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NewsRelease
TELEDYNE TECHNOLOGIES REPORTS
FOURTH QUARTER EARNINGS
·
Fourth quarter earnings per
share from continuing operations of $0.32, excluding special charges. Total earnings per share of $0.28.
·
Optoelectronics sales
consistent with strategic goals.
·
Special charges taken in
selected product lines within the Systems Engineering Solutions segment, for
which the company is reviewing strategic alternatives.
LOS ANGELES – January 25, 2001 – Teledyne Technologies Incorporated (NYSE:TDY) today reported fourth quarter 2000 sales from continuing operations of $196.3 million, compared with sales of $191.0 million from continuing operations for the same period in 1999.
Excluding special charges, net income from continuing operations was $10.4 million ($0.32 per diluted share) for the fourth quarter of 2000, compared with pro forma net income from continuing operations of $11.7 million ($0.44 per diluted share) for the fourth quarter of 1999. The fourth quarter of 2000 included pretax special charges totaling $2.2 million for receivables and cost adjustments in selected product lines in the Systems Engineering Solutions segment. Including these charges, earnings from continuing operations were $9.1 million ($0.28 per diluted share) for the fourth quarter of 2000. Net income including discontinued operations and special charges was $9.2 million ($0.28 per diluted share) for the fourth quarter of 2000. Year-over-year earnings per share comparisons for the fourth quarter reflect pretax operating expenses of $4.5 million in the fourth quarter of 2000 related to the company’s strategic growth initiatives in optoelectronics and wireless technologies and dilution resulting from the company’s public equity offering completed in the third quarter of 2000.
Fourth Quarter Earnings Summary
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Millions of Dollars |
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Dollars per Diluted Share |
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Fourth |
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Fourth |
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Fourth |
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Fourth
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Quarter |
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Quarter |
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Quarter |
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Quarter |
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2000 |
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1999(a) |
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2000 |
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1999(a) |
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Continuing operations,
excluding special charges |
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$ |
10.4 |
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$ |
11.7 |
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$ |
0.32 |
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$ |
0.44 |
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Special charges |
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(1.3 |
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— |
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(0.04 |
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— |
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Income from continuing operations |
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9.1 |
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11.7 |
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0.28 |
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0.44 |
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Discontinued operations, net |
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0.1 |
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— |
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— |
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— |
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Net Income |
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$ |
9.2 |
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$ |
11.7 |
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$ |
0.28 |
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$ |
0.44 |
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(a)
On
a pro forma basis
“Having completed our first full year as an independent company, I am pleased with the milestones we achieved,” said Robert Mehrabian, chairman, president and chief executive officer of Teledyne Technologies. “As previously projected, we invested approximately $20 million in additional capital expenditures and operating expenses primarily targeted at our strategic growth initiatives focused on broadband communications. In the fourth quarter, we recorded revenue from commercial optoelectronics in-line with our previously announced growth objective of a $20 million revenue run-rate by the end of 2000.
“In addition, year-over-year revenue growth in our overall Electronics and Communications segment increased for the fourth consecutive quarter. We are also pleased with the performance of our Aerospace Engines and Components segment, having put the majority of last year’s piston engine recall, and the associated business disruption, behind us.
“Our core systems engineering, space, and information technology services businesses each performed well; however, we recorded special charges totaling $2.2 million in unrelated product lines within this segment. These product lines, which primarily serve energy-related markets, include alternative energy generation systems, marine oil and gas exploration products, and natural gas distribution process control software. The adjustments were taken in connection with our strategic evaluation of these businesses. While we plan to exit the marine products and process control software businesses, we are excited about both the recent successes and the long-term opportunities in our energy systems business. We are currently reviewing strategies aimed at creating shareholder value with this asset.”
Full Year 2000
Sales from continuing operations for fiscal 2000 were $795.1 million, compared with $761.4 million for fiscal 1999. Net income from continuing operations, before product recall reserves and special charges, was $40.5 million ($1.37 per diluted share) for 2000, compared with pro forma net income before product recall reserves of $40.9 million ($1.50 per diluted share) for 1999. The second quarters of 2000 and 1999 included pretax charges of $12 million and $3 million, respectively, for piston engine product recall reserves, and the fourth quarter of 2000 included special charges totaling $2.2 million for receivables and cost adjustments within the Systems Engineering Solutions segment. Net income including discontinued operations, product recall reserves and special charges was $32.3 million ($1.09 per diluted share) for 2000, compared with pro forma net income of $40.9 million ($1.50 per diluted share), for 1999. Year-over-year earnings per share comparisons for 2000 reflect pretax operating expenses of $9.3 million during 2000 related to the company’s strategic growth initiatives in optoelectronics and wireless technologies and dilution resulting from the company’s public equity offering completed in the third quarter of 2000.
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 $13.1 million ($0.49 per diluted share) for the fourth quarter
of 1999 and $49.0 million ($1.79 per diluted share) for fiscal 1999.
Sale of Assets
In the fourth quarter of 2000, Teledyne Technologies completed the sale of its Cast Parts business. Discontinued operations for the fourth quarter include an after-tax gain on sale offset by operating losses.
Review of Operations
Electronics and Communications
The Electronics and Communications segment’s fourth quarter sales were $90.6 million, up 10.5 percent from 1999 fourth quarter sales of $82.0 million. Fourth quarter 2000 operating profit was $9.1 million, compared with $11.3 million in the fourth quarter of 1999.
