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Teledyne Technologies Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 9, 2011 03:12PM

Teledyne Technologies Inc. (TDY) filed Quarterly Report for the period ended 2011-07-03. Teledyne Technologies Inc. has a market cap of $1.78 billion; its shares were traded at around $48.08 with a P/E ratio of 13.7 and P/S ratio of 1. Teledyne Technologies Inc. had an annual average earning growth of 22.5% over the past 10 years. GuruFocus rated Teledyne Technologies Inc. the business predictability rank of 4-star.



Highlight of Business Operations:

Teledyne’s second quarter 2011 sales were $502.9 million, compared with sales of $408.0 million for the same period of 2010, an increase of 23.3%. Net income from continuing operations was $38.7 million ($1.04 per diluted share) for the second quarter of 2011, compared with $28.0 million ($0.76 per diluted share) for the second quarter of 2010, an increase of 38.2%. Net income including discontinued operations was $152.3 million ($4.08 per diluted share) for the second quarter of 2011, compared with $28.6 million ($0.78 per diluted share) for the second quarter of 2010. The second quarter of 2011 includes income from discontinued operations of $113.6 million.

Teledyne’s first six months 2011 sales were $971.0 million, compared with sales of $812.9 million for the same period of 2010, an increase of 19.4%. Net income from continuing operations was $71.2 million ($1.91 per diluted share) for the first six months of 2011, compared with $53.0 million ($1.44 per diluted share) for the first six months of 2010, an increase of 34.3%. Net income including discontinued operations, was $184.3 million ($4.94 per diluted share) for the first six months of 2011, compared with $53.6 million ($1.46 per diluted share) for the first six months of 2010. The first six months of 2011 includes income from discontinued operations of $113.1 million.

The second quarter 2011 sales increase reflected higher sales of $4.9 million from turbine engines resulting from increased sales for the Joint Air-to-Surface Standoff Missile (“JASSM”) program and higher energy systems sales of $0.7 million, partially offset by lower sales of $1.0 million from engineered products and services. The second quarter 2011 sales for engineered products and services primarily reflected higher sales for nuclear and other manufacturing programs, including $3.0 million in sales from acquisitions, more than offset by lower sales for space and defense programs. Operating profit in the second quarter of 2011 reflected the impact of higher sales and the impact of higher margins for turbine engines. Operating profit included pension expense of $0.4 million in the second quarter of 2011, compared with $0.4 million in the second quarter of 2010. Pension expense allocated to contracts pursuant to U.S. Government Cost Accounting Standards (“CAS”) was $2.2 million in the second quarter of 2011, compared with $1.8 million in the second 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.

The first six months 2011 sales decrease reflected lower sales of $13.7 million from engineered products and services and lower energy systems sales of $2.2 million, partially offset by higher sales of $6.8 million of turbine engines resulting from increased sales for the JASSM program. The sales decrease from engineered products and services, primarily reflected lower sales of space and defense programs, partially offset by $6.5 million in sales from acquisitions. The improved operating profit in the first six months of 2011 primarily reflected the impact of higher margins for turbine engines, partially offset by the impact of lower sales and slightly lower margins for engineered products and services. Operating profit included pension expense of $1.7 million in the first six months of 2011, compared with $0.8 million in the first six months of 2010. Pension expense allocated to contracts pursuant to CAS was $4.4 million in the first six months of 2011, compared with $3.6 million in the first six months of 2010.

Financing activities provided cash of $68.2 million for the first six months of 2011, compared with cash used by financing activities of $12.5 million for the first six months of 2010. Cash provided by financing activities for the first six months of 2011 included net borrowings of $59.7 million primarily to fund the DALSA acquisition and for the pension contributions. Cash used by financing activities for the first six months of 2010 included net repayments of $14.2 million. Proceeds from the exercise of stock options were $7.6 million and $1.6 million for the first six months of 2011 and 2010, respectively. The first six months of 2011 and 2010, included $3.2 million and $0.7 million, respectively, in excess tax benefits related to stock option exercises.

Total debt at July 3, 2011, includes $60.0 million outstanding under the $550.0 million credit facility and $250.0 million in senior notes. The Company also has $16.5 million in capital leases and other debt, of which $1.7 million is current. At July 3, 2011, Teledyne Technologies had $11.7 million in outstanding letters of credit. Available borrowing capacity under the $550.0 million credit facility, which is reduced by borrowings and outstanding letters of credit, was $478.3 million at July 3, 2011. The credit agreement requires the Company to comply with various financial and operating covenants and at July 3, 2011 the Company was in compliance with these covenants. As of July 3, 2011 the Company had a significant amount of margin between required financial covenant ratios and our actual ratios. At July 3, 2011 the required financial covenant ratios and the actual ratios were as follows:

Read the The complete Report



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