THOUSAND OAKS, Calif. — (BUSINESS WIRE) — January 23, 2019 — Teledyne Technologies Incorporated (NYSE: TDY):
- Record quarterly sales of $748.4 million, an increase of 6.2% compared to last year
- Record quarterly GAAP earnings per diluted share of $2.45, an increase of 33.2% compared to last year
- Record full year sales of $2.902 billion and GAAP earnings per diluted share of $9.01
- Record full year GAAP operating margin and cash flow
- Issuing full year 2019 GAAP earnings outlook of $9.25 to $9.35 per diluted share
- Announced pending acquisition of the Scientific Imaging businesses of Roper Technologies for $225.0 million in cash
Teledyne today reported fourth quarter 2018 net sales of $748.4 million, compared with net sales of $704.4 million for the fourth quarter of 2017, an increase of 6.2%. Net income was $91.1 million ($2.45 per diluted share) for the fourth quarter of 2018, compared with $67.6 million ($1.84 per diluted share) for the fourth quarter of 2017, an increase of 34.8%. The fourth quarter of 2018 included $2.5 million in severance and facility consolidation costs. The fourth quarter of 2018 also included net discrete income tax benefits of $6.9 million. The fourth quarter of 2017 included $0.7 million in severance and facility consolidation costs. The fourth quarter of 2017 also included net discrete income tax benefits of $1.3 million which included provisional charges of $4.7 million as a result of the Tax Cuts and Jobs Act of 2017 (“Tax Act”).
“Fourth quarter and full year sales and earnings were all-time records,” said Al Pichelli, President and Chief Executive Officer. “Fourth quarter operating margin increased 143 basis points, with particularly strong improvement in our Instrumentation segment. Sales increased in every segment and we achieved overall organic growth of 6.2% in the fourth quarter. Our full-year cash flow was the strongest in the company’s history, and orders exceeded sales for the fourth consecutive quarter.” Robert Mehrabian, Executive Chairman, added, “Teledyne’s outstanding performance throughout 2018 is evidence of our success in building a portfolio of balanced businesses, with common underlying technologies, to enable consistent and improved financial performance in different business cycles and demand drivers. To this end, we were pleased to announce another digital imaging acquisition that will expand our offerings to life sciences and academic research.”
Full Year 2018
Total year sales for 2018 were $2,901.8 million, compared with $2,603.8 million for 2017, an increase of 11.4%. Net income was $333.8 million ($9.01 per diluted share) for fiscal year 2018, compared with $227.2 million ($6.26 per diluted share) for fiscal year 2017, an increase of 46.9%.
Total year 2017 reflected pretax charges totaling $27.0 million in acquisition related costs for the acquisition of e2v technologies plc (“e2v”). Total year 2018 and 2017 also reflected pretax charges totaling $7.8 million and $4.2 million, respectively, for severance charges and facility consolidation charges. Net income for 2018 included net discrete tax benefits of $23.8 million. Net income for 2017 included net discrete tax benefits of $17.2 million which included provisional charges of $4.7 million for the estimated impact of the Tax Act. The 2018 and 2017 amounts included tax benefits of $12.9 million and $8.8 million, respectively related to share-based accounting.
Review of Operations
Comparisons are with the fourth quarter of 2017, unless noted otherwise. In the second quarter of 2018, we realigned the reporting structure for certain of our microwave product groupings. These products, acquired with the acquisition of e2v, were formerly reported as part of the Aerospace and Defense Electronics segment and are now reported as part of the Digital Imaging segment. Previously reported segment data has been adjusted to reflect this change. Total sales for these products were $24.2 million for fiscal year 2017.
The Instrumentation segment’s fourth quarter 2018 net sales were $263.4 million, compared with $254.8 million, an increase of 3.4%. Operating income was $43.0 million for the fourth quarter of 2018, compared with $30.7 million, an increase of 40.1%.
The fourth quarter 2018 net sales increase resulted from higher sales of test and measurement instrumentation and environmental instrumentation, partially offset by lower sales for marine instrumentation. Sales of test and measurement instrumentation increased $14.0 million while sales of environmental instrumentation increased $3.1 million. Sales of marine instrumentation decreased $8.5 million. The increase in operating income reflected the impact of higher sales and higher margins across most product lines.