Teledyne Technologies (TDY) 6 Aug 182018 Q2 Earnings call transcript

Ladies and gentlemen thank you for standing by and welcome to the Teledyne Second Quarter Earnings Call. At this time all lines are in a listen-only mode. Later we'll conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] And we are recording today. I will now like to turn the conference over to Jason VanWees. sir. ahead go Please

Call. This at VanWees, to Teledyne. Second Release to everyone. Strategy welcome Vice and Teledyne Conference Earnings XXXX M&A And Quarter is morning Senior Jason President everyone Good I'd like

We have released earnings earlier this morning. our

Sue, and President, Teledyne's COO, Senior Compliance will Melanie and General we and Counsel, Joining President Mehrabian; Main; Sue Cibik. Pichelli; Robert by Secretary, Chairman Chief today your President CEO, After Robert for me and questions. Vice CFO, is and Al Senior and remarks ask Vice Officer

may Of have assumptions course this you forward-looking our our noted before potential morning to results we approximately available get simultaneously earnings In filings caveats one via replay made is and reminded that call be and selective this started webcast and attorneys the statements various differ avoid tell me and being and in to to as a for month. are webcast both actual order materially. will subject release all disclosures periodic dial-in SEC

Robert. Here's

morning X.X% and achieved Quarter note joining increased Second for eXv earnings time sales growth Total you I acquired organic on should was which best margin. operating organic growth our X.X%. XXXX. Jason that of earnings, first the you Teledyne thank Teledyne everyone were sales, and for our including the record and history. call. included all-time March the in XX, We results Thank good

we'll and four segment. digital growth Within each among Furthermore, machine from double-digit to while year. organic factory our achieved exceptionally also businesses well quarter. instrumentation results second orders electronics these benefit to individual increased and well-balanced imaging automation. Our to and of the be vision in business within And continue in space industry-wide last all and defense our of compared of performed segments sales growth continue imaging our each significantly groups and

These X-ray dental for However, was metal-oxide-semiconductor medical or the digital complementary application. achieved normal detectors image X-ray lower resolution growth our using produce CMOS-based detectors than largest year-over-year outstanding and from radiation.

product three that instruments test increased measurement, Within and the and environmental, electronic lines is all sales instrumentation marine on year-over-year.

overall from in possess record-breaking Our points record with of award businesses backlog. margin last basis XX.X last new of GAAP four margin to increased year earnings large % business XXX segments year. $X.XX increasing winning defense XX.X% operating share all per increased and compared and are

acquired mentioned last pleased during Finally, business among with our call businesses, our cooperation the I very management. of and as of our we're companies quarter's successful indicate portfolio and integration

businesses acquire Of course, we current and will new our ones. continue in to invest

from point a favorable our XX.X% of of for segment continues domain protocol our increased instrumentation well segments. interconnect reflect instruments sales tools. XX.X% quarter simplifying performance increased. pollution test our and and life protocol marine second the result sales this see analyzers strong product in we led market of points last the sales and songs Overall Teledyne product basis drive However, increased increased XXX as segment higher network test customers improve largest leading opportunity business by growth electronic overall and systems vehicles processes. and environmental our across of and the on core profitable organically. also XX% In sales of LeCroy’s will corporate range products autonomous continued and and primarily cloud demand increased XX.X% In Growth sonar as Teledyne's laboratory Sales business now instrumentation in at an were to comment from increased to sales monitoring most systems as exceptional. underwater analyzers. I well as of science for operating and were instruments Sales of to streamlining margins Sales sales Ozone as which and also of largely focusing benefited of industrial of in maturity storage products. measurement Sales robust by a increased effort mix. lines XX.X% our instruments margin on year. all and

second proprietary digital XX.X% sales organic. entirely segment, which to increased Turning increased Sales year-over-year. detectors of X-ray quarter was the imaging significantly our

In addition, also for vision cameras sensors industrial grew applications machine and considerably.

of MEMS XXX microelectromechanical detectors Finally, basis segment shipments year. from hardware these systems also. products margin and geospatial and software increased points GAAP increased last infrared or and operating

points. XXXX excluding defense quarter some XX.X% offer sales as points. segment XXXX want In as To was charges well points margins. basis increased our to comparison of organic Nevertheless, due record electronic impacted XX growth increased primarily operating the Segment system primarily sales XXXX businesses. In these to XXX greater second to aerospace operating performance the quarter basis margin due the quarter. to the quarter and last some year's acquisition I being sales the perspectives and primarily majority second even improved related revenue by charges decreased quarter top X.X% second electronic increased While to across X.X% conclude, operating our to XXX segment eXv increased outlook. to basis our with margin defense engineering on of margin strongest due year-over-year

for mention multi-year first full while electronic relative that not performance given the the be we X% and this year. with in defense growth approximately in results, missile will number of organic well systems, the sales I communications infrared X.X% our warfare XXXX bookings greatest of as half X% to the company as projection of compared the year believe were to revenue February half currently were engineering. in detectors, exceptional across businesses the though of XXXX May to strong, second our Our among quarter first X% was only defense and should entire but of orders orders and in a

