TELEDYNE TECHNOLOGIES INC

Previous wording

The global trade environment continues to be highly dynamic. There have been continuing significant tariffs and trade sanctions between the United States and other countries, including China. China has also restricted the export of certain rare earth minerals that we use in our products, which could disrupt the supply chain for these minerals and components made from these materials. Tariffs, trade restrictions and retaliatory measures could result in revenue reductions, cost increases on material used in our products or significant production delays, which could adversely affect our business, financial condition, operational results and cash flows. Our manufacturing facilities span across many countries which helps us mitigate the impact of certain tariffs and trade restrictions. Also, consistent with our strategy, we continually optimize our operations and take measures to contain costs to reduce the impact from tariffs. We may also implement additional pricing actions to mitigate the impact of these tariffs. We have been working to minimize potential delivery delays and shortages of components and raw materials needed for certain products we manufacture. To date, we believe our strategies have helped minimize our exposure to these conditions. In February 2026, the U.S. Supreme Court issued a ruling invalidating certain tariffs. Significant uncertainty exists regarding the timing and amount of any potential tariff refunds. We will continue to assess these developments as additional information becomes available.

Current wording

The global trade environment continues to be highly dynamic. There have been continuing significant tariffs and trade sanctions between the United States and other countries, including China. China has also restricted the export of certain rare earth minerals that we use in our products, which could disrupt the supply chain for these minerals and components made from these materials. Tariffs, trade restrictions and retaliatory measures could result in revenue reductions, cost increases on material used in our products or significant production delays, which could adversely affect our business, financial condition, operational results and cash flows. Our manufacturing facilities span across many countries which helps us mitigate the impact of certain tariffs and trade restrictions. Also, consistent with our strategy, we continually optimize our operations and take measures to contain costs to reduce the impact from tariffs or other inflationary pressures. We may also implement additional pricing actions to mitigate the impact of these tariffs or other inflationary pressures. We have been working to minimize potential delivery delays and shortages of components and raw materials needed for certain products we manufacture. To date, we believe our strategies have helped minimize our exposure to these conditions. In February 2026, the U.S. Supreme Court issued a ruling invalidating tariffs under International Emergency Economic Powers Act (IEEPA). We filed for IEEPA refunds during the first half of 2026, and we began receiving these refunds in the second quarter of 2026. We also continue to pay tariffs, as required. We will continue to assess these developments as additional information becomes available.

Previous wording

U.S. Government shutdowns could negatively impact our businesses. Previous U.S. Government shutdowns have resulted in delays in anticipated contract awards, issuances of export licenses, shipments and payments of invoices for several of our businesses.

Current wording

Further U.S. Government shutdowns could negatively impact our businesses. Previous U.S. Government shutdowns have resulted in delays in anticipated contract awards, issuances of export licenses, shipments and payments of invoices for several of our businesses.

Previous wording

The Company is currently benefiting from increased global defense spending.

Current wording

The Company continues to benefit from increased global defense spending.

Previous wording

(a) Net sales exclude inter-segment sales of $5.3 million and $3.8 million for the first quarter of 2026 and 2025, respectively.

Current wording

(a) Net sales exclude inter-segment sales of $18.0 million and $23.3 million for the second quarter and six months of 2026, respectively, and $7.2 million and $11.0 million for the second quarter and six months of 2025, respectively.

Previous wording

The following is a discussion of our 2026 first quarter results compared with the first quarter results of 2025. Comparisons are with the corresponding reporting period of 2025 unless noted otherwise.

Current wording

The following is a discussion of our 2026 second quarter results compared with the second quarter results of 2025. Comparisons are with the corresponding reporting period of 2025 unless noted otherwise.

Previous wording

Our first quarter of 2026 net sales increased 7.6%, primarily due to higher sales in most segments. Net income attributable to Teledyne for the first quarter of 2026 increased 20.3%, primarily driven by an increase in sales and an increase in overall operating margin. Net income per diluted share was $4.85 for the first quarter of 2026, compared with net income per diluted share of $3.99.

