Engineered Systems

The Engineered Systems segment’s second quarter 2015 sales were $68.6 million, compared with $64.6 million, an increase of 6.2%. Operating profit was $4.8 million for the second quarter of 2015, compared with $6.8 million, a decrease of 29.4%.

The second quarter 2015 sales reflected higher sales of engineered products and services of $3.2 million, which primarily reflected higher sales of space and marine manufacturing programs, and higher sales of energy systems products of $3.5 million. Turbine engine sales were lower by $2.7 million. Operating profit in the second quarter of 2015 primarily reflected lower sales of higher margin turbine engines and higher pension expense of $0.5 million.

Additional Financial Information

Cash Flow

Cash provided by operating activities was $59.0 million for the second quarter of 2015, compared with $95.0 million. The lower cash provided by operating activities in the second quarter of 2015 reflected lower net income, $5.8 million in expected change in control severance payments related to the Bolt acquisition and higher income tax payments, partially offset by the receipt of $3.0 million related to a legal settlement. The 2014 amount included the receipt of $10.0 million related to a legal settlement. Free cash flow (cash provided by operating activities less capital expenditures) was $45.4 million for the second quarter of 2015, compared with $86.1 million, and reflected lower cash provided by operating activities and higher capital expenditures. At June 28, 2015, total debt, including capital lease obligations, was $765.3 million, which included $180.0 million outstanding under the $750.0 million credit facility. Cash totaled $61.3 million at June 28, 2015. The company received $8.1 million from the exercise of stock options in the second quarter of 2015, compared with $6.5 million. Capital expenditures for the second quarter of 2015 were $13.6 million, compared with $8.9 million. Depreciation and amortization expense for the second quarter of 2015 was $22.8 million, compared with $23.4 million. In June 2015, Teledyne acquired Industrial Control Machines SA for an initial payment of $21.4 million in cash, net of cash acquired. In April 2015, Teledyne DALSA, Inc. acquired the remaining 49% minority interest in the parent company of Optech Incorporated for $22.0 million in cash. Teledyne funded these acquisitions with cash on hand that was held in foreign jurisdictions.