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News
Teledyne Technologies Reports Second Quarter Earnings
-- Revenue from continuing operations increased 9.7% in the
second quarter of 2000 from the same period of 1999.
-- Earnings per share from continuing operations, excluding
product recall reserves, were $0.36 per share for the second
quarter 2000, compared with $0.32 per share for the pro forma
second quarter of 1999. Total earnings per share, excluding
product recall reserves, were $0.37 for the second quarter of
2000.
-- Discontinued operations include Teledyne Cast Parts which
management intends to divest.
LOS ANGELES: July 27, 2000
Teledyne Technologies Incorporated (NYSE:TDY) today reported
second quarter 2000 sales of $202.3 million, compared with sales of
$184.4 million for the same period in 1999.
Excluding piston engine product recall reserves, net income from
continuing operations was $10.1 million ($0.36 per diluted share) for
the second quarter of 2000, compared with pro forma net income of $8.9
million ($0.32 per diluted share) for the second quarter of 1999. The
second quarters of 2000 and 1999 included pre-tax charges of $12
million and $3 million, respectively, for piston engine product recall
reserves. Including these charges, earnings from continuing operations
were $2.8 million ($0.10 per diluted share) for the second quarter of
2000, compared with $7.1 million ($0.26 per diluted share) for the
same period of 1999. For the second quarter of 2000, net income
including discontinued operations was $3.1 million ($0.11 per diluted
share), compared with net income of $7.9 million ($0.29 per diluted
share) for the same period of 1999.
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Second Quarter Earnings Summary
Millions of Dollars Dollars per
Diluted Share
---------------- ----------------
Second Second Second Second
Quarter Quarter Quarter Quarter
2000 1999(a) 2000 1999(a)
================================= ======= ======= ======= =======
Continuing operations, excluding
special charges $ 10.1 $ 8.9 $ 0.36 $ 0.32
Product recall charge (7.3) (1.8) (0.26) (0.06)
------- ------- ------- -------
Income from continuing operations 2.8 7.1 0.10 0.26
Discontinued operations, net 0.3 0.8 0.01 0.03
------- ------- ------- -------
Net Income $ 3.1 $ 7.9 $ 0.11 $ 0.29
================================= ======= ======= ======= =======
(a) On a pro forma basis
"This quarter we achieved record sales in our Electronics and
Communications and Systems Engineering Solutions segments," said
Robert Mehrabian, president and chief executive officer of Teledyne
Technologies. "Our focus remains on increasing our participation in
attractive markets in broadband communications, including fiber optic,
wireless and satellite communication applications. Our decision to
exit the aerospace castings business is consistent with this
strategy."
Sales for the first six months of 2000 were $397.7 million,
compared with $375.4 million for the first six months of 1999. For the
first six months of 2000, net income including discontinued operations
was $13.3 million ($0.49 per diluted share), compared with pro forma
net income of $17.6 million ($0.64 per diluted share), for the same
period in 1999. Net income before product recall reserves was $20.6
million ($0.75 per diluted share) for the first six months of 2000,
compared with pro forma net income before product recall reserves of
$19.3 million ($0.70 per diluted share) for the same period of 1999.
Since Teledyne Technologies plans to divest Teledyne Cast Parts,
which is part of the company's Aerospace Engines and Components
segment, the attached consolidated financial statements have been
restated to reflect Teledyne Cast Parts as a discontinued operation,
with no loss on disposal anticipated.
Teledyne Technologies was spun off from Allegheny Technologies
Incorporated effective November 29, 1999. Pro forma adjustments in
1999 reflect the estimated expense impacts (primarily interest expense
and corporate expenses) that would have been incurred had Teledyne
Technologies operated as a separate company and as capitalized at the
time of the spin-off for the 1999 periods presented. Net income,
before pro forma adjustments, was $10.2 million ($0.37 per diluted
share) for the second quarter of 1999 and $22.1 million ($0.80 per
diluted share) for the first six months of 1999.
Revised Public Offering Requirement
As previously announced, the Internal Revenue Service agreed to a
modification of the tax ruling issued in connection with the spin-off
of Teledyne Technologies from Allegheny Technologies Incorporated. The
revised ruling requires Teledyne Technologies to complete a smaller
public offering of 15 to 18 percent of its outstanding common stock.
On July 21, 2000, Teledyne Technologies filed a registration statement
to register 4.1 million shares of its common stock with the Securities
and Exchange Commission to further this public offering requirement.
