Teledyne Technologies (TDY) 24 Apr 192019 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Teledyne Technologies First Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host Mr. Jason VanWees. Please go ahead, sir.

you. thank Great, everyone. Good morning, Jason to VanWees, earnings and is Vice conference Executive everyone to like welcome XXXX I'd Teledyne's call. This President, first release quarter morning We the earlier our this released market earnings opened. before

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

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

Here is Robert.

quarter. Jason, our pleased with short I'm any the quarter breadth in with every Thank of sales cash increased all first for and joining long began strongest a and you were records history. major and and earnings, XXXX flow performance with line. operating call. product first for our both businesses across very cycle cycle and our business segment Sales, margin earnings thank the We you, Company's in morning everyone good

end what quarter modest camera that's XXXX the seasonally to of compared of the period, as to first us XX.X% is X.X% the $X.XX was X.X March only X.X% Roper allowed ratio share of In X.X leverage free ratio, first our currency million last $XX our in XXXX. quarter weaker with complete at acquisition from XX, in scientific Specifically, of increase per including which from debt-to-EBITDA of flow a a year. cash record to sales Earnings increased of X.X% headwind. organic, increased

our company, execute well business products to markets. different process complex We proven of focused also strategy, rather technologies common with Teledyne related serve and balanced that but portfolio a continued and a to customers and portfolio. a not underlying first, is companies

to Second, improve earnings comment of balance and by we On and our cash our complementary Nevertheless, the now integrate in and, strong pipeline free and both third, want always continue that successfully will remain driven growth final flow, acquirer, organic our our very exceptionally capital I compound Al operations acquired sheet to is we growth to a acquisition acquisitions. call business disciplined pass remains allocating prudently segments. four performance as on businesses. the he will to healthy. and we point,

with Robert. Thank first Sales quarter year. once easy albeit growth our systems In was you, increased electronic measurement an segment, XX% last increased organically, and Strong sales X.X% test comparison. led again of analyzers. by overall protocol sales Instrumentation from of

environmental margin sales margin of periods. Sales Book-to-bill specialty oscilloscopes process rate. selected instruments. of from and improvement some instruments XX% of also increased greater and prior and gross the measurement of largely double-digit marine basis and the sales within cost and increased we as growth in result result test aggressive sales increased segment margins a operating X.X%, to of Overall, Instrumentation sales was gas from electronic as environmental profit domain, industrial However, the the began digitizers reductions marine and laboratory increased in In sales points and greater business. and slightly X.XX and improved a analyzers of instruments as higher benefit increased margin quarter. and scientific a XXX

sciences grew our sales of quarter also significantly significantly dental micro electro-mechanical or Digital year-over-year. increased lithography. increased life year. Turning for and proprietary in XX.X%. Sales and XX% last part converters advanced nearly detectors and of of extreme to defense systems UV of first Sales increased data MEMS Sales to compared space medical shipments consumables X-ray due to Imaging segment, and for increased detectors

scientific in first increased, Teledyne. from operating basis with but months industrial nicely Roper declined points margin the the acquired year. segment GAAP performed from two and Finally, XX profit cameras last

However, to devices excluding our for engines. nuclear reliability semiconductors. lower as largely and the operating as Segment first defense also X.X% profit Electronics in manufacturing electronic the accounting and Aerospace margin due turbine Engineering XX strong increased warfare, Systems basis higher purchase of sales operating to missile by offset related revenue year-over-year the partially across electronics missile defense majority of expenses defense primarily margin businesses, in segment broadly M&A Segment from decline primarily cruise well of segment, points and transaction In specialty sales radar increased growth improvement and but margin high particular the and the X.X% XX.X% and last of year. microwave due to Defense quarter increased sales programs, increased systems. sales to but strong energy businesses. margin Roper slightly from with due larger costs sales across first segment, engines acquisition, In to XX% quarter reflected aerospace sales,

we quarters However, in expect currently three the sequentially. sales increase and the to to margin improve following

our offer I regarding Sue, want additional Before outlook. turning to XXXX some to commentary

XXXX. to year acquisition, year. to first organic XXXX strong this be the the full year the revenue from quarter billion will of cameras scientific approximately projection currently in prior translates of Along revenue to X% results, compared X% with approximately that of contribution January our growth our the that $X.X believe we of Given of in full XX% for

shipments and Finally, revenue turn to throughout given expect in the call over of we ramp Sue. linear backlog XXXX. I a record level, relatively the now will a also at timing

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

second before of $X.XX items, to rate compared for outlook, increase XXXX. a $X.XX expected of in quarter earnings the is and share $X.XX. full the outlook is of XXXX from in our full-year that will year currently GAAP full-year range discrete an outlook per tax to The XXXX our Turning earnings XX.X% be per $X.XX, believes management to the share be to $X.XX prior basis $X.XX per the XXXX increase GAAP XXX point to estimated to share

in currently we with call I pass back to addition, less XXXX XXXX. now the discrete will In expect compared significantly items Robert.

