Teledyne Technologies Incorporated (NYSE:TDY) Q1 2024 Earnings Call Transcript April 24, 2024 11:00 AM ET Company Participants Jason VanWees - VC Robert Mehrabian - Executive Chairman Edwin Roks - CFO George Bobb - President, COO Stephen Blackwood - SVP, CFO Conference Call Participants Jim Ricchiuti - Needham & Company Greg Konrad - Jefferies Joe Giordano - TD Cowen Andrew Buscaglia - BNP Noah Poponak - Goldman Sachs Operator Ladies and gentlemen, thank you for standing by, and welcome to the Teledyne Q1 2 ...

Exhibit 99.1 1049 Camino Dos Rios Thousand Oaks, CA 91360-2362 NEWSRELEASE TELEDYNE TECHNOLOGIES REPORTS FIRST QUARTER RESULTS THOUSAND OAKS, Calif. – April 24, 2024 – Teledyne Technologies Incorporated (NYSE:TDY) Teledyne today reported first quarter 2024 net sales of $1,350.1 million, compared with net sales of $1,383.3 million for the first quarter of 2023, a decrease of 2.4%. Net income attributable to Teledyne was $178.5 million ($3.72 diluted earnings per share) for the first quarter of 2024, compared ...

Part I [Business](index=3&type=section&id=Item%201.%20Business) Teledyne provides advanced enabling technologies across four segments, with Digital Imaging being the largest, serving a diversified industrial and government customer base - Teledyne provides enabling technologies for markets like aerospace and defense, factory automation, environmental monitoring, medical imaging, and more[13](index=13&type=chunk) Segment Contribution to Total Net Sales | Segment | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Digital Imaging | 56% | 57% | 52% | | Instrumentation | 23% | 23% | 25% | | Aerospace and Defense Electronics | 13% | 12% | 14% | | Engineered Systems | 8% | 8% | 9% | [Digital Imaging Segment](index=3&type=section&id=Digital%20Imaging%20Segment) This largest segment provides high-performance sensors, cameras, and systems for industrial, scientific, defense, and medical applications - The Digital Imaging segment provides a wide range of products including sensors, cameras, MEMS, semiconductors, and unmanned systems for diverse applications such as machine vision, space imaging, medical diagnostics, and defense[18](index=18&type=chunk)[19](index=19&type=chunk)[21](index=21&type=chunk) [Instrumentation Segment](index=4&type=section&id=Instrumentation%20Segment) This segment offers monitoring and control instruments for marine, environmental, and industrial uses, plus electronic test and measurement equipment - Provides a broad range of instruments for marine applications (underwater vehicles, acoustic imaging), environmental monitoring (gas and water analysis), and test and measurement (oscilloscopes, protocol analyzers)[22](index=22&type=chunk)[23](index=23&type=chunk)[26](index=26&type=chunk) [Aerospace and Defense Electronics Segment](index=5&type=section&id=Aerospace%20and%20Defense%20Electronics%20Segment) This segment supplies high-reliability electronic components and subsystems for commercial aerospace and defense applications - Focuses on high-reliability electronic components and subsystems for applications like aircraft data management, electronic countermeasures, and satellite communications[35](index=35&type=chunk)[36](index=36&type=chunk) [Engineered Systems Segment](index=5&type=section&id=Engineered%20Systems%20Segment) This segment delivers systems engineering, integration, and complex manufacturing solutions for defense, space, environmental, and energy sectors - Provides systems engineering and manufacturing for defense, space, and energy applications, with major customers including NASA and the Department of Defense[37](index=37&type=chunk)[38](index=38&type=chunk) [Customers](index=5&type=section&id=Customers) The company has a diversified commercial customer base and significant sales to the U.S. Government and international markets U.S. Government Sales (in millions) | Segment | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Digital Imaging | $570.7 | $619.1 | $515.9 | | Instrumentation | $95.9 | $108.1 | $91.6 | | Aerospace and Defense Electronics | $330.3 | $266.3 | $227.2 | | Engineered Systems | $384.8 | $366.4 | $358.4 | | **Total U.S. Government sales** | **$1,381.7** | **$1,359.9** | **$1,193.1** | | **% of Total Net Sales** | **24.5%** | **24.9%** | **25.9%** | - Total sales to international customers were **$2,740.1 million in 2023**, representing approximately **49% of total net