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Teledyne Technologies Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 13, 2011 04:20PM
Teledyne Technologies Inc. (TDY) filed Quarterly Report for the period ended 2011-04-03. Teledyne Tech Inc. has a market cap of $1.82 billion; its shares were traded at around $49.68 with a P/E ratio of 15.3 and P/S ratio of 1. Teledyne Tech Inc. had an annual average earning growth of 22.5% over the past 10 years. GuruFocus rated Teledyne Tech Inc. the business predictability rank of 4-star.
Highlight of Business Operations:
Our first quarter 2011 sales were $468.1 million, compared with sales of $404.9 million for the same period of 2010, an increase of 15.6%. Net income attributable to Teledyne Technologies was $32.0 million ($0.86 per diluted share) for the first quarter of 2011, compared with $25.0 million ($0.68 per diluted share) for 2010, an increase of 28.0%. Net income attributable to Teledyne Technologies excluding discontinued operations was $32.5 million ($0.87 per diluted share) for 2011, compared with $25.0 million ($0.68 per diluted share) for 2010, an increase of 30.0%.
The 2011 sales increase resulted from $14.0 million of higher sales of microwave devices and interconnects, as well as increased sales of $8.4 million from avionic products and electronic relays, partially offset by a reduction of $5.4 million in sales of electronic manufacturing services. The increased sales of microwave devices and interconnects included sales of $9.9 million from the Paradise Datacom and Labtech divisions of Intelek acquired in July 2010. The increase in operating profit reflected the impact of higher sales, incremental operating profit from recent acquisitions of $0.2 million, cost reductions and product mix.
The first quarter 2011 sales decrease reflected lower sales of $12.7 million from engineered products and services, including lower sales for space and defense programs partially offset by $3.5 million in sales from the July 2010 acquisition of the CML division of Intelek, as well as lower energy systems sales of $2.9 million, partially offset by higher sales of $1.9 million of turbine engines resulting from increased sales for the Joint Air-to-Surface Standoff Missile (JASSM) program. Operating profit in the first quarter of 2011 reflected the impact of lower sales and higher pension expense, partially offset by the impact of higher margins for engineered products and services and turbine engines. Operating profit included pension expense of $1.3 million in the first quarter of 2011, compared with $0.4 million in the first quarter of 2010. Pension expense allocated to contracts pursuant to U.S. Government Cost Accounting Standards (CAS) was $2.2 million in the first quarter of 2011, compared with $1.8 million in the first quarter of 2010. Pension expense determined allowable under CAS can generally be recovered through the pricing of products and services sold to the U.S. Government.
Financing activities provided cash of $321.6 million for the first three months of 2011, compared with cash provided by financing activities of $11.1 million for the first three months of 2010. Cash provided by financing activities for the first three months of 2011 included net borrowings of $313.2 million primarily to fund the DALSA acquisition and for the pension contribution. Cash provided by financing activities for the first three months of 2010 included net borrowings of $9.7 million. Proceeds from the exercise of stock options were $5.7 million and $1.0 million for the first three months of 2011 and 2010, respectively. The first three months of 2011 and 2010, included $2.7 million and $0.4 million, respectively, in excess tax benefits related to stock option exercises.
At April 3, 2011, Teledyne Technologies had $313.5 million drawn on available credit lines, including $310.5 million drawn under its $550.0 million credit facility. Available borrowing capacity under the $550.0 million credit facility, which is reduced by borrowings and outstanding letters of credit, was $227.4 million at April 3, 2011. The credit agreement requires the Company to comply with various financial and operating covenants and at April 3, 2011 the Company was in compliance with these covenants. As of April 3, 2011 the Company had a significant amount of margin between required financial covenant ratios and our actual ratios. At April 3, 2011 the required financial covenant ratios and the actual ratios were as follows:
Total debt at April 3, 2011, includes $310.5 million outstanding under the $550.0 million credit facility, $3.0 million outstanding under the $5.0 million uncommitted line and $250.0 in senior notes. The Company also has $16.7 million in capital leases, of which $1.6 million is current. At April 3, 2011, Teledyne Technologies had $12.1 million in outstanding letters of credit. Subsequent to April 3, 2011, principally with the proceeds from the sale of its piston engines businesses, the Company reduced the amount outstanding under its credit facility.
Stocks Discussed: TDY,