The underwriting is to be managed by Goldman, Sachs & Co., Banc of
America Securities LLC and A.G. Edwards & Sons, Inc.
The registration statement has been filed with the Securities and
Exchange Commission but has not yet become effective. These securities
may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This press release shall
not constitute an offer to sell or the solicitation of an offer to buy
nor shall there be any sale of these securities in any State in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
State.
Review of Operations
Electronics and Communications
The Electronics and Communications segment second quarter sales
were $91.4 million, up 4.7 percent from 1999 second quarter sales of
$87.3 million. Second quarter operating profit rose 1.9 percent to
$10.9 million, from $10.7 million in the second quarter of 1999.
Second quarter sales, compared with the same period in 1999, grew
significantly in electronic manufacturing services, relay products,
business and commuter aircraft communications equipment and microwave
products. Sales from electronic manufacturing services and microwave
products grew as a result of new orders from military and commercial
customers. Relay products reported its strongest quarterly sales in
over two years based on demand from the communications and
semiconductor test equipment markets. Sales of medical and military
microelectronics were down from the same period last year. Segment
operating profit improved due to growth in sales, partially offset by
reduced margins on electronic manufacturing services and increased
spending in optoelectronics and broadband wireless initiatives.
Systems Engineering Solutions
The Systems Engineering Solutions segment second quarter sales
were $61.0 million, up 15.5 percent from 1999 second quarter sales of
$52.8 million. Operating profit for the second quarter improved
6.7 percent to $4.8 million, from $4.5 million in the same period last
year.
Second quarter performance reflected strong sales growth in
environmental programs, systems engineering and integration,
information technology and space programs. Operating results reflected
increased revenue, partially offset by mix differences in systems
engineering and integration and environmental sales.
Aerospace Engines and Components
The Aerospace Engines and Components segment second quarter sales
were $49.9 million, up 12.6 percent from $44.3 million in the 1999
second quarter. Excluding piston engine product recall reserves taken
in the second quarters of 2000 and 1999, operating profit in 2000 was
$6.4 million, compared with operating profit of $4.2 million in the
second quarter of 1999. Including product recall reserves, the
Aerospace Engines and Components segment incurred an operating loss of
$5.6 million for the second quarter 2000, compared with operating
profit of $2.5 million in the same period of 1999.
Increased sales for piston engines were driven by aftermarket new
engine sales and overhaul services. Sales and operating profit in the
turbine engine business grew due to an increase in military spare
parts sales.
The results of the Aerospace Engines and Components segment have
been restated to reflect Teledyne Cast Parts (which manufactures a
wide range of castings for the aerospace and defense industries) as a
discontinued operation.
Additional Financial Information
Prior to the product recall reserves, earnings from continuing
operations before interest, taxes, depreciation and amortization
(EBITDA) for the second quarter of 2000 were $22.1 million, compared
with pro forma EBITDA of $20.0 million for the same period of 1999.
Net pension income for the second quarter was $2.2 million, compared
with net pension income of $1.6 million for the same period of 1999.
Capital expenditures from continuing operations for the first six
months of 2000 were $9.3 million, compared with $6.4 million for the
same period in 1999.
This press release contains forward-looking statements, as defined
in the Private Securities Litigation Reform Act of 1995, relating to
earnings, growth opportunities, capital investments and strategic
plans. Actual results could differ materially from these
forward-looking statements. Many factors, including the extent and
timing of the required public offering, market, economic and political
conditions, and funding and continuation of government programs, as
well as the outcome of the crankshaft investigation, could change the
anticipated results. The disposition of Teledyne Cast Parts is subject
to many factors, including the terms and conditions of any definitive
asset sale and purchase agreement, as well as industry and business
conditions. Additional information concerning factors that could cause
actual results to differ materially from those projected in the
forward-looking statements is contained in Teledyne Technologies'
periodic filings with the Securities and Exchange Commission,
including its 1999 Annual Report on Form 10-K, as well as the
registration statement filed in connection with the anticipated public
offering.
Teledyne Technologies is a leading provider of sophisticated
electronics and communication products, systems engineering solutions
and aerospace engines and components. Teledyne Technologies has
operations in the United States, the United Kingdom and Mexico. For
more information, visit Teledyne Technologies' website at
www.teledyne.com.
A replay of Teledyne Technologies' second quarter earnings
conference call will be available from Thursday, July 27, 2:00 p.m.
