Teledyne Technologies is incorporated under the laws of State of Delaware and is headquartered in Thousand Oaks, California. The Company originated as a divestment by ATI to become an independent company in November 1999. The Company’s common stock is registered and listed on the New York Stock Exchange under the ticker “TDY”.
Teledyne Technologies provides sophisticated electronic instruments, components, communications services and products. These include defense electronics, control and monitoring instrumentation for environmental, industrial and marine applications, communications and data acquisition equipment for business aircraft and airlines, and subsystems for satellite and wireless communications. The Company also provides information technology and systems engineering services for space, environmental and defense applications as well as manufactures missile and general aviation components and engines.
The Company’s major clients include aerospace contractors, government agencies, general aviation companies, and major communications and industrial companies.
The Company continues to focus on its core area of interest of instrumentation, defense electronics and government systems engineering. The Company has always intended to strengthen its core business through strategic acquisitions. Teledyne Technologies also focuses on operational excellence thereby improving profit margins. The Company has grown internally as well as through acquisitions. Over the years Company has made several selective and strategic acquisitions to expand its services and products in instrumentation as well as defense markets. Its acquisition in 2006 includes:
Marine Instrumentation: The Company completed acquisition of Benthos, Inc, a manufacturer of oceanographic package and products inspection systems in January 2006 for nearly approximately $40.6 million. The acquisition expanded and complements the Company’s underwater acoustic product category. In August 2006, the Company completed acquisition of Ocean Design, Inc., manufacturer of mateable electrical, fiber-optic and sub – sea interconnect systems for a total consideration of $34.4 million.
Defense: The Company completed acquisition of KW Microwave Corporation, a manufacturer of defense microwave subsystems and components in April 2006 for a total consideration of $10.3 million. In August 2006, the Company completed acquisition of CollaborX, Inc., a supplier of government engineering services in US for a total consideration of $14.9 million. In September 2006, the Company completed acquisition of Rockwell Scientific Company LLC, research and development services provider for a total consideration of $158.6 million.
The Company uses a combination of internal marketing team and sales forces, distributors and external sales representatives to market and sell its services and products.
The Company is highly focused on the research and development effort and spent a total of $307.0 million in 2006 on R&D compared with $291.5 million and $263.3 million in 2005 and 2004, respectively.
The Company employed nearly 7,700 employees.
The Company has organized itself in four operating business units:
• Electronics and Communications
• Systems Engineering Solutions
• Aerospace Engines and Components
• Energy Systems.
Financial Performance: The Company’s worldwide net sales increased 18.8% to $1433 million in 2006 from $1206 million in 2005 mainly contributed by recent acquisition made by the company as well through organic growth. Teledyne Technologies’ operating profit increased 24.1% to $125 million in 2006 from $100.7 million in 2005. The Company’s operating profit margin improved to 8.7% in 2006 from 8.3% in 2005. The Company’s net income increased 25.1% to $80.3 million in 2006 from $64.2 million in 2005. Teledyne Technologies’ net income margin also increased to 5.6% in 2006 from 5.3% in 2005.
The Company’s total confirmed order backlog was nearly $582.4 million as at December 31, 2006 compared to $521.9 million as at January 1, 2006 and $471.3 million as at January 2, 2005. The Company expects to complete 98% of these orders during fiscal 2007.
Electronics and Communications segment contributed 63% to the total net sales of the Company in 2006 up from 60% in 2005. Systems Engineering Solutions segment contributed 20% to the total net sales of the Company in 2006 2 percentage point declined from 22% in 2005. Aerospace Engines and Components 15% to the total net sales of the Company in 2006 one percentage point declined from 16% in 2005. Energy Systems 2% to the total net sales of the Company in 2006 same as in 2005.
The Company derives nearly 21% of its sales from its International operations as increase by three percentage points compared with 18% in 2005 and four percentage points compared with 19% in 2004. In 2006, the Company sold its products to clients in more than 100 foreign countries.
Nearly 60% of the Company’s total sales in 2006 were accounted for by commercial customers and the rest was accounted for by the US Government.