3 million of transaction and integration-related costs, $52.2 million for the settlement of FLIR employee and director stock awards, $22.8 million in acquired intangible asset amortization expense and $23.4 million in acquired inventory step-up expense. The second quarter of 2021 also included $10.0 million of acquired intangible asset amortization expense for transactions completed in prior periods. Excluding these charges, non-GAAP net income for the second quarter of 2021 would have been $201.0 million ($4.61 per share). The second quarter of 2020 included pretax charges of $18.3 million which included $9.7 million in acquired intangible asset amortization expense and $8.6 million in severance, facility consolidation and acquisition costs. Excluding acquired intangible asset amortization expense, non-GAAP net income for the second quarter of 2020 would have been $101.1 million ($2.68 per share). Operating margin was 9.3% for the second quarter of 2021, compared with 14.8% for the second quarter of 2020. Excluding acquisition-related transaction and purchase accounting expenses, non-GAAP operating margin for the second quarter of 2021 was 22.8%, compared with 16.1% for the second quarter of 2020. The second quarter of 2021 reflected net discrete income tax expense of $4.1 million compared with net discrete income tax benefits of $10.4 million for the second quarter of 2020.
"The second quarter was truly a record for Teledyne with sales, operating margin and earnings, excluding acquisition-related costs, significantly greater than any prior period," said Robert Mehrabian, Executive Chairman. "We achieved double-digit organic growth with such sales from digital imaging, environmental and electronic test and measurement instrumentation increasing from 17% to nearly 25% year-over-year. Furthermore, Teledyne FLIR performed very well in its first few weeks under Teledyne ownership. We have already made rapid progress integrating FLIR, increasing visibility and accelerating the financial reporting cadence, while continuing to enhance FLIR's compliance standards. At the same time, we have eliminated significant corporate overhead, consultants and other third-party service providers. As a result, we now expect to achieve our annualized cost savings target of $80.0 million before the end of 2022, as opposed to 2024 as described in our final merger proxy. I should note that the very strong non-GAAP margin and earnings performance in the second quarter resulted, in part, from a disproportionate amount of sales from FLIR relative to costs in its first six weeks of consolidation. In addition, the average share count in the second quarter only partially reflected the stock issued in connection with the transaction. Both items are normalized and reflected in our outlook for 2021."
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