(EDT) until Friday, July 28, 11:59 p.m. (EDT). To listen to the
replay, dial 1-800-475-6701 (or 320-365-3844 for international
callers), access code 530171.
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TELEDYNE TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS(a)
ACTUAL RESULTS FOR THE THREE AND SIX MONTHS ENDED JULY 2, 2000
AND PRO FORMA RESULTS FOR THE THREE AND SIX MONTHS ENDED JULY 4, 1999
(Unaudited - In millions, except per share amounts)
Second Second Six Six
Quarter Quarter Months Months
2000 1999 2000 1999
================================ ======== ======== ======== ========
Net sales $ 202.3 $ 184.4 $ 397.7 $ 375.4
Costs and expenses:
Costs of sales 146.9 133.3 287.4 275.3
Selling, general and
administrative expenses(b) 49.3 37.2 85.4 68.7
-------- -------- -------- --------
Income before other income and
expense and taxes 6.1 13.9 24.9 31.4
Other income 0.3 0.2 0.4 0.5
Interest expense, net 1.8 2.0 3.6 4.0
-------- -------- -------- --------
Income before taxes 4.6 12.1 21.7 27.9
Provision for taxes 1.8 5.0 8.6 11.5
-------- -------- -------- --------
Income from continuing operations 2.8 7.1 13.1 16.4
Discontinued operations, net 0.3 0.8 0.2 1.2
-------- -------- -------- --------
Net Income $ 3.1 $ 7.9 $ 13.3 $ 17.6
======== ======== ======== ========
Diluted earnings per common share:
Income from continuing operations 0.10 0.26 0.48 0.60
Discontinued operations, net 0.01 0.03 0.01 0.04
-------- -------- -------- --------
Diluted earnings per common share $ 0.11 $ 0.29 $ 0.49 $ 0.64
======== ======== ======== ========
Weighted average diluted common
shares outstanding 27.6 27.5 27.3 27.6
EBITDA - continuing operations(c) $ 22.1 $ 20.0 $ 45.1 $ 40.8
================================ ======== ======== ======== ========
(a) Restated to reflect Teledyne Cast Parts as a discontinued
operation.
(b) Includes pre-tax charges of $12 million and $3 million in the
second quarters of 2000 and 1999, respectively, for product
recall reserves.
(c) Excludes pre-tax charges of $12 million and $3 million in the
second quarters of 2000 and 1999, respectively, for product
recall reserves.
The pro forma financial information has been presented for
informational purposes only and may not reflect the results of
operations or financial position of Teledyne Technologies that
would have occurred had Teledyne Technologies operated as a
separate, independent company for the 1999 periods presented.
The pro forma financial information should not be relied upon as
being indicative of future results. Pro forma adjustments
reflect the estimated expense impacts (primarily interest
expense and corporate expenses) that would have been incurred
had Teledyne Technologies been operated as a separate company as
of the beginning of the 1999 fiscal year and as capitalized at
the time of the spin-off for the 1999 periods presented. As part
of the spin-off, Teledyne Technologies incurred $100 million in
long-term debt and Allegheny Technologies (its former parent)
retained the proceeds. Pro forma income includes pro forma
interest expense on the long-term debt as if it was outstanding
for the 1999 periods presented. Pro forma income adjusts
corporate expenses to an annual level of $15 million from the
amount previously allocated, which was lower.
TELEDYNE TECHNOLOGIES INCORPORATED
HISTORICAL CONSOLIDATED STATEMENTS OF OPERATIONS(a)
FOR THE THREE AND SIX MONTHS ENDED JULY 2, 2000
AND FOR THE THREE AND SIX MONTHS ENDED JULY 4, 1999
(Unaudited - In millions, except per share amounts)
Second Second Six Six
Quarter Quarter Months Months
2000 1999 2000 1999
================================ ======== ======== ======== ========
Net sales $ 202.3 $ 184.4 $ 397.7 $ 375.4
Costs and expenses:
Costs of sales 146.9 133.3 287.4 275.3
Selling, general and
administrative expenses(b) 49.3 35.3 85.4 65.0
-------- -------- -------- --------
Income before other income and
expense and taxes 6.1 15.8 24.9 35.1
Other income 0.3 0.2 0.4 0.5
Interest expense, net 1.8 -- 3.6 --
-------- -------- -------- --------
Income before taxes 4.6 16.0 21.7 35.6
Provision for taxes 1.8 6.6 8.6 14.7
-------- -------- -------- --------
Income from continuing operations 2.8 9.4 13.1 20.9
Discontinued operations, net 0.3 0.8 0.2 1.2
-------- -------- -------- --------
Net Income $ 3.1 $ 10.2 $ 13.3 $ 22.1
======== ======== ======== ========
Diluted earnings per common share:
Income from continuing operations 0.10 0.35 0.48 0.76
Discontinued operations, net 0.01 0.02 0.01 0.04
-------- -------- -------- --------
Diluted earnings per common share $ 0.11 $ 0.37 $ 0.49 $ 0.80
======== ======== ======== ========
Weighted average diluted common
shares outstanding 27.6 27.5 27.3 27.6
EBITDA - continuing operations(c) $ 22.1 $ 21.9 $ 45.1 $ 44.5
================================ ======== ======== ======== ========
(a) Restated to reflect Teledyne Cast Parts as a discontinued
operation.