Current wording

Our second quarter of 2026 net sales increased 9.8%. Net income attributable to Teledyne for the second quarter of 2026 increased 19.9%, primarily driven by an increase in sales and an increase in overall operating margin. Net income per diluted share was $5.37 for the second quarter of 2026, compared with net income per diluted share of $4.43.

Previous wording

The first quarter of 2026 net sales compared with the first quarter of 2025 reflected higher net sales in the Digital Imaging, Instrumentation and Aerospace and Defense Electronics segments, partially offset by lower net sales in the Engineered Systems segment. The first quarter of 2026 included $33.3 million in incremental sales from recent acquisitions, which are included within the Digital Imaging, Instrumentation and Aerospace and Defense Electronics segments.

Current wording

The second quarter of 2026 net sales compared with the second quarter of 2025 reflected higher net sales in each segment. The second quarter of 2026 included $12.2 million in incremental sales from recent acquisitions, which are included within the Digital Imaging and Instrumentation segments.

Previous wording

Selling, general and administrative (“SG&A”) expense increased $3.5 million in the first quarter of 2026 primarily due to higher net sales, including net sales related to 2026 and 2025 acquisitions. SG&A expense as a percentage of net sales decreased to 15.2% for the first quarter of 2026 compared with 16.1%. Corporate expense, which is included in SG&A expense, was $19.0 million for the first quarter of 2026 compared with $22.2 million, with the decrease related to lower transaction and integration costs. Stock-based compensation expense was $5.6 million for the first quarter of 2026 compared with $8.9 million.

Current wording

Selling, general and administrative (“SG&A”) expense increased $29.3 million in the second quarter of 2026 primarily due to higher net sales, including net sales related to 2026 and 2025 acquisitions. SG&A expense as a percentage of net sales increased to 15.6% for the second quarter of 2026 compared with 15.2%. Corporate expense, which is included in SG&A expense, was $28.0 million for the second quarter of 2026 compared with $21.7 million, with the increase related to higher compensation costs, including incentive compensation as well as higher professional services. Stock-based compensation expense was $13.9 million for the second quarter of 2026 compared with $11.3 million.

Previous wording

R&D expense increased $10.3 million in the first quarter of 2026 primarily due to higher R&D expense in the Digital Imaging segment.

Current wording

R&D expense increased $7.8 million in the second quarter of 2026 primarily due to higher R&D expense in the Digital Imaging segment.

Previous wording

Acquired intangible asset amortization for the first quarter of 2026 was $57.6 million compared with $52.0 million, with the increase primarily related to 2025 and 2026 acquisitions across multiple segments.

Current wording

Acquired intangible asset amortization for the second quarter of 2026 was $56.0 million compared with $54.6 million, with the increase primarily related to 2026 and 2025 acquisitions across multiple segments.

Previous wording

Pension service expense is included in both cost of sales and SG&A expense. For the first quarter of 2026 and 2025, pension service expense was $1.2 million and $1.5 million, respectively.

Current wording

Pension service expense is included in both cost of sales and SG&A expense. For the second quarter of 2026 and 2025, pension service expense was $1.2 million and $1.5 million, respectively.

Previous wording

Operating income for the first quarter of 2026 increased 13.5%. The first quarter of 2026, compared with the first quarter of 2025, reflected higher operating income in each segment, including incremental operating income related to 2026 and 2025 acquisitions.

Current wording

Operating income for the second quarter of 2026 increased 19.8%. The second quarter of 2026, compared with the second quarter of 2025, reflected higher operating income in the Digital Imaging, Aerospace and Defense Electronics and Engineered Systems segments, including incremental operating income related to 2026 and 2025 acquisitions.

Previous wording

Interest and debt expense, net of interest income, was $12.3 million for the first quarter of 2026 compared with $17.3 million, with the decrease related to lower outstanding borrowings compared to the first quarter of 2025. Non-service retirement benefit income was $2.7 million for the first quarter of 2026 compared with $2.8 million. Other income (expense), net, was expense of $5.9 million for the first quarter of 2026 and for the first quarter of 2025. Other income (expense), net, primarily consisted of foreign currency exchange losses for the first quarter of 2026 and for the first quarter of 2025.