currently be will as was year-over-year second the the to not Thus Finally, not quarter. strong and expect in do expect quarter. second favorable to unusually quarters we also the half, call I the we Susan. product to continue turn segment sales over the operating in the mix each while, in growth following second margin in as

with million $XX.X in that the for same quarter the million the capital XXXX. second period of then quarter Thank year covered in leases payments. in $XX partially period by reflected with amortization quarter that second of We good $XXX.X second expenditures the not outlook. less million net morning first Robert XXXX. same from and second discuss discuss to for quarter expenditures million XXXX full cash was Depreciation $XX.X and debt operating with In net compared the the flow $XX.X cash for the same XXXX activities second debt the for Robert operating cash $XX.X Capital is compared $XXX.X compared higher of XXXX. capital higher higher financials income impact the million offset was third cash million activities million and compared period income of some of quarter XXXX. from million I is operating The primarily to a $XXX expense of million I cash less for and of $XX.X ended $XX.X and million of the was flow our operating you will quarter will flow XX.X%. $XXX.X by million provided XXXX of in to cash ratio of were debt activities everyone. capital by of tax quarter Free quarter in the additional

million the second of the option the was quarter compared X.X times second X.X in ratio of end times X.X leverage after at $X.X the of XXXX. end quarter XXXX and second to expense last the was in immediately compared the eXv to compensation Stock million the of of Our XXXX acquisition at first $X.X quarter quarter completing year.

noted eXv segment $X.X charges $X.X and the the was the and million transaction of was of which aerospace related or approximately the As reported million a recorded included million in XXXX the release of $X.XX acquisition imaging to second in cost to in digital earnings defense segment share. quarter $X.X pre-tax

to outlook currently share outlook our full to third of that to per now for believes range GAAP lower of management earnings in XXXX quarter $X.XX. to Robert. our $X.XX to tax $X.XX back and our will XXXX estimated is the XX.X% pass I'll items XXXX. before in prior in The discrete $X.XX outlook $X.XX be the XXXX $X.XX GAAP rate and to per XXXX call in share earnings year per which share expect the currently compared be to of to the four-year we Turning

Thank We the [indiscernible] with to questions Susan. now. questions and your ahead. you like go to would ready take if proceed please answers you're

Jefferies. We Gregory the with question line Konrad have [Operator Instructions] a from of

open. You're

quarter. Great morning. Good

conservative growth us back You forecast growth a way short any around those I businesses the versus thoughts of organic just more represent of cycle businesses. year. longer expectations to the your parse organic cycle shorter forecast cycle for the your does half around slower mean gave and around there is some updated for rest

Greg. morning Good

question. the last your me last Let answer the just The part with of is start yes. question

comps little go going it for be of we question. the think segment but you system year, year. X.X% first can whole answer tough wish by the to X% maybe conservative I the year-over-year let We having part into compared sub-segments me if that We that because are segment flat think to and do are is your engineered relatively up - a pretty I'll said last

say X% and long so as think Our - up between for defense we more engineered little which segment be will aerospace and or maybe X%. is year X% is systems let's a cycle the X.X%

year fact the in QX it’ll XX% the organic so we that of had be we uptake. you year's acquisition had eXv an think throw we recognizing eXv From On the related the will in whole XX% because that last but overall be about. digital up uptake we we QX imaging if XX% acquisition from picked that for from XX% about perspective

and of cycle would we which the be to measurement, in of organic business X% growth Finally, test specialist our in is order environmental instruments and believe X.X%. the shortest

to We of X.X% X.X%. have overall there about a about acquisition little bit tailwind

and of a again in back have defense from our I about We eXv should little X.X% aerospace go acquisitions. bit tailwind

you that. if gave So I the X.X Greg. Organically, about will answers X.X%. I be don't know included that I think

margins seems outlook guess into I of mix the on should of imaging No, the favorable know even doing and we mean has better mean kind you that maybe digital for and digital margins I margin been structurally with QX that's every how that of leads in end mean imaging time about mix I guess up favorable the and I sequentially I question. business. benefit again mean great I you it margin the mixed think just some like

the about I would of I say first overall end to imaging quarter has which digital what year. think of XX.X% the probably expect that's margins I would

up. it quarter this So was

this XX margin operating last year next with the as that's a be average honor to year they in with down Overall primarily our it'll know XX.X%. about everything ended XX and two QX XX.X% segment quarters think bit got favor and XX.X% worked we I mix. and .X with to a you with to due