sales**[39](index=39&type=chunk)[82](index=82&type=chunk) - The top five countries for international sales in 2023 were the United Kingdom, China, Japan, Germany, and Norway, representing about **21% of total net sales**[40](index=40&type=chunk) [Human Capital](index=7&type=section&id=Human%20Capital) The company maintains a stable, long-tenured global workforce of 14,900 with a focus on retention, development, and diversity Workforce Demographics (as of Dec 31, 2023) | Region | Percent of Total Employees | Average Age | Average Years of Service | | :--- | :--- | :--- | :--- | | Americas | 69% | 48.4 | 10.0 | | Europe, the Middle East and Africa | 28% | 43.3 | 9.9 | | Asia-Pacific Region | 3% | 40.7 | 8.0 | - The total workforce consisted of approximately **14,900 employees**[56](index=56&type=chunk) - Voluntary employee turnover in 2023 was approximately **10%**[56](index=56&type=chunk) [Risk Factors](index=8&type=section&id=Item%201A.%20Risk%20Factors) The company faces material risks from economic conditions, acquisition strategy, supply chain disruptions, geopolitical tensions, and government contract dependency - **Business and Industry Risks:** Potential recessions, economic slowdown in China, and cyclical downturns in semiconductor and aerospace markets could reduce demand; Inflation and supply chain constraints increase costs[64](index=64&type=chunk)[66](index=66&type=chunk)[73](index=73&type=chunk) - **Geopolitical Risks:** Escalating trade tensions (U.S.-China), the conflict in Ukraine, and the conflict in Israel could negatively impact operations, supply chains, and costs[74](index=74&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) - **Acquisition Risks:** The company's growth strategy depends on acquisitions, which involve inherent risks like inaccurate valuation, integration difficulties, and potential unknown liabilities[68](index=68&type=chunk)[70](index=70&type=chunk) - **Government Contract Risks:** Revenue from U.S. Government contracts (**24.5% of 2023 sales**) depends on continued funding, which is subject to congressional appropriations, budget cuts, and policy changes[93](index=93&type=chunk)[94](index=94&type=chunk) - **Cybersecurity Risks:** The company faces sophisticated cyber-attacks which could lead to theft of intellectual property, business disruption, and liability; The risk is elevated by geopolitical tensions and new technologies like AI[151](index=151&type=chunk) - **Goodwill Impairment Risk:** A significant portion of assets is goodwill (**$8.0 billion**); A decline in business conditions could lead to impairment charges, particularly for the recently acquired FLIR reporting unit, whose fair value exceeded its carrying value by **only 6%** at the last test[91](index=91&type=chunk)[266](index=266&type=chunk) [Cybersecurity](index=22&type=section&id=Item%201C.%20Cybersecurity) The company's cybersecurity strategy, overseen by the Audit Committee, aligns with NIST frameworks to manage and mitigate cyber threats - The company's cybersecurity strategy is aligned with its Enterprise Risk Management strategy and focuses on deterrence, early detection, and interruption of cyber-attacks, using frameworks like NIST[163](index=163&type=chunk) - Governance is managed by the Audit Committee of the Board, which receives quarterly updates from the Chief Information Officer (CIO) and Chief Information Security Officer (CISO)[167](index=167&type=chunk) - The company has incident response plans and conducts 'tabletop' exercises to maintain readiness; It also engages third-party expertise and utilizes threat intelligence feeds[166](index=166&type=chunk) [Properties](index=23&type=section&id=Item%202.%20Properties) Teledyne operates 76 principal facilities across the U.S. and 10 foreign countries, which are considered adequate for current operations - The company has **76 principal operating facilities** located in 20 states and 10 foreign countries[171](index=171&type=chunk) - Principal operating facilities are located in the US, Canada, and Europe, with specific locations detailed for each business segment[171](index=171&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=23&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE under "TDY," with no plans for dividends or near-term stock repurchases - Common Stock is listed on the NYSE under the symbol **"TDY"**[175](index=175&type=chunk) - The company does not anticipate paying any cash