Teledyne Technologies(US:TDY)2024-04-27 00:39Part I This section covers unaudited condensed consolidated financial statements, management's discussion and analysis, market risk, and controls Financial Statements This section presents the unaudited condensed consolidated financial statements for Q1 2024, including detailed notes Condensed Consolidated Statements of Income (Loss) Net sales decreased to $1.35 billion in Q1 2024, with operating income also declining, while net income remained stable at $178.5 million Q1 2024 vs Q1 2023 Income Statement Highlights | Metric | Q1 2024 (in millions) | Q1 2023 (in millions) | Change | | :--- | :--- | :--- | :--- | | Net sales | $1,350.1 | $1,383.3 | -2.4% | | Operating income | $234.3 | $242.5 | -3.4% | | Net income attributable to Teledyne | $178.5 | $178.7 | -0.1% | | Diluted earnings per common share | $3.72 | $3.73 | -0.3% | Condensed Consolidated Statements of Comprehensive Income (Loss) Comprehensive income significantly decreased to $87.6 million in Q1 2024, primarily due to a large negative foreign exchange translation adjustment - A significant foreign exchange translation adjustment of -$88.8 million caused a sharp drop in comprehensive income to $87.6 million in Q1 2024 from $178.4 million in Q1 202311 Condensed Consolidated Balance Sheets Total assets increased to $14.64 billion as of March 31, 2024, driven by a significant rise in cash and cash equivalents to $912.4 million Balance Sheet Highlights | Metric (in millions) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $912.4 | $648.3 | | Total current assets | $3,223.6 | $2,981.4 | | Goodwill | $7,956.0 | $8,002.8 | | Total Assets | $14,639.2 | $14,527.9 | | Total Liabilities | $5,306.0 | $5,302.1 | | Total Stockholders' Equity | $9,328.0 | $9,221.2 | Condensed Consolidated Statements of Cash Flows Net cash from operating activities significantly increased to $291.0 million in Q1 2024, while cash used in investing activities decreased Cash Flow Summary (Three Months Ended) | Activity (in millions) | March 31, 2024 | April 2, 2023 | | :--- | :--- | :--- | | Net cash from operating activities | $291.0 | $203.0 | | Net cash from investing activities | $(15.9) | $(76.9) | | Net cash from financing activities | $6.1 | $(103.4) | | Change in cash and cash equivalents | $264.1 | $27.1 | Notes to Condensed Consolidated Financial Statements These notes detail accounting policies, acquisitions, segment performance, revenue recognition, debt, and significant subsequent events - In 2023, the company acquired ChartWorld for $53.5 million and Xena Networks for $24.2 million2526 - As of March 31, 2024, remaining performance obligations were $3.29 billion, with 78% expected to be recognized as revenue within the next twelve months39 - Subsequent to Q1 2024, the company acquired Valeport, announced an agreement to acquire Adimec, paid off $450 million in senior notes, and authorized a new $1.25 billion stock repurchase program727374 Management's Discussion and Analysis Management discusses Q1 2024 financial performance, highlighting sales decline from industrial weakness, mixed segment results, and strong operating cash flow - The company's strategy focuses on growth in its four segments through targeted acquisitions, product development, and operational excellence77 - Management now forecasts a meaningful full-year sales decline in industrial automation and test & measurement markets, a worsening outlook from previous assumptions79 - In April 2024, the Board authorized a new stock repurchase program of up to $1.25 billion, superseding prior programs12274 Results of Operations Net sales decreased 2.4% to $1.35 billion in Q1 2024, with operating income also declining, while interest expense significantly decreased Q1 2024 vs Q1 2023 Operating Results | Metric (in millions) | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,350.1 | $1,383.3 | (2.4)% | | Operating Income | $234.3 | $242.5 | (3.4)% | | Interest and debt expense, net | $(12.7) | $(21.0) | (39.5)% | Segment Results Q1 2024 segment performance was mixed, with Aerospace and Defense Electronics showing strong growth, while Digital Imaging and Engineered Systems declined Q1 2024 Segment Sales and Operating Income (vs Q1 2023) | Segment | Net Sales (in millions) | Sales % Change | Operating Income (in millions) | Op. Income % Change | | :--- | :--- | :--- | :--- | :--- | | Digital Imaging | $740.8 | (4.1)% | $113.8 | (6.9)% | | Instrumentation | $330.4 | (0.9)% | $86.0 | 6.6% | | Aerospace and Defense Electronics | $185.7 | 7.2% | $51.9 | 10.4% | | Engineered Systems | $93.2 | (10.5)% | $2.7 | (73.0)% | - Instrumentation's operating income grew despite lower sales, driven by a $19.6 million increase in marine instrumentation sales and improved margins105107 - Engineered Systems' operating income decline was primarily due to program mix and unfavorable estimate changes on electronic manufacturing services contracts115 Financial Condition, Liquidity and Capital Resources The company maintained strong liquidity with cash increasing to $912.4 million, total debt at $3.25 billion, and a new $1.25 billion stock repurchase program - Cash and cash equivalents increased by $264.1 million during the quarter to a total of $912.4 million11819 - Total debt was $3.25 billion at March 31, 2024, and a $450 million debt maturity payment was made in April 2024119 - A new stock repurchase program for up to $1.25 billion was authorized by the Board of Directors in April 2024122 Quantitative and Qualitative Disclosures About Market Risk There were no material changes to the market risk disclosures from the 2023 Annual Report on Form 10-K - There were no material changes to the information regarding market risk from the 2023 Form 10-K135 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal controls - The company's disclosure controls and procedures were concluded to be effective as of March 31, 2024137 - No changes in internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, internal controls were made during the quarter137 Part II This section covers legal proceedings, risk factors, other information, and a list of exhibits filed with the report Legal Proceedings This section details commitments and contingencies, including voluntary disclosures regarding potential export violations and environmental remediation obligations - The company has made voluntary disclosures to the U.S. Department of State and Commerce regarding potential export violations by Teledyne FLIR, with the potential loss or penalty not reasonably estimable at this time69138 Risk Factors There were no material changes to the risk factors previously disclosed in the 2023 Annual Report on Form 10-K - There are no material changes to the risk factors previously disclosed in the 2023 Form 10-K138 Other Information No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the first fiscal quarter of 2024 - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the fiscal quarter ended March 31, 2024139 Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The exhibits filed with this report include Sarbanes-Oxley certifications by the CEO and CFO, and XBRL data files141147