We with ready to proceed, Brad, now Sue. your take would you, if questions. the Thank proceed question-and-answers. to please like you're

comes today [Operator Please with Instructions] And Greg ahead. of Konrad line go Jefferies. our from the first question

Just the wanted nature appreciating from mean do has I the that you cycle impressive. I test measurement pretty growth first, have are of what business, in customers, I business you your on short the what of to organic and mean, visibility hearing touch type mean been and

in weeks. As three you a say, month, than don't a that of I Greg, we whole backlog lot maybe business. less know, would have

And so predictable. it's not

has hand, starting quarter done the positive. exceptionally certainly the business well first last been the year and very On other

to the the expect year We moderate end the as goes year. it of on, especially near

know as side, you doing and flip domain. we have that we protocol are really the On analyzers well in

to coupled growth. term. point our protocol especially So Europe to contributed I the it's sales, Asia, difficult it's oscilloscopes, happen over tell have in this predict in very oscilloscopes and to what you improve to have will longer that the at But the sales the

X% the more the year, year? just having are it about bigger And kind the expected if the for mean of areas back portfolio identified growth that tying into revenue risk specific think then, as cycle I I into the that short is and visibility of or picture, just half part of you've the organic mean there not the that you

as you sitting there that the that's I other. one is as said, the China out the affect usual also can and little business Greg, cautious or way which our don't we being have visibility, the because are we think, negotiations unknown a is there, with

of are We example, in Chinese. our, reduction the seeing with dispute margins because some for the

are being So basically; we yes. cautious

ahead. the Needham do Ricchiuti of go And Please from a we Jim with line Company. question have &

bookings It our, other business you're of of guess Wondering marine the I but the that in bookings seeing quarters couple if bookings in has a instrumentation which recovery suggest been sounds in segment. very you could areas? talk about a some nice little bit business how by like some area, the

let the big picture me Let answer Al the and into give you go just more details.

bookings Al, to other track the bit much overall But the you ratio. are about and about think little marine pretty talk X.XX, want I things? a Instruments X.XX, that.

continued Robert. we QX some thank and year did QX. I bookings have marine the strong Sure, you, that can. space in very of has in In last certainly

just burn, test if a we're in X X.XX book-to-bill environmental been, month, now QX. the what and change. historically you there the and just spoke down right those order very so cycle, that has move Robert to So to in book that's the hair businesses short book backlog that and really over than the to, And to and looking ratios don't we bill less and that expect marine are measurement is at a

that gives instruments X.XX for group. about hence So the us

of little the range from a broad you X-rays little at machine down area actually you know, for bit a If you to below foundries, programs major the Defense the medical getting down imaging, to Aerospace, in move Electronics, is major and with the X.XX. we're sort we're And and running on more some if a and X, with digital MEMS, a in dental space. measures giving and airlines and move we're radar. number vision, data businesses to imaging of bit quarter digital that Aerospace on fairly to to Electronics, flattish, new been counter - the Defense going and of business communications on some and combined successful activity of is and we've long programs And legacy of the

that was orders about have although in which the Engineered Systems say a very the healthy is a segment for book-to-bill that that's look programs backlog. about of are X.XX So Systems be X.XX, Engineered tend then specifically remember, you in our going to looks not segment quarter lumpy. to one probably fairly to would in also lumpy, number, Engineered I year which a the quarter and be finally high may activities is lumpy of because negative The representation are at book-to-bill a the a X. shipments be the is And book-to-bill we a robust Systems, and to for at

at if QX for a you that add So to it take X.XX. together, up book-to-bill all

the the Defense, and of been question the kind challenges is, guess in any within seeing commercial business you Boeing it, in of disruption are Aerospace has some touched portion that of the light And but on aerospace you of facing? I

very time There a in this are at - MAX. are supplier the we to much. Not Boeing XXX

that expect they so some in issues. their until And resolve softness we area

there. a And $X $X so, probably delivered we probably haircut million, product. little perhaps of less bit million take We will a have to

that And million. customers to is primarily We in stoppage product know about $XX is from limbo, a right to domain. be because plan about mostly in in going QX taking $XX in QX now have but IDECOM we soft deliver million, the

So doing major to that aerospace the we're business. be that, think than our negative would OK. I Other

signs pickup on supplier machine signs are last and camera one may, see question, vision a I the of easier there coming second I just you some heard actually area, it's industrial any to comparisons that? because from that is starting some the seeing they if of up the year, in are maybe but of half And

is movement. some there Yes,

manufacturing some have predict. now, we OLED it's started, of the that. been I of QX lines going think that But we think X As that just again, difficult we're production coming pretty signs with started terms and seeing you imaging we new But like to Right we'll know, book-to-bill. quiet over in are we online. second X, projecting digital our year much while the be less end the than with stronger a half is to little

expect especially online. and more QX stronger come And QX the be production of online, so as the comes we lines year, rest more to

we And the a ahead. go Godfrey CL do George have from with Please of question line King.

nice Wanted same? margin vary across Did operating is or marine, test the within to environmental the the ask margin instrumentation, or the all and it increase. the about about instrumentation, really in measurement roughly

the the time with the we're as is of groups this we the and In environmental being about that, In last do vary, We in marine XX% we for call negatively range, and on, points goes that margin. test and by the what year marine, the the discrepancy total year, go between the George. within marine up be XX.X. we'd year instruments, lower XX% teens. a environmental They year XXX combination by to end we little probably there about marine. measurement, XX.X% No. and measurement affected in having high up the was XXX, about to expect closer bit think year but Having and said we're full basis the all, highest and are test we the a environmental, the

you the revenue growth by heard the Thank organic it. give for you you. please a Can and the give segment whole. as I us that's quarter And

Sure, George.