dividends in the foreseeable future[176](index=176&type=chunk) - A stock repurchase program for up to three million shares is authorized, but no shares have been repurchased since 2015 and there are no current plans to do so[177](index=177&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2023 saw sales and income growth driven by all segments, alongside significant debt reduction and strong free cash flow generation [Overall Financial Performance](index=24&type=section&id=Selected%20Consolidated%20Operating%20Results) In 2023, the company achieved 3.2% sales growth to $5.64 billion and an 11.9% increase in diluted EPS to $18.49 Consolidated Operating Results (2023 vs 2022, in millions, except per-share amounts) | Metric | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $5,635.5 | $5,458.6 | 3.2% | | Operating income | $1,034.4 | $972.0 | 6.4% | | Net income attributable to Teledyne | $885.7 | $788.6 | 12.3% | | Diluted earnings per common share | $18.49 | $16.53 | 11.9% | - Net income for 2023 included net discrete tax benefits of **$137.5 million**, compared to $86.7 million in 2022[189](index=189&type=chunk) [Business Segment Operating Results](index=26&type=section&id=Business%20Segment%20Operating%20Results) All segments reported sales growth in 2023, with Instrumentation and Engineered Systems showing the strongest operating income gains Net Sales by Segment (in millions) | Segment | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Digital Imaging | $3,144.1 | $3,110.9 | 1.1% | | Instrumentation | $1,326.2 | $1,254.0 | 5.8% | | Aerospace and Defense Electronics | $726.5 | $682.4 | 6.5% | | Engineered Systems | $438.7 | $411.3 | 6.7% | Operating Income by Segment (in millions) | Segment | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Digital Imaging | $517.4 | $519.3 | (0.4)% | | Instrumentation | $338.3 | $295.3 | 14.6% | | Aerospace and Defense Electronics | $199.6 | $184.1 | 8.4% | | Engineered Systems | $44.7 | $39.2 | 14.0% | [Financial Condition, Liquidity and Capital Resources](index=28&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) The company improved its financial position in 2023 by generating $721.2 million in free cash flow and reducing long-term debt by over $675 million - Long-term debt was reduced from **$3,920.6 million** at the beginning of 2023 to **$3,244.9 million** at year-end[222](index=222&type=chunk) - During 2023, the company repaid **$125.0 million** on its credit facility, the **$300.0 million** Fixed Rate Senior Notes due April 2023, and the remaining **$245.0 million** on its term loan due May 2026[222](index=222&type=chunk)[236](index=236&type=chunk) Cash Flow Summary (in millions) | Cash Flow | 2023 | 2022 | | :--- | :--- | :--- | | Net cash from operating activities | $836.1 | $486.8 | | Net cash used in investing activities | ($190.3) | ($175.4) | | Net cash used in financing activities | ($651.5) | ($110.0) | | **Free Cash Flow** | **$721.2** | **$394.2** | Contractual Obligations Summary (in millions) | Obligation Type | Total | Due in 2024 | | :--- | :--- | :--- | | Debt obligations | $3,266.0 | $600.1 | | Interest expense | $405.8 | $73.1 | | Operating lease obligations | $174.5 | $36.4 | | Purchase obligations | $304.0 | $269.5 | | **Total** | **$4,150.3** | **$979.1** | [Critical Accounting Policies and Estimates](index=32&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Key accounting estimates involve revenue recognition, business combinations, and goodwill, with the FLIR unit showing a heightened risk of impairment - Key critical accounting policies are: Revenue Recognition, Business Combinations, Goodwill and Acquired Intangible Assets, and Income Taxes[256](index=256&type=chunk) - Approximately **30% of revenue** is recognized over time, primarily using a cost-to-cost method that requires significant estimation[257](index=257&type=chunk) - Goodwill impairment testing is a critical estimate; In the Q4 2023 test, the estimated fair value of the FLIR reporting unit (goodwill of **$5.83B**) exceeded its carrying value by approximately **6%**, indicating a higher risk of future impairment if business conditions change[266](index=266&type=chunk) - The FLIR indefinite-lived trademark, with a carrying value of **$685.3 million**, had a fair value of $694.9 million at the annual test, also indicating sensitivity to changes in assumptions[268](index=268&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were