I as the that think operating still should we closer moderate to year XX.X margin do in we XX.X would goes if on at end XX that the segment XXX and points basis year-over-year. gained we to year

digital of just and call in like it That's thoughts for mean and really any end terms of of for automation. around as imaging business of then vision a that machine kind warehouse business? vision maybe I helpful that I machine lot tailwinds forward for mean kind and and that visibility we and go that the me markets one backlog within you there's seems

down just me let First digital bit. imaging a break

in revenue will there are than basis we our and we again and a then panel our Healthcare MEMS those areas annualized annualized the treatment, world and in and have microelectromechanical CMOS think way longer-term and in about By making Teledyne cancer And our hydro million and four million includes we very that's approximately our we with have up a independent systems visibility sensitive And million on gaining recently. $XX $XXX share last Bromont LiDAR and are foundry and backlog geospatial programs it's revenues and second that areas, Aerospace million detectors that cameras foundry largest and was anticipate there different have sensors our the we're should a MEMS which software backlog is X-ray get we is There about for we and in those million $XXX have for displays. do which there Machine have two there. annualized. that that the less Greg sensors for ocean, which than X-ray mostly includes visioned five about $XX largest as going We $XX revenue I the more in have we that have and $XXX an do investments to in here detectors. market flat our different we have radiotherapy should that and our visibility we one of in end sources is high-resolution million. should about think a ranked little expect revenue. in we defense California. imaging cameras scientific business of and

We of display think panel are the about market a half little because flat down be worried a that the would second in the little year. we

the increasing. On the robotics see market we and logistics hand other

the So overall I mentioned annualized the growth imaging, little as is XX% hope pretty we I question. when of digital revenue that before a healthy. answers across organic over

was than helpful. Thank you. That more

And George Godfrey have a we next & with of King Associates. line CL

open. You are

quarter. Thank you and on you my Excellent job the morning. taking Thank good for questions.

Thank you George.

particularly digital defense also but orders out call with over X.XX? book overall imaging the build to related X.X you instrumentation to Well, rate than space and contracts, build book the strong greater

Yes, is. it

that We It is imaging above X.XX year-end. QX be in it think in was was healthy. digital and expected be in to course but X.X it’ll pretty X.X by and or it I QX should above of moderate of this

Okay this organic of up rate. and half such year walked in growth an the outstanding organic been and growth first it's rate the you've

the picture back how a trends particularly measurement you. is trends longer each oil much some but is today environmental you side of where and if the bigger the trends this Just cycle positive it increase and now where a tailwind this came the in were the of to prices cycle from but in from at we job the test marine, instrumentation seeing and again like of you're feel look for also where on versus ‘XX, more I ‘XX quarter. do of standpoint on the me has we much how segments are that three Thank an some we related nice shorter

you again. Thank

series test Let small and to instrumentation. devices systems test among companies, together have me that and measurements rolling companies things. these and to go measurement to of marine people and start are we with based communicate able In other a for tests and the last. environmental Then be the analyzers between protocol three rule

you has businesses little connect oscilloscope of in certain business bigger very be your actually Those that than with the based example For that we a very a Bluetooth in growing car while a up rule our and fast. business and are businesses. might think get set Actually, programs. there it's profitable

doing hand other XX-bit will And healthily very oscilloscope market. we well we businesses and our – in growing the growth there have our been enjoy have On have there. high-definition really scopes that significant the are

the the So systems their the the and cycle The as well. very this Having lot to about water of of we maybe had quality that know it doing really products approached that well are we including of do business those have as you as a They're is year difficult said quality X% all measuring sell environment Those supply short the having is includes organically, business also organically about many of that almost good a grow little air. a run is for think short X.X%. as Those series it a cautious said growth semiconductor also we example businesses all good, but both other really for going cycle year to and we're will measurement to business. monitoring in such We predict. approached XX.X%. because among well almost that more things environmental to as China there. our XX%, growing test and for buying it’s

They the to are almost $XX in doing are a and maybe submarine one parts and expect $XX would connectors X%. those year's go while simultaneously. oil oil would about back doing versus move great. and cap investments gliders are are go – a of that grow we deals Marine $XX battleship around and have If I prices even be businesses that XXXX. also back as billion the expectations gliders The by at they're XXX of hovering be gas Those the such and laid group is out domains a time so they've orders. front that hard time little into many those defense, then what's to that sensing. time get term happened in it Marine any naval the with orders out. we well a having lot people talking are business the in deploying of space longer Those engineers. we the purchase their [indiscernible] Marine. a designs the really are marine business about Frankly, that to their getting Let me They're lacking year-over-year and this

by marine for that off from close is no from end finish there's lot a very do and year production. would So going we only of saying or for production and going just most have exploration XXXX. and $XXX will business businesses year XXXX of not of that business think about our the I that longer-term, there until gas expect $XXX improve non-oil recovery the the it they're oil this think is to the likely overall about us. the bit We there. think of in we be come little our million comes that to to land of question, We good and I a

the picks us So very will if we it because $XXX XXXX XXXX be million. dropped good about up [chin] and that on that it for between took business

are gas year before the there expectations see marine that domain another uptake. and serious be oil our we So in a will

Very for very helpful. much Robert. you that detail Thank

You bet.

followed press point one. And this else And up. queued if there are any is at please additional no by one questions star

Thanks. And [indiscernible]. conclude conference ask to Jason you I will call. our Thank VanWees

this us joining morning. for everyone thanks again and Robert Thanks

website today's and followup this number are news on individuals Teledyne.com. call our Of conclude great. And All everyone. listed at you conference call available releases earnings save the the would release. course our the if replay please for details you the me on Thank that be questions have

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