THOUSAND OAKS, Calif. — (BUSINESS WIRE) — January 24, 2024 — Teledyne Technologies Incorporated (NYSE: TDY):

• All-time record orders of $1,519.4 million
• All-time record sales of $1,425.0 million
• Fourth quarter GAAP operating margin of 19.1% and record fourth quarter non-GAAP operating margin of 22.7%
• All-time record GAAP and non-GAAP diluted earnings per share of $6.75 and $5.44, respectively
• Record full year GAAP and non-GAAP operating margin of 18.4% and 22.0%, respectively
• Record full year GAAP and non-GAAP diluted earnings per share of $18.49 and $19.69, respectively
• Issuing full year 2024 GAAP diluted earnings per share outlook of $17.15 to $17.53 and full year 2024 non-GAAP earnings per share outlook of $20.35 to $20.68
• Consolidated Leverage Ratio improved to 1.9x

Teledyne today reported fourth quarter 2023 net sales of $1,425.0 million, compared with net sales of $1,418.2 million for the fourth quarter of 2022, an increase of 0.5%. Net income attributable to Teledyne was $323.1 million ($6.75 diluted earnings per share) for the fourth quarter of 2023, compared with $226.4 million ($4.74 diluted earnings per share) for the fourth quarter of 2022, an increase of 42.7%. The fourth quarter of 2023 included $48.6 million of pretax acquired intangible asset amortization expense, $3.0 million of pretax FLIR integration costs and $102.2 million of acquisition related discrete income tax benefits. Excluding these items, non-GAAP net income attributable to Teledyne for the fourth quarter of 2023 was $260.5 million ($5.44 diluted earnings per share). The fourth quarter of 2022 included $47.9 million of pretax acquired intangible asset amortization expense, $4.0 million of pretax income related to the favorable resolution of certain pretax FLIR integration costs, and $24.1 million of acquisition related discrete income tax expense benefits. Excluding these items, non-GAAP net income attributable to Teledyne for the fourth quarter of 2022 was $236.1 million ($4.94 diluted earnings per share). Operating margin was 19.1% for the fourth quarter of 2023, compared with 19.3% for the fourth quarter of 2022. Excluding the non-GAAP items discussed above, non-GAAP operating margin for the fourth quarter of 2023 was 22.7%, compared with 22.4% for the fourth quarter of 2022.

“In the fourth quarter, we achieved record sales and GAAP and non-GAAP earnings per share,” said Robert Mehrabian, Executive Chairman. “Sales increased primarily due to the performance of our marine, medical and aerospace businesses, which were more than able to compensate for the previously announced headwind in the industrial automation and laboratory instrumentation markets. Furthermore, overall record orders exceeded sales in every business segment but were particularly strong in our marine and defense businesses. Leverage declined further and our balance sheet remains very healthy. Finally, we continue to acquire complementary businesses as shown by the acquisition of Xena Networks in the fourth quarter.”

Full Year

Full year sales for 2023 were $5,635.5 million, compared with $5,458.6 million for 2022, an increase of 3.2%. Net income attributable to Teledyne was $885.7 million ($18.49 diluted earnings per share) for fiscal year 2023, compared with $788.6 million ($16.53 diluted earnings per share) for fiscal year 2022, an increase of 12.3%.

Full year 2023 net sales included $99.8 million in incremental net sales from current and prior year acquisitions. The full year of 2023 included $196.7 million of pretax acquired intangible asset amortization expense, $8.8 million of pretax FLIR integration costs and $100.5 million of acquisition related net discrete income tax benefits. Excluding these items, non-GAAP net income attributable to Teledyne for the full year of 2023 was $943.3 million ($19.69 diluted earnings per share). The full year of 2022 included $201.7 million of pretax acquired intangible asset amortization expense, $4.0 million of pretax income related to the favorable resolution of certain FLIR integration costs and $72.7 million of acquisition related net discrete income tax benefits. Excluding these items, non-GAAP net income attributable to Teledyne for the full year of 2022 was $867.8 million ($18.19 diluted earnings per share). Operating margin was 18.4% for 2023, compared with 17.8% for 2022. Excluding the non-GAAP items discussed above, non-GAAP operating margin for 2023 was 22.0%, compared with 21.4% for 2022.

Full year 2023 income tax expense reflected net discrete income tax benefits of $137.5 million compared with net discrete income tax benefits of $86.7 million for 2022.

Review of Operations

Comparisons are with the fourth quarter of 2022, unless noted otherwise.

Digital Imaging

The Digital Imaging segment’s fourth quarter 2023 net sales were $802.5 million, compared with $806.7 million, a decrease of 0.5%. Operating income was $134.3 million for the fourth quarter of 2023, compared with $152.0 million, a decrease of 11.6%. The fourth quarter of 2023 included $3.0 million of pretax FLIR integration costs compared to $4.0 million of pretax income related to the favorable resolution of certain FLIR integration costs in the fourth quarter of 2022. Acquired intangible amortization expense for the fourth quarter of 2023 was $44.9 million compared with $44.1 million. Excluding these items, non-GAAP operating income for the fourth quarter of 2023 was $182.2 million, compared with $192.1 million, a decreased of 5.2%.

The fourth quarter of 2023 net sales included $17.6 million in incremental sales from recent acquisitions, as well as greater sales of x-ray products and surveillance systems, offset by lower sales of industrial imaging cameras, unmanned air systems, micro-electro-mechanical systems (“MEMS”), and commercial maritime products. The decrease in operating income was due to product mix as well as higher FLIR integration costs.

Instrumentation

The Instrumentation segment’s fourth quarter 2023 net sales were $335.2 million, compared with $326.2 million, an increase of 2.8%. Operating income was $90.7 million for the fourth quarter of 2023, compared with $79.0 million, an increase of 14.8%.

The fourth quarter of 2023 net sales increase resulted from higher marine instrumentation product lines. Sales of marine instrumentation increased $18.1 million, partially offset by an $8.8 million decrease in sales of environmental instrumentation and a $0.3 million decrease in sales of test and measurement instrumentation. The increase in operating income primarily reflected the impact of higher sales as well as improved product margins.

Aerospace and Defense Electronics

The Aerospace and Defense Electronics segment’s fourth quarter 2023 net sales were $184.0 million, compared with $177.9 million, an increase of 3.4%. Operating income was $50.0 million for the fourth quarter of 2023, compared with $52.8 million, a decrease of 5.3%.

The fourth quarter of 2023 net sales reflected higher sales of $7.6 million for aerospace electronics partially offset by lower sales of $1.5 million for defense electronics. The decrease in operating income primarily reflected the impact of product mix.

Engineered Systems

The Engineered Systems segment’s fourth quarter 2023 net sales were $103.3 million, compared with $107.4 million, a decrease of 3.8%. Operating income was $12.3 million for the fourth quarter of 2023, compared with $9.3 million, an increase of 32.3%.

The fourth quarter of 2023 net sales reflected lower sales of $4.5 million for engineered products partially offset by an increase of $0.4 million for energy systems. The lower sales for engineered products primarily reflected decreased sales from maritime and other manufacturing services products partially offset by higher revenue from space programs and electronic manufacturing service products. The increase in operating income was primarily driven by program mix, with the fourth quarter of 2023 having a higher percentage of electronic manufacturing services products.

Additional Financial Information

Cash Flow