(b) Includes pre-tax charges of $12 million and $3 million in the
second quarters of 2000 and 1999, respectively, for product
recall reserves.
(c) Excludes pre-tax charges of $12 million and $3 million in the
second quarters of 2000 and 1999, respectively, for product
recall reserves.
TELEDYNE TECHNOLOGIES INCORPORATED
SUMMARY OF SEGMENT NET SALES AND OPERATING PROFIT
FOR THE THREE AND SIX MONTHS ENDED JULY 2, 2000
AND FOR THE THREE AND SIX MONTHS ENDED JULY 4, 1999
(Unaudited - In millions of dollars)
Second Second Six Six
Quarter Quarter Months Months
2000 1999 2000 1999
================================ ======== ======== ======== ========
Net Sales:
Electronics and Communications $ 91.4 $ 87.3 $ 177.1 $ 170.5
Systems Engineering Solutions 61.0 52.8 118.2 112.4
Aerospace Engines and
Components(a) 49.9 44.3 102.4 92.5
-------- -------- -------- --------
Total Net Sales $ 202.3 $ 184.4 $ 397.7 $ 375.4
======== ======== ======== ========
Operating Profit:
Electronics and Communications $ 10.9 $ 10.7 $ 20.4 $ 19.2
Systems Engineering Solutions 4.8 4.5 10.4 9.4
Aerospace Engines and
Components(a,b) 6.4 5.5 14.0 13.5
-------- -------- -------- --------
Total Operating Profit $ 22.1 $ 20.7 $ 44.8 $ 42.1
================================ ======== ======== ======== ========
(a) Restated to reflect Teledyne Cast Parts as a discontinued
operation.
(b) Excludes pre-tax charges of $12 million and $3 million in the
second quarters of 2000 and 1999, respectively, for product
recall reserves.
TELEDYNE TECHNOLOGIES INCORPORATED
BALANCE SHEET FOR THE PERIOD ENDED JULY 2, 2000
AND THE FISCAL YEAR ENDED JANUARY 2, 2000(a)
(Current period unaudited - In millions of dollars)
July 2, January 2,
2000 2000
========================================== =========== ===========
ASSETS
Cash and cash equivalents $ 3.2 $ 7.1
Accounts receivable, net 123.4 109.1
Inventories, net 57.4 51.4
Deferred income taxes, net 20.2 21.7
Prepaid expenses and other current assets 8.6 4.5
----------- -----------
Total Current Assets 212.8 193.8
Property, plant and equipment, net 58.5 56.0
Deferred income taxes, net 31.6 25.6
Cost in excess of net assets acquired, net 7.8 8.2
Other assets 19.4 16.9
Net assets of discontinued operation 12.4 12.9
----------- -----------
Total Assets $ 342.5 $ 313.4
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 54.6 $ 44.2
Accrued liabilities 61.6 47.3
Income taxes payable -- 3.8
----------- -----------
Total Current Liabilities 116.2 95.3
Long-term debt 91.0 97.0
Other long-term liabilities 77.0 76.6
----------- -----------
Total Liabilities 284.2 268.9
Total Stockholders' Equity 58.3 44.5
----------- -----------
Total Liabilities and
Stockholders' Equity $ 342.5 $ 313.4
========================================== =========== ===========
(a) Restated to reflect Cast Parts as a discontinued operation.
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Investor Contact:
Jason VanWees
(310) 893-1642
Press Contact:
Robyn McGowan
(310) 893-1640
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