Let me of get just my kind numbers.

the was organic sums in X.X, marine it digital total X.X, to instruments rest X.X around Electronics, X%. in was Defense just being in it Aerospace for Engineered I about up and made think and In the with measurement. imaging, overall, environmental, The that was and it with test the it X.X% about by X.X was lowest, and of Systems portfolio. up

Joe [Operator question Please of Giordano with have a Instructions] we And do line the Cowen. ahead. from go

I'm segment color know is kind accelerating you're curious, in but doing the different space. hearing it growing or players your right Instrumentation decelerating. and different it's oscilloscope that in is now here, well, from I business of some

just So, there. curious

the just XX% than now Right But oscilloscopes. much mentioned accelerating been year-over-year. so in up protocol least doing far - better as at that. it's But about QX, I it's that's before, analyzes are

it's the energy And is piece sticking know cycle. with that, long I

leverage So it through you as how But then much peak? business and taken much it a smaller lot have you've that out takes book-to-bill how to play revenue, through. at you'd that can to flow talk is maybe that and starts given about the cost to

with to going that At this year. XXXX, We right. you're which last closer $XXX and Yes, business was was it's think the about million. to be $XXX peak, million growth that's from year some

revenue. in down significant So

hand, continuously improving. our you and other are the cost On lot taken we've of out as margins mentioned, a

of didn't we no, - really sales had - enjoy improvement. we about a were had up quarter, X%. first We The whole lot

have quarter been. how be but think going orders a QX and tougher, to the our about X.X% is good should year year be we three, years end revenue I are exceptionally We last going and good. considering which an four the are think think bad of second by QX approach pick the to little X.X%, I would in growth, up

XX% you Can that you so. that I was maybe - was when something just peak? mentioned or margin think like marine scale business What

XX%. Well, it was great. was over It

Yes.

are used and of X% also a maybe first the facilities We lot are time for and seeing XX% the weeks a lot so high the business, customers last people on we at and also side. seeing downside are one, projections both - you have X% the abroad, that enjoying consolidated grow, But concerned we've we especially a of here low workforce, but on the think price, taken considering XX%, deliver It out, of more be, we're it, suffered time, We're little the through about, you earnings is in offshore being the part much. more lot pricing people but on a the that our We're price, third price. quotes. a can to advantage. two now least in from little happening projections side, that more the what's between you more a

that be we we - it's So, in quarter quarter, think there'll and opportunity lot a third as more this year, and close fourth certainly XXXX.

orders an maybe you work? I on that projects, just guess, in, contested mentioned can new the there's one some a I if maybe new If last and the won you missile guys sneak the largely if update had defense contract that one on Defense multi-year in, little in expand bit can Electronics, you you on of simulation

within Electronics of Knight that delivering basically Defense and the do are and the be nice radars satellites. commercial looking the have big a for [IDECOM] which to program, countermeasures XXX we able large have which is Yes, We helicopters they're contract to nice example channelizers a radar, is the where - have that us. ground part fly do say, contract and us. Silent the Electronic a OneWeb an track for also integrated I is above to contract, ground. stay forward to being of big into also Defense program program is a our stay back Defense their which But big automated their a for Electronics, by and are able is we automated, called feet go those be one to contract That's used and able

that's one. So

the segment brought or to up. Engineered you that back Systems go me our Let TBE

recently. enjoyed programs some even the - we've First, there have we new that

doing is well. very program water shallow Our

asked it, in protests, was highly. and there as a awarded sequential was That some was serious that you Let program And that almost objected question least, that me announced was we've was objectives in there so - the simulations to rightfully performance mask. there We and years on was you rated view, that our was that but were - - because another framework were been were at know, go some that that very back for our program. to winner program serious XX irregularities. in to there some the

come are is and what anticipate not investigating, protest was the thing - - they we they're out done on think case. the they - are short still we was the perform usual are to you'd investigating continuing a don't meantime, they properly, decision. the the So, We program. to In know there cycle answer a going with we good when that, get have

So, that's stands. where that

Instructions] [Operator

If you, Thank questions, there now are please. our conclude more I'll call, Jason Brad. conference no ask to

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

If would please Brad, you, give to wouldn't the can if and here, replay earnings if call follow-up have that feel mind, and release the you just end be the webcast me free ideal. at on you the information at any questions, call number you everyone. of the Thank

And for May will ladies conference XX:XX available replay AM be and XX. gentlemen, today's after through today,

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