How did Teledyne perform financially in 2007?

Sales were $1,622.3 million, up 13.2% from $1,433.2 million in 2006. Net income was $98.5 million, or $2.72 per diluted share, compared with $80.3 million, or $2.26 per diluted share, in 2006, an increase of 22.7%.

Which business segment drove growth?

The Electronics and Communications segment, which accounted for about 66% of 2007 sales, grew sales 19.1% to $1,071.6 million and operating profit 31.0% to $143.2 million. Growth came from defense electronics and electronic instruments, partly through acquisitions.

What is the company's exposure to government spending?

Sales under U.S. Government contracts were about 41% of 2007 total revenue. The filing notes that government contracts depend on continued congressional appropriations, that contracts may be terminated for convenience, and that 42% of government prime and subcontracts were fixed-price, which exposes the company to cost overruns.

What acquisitions did Teledyne make?

In fiscal 2007 it acquired D.G. O'Brien ($37.1 million) and Tindall Technologies ($6.6 million). Subsequent to year-end it completed Impulse Enterprise ($35.0 million), Storm Products ($47.5 million), TSS International (about $57.9 million) and Judson Technologies ($27.0 million).

Does Teledyne pay dividends and what is its 2008 outlook?

Teledyne does not anticipate paying cash dividends in the foreseeable future and intends to retain earnings to fund growth, including acquisitions. For full-year 2008, management expects diluted EPS of $2.86 to $2.94, reflecting higher amortization and interest expense from recent acquisitions.

TDY 10-K FY2007 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed February 28, 2008. Cited figures are marked; the original filing is the authoritative source.

Teledyne Technologies Incorporated (TDY) reported 2007 sales of $1,622.3 million^a, up 13.2% from $1,433.2 million in 2006, and net income of $98.5 million ($2.72 per diluted share) versus $80.3 million ($2.26 per diluted share) a year earlier, an increase of 22.7%.

Growth was led by the Electronics and Communications segment, which grew 19.1% in sales to $1,071.6 million^b and 31.0% in operating profit to $143.2 million, driven partly by acquisitions such as Teledyne Scientific & Imaging, ODI and Benthos. Free cash flow was $126.4 million, compared with $52.0 million in 2006, and cash from operations was $166.7 million. The company spent $42.7 million on acquisitions in fiscal 2007 and $167.4 million on deals completed in early fiscal 2008, including TSS International, Impulse, Storm Products and Judson Technologies.

Total debt was $143.2 million^c at year-end 2007, and the credit facility was increased to $590.0 million in February 2008. Government contracts represented approximately 41% of 2007 sales, and fixed-price government contracts were 42% of such work, which the filing flags as a source of risk. For 2008, management's full-year diluted EPS outlook is $2.86 to $2.94, reflecting expected sales growth in defense electronics and instrumentation and higher amortization and interest expense from the recent acquisitions.

The company does not anticipate paying cash dividends, intending to retain earnings for growth and acquisitions. Its pension plan remained underfunded at year-end 2007, with an accrued pension obligation of $74.3 million^d.

02—Key points

Key Highlights

Sales rose 13.2% to $1,622.3 million in 2007, and net income rose 22.7% to $98.5 million ($2.72 diluted EPS).
Electronics and Communications, 66% of sales, grew sales 19.1% to $1,071.6 million and operating profit 31.0% to $143.2 million.
Cash from operations was $166.7 million and free cash flow was $126.4 million, up from $52.0 million in 2006.
Acquisitions totaled $42.7 million in fiscal 2007 and $167.4 million for deals completed in fiscal 2008, including Storm Products, Impulse, TSS International and Judson.
U.S. Government sales were about 41% of 2007 revenue, and 42% of government contracts were fixed-price, which the filing identifies as a risk.
2008 full-year diluted EPS outlook is $2.86 to $2.94, and the company does not plan to pay cash dividends.
Long-term debt was $142.4 million at year-end 2007, and the credit facility was expanded to $590.0 million in February 2008.

03—Questions

Frequently Asked Questions

How did Teledyne perform financially in 2007?
Sales were $1,622.3 million, up 13.2% from $1,433.2 million in 2006. Net income was $98.5 million, or $2.72 per diluted share, compared with $80.3 million, or $2.26 per diluted share, in 2006, an increase of 22.7%.
Which business segment drove growth?
The Electronics and Communications segment, which accounted for about 66% of 2007 sales, grew sales 19.1% to $1,071.6 million and operating profit 31.0% to $143.2 million. Growth came from defense electronics and electronic instruments, partly through acquisitions.
What is the company's exposure to government spending?
Sales under U.S. Government contracts were about 41% of 2007 total revenue. The filing notes that government contracts depend on continued congressional appropriations, that contracts may be terminated for convenience, and that 42% of government prime and subcontracts were fixed-price, which exposes the company to cost overruns.
What acquisitions did Teledyne make?
In fiscal 2007 it acquired D.G. O'Brien ($37.1 million) and Tindall Technologies ($6.6 million). Subsequent to year-end it completed Impulse Enterprise ($35.0 million), Storm Products ($47.5 million), TSS International (about $57.9 million) and Judson Technologies ($27.0 million).
Does Teledyne pay dividends and what is its 2008 outlook?
Teledyne does not anticipate paying cash dividends in the foreseeable future and intends to retain earnings to fund growth, including acquisitions. For full-year 2008, management expects diluted EPS of $2.86 to $2.94, reflecting higher amortization and interest expense from recent acquisitions.

04—Continue

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