effective as of year-end 2023 - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2023[281](index=281&type=chunk) - Management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2023, based on the COSO framework[303](index=303&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended December 31, 2023[283](index=283&type=chunk) [Financial Statements](index=38&type=section&id=Financial%20Statements) This section presents the audited consolidated financial statements and related notes for the fiscal year ended December 31, 2023 [Consolidated Statements of Income](index=43&type=section&id=Consolidated%20Statements%20of%20Income) For 2023, the company reported net sales of $5.64 billion, net income of $885.7 million, and diluted EPS of $18.49 Consolidated Income Statement Highlights (in millions, except per-share amounts) | Account | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net sales | $5,635.5 | $5,458.6 | $4,614.3 | | Operating income | $1,034.4 | $972.0 | $624.3 | | Net income attributable to Teledyne | $885.7 | $788.6 | $445.3 | | Diluted earnings per common share | $18.49 | $16.53 | $10.05 | [Consolidated Balance Sheets](index=44&type=section&id=Consolidated%20Balance%20Sheets) As of year-end 2023, total assets were $14.53 billion, while total liabilities decreased to $5.30 billion due to debt reduction Consolidated Balance Sheet Highlights (in millions) | Account | Dec 31, 2023 | Jan 1, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $648.3 | $638.1 | | Total Current Assets | $2,981.4 | $2,817.9 | | Goodwill | $8,002.8 | $7,873.0 | | **Total Assets** | **$14,527.9** | **$14,354.0** | | **Liabilities and Equity** | | | | Total Current Liabilities | $1,766.1 | $1,523.4 | | Long-term debt | $2,644.8 | $3,620.5 | | **Total Liabilities** | **$5,302.1** | **$6,181.1** | | **Total Stockholders' Equity** | **$9,221.2** | **$8,169.2** | [Consolidated Statements of Cash Flows](index=46&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating activities generated $836.1 million in cash, financing activities used $651.5 million for debt repayment, and investing used $190.3 million Consolidated Cash Flow Highlights (in millions) | Activity | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net cash from operating activities | $836.1 | $486.8 | $824.6 | | Net cash used in investing activities | ($190.3) | ($175.4) | ($3,824.3) | | Net cash from (used in) financing activities | ($651.5) | ($110.0) | $2,807.1 | | Effect of exchange rate changes | $15.9 | ($38.0) | ($5.8) | | **Change in cash and cash equivalents** | **$10.2** | **$163.4** | **($198.4)** | [Note 8. Long-Term Debt](index=60&type=section&id=Note%208.%20Long-Term%20Debt) Total long-term debt was reduced to $3.24 billion in 2023, with $1.13 billion of available capacity under the credit facility Maturities of Long-Term Debt (as of Dec 31, 2023, in millions) | Fiscal year | Amount | | :--- | :--- | | 2024 | $600.1 | | 2025 | $0.2 | | 2026 | $450.2 | | 2027 | $0.2 | | 2028 | $700.1 | | Thereafter | $1,515.2 | | **Total principal payments** | **$3,266.0** | - In 2023, the company repaid **$125.0 million** on its credit facility, the **$300.0 million** Senior Notes due 2023, and the remaining **$245.0 million** on its term loan due 2026[420](index=420&type=chunk) [Note 9. Income Taxes](index=61&type=section&id=Note%209.%20Income%20Taxes) The effective tax rate was 7.5% in 2023, significantly below the statutory rate due to reversals of unrecognized tax benefits and various credits Reconciliation of Statutory to Effective Tax Rate (2023) | Description | Rate | | :--- | :--- | | U.S. federal statutory income tax rate | 21.0% | | State and local taxes, net of federal benefit | 1.8% | | Research and development tax credits | (2.4)% | | Net accruals (reversals) for unrecognized tax benefits | (10.8)% | | Stock-based compensation | (2.1)% | | U.S. export sales | (2.2)% | | Other | (0.3)% | | **Effective income tax rate** | **7.5%** | - Unrecognized tax benefits decreased from **$162.8 million** at the start of 2023 to **$96.5 million** at year-end, primarily due to a $96.3 million reduction from the lapse of statutes of limitation[428](index=428&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=36&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2024 Proxy Statement - The information required by this item is incorporated by reference from the 2024 Proxy Statement[289](index=289&type=chunk) [Executive Compensation](index=37&type=section&id=Item%2011.