Current wording

Interest and debt expense, net of interest income, was $13.6 million for the second quarter of 2026 compared with $17.6 million, with the decrease related to lower outstanding borrowings compared to the second quarter of 2025. Non-service retirement benefit income was $2.6 million for the second quarter of 2026 compared with $2.7 million. Other income (expense), net, was expense of $0.9 million for the second quarter of 2026 compared with expense of $2.7 million. Other income (expense), net, primarily consisted of foreign currency exchange losses for the second quarter of 2026 and 2025.

Previous wording

The first quarter of both the 2026 and 2025 income tax provision considers income, permanent items, tax credits and various statutory tax rates.

Current wording

The second quarter of both the 2026 and 2025 income tax provision considers income, permanent items, tax credits and various statutory tax rates.

Previous wording

(a) The first quarter of 2026 and 2025 includes net discrete income tax benefits of $8.0 million and $3.7 million, respectively.

Current wording

(a) The second quarter of 2026 and 2025 includes net discrete income tax benefits of $1.2 million and $8.4 million, respectively.

Previous wording

Cost of sales increased $55.9 million in the first quarter of 2026, primarily driven by higher net sales. Cost of sales as a percentage of net sales decreased for the first quarter of 2026, to 56.8% from 57.3%.

Current wording

Cost of sales increased $111.2 million in the first six months of 2026, primarily driven by higher net sales partially offset by tariff refunds, primarily within the Digital Imaging segment. Cost of sales as a percentage of net sales decreased for the first six months of 2026 to 56.2% from 57.3%.

Previous wording

Net sales increased primarily due to higher sales of infrared imaging detectors, components and subsystems for both defense and commercial applications as well as higher surveillance and unmanned air systems for defense applications. Sales of infrared imaging detectors, components and subsystems increased $18.9 million, sales of surveillance increased $8.9 million, and sales of unmanned air systems increased $11.4 million. The first quarter of 2026 included $8.0 million in incremental Digital Imaging sales from recent acquisitions.

Current wording

Net sales increased primarily due to higher sales of infrared imaging detectors, components and subsystems for both defense and commercial applications as well as higher surveillance systems, industrial and scientific imaging systems, and X-ray products. Sales of infrared imaging detectors, components and subsystems increased $29.0 million, sales of surveillance systems increased $15.5 million, and sales of industrial and scientific imaging systems increased $9.1 million, and sales of X-ray products increased $7.1 million. The second quarter of 2026 included $6.1 million in incremental Digital Imaging sales from recent acquisitions.

Previous wording

Cost of sales increased primarily due to higher net sales, partially offset by favorable product mix. The cost of sales percentage decreased during the period due to favorable product mix. SG&A expense increased primarily due to higher net sales, and SG&A expense as a percentage of net sales decreased. R&D expense and R&D expense as a percentage of net sales increased primarily due to the timing of FLIR product development activities, including both defense and commercial development activities. Acquired intangible asset amortization increased, and acquired intangible asset amortization as a percentage of net sales decreased.

Current wording

Cost of sales increased primarily due to higher net sales, and the cost of sales percentage decreased during the period due to favorable product mix as well as tariff refunds. SG&A expense increased primarily due to higher net sales, and SG&A expense as a percentage of net sales decreased. R&D expense and R&D expense as a percentage of net sales increased primarily due to the timing of FLIR product development activities, including both defense and commercial development activities. Acquired intangible asset amortization increased while acquired intangible asset amortization as a percentage of net sales decreased.

Previous wording

Net sales increased due to higher sales in the Marine Instrumentation and Environmental Instrumentation product lines. Sales of Marine Instrumentation increased $13.5 million due to stronger offshore energy and defense markets. Sales of Environmental Instrumentation increased $7.3 million primarily due to stronger sales of gas detection products. Test and Measurement Instrumentation decreased $2.7 million. The first quarter of 2026 included $5.0 million in incremental Environmental Instrumentation sales from recent acquisitions.

