THOUSAND OAKS, Calif. — (BUSINESS WIRE) — January 22, 2020 — Teledyne Technologies Incorporated (NYSE: TDY):

• Record quarterly sales of $834.2 million, an increase of 11.5% compared to last year
• Record quarterly GAAP earnings per diluted share of $3.06, an increase of 24.9% compared to last year
• Record full year sales of $3,163.6 million and GAAP earnings per diluted share of $10.73
• Record quarterly and full year cash flow
• Record fourth quarter and full year GAAP operating margin
• Issuing full year 2020 GAAP earnings outlook of $11.20 to $11.30 per diluted share
• Recently acquired OakGate Technology, Inc.

Teledyne today reported fourth quarter 2019 net sales of $834.2 million, compared with net sales of $748.4 million for the fourth quarter of 2018, an increase of 11.5%. Net income was $115.7 million ($3.06 per diluted share) for the fourth quarter of 2019, compared with $91.1 million ($2.45 per diluted share) for the fourth quarter of 2018, an increase of 27.0%. The fourth quarter of 2019 reflected net discrete income tax benefits of $8.3 million compared with net discrete income tax benefits of $6.9 million for the fourth quarter of 2018. The fourth quarter of 2019 included $2.1 million in severance and facility consolidation costs compared with $2.5 million in severance and facility consolidation costs for the fourth quarter of 2018.

“For the second consecutive quarter, we achieved all-time record sales, earnings per share and cash flow,” said Robert Mehrabian, Executive Chairman. “Our full year results were also record breaking, with significant increases in sales, earnings per share and cash flow. In addition, full year GAAP operating margin increased 119 basis points given our continued emphasis on margin improvement. Finally, we deployed $484 million on complementary acquisitions in 2019, but nevertheless, ended 2019 with our lowest leverage in over five years.” Al Pichelli, President and Chief Executive Officer, added, “Growth across Teledyne was once again driven by our balanced business portfolio. Instrumentation performance was led by a recovery in the marine market. The Digital Imaging segment reflected growth in healthcare and space markets. Our U.S. defense businesses also performed well across the entire company. Lastly, fourth quarter orders exceeded sales and we concluded 2019 with record backlog.”

Full Year 2019

Total year sales for 2019 were $3,163.6 million, compared with $2,901.8 million for 2018, an increase of 9.0%. Net income was $402.3 million ($10.73 per diluted share) for fiscal year 2019, compared with $333.8 million ($9.01 per diluted share) for fiscal year 2018, an increase of 20.5%.

Total year 2019 and 2018 also reflected pretax charges totaling $3.2 million and $7.8 million, respectively, for severance charges and facility consolidation charges. Net income for 2019 included net discrete tax benefits of $26.1 million, compared with $23.8 million for 2018. The 2019 and 2018 amounts included tax benefits of $15.4 million and $12.9 million, respectively, related to share-based accounting.

Review of Operations

Comparisons are with the fourth quarter of 2018, unless noted otherwise. In the third quarter of 2019, we realigned the reporting structure for certain business units, primarily related to certain refinements of our management reporting structure. This change primarily related to moving certain electronic manufacturing services products from the Aerospace and Defense Electronics segment to the Engineered Systems segment. Total net sales for these products were $76.2 million for fiscal year 2018. Other immaterial changes included moving certain United Kingdom (U.K.) microwave product lines (previously within the Digital Imaging segment) and certain U.K. manufactured composite parts (previously within the Engineered Systems segment) into the Aerospace and Defense Electronics segment. Total net sales for these U.K. product lines were less than $20.0 million for fiscal year 2018. Previously reported segment data has been adjusted to reflect these changes.

Instrumentation

The Instrumentation segment’s fourth quarter 2019 net sales were $301.6 million, compared with $263.4 million, an increase of 14.5%. Operating income was $59.5 million for the fourth quarter of 2019, compared with $43.0 million, an increase of 38.4%.

The fourth quarter 2019 net sales increase resulted from higher sales of environmental instrumentation and marine instrumentation, partially offset by lower sales of test and measurement instrumentation. Sales of environmental instrumentation increased $27.8 million and sales of marine instrumentation increased $15.3 million, while sales of test and measurement instrumentation decreased $4.9 million. The increase in sales in environmental instrumentation included $28.1 million in sales from the acquisition of the Gas and Flame Detection business of 3M. The increase in operating income reflected the impact of higher sales and higher margins across most product lines.

Digital Imaging

The Digital Imaging segment’s fourth quarter 2019 net sales were $268.1 million, compared with $223.3 million, an increase of 20.1%. Operating income was $47.1 million for the fourth quarter of 2019, compared with $36.3 million, an increase of 29.8%.

The fourth quarter 2019 net sales primarily reflected higher sales of X-ray detectors for life sciences applications and space, defense, geospatial and MEMS products, as well as $26.9 million in sales from the acquisitions of the scientific imaging businesses of Roper Technologies, Inc. and Micralyne Inc., partially offset by lower sales of industrial machine vision products. The increase in operating income in the fourth quarter of 2019 primarily reflected higher sales and product mix differences.

Aerospace and Defense Electronics

The Aerospace and Defense Electronics segment’s fourth quarter 2019 net sales were $170.4 million, compared with $166.0 million, an increase of 2.7%. Operating income was $32.8 million for the fourth quarter of 2019, compared with $35.4 million a decrease of 7.3%.

The fourth quarter 2019 net sales reflected $9.2 million of higher sales of defense electronics, partially offset by lower sales of $4.8 million for aerospace electronics. Operating income in the fourth quarter of 2019 reflected the impact of higher sales, offset by product mix differences.

Engineered Systems

The Engineered Systems segment’s fourth quarter 2019 net sales were $94.1 million, compared with $95.7 million, a decrease of 1.7%. Operating income was $10.5 million for the fourth quarter of 2019, compared with $10.7 million, a decrease of 1.9%.

The fourth quarter 2019 net sales reflected lower sales of $3.1 million of engineered products and $1.1 million of energy systems, partially offset by higher sales of $2.6 million for turbine engines. The lower sales of engineered products and services primarily reflected lower sales from missile defense programs partially offset by increased sales from space and nuclear programs, as well as electronic manufacturing services products. Operating income in the fourth quarter of 2019 decreased primarily due to lower sales.

Additional Financial Information

Cash Flow

Cash provided by operating activities was $167.9 million for the fourth quarter of 2019, compared with $125.5 million. The higher cash provided by operating activities in the fourth quarter of 2019 reflected the impact of higher operating income, cash flow from recent acquisitions and improved working capital management. At December 29, 2019, cash totaled $199.5 million, compared with $142.5 million at December 30, 2018. At December 29, 2019, total debt was $850.6 million, compared with $747.5 million at December 30, 2018. At December 29, 2019, $125.0 million was outstanding under the $750.0 million credit facility. The company received $5.4 million from the exercise of stock options in the fourth quarter of 2019, compared with $1.1 million. Capital expenditures for the fourth quarter of 2019 were $23.9 million, compared with $18.7 million. Depreciation and amortization expense for both the fourth quarter of 2019 and 2018 was $29.3 million. On January 3, 2020, Teledyne acquired OakGate Technology, Inc.