%20Executive%20Compensation) Details on executive and director compensation are incorporated by reference from the 2024 Proxy Statement - The information required by this item is incorporated by reference from the 2024 Proxy Statement[291](index=291&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=37&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership is incorporated by reference from the 2024 Proxy Statement - The information required by this item is incorporated by reference from the 2024 Proxy Statement[292](index=292&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=37&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Details on related party transactions and director independence are incorporated by reference from the 2024 Proxy Statement - The information required by this item is incorporated by reference from the 2024 Proxy Statement[293](index=293&type=chunk) [Principal Accountant Fees and Services](index=37&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on accountant fees and services is incorporated by reference from the 2024 Proxy Statement - The information required by this item is incorporated by reference from the 2024 Proxy Statement[294](index=294&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=37&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with or incorporated into the Form 10-K - This section contains the index to Financial Statements, Financial Statement Schedules, and a list of all Exhibits filed with the report[296](index=296&type=chunk)

Financial Data and Key Metrics - Q4 2023 operating cash flow was $164.4 million, down from $237.7 million in 2022, while free cash flow was $124.2 million, down from $203.6 million in 2022 [5] - Depreciation and amortization expense was $77.4 million in Q4 2023, compared to $81.8 million in 2022 [122] - Net debt at the end of Q4 2023 was approximately $2.60 billion, with total debt of $3.24 billion and cash of $48.3 million [122] - Full-year 2024 GAAP EPS guidance is $17.15 to $17.53, and non-GAAP EPS is $20.35 to $20.68, with an estimated tax rate of 22.5% [12] Business Segment Performance - Digital Imaging segment (56% of revenue) saw Q4 healthcare revenue increase 13.5%-14%, aerospace and defense revenue increase 5%, offset by weakness in industrial and scientific vision systems [7] - FLIR business saw Q4 revenue increase 4.8%, with surveillance systems growing 16.5% and detection products also showing robust growth [14] - Instrumentation segment (23% of revenue) saw Q4 sales increase 2.8%, with marine instruments up 14.7%, while environmental instruments decreased 7.3% [36][46] - Aerospace and Defense Electronics segment (13% of revenue) saw Q4 sales increase 3.4%, driven by commercial aerospace products [60] - Engineered Systems segment (8% of revenue) saw Q4 revenue decrease 3.8%, but operating profit increased with margins up 325 basis points [61] Market Performance - Marine business saw strong growth in offshore energy, global defense, and ocean science markets [46] - Industrial automation and laboratory instrumentation markets faced headwinds, with declines in industrial imaging systems and MEMS [44] - Defense business saw strong order intake, particularly in modernization and stockpile replacement programs [94] Strategic Direction and Industry Competition - The company is focusing on cost structure optimization and margin improvement, with expected segment margin expansion of 50-100 basis points in 2024 [70] - The company is consolidating leased spaces into owned spaces, which is expected to save $500,000-$700,000 annually [10] - The company is pursuing smaller bolt-on acquisitions, as larger deals remain expensive [21][112] Management Commentary on Operating Environment and Future Outlook - Management expects a linear ramp in sales and earnings throughout 2024, with average revenue growth of 4% and margin improvement of 50-60 basis points [32] - Short-cycle businesses are expected to recover in the second half of 2024, with industrial automation and laboratory instrumentation markets showing signs of improvement [20][95] - The company is cautious about macroeconomic shocks but remains confident in its ability to generate record cash flow and execute acquisitions [65] Other Important Information - The company paid down $680 million of debt in 2023, reducing its