Current wording

Net sales increased due to higher sales in each product line. Sales of Marine Instrumentation increased $9.7 million due to stronger offshore energy and defense markets. Sales of Environmental Instrumentation increased $7.2 million primarily due to stronger sales of gas detection products. Test and Measurement Instrumentation increased $3.3 million. The second quarter of 2026 included $6.1 million in incremental Environmental Instrumentation sales from recent acquisitions.

Previous wording

Cost of sales increased due to higher net sales and unfavorable product mix. The cost of sales percentage increased. SG&A expense increased, and SG&A expense as a percentage of net sales increased. R&D expense increased in each product line, and R&D expense as a percentage of net sales decreased slightly.

Current wording

Cost of sales increased due to higher net sales and unfavorable product mix. As a result, the cost of sales percentage increased. SG&A expense increased, and SG&A expense as a percentage of net sales increased. R&D expense increased in each product line, and R&D expense as a percentage of net sales decreased slightly. Acquired intangible asset amortization increased due to the 2026 acquisition of DD-Scientific while acquired intangible asset amortization as a percentage of net sales remained consistent for both periods.

Previous wording

Operating income increased primarily due to increased net sales, and operating income as a percentage of net sales increased primarily due to favorable product mix.

Current wording

Operating income increased primarily due to increased net sales, and operating income as a percentage of net sales increased primarily due to lower R&D expense.

Previous wording

Net sales increased due to a $36.1 million increase in defense electronics, partially offset by a $1.1 million decrease in aerospace electronics. The first quarter of 2026 included $20.3 million in incremental defense electronics sales from recent acquisitions.

Current wording

Net sales increased due to a $56.9 million increase for defense electronics, partially offset by a $0.3 million decrease for aerospace electronics.

Previous wording

Cost of sales increased due to higher net sales. The cost of sales percentage decreased due to favorable product mix. SG&A expense and SG&A expense as a percentage of net sales decreased due to higher transaction and integration costs in 2025 as a result of acquisitions. R&D expense increased, and R&D expense as a percentage of net sales remained reasonably consistent between the two periods. Acquired intangible asset amortization and acquired intangible asset amortization as a percentage of net sales increased primarily due to the 2025 acquisitions.

Current wording

Cost of sales increased due to higher net sales. The cost of sales percentage decreased due to favorable product mix. SG&A expense and SG&A expense as a percentage of net sales decreased. R&D expense and R&D expense as a percentage of net sales decreased. Acquired intangible asset amortization, and acquired intangible asset amortization as a percentage of net sales increased due to the 2025 acquisitions.

Previous wording

Cost of sales decreased primarily due to lower net sales and favorable program mix. Cost of sales as a percentage decreased due to favorable program mix. SG&A expense and SG&A expense as a percentage of net sales increased due to higher employee compensation costs.

Current wording

Cost of sales increased primarily due to higher net sales, partially offset by favorable program mix. Cost of sales as a percentage decreased due to favorable program mix. SG&A expense increased slightly due to higher employee compensation costs, and SG&A expense as a percentage of net sales decreased.

Previous wording

Cash and cash equivalents totaled $521.4 million at March 29, 2026, compared with $352.4 million at December 28, 2025, with the increase primarily related to cash generated from operating activities partially offset by the 2026 acquisition and capital expenditures. Cash equivalents consist of highly liquid money-market mutual funds, with maturities of three months or less when purchased.

Current wording

Cash and cash equivalents totaled $340.1 million at June 28, 2026, compared with $352.4 million at December 28, 2025, with the decrease primarily related to a debt maturity payment on a fixed rate senior note, funding of capital expenditures, and our 2026 acquisition of DD-Scientific, primarily offset by cash generated from operating activities. Cash equivalents consist of highly liquid money-market mutual funds, with maturities of three months or less when purchased.

Previous wording

Total debt, net of unamortized debt discount and debt issuance costs at March 29, 2026, was $2,476.3 million compared with $2,475.4 million at December 28, 2025. Subsequent to the end of the quarter, the Company repaid $450.0 million of its Fixed Rate Senior Notes due April 2026 primarily from cash on hand.

