THOUSAND OAKS, Calif. — (BUSINESS WIRE) — May 3, 2018 — Teledyne Technologies Incorporated (NYSE: TDY):
- Record first quarter sales of $695.6 million, an increase of 22.9% compared to last year
- Record first quarter GAAP earnings per diluted share of $1.81
- Record first quarter operating margin
- Raising full year 2018 GAAP earnings outlook to $7.67 to $7.77, an increase from the prior outlook of $7.51 to $7.61
Teledyne today reported first quarter 2018 net sales of $695.6 million, compared with net sales of $566.1 million for the first quarter of 2017, an increase of 22.9%. Net income was $66.5 million ($1.81 per diluted share) for the first quarter of 2018, compared with $30.5 million ($0.84 per diluted share) for the first quarter of 2017, an increase of 118.0%. The first quarter of 2017 includes $21.2 million ($0.42 per share) in acquisition costs related to the e2v technologies plc (“e2v”) acquisition.
“We began 2018 with an outstanding quarter. Total sales increased 22.9% including organic growth of 7.9%. In addition, orders exceeded sales in every segment, generating an overall book to bill greater than 1.2 times,” said Robert Mehrabian, Chairman and Chief Executive Officer. “Our Digital Imaging segment performed exceptionally well again, with sales increasing 21.7% organically from last year. Sales of defense and space electronics were also strong with one large space program contributing to our all-time record orders. Finally, while operating margin was a record for any first quarter, we believe there remains room for long-term improvement.”
Review of Operations
Comparisons are with the first quarter of 2017, unless noted otherwise. Effective January 1, 2018, Teledyne adopted the requirements of Accounting Standards Update (“ASU”) No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” This ASU requires the service cost component of net benefit costs to be reported in the same line item or items within operating income as other compensation costs, with the other components of net benefit cost to be presented outside of operating income. The 2017 period has been adjusted to be consistent with the 2018 presentation. In addition, effective January 1, 2018, Teledyne adopted ASU No. 2014-09 (Topic 606), “Revenue from Contracts with Customers”, using the modified retrospective transition method. Prior period comparative information is not adjusted and is reported under the accounting standards in effect for that period. The cumulative effect of adopting the new standard resulted in an immaterial increase to retained earnings as of January 1, 2018.
The Instrumentation segment’s first quarter 2018 net sales were $239.0 million, compared with $232.8 million, an increase of 2.7%. First quarter 2018 operating income was $27.8 million, compared with $30.2 million, a decrease of 7.9%.
The first quarter 2018 net sales increase resulted from higher sales of test and measurement instrumentation and environmental instrumentation, as well as the contribution from recent acquisitions, partially offset by lower sales of marine instrumentation. Sales of test and measurement instrumentation increased $5.8 million and included $0.8 million in incremental sales from recent acquisitions. Sales of environmental instrumentation increased $5.7 million and included $4.5 million in incremental sales from recent acquisitions. Sales of marine instrumentation decreased $5.3 million and primarily reflected lower sales of sensors for energy exploration and unfavorable timing of U.S. Government sales, partially offset by higher sales of sonar systems. The decrease in operating income reflected lower sales in marine instruments and costs associated with the relocation of certain marine instrumentation facilities, partially offset by the impact of greater sales of test and measurement instrumentation and environmental instrumentation.
The Digital Imaging segment’s first quarter 2018 net sales were $206.4 million, compared with $113.8 million, an increase of 81.4%. Operating income was $34.6 million for the first quarter of 2018, compared with $15.1 million, an increase of 129.1%.
The first quarter 2018 net sales included $69.5 million in incremental sales from the e2v acquisition. The first quarter 2018 net sales also reflected higher sales of X-ray detectors for life sciences applications, infrared sensors for U.S. Government programs and machine vision cameras for industrial applications. The increase in operating income in the first quarter of 2018 reflected the impact of higher sales, favorable product mix and incremental operating profit from e2v. Operating income in 2017 included $2.5 million in acquisition-related costs related to the e2v acquisition.
Aerospace and Defense Electronics
The Aerospace and Defense Electronics segment’s first quarter 2018 net
sales were $178.2 million, compared with $151.9 million, an increase of
17.3%. Operating income was $31.7 million for the first quarter of 2018,
compared with $24.8 million, an increase of 27.8%.