net debt-to-EBITDA ratio to 1.9, with further reduction expected in 2024 [87] - The company expects to make additional tax payments in 2024, which impacted Q4 2023 cash flow [121] Q&A Summary Question: Can you provide more details on the growth assumptions for 2024? - The company expects 4% organic revenue growth, with instrumentation growing 3.5%, digital imaging above 4%, aerospace and defense 5%, and engineered systems 4% [13][82] Question: What is driving the margin improvement in 2024? - Margin improvement is driven by cost structure optimization, price increases, and growth in longer-cycle businesses [25][67] Question: How is the pricing environment evolving? - The company expects 2%-3% price increases in 2024, similar to 2023, with higher increases in non-government contracts [101][116] Question: What is the outlook for defense awards? - The company has a strong pipeline of defense programs, including new products like the Black Hornet 4 and space-based systems [40][123] Question: Are there plans for stock buybacks or splits? - The company prefers acquisitions over stock buybacks and has no current plans for a stock split [99][118]

Core Insights - Teledyne e2v has introduced the OnyxMax 1.3M pixel CMOS imaging sensor, which is designed for high-performance applications in various industries [1][2] - The OnyxMax sensor features a low-light sensitivity of 1 mLux and a high dynamic range (HDR) mode with a range of 100 dB, making it suitable for demanding imaging tasks [2] Group 1: Product Features - The OnyxMax sensor has a resolution of 1,280 x 1,024 pixels and utilizes Teledyne's HiRho technology for enhanced performance [2] - It offers a quantum efficiency (QE) of 58% at a wavelength of 850 nm and a modulation transfer function (MTF) of 63% [2] - The sensor operates with a signal-to-noise ratio (SNR) of 75 dB and is capable of HDR imaging, which is critical for applications requiring detailed image capture in varying light conditions [2] Group 2: Market Positioning - Teledyne e2v aims to position the OnyxMax sensor as a leading solution for industries such as space, defense, and industrial applications, highlighting its advanced imaging capabilities [2] - The product will be showcased at the SPIE Photonics West event, indicating the company's commitment to innovation and market presence [2]

Core Insights - Teledyne DALSA has launched the AxCIS Contact Image Sensor, which enhances imaging capabilities for various applications [1] - The AxCIS sensor operates at a speed of 120 kHz, with a resolution of 900 dpi, and supports HDR imaging [1] - The sensor is designed for high-precision detection systems, ensuring 100% accuracy in HDR imaging [1] Product Features - The AxCIS sensor features a dual HDR capability, operating at 60 kHz x 2, which allows for improved image quality [1] - It has a pixel size of 28 µm, contributing to its high-resolution output [1] - The sensor supports Camera Link HS SFP+ interface, facilitating high-speed data transfer [1] Applications - The AxCIS sensor is suitable for various detection systems, enhancing the performance of imaging solutions in industrial applications [1] - Teledyne DALSA aims to provide advanced vision solutions through the integration of the AxCIS sensor into their product offerings [1]

Core Insights - Teledyne e2v has launched the Emerald Gen2, a new CMOS imaging solution designed for high-performance applications in various industries [1] Group 1: Product Features - The Emerald Gen2 offers resolutions of 8.9 million pixels (4,096 x 2,160) and 12 million pixels (4,096 x 3,072), providing enhanced imaging capabilities [1] - It features a 2.8µm pixel size and includes 10 and 12-bit ADC models with a signal-to-noise ratio of 67 dB, indicating high-quality image capture [1] - The compact design of the Emerald Gen2 measures 21 x 20 mm², making it suitable for integration into various systems [1] Group 2: Market Applications - The Emerald Gen2 is positioned for use in space applications, industrial automation, and other sectors requiring advanced imaging solutions [1] - The product is expected to be showcased at the ITE event in December 2023, highlighting its capabilities to potential clients [1] Group 3: Company Strategy - Teledyne e2v aims to enhance its imaging solutions portfolio with the introduction of the Emerald Gen2, targeting a diverse range of customers and applications [1] - The company emphasizes its commitment to innovation in imaging technology, as reflected in the development of the Emerald Gen2 [1]

