01—Abstract
Summary
Summary of the 10-K filed March 1, 2016. Cited figures are marked; the original filing is the authoritative source.
Teledyne Technologies Incorporated (TDY) reported 2015 total sales of $2,298.1 milliona, down from $2,394.0 million in 2014, and net income attributable to Teledyne of $195.8 million ($5.44 per diluted share), compared with $217.7 million ($5.75 per diluted share) in 2014.
Operating income was $281.7 millionb versus $294.5 million a year earlier. Approximately 74% of 2015 sales were to commercial and international customers and 26% to the U.S. Government, and international sales were about 44% of total sales. Instrumentation remained the largest segment at 46% of sales, followed by Aerospace and Defense Electronics at 26%, Digital Imaging at 16% and Engineered Systems at 12%.
Cash flow and capital deployment were central to the year. Cash provided by operating activities was $210.2 millionc, and free cash flow was $163.2 million. Teledyne spent $66.7 million on acquisitions and investments, including Bowtech Products Limited, Industrial Control Machines SA and the remaining 49% noncontrolling interest in Optech Incorporated, and repurchased common stock for $243.8 million.
Total outstanding indebtedness was $765.5 milliond at January 3, 2016, and the company reported compliance with its financial covenants. Management also authorized a new repurchase program of 3,000,000 shares in January 2016.
The filing highlights exposure to the offshore oil and gas market, where Brent crude fell from a high of $116 in June 2014 to a low of $27 in January 2016, and to U.S. Government funding, with fixed-price contracts representing 54% of U.S. Government contracts in 2015. Total backlog of confirmed orders was $802.8 million at January 3, 2016, down from $944.6 million a year earlier, and the company expects to fulfill 96% of it during 2016.
02—Key points
Key Highlights
- Total sales of $2,298.1 million in 2015 declined from $2,394.0 million in 2014, and operating income fell to $281.7 million from $294.5 million.
- Net income attributable to Teledyne was $195.8 million, or $5.44 per diluted share, versus $217.7 million, or $5.75 per diluted share, in 2014.
- Cash provided by operating activities was $210.2 million and free cash flow was $163.2 million, compared with $287.9 million and $244.4 million in 2014.
- Teledyne repurchased common stock for $243.8 million in 2015 and spent $66.7 million on acquisitions and investments, including Bowtech, ICM and the remaining Optech noncontrolling interest.
- Confirmed order backlog was $802.8 million at January 3, 2016, compared with $944.6 million at December 28, 2014.
- Instrumentation was 46% of 2015 sales, and Marine Instrumentation sales fell to $614.0 million from $654.8 million amid the energy market downturn.
- Total indebtedness was $765.5 million at January 3, 2016, and the company reported compliance with its financial covenants.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, Teledyne Technologies kept $0.09.
- Revenue$2.30B100.0%
- Cost of revenue−$1.43B62.1%
- Gross profit$870.3M37.9%
- Operating costs−$588.6M25.6%
- Operating income$281.7M12.3%
- Interest, other & tax−$85.9M3.7%
- Net income$195.8M8.5%
Where FY2016 revenue went
$2.30B- Cost of revenue: $1.43B, 62% of revenue
- SG&A: $588.6M, 26% of revenue
- Net income: $195.8M, 8.5% of revenue
- Interest, other & tax: $85.9M, 3.7% of revenue
Kept 8.5% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed March 1, 2016Financial Statements
| Revenue | $2.30B |
| Cost of Revenue | $1.43B |
| Gross Profit | $870.30M |
| SG&A Expenses | $588.60M |
| Operating Expenses | $2.02B |
| Operating Income | $281.70M |
| Interest Expense | $17.20M |
| Net Income | $195.80M |
| EPS (Basic) | $5.55 |
| EPS (Diluted) | $5.44 |
| Shares Outstanding (Basic) | 35.30M |
| Shares Outstanding (Diluted) | 36.00M |
05—Questions
Frequently Asked Questions
How did Teledyne's revenue and earnings change in 2015?
Sales decreased to $2,298.1 million from $2,394.0 million, and net income attributable to Teledyne fell to $195.8 million ($5.44 per diluted share) from $217.7 million ($5.75 per diluted share). The filing attributes the sales decline to lower sales in each segment except Engineered Systems.
What drove the decline in the Instrumentation segment?
Instrumentation sales fell to $1,051.1 million from $1,115.5 million. The filing cites lower sales of marine instrumentation, including geophysical sensors for offshore oil exploration, and lower electronic test and measurement sales, partly offset by $32.1 million of incremental sales from recent acquisitions.
How is Teledyne exposed to the oil and gas market?
The filing states that a material amount of revenue comes from offshore oil and gas customers, and that Brent crude fell from a high of $116 in June 2014 to a low of $27 in January 2016. It notes that lower prices reduce marine seismic activity and demand for related products.
How much of Teledyne's business depends on U.S. Government contracts?
Approximately 26% of 2015 sales were derived from contracts with, or as a prime contractor or subcontractor to, the U.S. Government, and 54% of U.S. Government prime contracts and subcontracts were fixed-price type contracts. The filing notes that eight U.S. Government contracts were terminated for convenience in 2015.
What did Teledyne do with its capital in 2015?
Teledyne spent $66.7 million on acquisitions and investments, repurchased $243.8 million of common stock, and made capital expenditures of $47.0 million. It issued $125.0 million of senior unsecured notes in November 2015 and authorized an additional repurchase of 3,000,000 shares in January 2016.
06—Continue