Teledyne Technologies Reports First Quarter Results

Income Taxes
The effective tax rate for the first quarter of 2016 was 28.9% compared with 29.8%. The first quarter of 2016 reflected net discrete tax expense of $0.1 million compared with net discrete tax expense of $0.2 million. Excluding the net discrete tax items in both periods, the effective tax rates would have been 28.8% for the first quarter of 2016 and 29.5% for the first quarter of 2015.

Stock Option Compensation Expense
Stock option expense for the first quarter of 2016 was $3.3 million, of which $2.4 million was recorded in the operating segment results and $0.9 million was recorded as corporate expense. Stock option expense for the first quarter of 2015 was $3.8 million, of which $2.6 million was recorded in the operating segment results and $1.2 million was recorded as corporate expense.

Other
Pension income was $0.5 million for the first quarter of 2016 compared with pension income of $0.2 million. In the first quarter of 2015, Teledyne froze its non-qualified pension plan for top executives which resulted in a one-time gain of $1.2 million. Interest expense, net of interest income, was $5.7 million for the first quarter of 2016, compared with $5.9 million. Corporate expense was $10.7 million for the first quarter of 2016, compared with $10.2 million. Other income and expense was $1.3 million of expense for the first quarter of 2016 compared with income of $0.8 million, and primarily reflected the impact of exchange rate changes.

Outlook
Based on its current outlook, the company’s management believes that second quarter 2016 earnings per diluted share will be in the range of $1.20 to $1.26 and full year 2016 earnings per diluted share will be in the range of $5.05 to $5.15. The second quarter and full year outlooks include severance, lease termination and other facility consolidation costs, expected to be offset by a gain on the sale of real estate no longer needed as a result of facility consolidations. The company’s effective tax rate for 2016 is expected to be 28.8%, before discrete items.

Forward-Looking Statements Cautionary Notice
This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, relating to earnings, growth opportunities, acquisitions and divestitures, product sales, capital expenditures, pension matters, stock option compensation expense, stock repurchases, interest expense, taxes, exchange rate fluctuations, cost reductions, facility consolidation costs, including real estate sales, and strategic plans. Forward-looking statements are generally accompanied by words such as “estimate”, “project”, “predict”, “believes” or “expect”, that convey the uncertainty of future events or outcomes. All statements made in this press release that are not historical in nature should be considered forward-looking.

Actual results could differ materially from these forward-looking statements. Many factors could change the anticipated results, including: disruptions in the global economy; changes in demand for products sold to the defense electronics, instrumentation, digital imaging, energy exploration and production, commercial aviation, semiconductor and communications markets; funding, continuation and award of government programs; cuts to defense spending resulting from existing and future deficit reduction measures; and threats to the security of our confidential and proprietary information, including cyber security threats. Continued lower oil and natural gas prices, as well as instability in the Middle East or other oil producing regions, and new regulations or restrictions relating to energy production, including with respect to hydraulic fracturing, could further negatively affect the company’s businesses that supply the oil and gas industry. Increasing fuel costs could negatively affect the markets of our commercial aviation businesses. In addition, financial market fluctuations affect the value of the company’s pension assets.

Changes in the policies of U.S. and foreign governments, including economic sanctions, could result, over time, in reductions or realignment in defense or other government spending and further changes in programs in which the company participates.

While the company’s growth strategy includes possible acquisitions, we cannot provide any assurance as to when, if or on what terms any acquisitions will be made. Acquisitions involve various inherent risks, such as, among others, our ability to integrate acquired businesses, retain customers and achieve identified financial and operating synergies. There are additional risks associated with acquiring, owning and operating businesses internationally, including those arising from U.S. and foreign policy changes and exchange rate fluctuations.

While the company believes its internal and disclosure control systems are effective, there are inherent limitations in all control systems, and misstatements due to error or fraud may occur and may not be detected.

Readers are urged to read the company’s periodic reports filed with the Securities and Exchange Commission (“SEC”) for a more complete description of the company, its businesses, its strategies and the various risks that the company faces. Various risks are identified in Teledyne’s 2015 Annual Report on Form 10-K. The company assumes no duty to publicly update or revise any forward-looking statements, whether as a result of new information or otherwise.

A live webcast of Teledyne’s first quarter earnings conference call will be held at 11:00 a.m. (Eastern) on Thursday, May 5, 2016. To access the call, go to www.teledyne.com approximately ten minutes before the scheduled start time. A replay will also be available for one month starting at 12:00 p.m. (Eastern) on Thursday, May 5, 2016.

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