Part I Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements for Q3 and nine months ended October 1, 2023, including income, balance, and cash flow statements [Condensed Consolidated Statements of Income (Loss)](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) Net sales and net income increased in Q3 2023, with diluted EPS rising to $4.15, while nine-month net income remained flat Consolidated Income Statement Highlights (in millions, except per-share amounts) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $1,402.5 | $1,363.6 | $4,210.5 | $4,040.4 | | **Operating Income** | $264.3 | $245.2 | $762.9 | $698.2 | | **Net Income Attributable to Teledyne** | $198.6 | $178.3 | $562.6 | $562.2 | | **Diluted Earnings Per Share** | $4.15 | $3.74 | $11.75 | $11.79 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to $14.22 billion, while total liabilities and long-term debt significantly reduced, and stockholders' equity increased Consolidated Balance Sheet Highlights (in millions) | Metric | Oct 1, 2023 | Jan 1, 2023 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $508.6 | $638.1 | | **Total Assets** | $14,215.8 | $14,354.0 | | **Total Liabilities** | $5,489.7 | $6,181.1 | | **Long-term debt, net of current portion** | $2,794.0 | $3,620.5 | | **Total Stockholders' Equity** | $8,721.9 | $8,169.2 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to $671.7 million, while overall cash and cash equivalents decreased due to investing and financing activities Consolidated Cash Flow Highlights (Nine Months Ended, in millions) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $671.7 | $249.1 | | **Net cash used in investing activities** | $(127.3) | $(63.9) | | **Net cash used in financing activities** | $(665.7) | $(115.2) | | **Change in cash and cash equivalents** | $(129.5) | $4.6 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes cover business acquisitions, segment performance, revenue breakdown, debt reduction, and trade compliance matters - In Q1 2023, the company acquired ChartWorld International Limited for **$53.5 million** in cash, which is now part of the Digital Imaging segment[24](index=24&type=chunk) - As of October 1, 2023, the company had remaining performance obligations of **$3,122.5 million**, with approximately **80%** expected to be recognized as revenue within the next twelve months[40](index=40&type=chunk) - Total debt was reduced to **$3,244.1 million** at October 1, 2023, from **$3,920.6 million** at the start of the year, following repayments of credit facility borrowings, senior notes, and a term loan[52](index=52&type=chunk)[132](index=132&type=chunk) - The company has made voluntary disclosures to U.S. authorities regarding potential export violations. The potential financial impact is not yet reasonably estimable[72](index=72&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 2023 performance, highlighting sales growth, segment results, liquidity, and ongoing supply chain challenges - The company's strategy focuses on growth in its four segments through targeted acquisitions and product development, complemented by a focus on operational excellence and cost containment[79](index=79&type=chunk) - The company continues to experience supply chain challenges, including long lead times and cost inflation for parts, logistics, and labor, which are expected to persist through Q4 2023 and into 2024[81](index=81&type=chunk) - In Q3 2023, the company recorded **$5.8 million** in FLIR-related integration costs, including employee separation and facility consolidation costs, with an additional **$3.0 to $4.0 million** expected in the next six months[79](index=79&type=chunk)[89](index=89&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Q3 2023 net sales rose 2.9% and net income increased 11.4%, while nine-month sales grew 4.2% with a nearly flat net income Quarterly and Year-to-Date Performance vs. Prior Year | Period | Net Sales Change | Net Income Change | Diluted EPS | | :--- | :--- | :--- | :--- | | **Q3 2023** | +2.9% | +11.4% | $4.15 | | **Nine Months 2023** | +4.2% | +0.1% | $11.75 | - Cost of sales as a percentage of net sales decreased in both the third quarter (**56.8%** vs **57.6%**) and the first nine months (**56.9%** vs **57.6%**) of 2023 compared to 2022[88](index=88&type=chunk)[97](index=97&type=chunk) [Segment