THOUSAND OAKS, Calif. — (BUSINESS WIRE) — January 27, 2022 — Teledyne Technologies Incorporated (NYSE: TDY)

• Record quarterly sales of $1,375.7 million, an increase of 70.0% compared with last year
• Fourth quarter GAAP diluted earnings per share of $3.39 and non-GAAP diluted earnings per share of $4.56
• Fourth quarter GAAP operating margin of 14.2% and non-GAAP operating margin of 21.5%
• Record annual sales of $4,614.3 million, an increase of 49.5% compared with last year
• Full year GAAP diluted earnings per share of $10.05 and non-GAAP diluted earnings per share of $16.86
• Full year GAAP operating margin of 13.5% and non-GAAP operating margin of 21.3%
• Record quarterly and annual cash flow from operations
• Year-end Consolidated Leverage Ratio declined to 2.9x from 3.8x in May 2021
• Issuing full year 2022 GAAP diluted earnings outlook of $14.10 to $14.55 per share and full year 2022 non-GAAP earnings outlook of $17.60 to $18.00 per share

Teledyne today reported fourth quarter 2021 net sales of $1,375.7 million, compared with net sales of $809.3 million for the fourth quarter of 2020, an increase of 70.0%. Net income was $161.8 million ($3.39 diluted earnings per share) for the fourth quarter of 2021, compared with $132.1 million ($3.48 diluted earnings per share) for the fourth quarter of 2020, an increase of 22.5%. The fourth quarter of 2021 net sales included $498.6 million in incremental net sales from the acquisition of FLIR Systems, Inc.​ (“FLIR”). In connection with the FLIR acquisition, in the fourth quarter of 2021, Teledyne incurred pretax expenses of $90.5 million, which included $47.8 million in acquired inventory step-up expense, $41.9 million in acquired intangible asset amortization expense and $0.8 million of transaction and integration-related costs. The fourth quarter of 2021 also included $9.5 million of pretax acquired intangible asset amortization expense for transactions completed in prior periods. Excluding these charges and related tax matters, non-GAAP net income for the fourth quarter of 2021 was $217.4 million ($4.56 per share). The fourth quarter of 2020 included pretax charges of $20.0 million which included $9.6 million in acquired intangible asset amortization expense and $10.4 million in severance, facility consolidation and other costs. Excluding acquired intangible asset amortization expense, non-GAAP net income for the fourth quarter of 2020 was $139.5 million ($3.68 per share). Operating margin was 14.2% for the fourth quarter of 2021, compared with 17.8% for the fourth quarter of 2020. Excluding acquisition-related transaction and purchase accounting expenses, non-GAAP operating margin for the fourth quarter of 2021 was 21.5%, compared with 19.0% for the fourth quarter of 2020. The fourth quarter of 2021 reflected net discrete income tax benefits of $26.2 million compared with net discrete income tax benefits of $18.8 million for the fourth quarter of 2020.

“2021 was a defining year for Teledyne with record sales and adjusted earnings, operating margin and cash flow. Furthermore, with the successful acquisition and integration of Teledyne FLIR, Teledyne has further evolved into a global sensing and decision-support technology company,” said Robert Mehrabian, Chairman, President and Chief Executive Officer. “Organic sales growth in the fourth quarter and full year was over eight percent in each period. In addition, fourth quarter and full year adjusted operating margins increased approximately 250 and 450 basis points, respectively. When Teledyne first announced the FLIR acquisition, we projected that leverage would decline to 3.0x by the end of 2022, and we exited 2021 with a leverage ratio of just 2.9x. We also projected that the acquisition would be accretive to GAAP earnings in the first full calendar year following the transaction. Today’s full year 2022 GAAP earnings per share outlook is over 30% greater than any pre-acquisition period, and excluding only intangible asset amortization, our 2022 non-GAAP earnings outlook is over 50% greater than 2019 or 2020.”

