Teledyne Technologies Inc. (NYSE:TDY) Q1 2018 Earnings Conference Call - Final Transcript

May 03, 2018 • 11:00 am ET


Teledyne Technologies Inc. (NYSE:TDY) Q1 2018 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for your patience and standing by. Welcome to Teledyne's First Quarter Earnings Call. At this time, all of your participant phone lines are in a listen-only mode. And later, there will be an opportunity here for question. Just a brief reminder, today's conference is being recorded.

And I'd now like to turn the conference over to Jason VanWees.

Jason VanWees

Good morning, everyone. This is Jason VanWees, Senior Vice President, Strategy and M&A, at Teledyne. And I'd like to welcome everyone to Teledyne's first quarter 2018 earnings release conference call. We released our earnings earlier this morning.

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

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

Here is Robert.

Robert Mehrabian

Thank you, Jason, and good morning everyone. We began 2018 with an outstanding quarter, which is record sales, record earnings per share, and record operating margin for any first quarter. Total sales increased 22.9%, including organic growth of 7.9%.

Our Digital Imaging segment performed exceptionally well again, with sales increasing 21.7% organically, and 81.4% overall from the last year. Within the Digital Imaging, we continued to benefit from the industry-wide growth in machine vision and factory automation, along with the new product launches and strong execution. However, the largest year-over-year organic growth was achieved from our CMOS, that is Complementary Metal-Oxide Semiconductor based digital X-ray detectors for medical and dental applications, which produce outstanding image resolution, using lower-than-normal X-ray radiation.

Notwithstanding, the excellent performance in our Digital Imaging segment, our strong results were well-balanced among all of our segments and within each of our segments. Sales increased organically in all segments. Every segment also contributed to our all-time record orders with segments book-to-bill ratio ranging from 1.09 to 1.57 for a total of 1.23 the overall Company. Even excluding one multi-year space program in our Aerospace and Defense Electronics segment, our overall book-to-bill is still exceeded 1.1.

Now comment on the performance of our business segments. In our Instrumentation segment, overall first quarter sales increased 2.7% from last year. Sales of marine instruments declined 4.8% and primarily reflected lower sales of sensors for energy exploration, and unfavorable timing of US Government sales, partially offset by higher sales of sonar systems. However, marine orders exceeded sales by 12%. And we believe the outlook for subsea defense and offshore energy continues to improve.

In the environmental domain, sales