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Teledyne Technologies Annual Report, Year Ended Dec 31, 2023

Filing Date
Filed February 23, 2024
Period End
December 31, 2023
Security
TDY
In the record · 2016–202610-K1210-Q338-K120

TDY filed 12 annual reports (10-K), 33 quarterly reports (10-Q) and 120 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Mar ’19Mar ’19
  2. Deal closed8-K · May ’21May ’21
  3. Leadership change8-K · Jan ’23Jan ’23
  4. Leadership change8-K · Oct ’26Oct ’26

01—Abstract

Summary

Summary of the 10-K filed February 23, 2024. Cited figures are marked; the original filing is the authoritative source.

Teledyne Technologies Incorporated (NYSE: TDY) reported 2023 net sales of $5,635.5 milliona, up from $5,458.6 million in 2022, and net income attributable to Teledyne of $885.7 million, up from $788.6 million.

Operating income rose to $1,034.4 millionb from $972.0 million. Diluted earnings per share were $18.49, compared with $16.53 in 2022. The filing notes that 2023 net income included net discrete tax benefits of $137.5 million, versus $86.7 million in 2022, and the effective tax rate was 7.5% compared with 13.1% in 2022.

The company operates four segments: Digital Imaging (56% of 2023 net sales), Instrumentation (23%), Aerospace and Defense Electronics (13%) and Engineered Systems (8%). Digital Imaging operating income was $517.4 millionc, roughly flat year over year, while Instrumentation operating income rose to $338.3 million. U.S. Government sales were $1,381.7 million, or 24.5% of total net sales.

Cash provided by operating activities was $836.1 milliond, and free cash flow was $721.2 million. Long-term debt fell to $3,244.9 million from $3,920.6 million after repayments during 2023.

Risk factors highlighted in the filing include a possible recession, China economic slowdown, a cyclical semiconductor downturn affecting Digital Imaging and Instrumentation, government funding and shutdown risks, tariffs and export restrictions, and the goodwill and trademark carrying values for the FLIR reporting unit, where estimated fair value exceeded carrying value by approximately $460 million or 6%. The company completed two acquisitions in 2023 and announced an agreement on February 13, 2024 to acquire Adimec Holding B.V.

02—Key points

Key Highlights

  1. Net sales rose 3.2% to $5,635.5 million, with all four segments reporting higher sales; $99.8 million of incremental net sales came from acquisitions.
  2. Operating income increased 6.4% to $1,034.4 million, with Instrumentation operating income up 14.6% and Aerospace and Defense Electronics up 8.4%, while Digital Imaging operating income declined 0.4%.
  3. Diluted EPS of $18.49 versus $16.53 in 2022; net income attributable to Teledyne of $885.7 million included net discrete tax benefits of $137.5 million.
  4. Cash provided by operating activities was $836.1 million and free cash flow was $721.2 million, up from $394.2 million in 2022 (which included a $296.4 million Swedish tax payment).
  5. Total long-term debt declined to $3,244.9 million from $3,920.6 million, with $1,129.1 million available under the $1.15 billion credit facility at December 31, 2023.
  6. U.S. Government sales were $1,381.7 million, or 24.5% of total net sales, and approximately 79% of U.S. Government prime and subcontracts were fixed-price type.
  7. The FLIR reporting unit's fair value exceeded its carrying value by approximately $460 million or 6%, and the FLIR indefinite-lived trademark carrying value of $685.3 million was compared with a fair value of $694.9 million.

03—Questions

Frequently Asked Questions

  1. How did Teledyne perform financially in 2023?

    Net sales increased 3.2% to $5,635.5 million, operating income rose 6.4% to $1,034.4 million, and net income attributable to Teledyne increased 12.3% to $885.7 million. Diluted EPS was $18.49, up from $16.53. The filing states that net income included $137.5 million of net discrete tax benefits.

  2. Which segments drive Teledyne's revenue?

    In 2023, Digital Imaging contributed 56% of total net sales ($3,144.1 million), Instrumentation 23% ($1,326.2 million), Aerospace and Defense Electronics 13% ($726.5 million) and Engineered Systems 8% ($438.7 million).

  3. How dependent is Teledyne on the U.S. Government?

    U.S. Government sales, including prime and subcontract sales, were $1,381.7 million, or 24.5% of 2023 net sales, compared with 24.9% in 2022. The principal U.S. Government customer is the Department of Defense, with net sales of $1,081.3 million in 2023. The filing notes that contracts are subject to congressional appropriations and termination for convenience.

  4. What are the main risks to Teledyne's outlook according to the filing?

    The filing cites a possible U.S. or global recession, slowing growth in China, higher interest rates, a cyclical downturn in the semiconductor market affecting Digital Imaging and Instrumentation, tariffs and export restrictions, supply chain constraints, U.S. Government funding and shutdown risks, and cybersecurity threats. It also discloses unresolved voluntary export disclosures related to Teledyne FLIR, for which the company cannot reasonably estimate potential penalties.

  5. How has Teledyne's debt and cash position changed?

    During 2023 the company repaid $125.0 million on its credit facility, the $300.0 million 0.65% senior notes due April 2023 and the remaining $245.0 million on its term loan due May 2026, and repurchased $10.0 million of its 2.75% senior notes due April 2031. Cash and cash equivalents were $648.3 million at December 31, 2023, of which $369.1 million was held by foreign subsidiaries.

04—Continue

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