Full Year 2021

Full year sales for 2021 were $4,614.3 million, compared with $3,086.2 million for 2020, an increase of 49.5%. Net income was $445.3 million ($10.05 per diluted share) for fiscal year 2021, compared with $401.9 million ($10.62 per diluted share) for fiscal year 2020, an increase of 10.8%.

Full year 2021 net sales included $1,273.6 million in incremental net sales from the acquisition of FLIR. In connection with the FLIR acquisition, Teledyne incurred pretax expenses of $350.3 million, which included $110.3 million in acquired intangible asset amortization expense, $106.4 million in acquired inventory step-up expense, $103.0 million of transaction and integration-related costs, and $30.6 million in bridge loan and debt extinguishment fees. Full year 2021 also included $39.0 million of pretax acquired intangible asset amortization expense for transactions completed in prior periods. Excluding these charges and related tax matters, non-GAAP net income for 2021 was $746.9 million ($16.86 per share). Full year 2020 included pretax charges of $72.1 million which included $38.8 million in acquired intangible asset amortization expense and $33.3 million in severance, facility consolidation and other costs. Excluding acquired intangible asset amortization expense, non-GAAP net income for 2020 was $431.6 million ($11.41 per share). Operating margin was 13.5% for 2021, compared with 15.6% for 2020. Excluding acquisition-related transaction and purchase accounting expenses, non-GAAP operating margin for 2021 was 21.3%, compared with 16.8% for 2020. Full year 2021 reflected net discrete income tax benefits of $34.7 million compared with net discrete income tax benefits of $34.6 million for 2020.

Review of Operations

Comparisons are with the fourth quarter of 2020, unless noted otherwise. The fourth quarter of 2021 contained 13 weeks and the fourth quarter of 2020 contained 14 weeks. Acquired intangible asset amortization was previously included in selling, general and administrative expenses. Prior period amounts have been reclassified to conform to the current presentation.

Digital Imaging

The Digital Imaging segment’s fourth quarter 2021 net sales were $809.5 million, compared with $262.0 million, an increase of 209.0%. Operating income was $94.1 million for the fourth quarter of 2021, compared with $56.7 million, an increase of 66.0%.

The fourth quarter 2021 net sales increase included $498.6 million of incremental net sales from the FLIR acquisition as well as strong organic sales growth from industrial and scientific sensors and cameras, x-ray products and micro-electro-mechanical systems (“MEMS”), partially offset by lower sales for geospatial imaging systems. The increase in operating income in the fourth quarter of 2021 reflected the contribution from the FLIR acquisition, partially offset by pretax expenses of $90.1 million of FLIR acquisition-related transaction and purchase accounting expenses, which included $47.8 million in inventory step-up expense, $41.9 million in acquired intangible asset amortization expense and $0.4 million of integration-related costs. The increase in operating income also reflected the impact of organic sales growth, favorable product mix and margin improvement.

Instrumentation

The Instrumentation segment’s fourth quarter 2021 net sales were $302.2 million, compared with $282.8 million, an increase of 6.9%. Operating income was $66.7 million for the fourth quarter of 2021, compared with $63.2 million, an increase of 5.5%.

The fourth quarter 2021 net sales increase resulted from higher sales of test and measurement instrumentation, marine instrumentation and environmental instrumentation. Sales of test and measurement instrumentation, marine instrumentation and environmental instrumentation increased $9.1 million, $6.9 million and $3.4 million, respectively. The increase in operating income primarily reflected the impact of higher sales.

Aerospace and Defense Electronics

The Aerospace and Defense Electronics segment’s fourth quarter 2021 net sales were $163.3 million, compared with $145.2 million, an increase of 12.5%. Operating income was $40.6 million for the fourth quarter of 2021, compared with $23.2 million, an increase of 75.0%.

The fourth quarter 2021 net sales reflected higher sales of $10.6 million for aerospace electronics and $7.5 million for defense and space electronics. Operating income in the fourth quarter of 2021 reflected the impact of higher sales and a lower cost structure due to actions taken in 2020.