Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________ FORM 10-Q _____________________________________ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 2, 2017 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-15295 _____________________________________ TELEDYNE TECHNOLOGIES INCORPORATED (Exact name of registrant as specified in its charter) _____________________________________ Delaware 25-1843385 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 1049 Camino Dos Rios 91360-2362 Thousand Oaks, California (Address of principal executive offices) (Zip Code) (805) 373-4545 (Registrant’s telephone number, including area code) _____________________________________ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No There were 35,286,579 shares of common stock, $.01 par value per share, outstanding as of May 10, 2017.
Table of Contents TELEDYNE TECHNOLOGIES INCORPORATED TABLE OF CONTENTS PAGE Part I Financial Information 2 Item 1. Financial Statements 2 Condensed Consolidated Statements of Income 2 Condensed Consolidated Statements of Comprehensive Income 2 Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statements of Cash Flows 4 Notes to Condensed Consolidated Financial Statements 5 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 17 Item 3. Quantitative and Qualitative Disclosures About Market Risk 25 Item 4. Controls and Procedures 26 Part II Other Information 26 Item 1. Legal Proceedings 26 Item 1A. Risk Factors 26 Item 6. Exhibits 27 Signatures 28 1
Table of Contents PART I FINANCIAL INFORMATION Item 1. Financial Statements TELEDYNE TECHNOLOGIES INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED APRIL 2, 2017 AND APRIL 3, 2016 (Unaudited - Amounts in millions, except per-share amounts) First Quarter 2017 2016 Net sales $ 566.1 $ 530.5 Costs and expenses Cost of sales 354.2 324.8 Selling, general and administrative expenses 153.8 144.8 Total costs and expenses 508.0 469.6 Operating income 58.1 60.9 Interest and debt expense, net (8.2) (5.7) Other expense, net (9.3) (1.3) Income before income taxes 40.6 53.9 Provision for income taxes 10.1 14.9 Net income $ 30.5 $ 39.0 Basic earnings per common share $ 0.87 $ 1.13 Weighted average common shares outstanding 35.1 34.4 Diluted earnings per common share $ 0.84 $ 1.11 Weighted average diluted common shares outstanding 36.1 35.2 The accompanying notes are an integral part of these condensed consolidated financial statements. TELEDYNE TECHNOLOGIES INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED APRIL 2, 2017 AND APRIL 3, 2016 (Unaudited - Amounts in millions) First Quarter 2017 2016 Net income $ 30.5 $ 39.0 Other comprehensive income: Foreign exchange translation adjustment 4.0 23.1 Hedge activity, net of tax (0.2) 4.6 Pension and postretirement benefit adjustments, net of tax 3.5 3.6 Other comprehensive income 7.3 31.3 Comprehensive income, net of tax $ 37.8 $ 70.3 The accompanying notes are an integral part of these condensed consolidated financial statements. 2
Table of Contents TELEDYNE TECHNOLOGIES INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited - Amounts in millions, except share amounts) April 2, 2017 January 1, 2017 Assets Current Assets Cash $ 69.7 $ 98.6 Accounts receivable, net 444.8 383.7 Inventories, net 415.6 314.2 Prepaid expenses and other current assets 55.0 49.7 Total current assets 985.1 846.2 Property, plant and equipment, net of accumulated depreciation and amortization of $480.7 at April 2, 2017 and $468.5 at January 1, 2017 443.0 340.8 Goodwill 1,671.0 1,193.5 Acquired intangibles, net 402.7 234.6 Prepaid pension assets 95.7 88.5 Other assets, net 75.5 70.8 Total Assets $ 3,673.0 $ 2,774.4 Liabilities and Stockholders’ Equity Current Liabilities Accounts payable $ 182.1 $ 138.8 Accrued liabilities 314.0 261.0 Current portion of long-term debt, capital leases and other debt 103.5 102.0 Total current liabilities 599.6 501.8 Long-term debt and capital leases 1,209.6 515.8 Other long-term liabilities 259.7 202.4 Total Liabilities 2,068.9 1,220.0 Commitments and contingencies Stockholders’ Equity Preferred stock, $0.01 par value; outstanding shares - none — — Common stock, $0.01 par value; authorized 125,000,000 shares; issued shares: 37,697,865 at April 2, 2017 and January 1, 2017; outstanding shares: 35,238,500 at April 2, 2017 and 35,110,762 at January 1, 2017 0.4 0.4 Additional paid-in capital 335.4 335.7 Retained earnings 1,942.9 1,912.4 Treasury stock, 2,459,365 at April 2, 2017 and 2,587,103 at January 1, 2017 (230.7) (242.9) Accumulated other comprehensive loss (443.9) (451.2) Total Stockholders’ Equity 1,604.1 1,554.4 Total Liabilities and Stockholders’ Equity $ 3,673.0 $ 2,774.4 The accompanying notes are an integral part of these condensed consolidated financial statements. 3
Table of Contents TELEDYNE TECHNOLOGIES INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED APRIL 2, 2017 AND APRIL 3, 2016 (Unaudited - Amounts in millions) Three Months 2017 2016 Operating Activities Net income $ 30.5 $ 39.0 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 22.8 21.1 Deferred income taxes 0.6 4.1 Stock-based compensation 5.4 3.4 Changes in operating assets and liabilities: Accounts receivable (10.1) 3.6 Inventories (21.7) (10.2) Prepaid expenses and other assets (5.8) (5.4) Accounts payable 14.0 (2.2) Accrued liabilities 9.7 9.9 Income taxes receivable/payable, net 8.1 10.9 Long-term assets (1.8) 1.6 Other long-term liabilities (0.2) (5.5) Pension and postretirement benefits (5.8) (6.1) Other operating, net 7.7 4.9 Net cash provided by operating activities 53.4 69.1 Investing Activities Purchases of property, plant and equipment (12.6) (14.2) Purchase of businesses, net of cash acquired (740.6) — Proceeds from the sale of assets 0.3 0.2 Other investing, net — (0.5) Net cash used in investing activities (752.9) (14.5) Financing Activities Net proceeds (payments) on credit facility 595.0 (51.5) Proceeds from term loan 100.0 — Payments on other debt (31.0) (10.8) Proceeds from exercise of stock options 6.3 2.6 Other financing, net (1.4) 0.5 Net cash provided by (used in) financing activities 668.9 (59.2) Effect of exchange rate changes on cash 1.7 2.7 Decrease in cash (28.9) (1.9) Cash—beginning of period 98.6 85.1 Cash—end of period $ 69.7 $ 83.2 The accompanying notes are an integral part of these condensed consolidated financial statements. 4
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