Results](index=24&type=section&id=Segment%20Results) Q3 2023 saw sales growth in most segments, with Instrumentation leading operating income growth, and all segments showing nine-month sales and operating income increases Q3 2023 vs Q3 2022 Segment Performance (in millions) | Segment | Net Sales | Sales Change | Operating Income | Op. Income Change | | :--- | :--- | :--- | :--- | :--- | | **Digital Imaging** | $775.8 | (0.3)% | $136.3 | +1.9% | | **Instrumentation** | $329.1 | +7.4% | $85.5 | +20.3% | | **Aerospace and Defense Electronics** | $183.3 | +8.1% | $49.4 | +11.5% | | **Engineered Systems** | $114.3 | +4.1% | $10.9 | (8.4)% | - The Instrumentation segment's growth was driven by a **$22.5 million** increase in marine instrumentation sales due to the recovery in offshore energy markets[114](index=114&type=chunk) - The Engineered Systems segment's operating income declined in Q3 due to a higher mix of lower-margin cost-reimbursable space programs[127](index=127&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=27&type=section&id=Financial%20Condition,%20Liquidity%20and%20Capital%20Resources) Strong financial condition with nearly $700 million debt reduction, significant increase in operating cash flow, and sufficient liquidity for future needs - Total debt decreased from **$3,920.6 million** at the start of 2023 to **$3,244.1 million** at October 1, 2023[132](index=132&type=chunk) - Net cash from operating activities for the first nine months of 2023 was **$671.7 million**, compared to **$249.1 million** in the prior year, partly due to deferred U.S. federal tax payments of approximately **$139 million** into Q4 2023[135](index=135&type=chunk) - As of October 1, 2023, **$1,130.9 million** was available under the company's **$1.15 billion** credit facility[132](index=132&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures previously reported in the 2022 Annual Report on Form 10-K - There were no material changes to the Quantitative and Qualitative Disclosure About Market Risk provided in the company's 2022 Form 10-K[146](index=146&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including CEO and CFO, concluded that disclosure controls and procedures were effective as of October 1, 2023 - The company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of October 1, 2023[147](index=147&type=chunk) Part II Other Information [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is detailed in Note 14 of the financial statements under commitments and contingencies - Information regarding legal proceedings is provided in Part I, Item 1, Note 14, under "Commitments and Contingencies"[148](index=148&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the company's 2022 Annual Report on Form 10-K - There are no material changes to the risk factors previously disclosed in the company's 2022 Form 10-K[148](index=148&type=chunk) [Other Information](index=29&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q3 2023 - No directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the fiscal quarter ended October 1, 2023[149](index=149&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including CEO and CFO certifications and Interactive Data Files (XBRL) - The report includes CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as XBRL data files[150](index=150&type=chunk)[156](index=156&type=chunk)

Teledyne Technologies Incorporated (NYSE:TDY) Q3 2023 Results Conference Call October 25, 2023 11:00 AM ET Company Participants Jason VanWees - Vice Chairman Robert Mehrabian - Chairman, President and CEO Sue Main - SVP and CFO Conference Call Participants Jim Ricchiuti - Needham & Company Joe Giordano - TD Cowen Greg Konrad - Jefferies Andrew Buscaglia - BNP Rob Jamieson - UBS Kristine Liwag - Morgan Stanley Noah Poponak - Goldman Sachs Operator Ladies and gentlemen, thank you for standing by. Welcome to T ...

(e) Other includes commercial or foreign government sales of electronics for microwave and satellite communications, industrial interconnect systems, electronic components and other product lines 33% 37% 17% 4% 6% Aerospace Engines Aerospace Castings 34% 32% 19% 7% 7% Instrumentation Digital Imaging Aerospace & Defense Electronics Engineered Systems Divested Operations Aerospace Engines $657 Million $1.64 Billion ~$5.47 Billion Printed Circuits 3% Printed Circuits 1% 12% 23% 7% 58% History of Focused, Succe ...