Fourth quarter sales, compared with the
same period in 1999, grew significantly in relay products, business and
commuter aircraft communications equipment, optoelectronics and wireless
products. Sales from wireless products
grew as a result of new orders from military and commercial customers. Relay products reported continued strong quarterly sales driven by
demand from the communications and semiconductor test equipment markets. Sales of medical and military
microelectronics were down from the same period last year. Operating profit reflected growth in sales,
which was more than offset by increased spending on optoelectronics and wireless initiatives and reduced margins on electronic
manufacturing services.
Systems Engineering Solutions
The Systems Engineering
Solutions segment’s fourth quarter sales were $56.5 million, compared with
1999 fourth quarter sales of $60.0 million.
Operating profit for the fourth quarter of 2000 was $4.8 million,
excluding special charges totaling $2.2 million for receivables and cost
adjustments, compared with $6.9 million in the same period last year.
Fourth quarter performance reflected sales growth in
systems engineering, space programs, information technology and environmental
programs. These sales increases were
more than offset by lower sales in energy systems, marine products and control
applications in the fourth quarter of 2000.
Operating profit prior to special charges reflected lower sales in
energy systems, marine products and control applications.
Aerospace Engines and Components
The Aerospace Engines and Components segment’s
fourth quarter sales were $49.2 million, compared with $49.0 million in the
1999 fourth quarter. Operating profit
for the fourth quarter of 2000 was $7.1 million, compared with operating profit
of $6.1 million for the same period of 1999.
Strong sales for
piston engines reflected higher OEM and service sales, partially offset by
lower rebuilt engines and after market new engine sales.
Favorable operating profit for piston engines resulted from strong
sales, as well as product mix shifts.
Sales and operating profit in the turbine
engine business were lower due to reduced sales and increased product
development expenses on new turbine engine programs. In addition, as previously anticipated, no new J69 turbine
engines were sold in the fourth quarter of 2000 versus $2.1 million in the same
period last year, however, this was partially offset by increased sales of J69
spare parts.
Additional Financial Information
Net pension income
for the fourth quarter of 2000 was $2.3 million, compared with $1.8 million for the same
period of 1999. Capital expenditures from continuing operations
for 2000 were $30.7 million,
compared with $28.3 million for 1999.
At year-end 2000, the company had committed approximately $7.4 million
for additional capital expenditures, with
$2.5 million related to its strategic growth initiatives.
Outlook
Although
the company is cautious with the increasing economic uncertainty, Teledyne
Technologies’ participation in a variety of niche markets and the diversity of
its customer base help cushion the company from the negative effects of a
softening economy. The current level of
economic uncertainty affects the company’s outlook for certain commercial
electronic markets, such as relays used in semiconductor and wireless test
equipment, where the company has limited revenue visibility. However, Teledyne Technologies’ outlook for
the majority of other electronics and communications businesses remains
unchanged. The company remains
optimistic about the prospects for its strategic growth businesses, especially
optoelectronics. The size of the
optoelectronics market, the market’s growth rate and Teledyne Technologies’
success to date continue to support the company’s investments in this area. Expenditures in this area are expected to
continue and will negatively impact operating profit for the Electronics and
Communications segment, especially during the first half of 2001. The outlook for the company’s core Systems
Engineering Solutions businesses and its Aerospace Engines and Components
segment, which primarily serve aerospace and defense customers, remains
unchanged.
The
company forecasts year-over-year revenue growth in 2001 of between 10% and 12%
for its Electronics and Communications segment, revenue growth of between 3%
and 5% in its Systems Engineering Solutions segment, and flat revenue to a 5%
decline for its Aerospace Engines and Components segment. Teledyne Technologies expects that full year
2001 earnings per share will be in-line with previous forecasts.
Teledyne
Technologies expects overall first quarter 2001 revenue to be comparable to the
fourth quarter of 2000. However, the
company expects first quarter 2001 profit in its Electronics and Communications
segment to decline somewhat from the fourth quarter of 2000. This decline will result from continued
development costs and additional depreciation expense related to the company’s
strategic growth initiatives, combined with a weaker market for certain
commercial electronics products, such as relays. In addition, the previously announced events in the turbine
engine market are expected to begin negatively impacting results for the
Aerospace Engines and Components segment in the first quarter of 2001. Until the company divests its marine products
and control applications businesses, the continued weakness in these unrelated
product lines is expected to unfavorably impact profitability in the Systems
Engineering Solutions segment.
Following the first quarter of 2001, Teledyne Technologies expects that
revenues and earnings will generally increase over the preceding quarters.
Forward-Looking
Statements Notice
This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, relating to earnings, growth opportunities, capital expenditures and strategic plans. Actual results could differ materially from these forward-looking statements. Many factors, including the extent and timing of acceptance of fiber optic products by customers (including service providers), continued outsourced manufacturing of optoelectronic products, funding and continuation of government programs and economic and political conditions, as well as the outcome of the crankshaft investigation, could change the anticipated results. 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 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 live webcast of Teledyne Technologies’ fourth
quarter earnings conference call will be
held at 11:00 a.m. (Eastern) on Thursday, January 25. To access the call, go to www.streetfusion.com or www.teledyne.com
approximately five minutes before the scheduled start time. A replay will also be available at these
same sites from Thursday, January 25, 2:00 p.m. (Eastern) until Thursday,
February 1, 11:59 p.m. (Eastern).
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Investor Contact: Media Contact: |
Jason VanWees Robyn Choi (310) 551-4340 |
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