THOUSAND OAKS, Calif. — (BUSINESS WIRE) — October 23, 2024 — Teledyne Technologies Incorporated (NYSE: TDY):

• Orders exceeded sales for the fourth consecutive quarter
• All-time record quarterly sales of $1,443.5 million, an increase of 2.9% compared with last year
• Third quarter GAAP operating margin of 18.8% and third quarter non-GAAP operating margin of 22.5%
• Record third quarter GAAP diluted earnings per share of $5.54 and non-GAAP diluted earnings per share of $5.10
• Third quarter cash from operations of $249.8 million and free cash flow of $228.7 million
• Raising full year 2024 GAAP diluted earnings per share outlook to $17.28 to $17.42, compared with the prior outlook of $15.87 to $16.13, and narrowing full year 2024 non-GAAP earnings per share outlook to $19.35 to $19.45, compared with the prior outlook of $19.25 to $19.45
• Capital deployment year-to-date through October 2024 includes estimated stock repurchases of approximately $354 million
• Quarter-end Consolidated Leverage Ratio of 1.7x

Teledyne today reported third quarter 2024 net sales of $1,443.5 million, compared with net sales of $1,402.5 million for the third quarter of 2023, an increase of 2.9%. Net income attributable to Teledyne was $262.0 million ($5.54 diluted earnings per share) for the third quarter of 2024, compared with $198.6 million ($4.15 diluted earnings per share) for the third quarter of 2023, an increase of 31.9%. The third quarter of 2024 included $49.8 million of pretax acquired intangible asset amortization expense, $3.7 million of pretax FLIR integration costs and $61.7 million of FLIR acquisition-related discrete income tax benefits. Excluding these items, non-GAAP net income attributable to Teledyne for the third quarter of 2024 was $241.3 million ($5.10 diluted earnings per share). The third quarter of 2023 included $49.1 million of pretax acquired intangible asset amortization expense, $5.8 million of pretax FLIR integration costs and $1.0 million of FLIR acquisition-related discrete income tax expense. Excluding these items, non-GAAP net income attributable to Teledyne for the third quarter of 2023 was $241.9 million ($5.05 diluted earnings per share). Operating margin was 18.8% for both the third quarter of 2024 and 2023. Excluding pretax acquired intangible asset amortization expense and pretax FLIR integration costs, non-GAAP operating margin for the third quarter of 2024 was 22.5%, compared with 22.8% for the third quarter of 2023.

“Teledyne achieved all-time record orders and sales in the third quarter,” said Robert Mehrabian, Executive Chairman. “Revenue was sequentially greater in each segment, allowing us to report overall year-over-year growth as we expected. We continue to see robust demand in our longer cycle defense, space, and energy businesses. Furthermore, sales for most of our shorter cycle commercial businesses have stabilized or are recovering, and year-over-year comparisons have just begun to ease. We opportunistically repurchased $354 million of stock over the last several months, and we will continue to evaluate share repurchases against acquisitions, for which the pipeline has recently improved.”

Review of Operations

Comparisons are with the third quarter of 2023, unless noted otherwise.

Digital Imaging

The Digital Imaging segment’s third quarter 2024 net sales were $768.4 million, compared with $775.8 million, a decrease of 1.0%. Operating income was $123.9 million for the third quarter of 2024, compared with $136.3 million, a decrease of 9.1%. The third quarter of 2024 included $3.7 million of pretax FLIR integration costs compared with $5.8 million. Acquired intangible amortization expense for the third quarter of 2024 was $46.0 million compared with $45.4 million. Excluding these items, non-GAAP operating income for the third quarter of 2024 was $173.6 million, compared with $187.5 million, a decrease of 7.4%.

The third quarter of 2024 net sales decreased primarily due to lower sales of industrial automation imaging systems and X-ray products, partially offset by higher sales of unmanned air systems, surveillance systems, infrared detectors and commercial infrared imaging systems. The third quarter of 2024 also included $10.8 million of incremental sales from recent acquisitions. The decrease in operating income was primarily due to lower sales and unfavorable product mix, including lower industrial automation imaging systems sales.

Instrumentation

The Instrumentation segment’s third quarter 2024 net sales were $349.8 million, compared with $329.1 million, an increase of 6.3%. Operating income was $96.3 million for the third quarter of 2024, compared with $85.5 million, an increase of 12.6%.

The third quarter of 2024 net sales increase resulted from a $31.9 million increase in sales of marine instrumentation primarily due to stronger offshore energy and defense markets, partially offset by a $7.2 million decrease in sales of electronic test and measurement instrumentation as well as a $4.0 million decrease in sales of environmental instrumentation. The third quarter of 2024 also included $7.2 million of incremental sales from recent acquisitions. The increase in operating income primarily reflected the impact of higher marine instrumentation sales as well as favorable marine instrumentation product mix and improved marine instrumentation margins.

Aerospace and Defense Electronics

The Aerospace and Defense Electronics segment’s third quarter 2024 net sales were $200.2 million, compared with $183.3 million, an increase of 9.2%. Operating income was $56.3 million for the third quarter of 2024, compared with $49.4 million, an increase of 14.0%.

The third quarter of 2024 net sales reflected higher sales of $12.6 million for defense electronics and $4.3 million for aerospace electronics. The increase in operating income primarily reflected the impact of higher sales and favorable product mix.

Engineered Systems

The Engineered Systems segment’s third quarter 2024 net sales were $125.1 million, compared with $114.3 million, an increase of 9.4%. Operating income was $12.9 million for the third quarter of 2024, compared with $10.9 million, an increase of 18.3%.

The third quarter of 2024 net sales reflected higher sales of $10.2 million for engineered products and $0.6 million for energy systems. The higher sales for engineered products primarily reflected increased sales from electronic manufacturing services products. The increase in operating income was driven primarily by higher net sales.

Additional Financial Information

Cash Flow

Cash provided by operating activities was $249.8 million for the third quarter of 2024 compared with $278.2 million, with the decrease driven primarily by higher income tax payments in the third quarter of 2024. Depreciation and amortization expense for both the third quarter of 2024 and 2023 was $76.9 million. Stock-based compensation expense for the third quarter of 2024 was $8.7 million compared with $8.0 million.

Capital expenditures for the third quarter of 2024 were $21.1 million compared with $23.0 million. Teledyne received $5.0 million from the exercise of stock options in the third quarter of 2024 compared with $12.2 million.

During the third quarter of 2024, the Company repurchased approximately 0.3 million shares for $138.8 million, bringing the year-to-date repurchases to $332.6 million through the end of September 2024.

As of September 29, 2024, net debt was $2,237.0 million which is calculated as total debt of $2,798.0 million, net of cash and cash equivalents of $561.0 million. As of December 31, 2023, net debt was $2,596.6 million representing total debt of $3,244.9 million, net of cash and cash equivalents of $648.3 million.

As of September 29, 2024, $1,171.1 million was available under the $1.20 billion credit facility, after reductions of $28.9 million in outstanding letters of credit.