Current wording

Total debt, net of unamortized debt discount and debt issuance costs at June 28, 2026, was $2,027.0 million compared with $2,475.4 million at December 28, 2025. In the second quarter of 2026, the Company repaid $450.0 million of its Fixed Rate Senior Notes due April 2026.

Previous wording

At March 29, 2026, we had $56.7 million in outstanding letters of credit, including $34.2 million against our credit facility.

Current wording

At June 28, 2026, we had $64.2 million in outstanding letters of credit, including $39.3 million against our credit facility.

Previous wording

Our credit facility requires us to comply with various financial and operating covenants and at March 29, 2026, we were in compliance with these covenants and had a significant amount of margin between required financial covenant ratios and our actual ratios. Currently, we do not believe our ability to undertake additional debt financing, if needed, is reasonably likely to be materially impacted by debt restrictions under our credit agreements. Available borrowing capacity under the $1.2 billion credit facility, which is reduced by borrowings and $34.2 million in outstanding letters of credit, was $1,165.8 million at March 29, 2026.

Current wording

Our credit facility requires us to comply with various financial and operating covenants and at June 28, 2026, we were in compliance with these covenants and had a significant amount of margin between required financial covenant ratios and our actual ratios. Currently, we do not believe our ability to undertake additional debt financing, if needed, is reasonably likely to be materially impacted by debt restrictions under our credit agreements. Available borrowing capacity under the $1.2 billion credit facility, which is reduced by borrowings and $39.3 million in outstanding letters of credit, was $1,160.7 million at June 28, 2026.

Previous wording

In July 2025, our Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $2.0 billion of our common stock. As of March 29, 2026, $1.6 billion remained available under the repurchase authorization. The authorized stock repurchase program does not have a stated expiration date. Shares may be repurchased from time to time in open-market transactions at prevailing market prices, in privately negotiated transactions or via an accelerated stock repurchase program. Shares could be repurchased in a plan pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934. The repurchase program is expected to remain open continuously, and the number of shares purchased will depend on a variety of factors such as share price, levels of cash available, acquisitions and alternative investment opportunities available immediately or longer-term, and other regulatory, market or economic conditions. We currently intend to fund future share repurchases, if any, with cash on hand and available borrowings under our credit facility. No repurchases under any authorizations were made in the first quarter of 2026.

Current wording

In July 2025, our Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $2.0 billion of our common stock. As of June 28, 2026, $1.6 billion remained available under the repurchase authorization. The authorized stock repurchase program does not have a stated expiration date. Shares may be repurchased from time to time in open-market transactions at prevailing market prices, in privately negotiated transactions or via an accelerated stock repurchase program. Shares could be repurchased in a plan pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934. The repurchase program is expected to remain open continuously, and the number of shares purchased will depend on a variety of factors such as share price, levels of cash available, acquisitions and alternative investment opportunities available immediately or longer-term, and other regulatory, market or economic conditions. We currently intend to fund future share repurchases, if any, with cash on hand and available borrowings under our credit facility. No repurchases under any authorizations were made in the second quarter and first six months of 2026.

Previous wording

Net cash provided by operating activities was $234.0 million for the first three months of 2026 compared with net cash provided by operating activities of $242.6 million, with the decrease primarily driven by higher inventory purchases in 2026 partially offset by favorable operating results.

Current wording

Net cash provided by operating activities was $549.2 million for the first six months of 2026 compared with net cash provided by operating activities of $469.2 million, with the increase primarily driven by favorable operating results and lower income tax payments, partially offset by higher inventory purchases in 2026.

Previous wording

Net cash used in investing activities was $83.1 million for the first three months of 2026 compared with net cash used in investing activities of $775.0 million. During the first three months of 2026, we spent $53.4 million on acquisitions compared with $757.6 million. Capital expenditures for the first three months of 2026 and 2025 were $29.7 million and $18.0 million, respectively. During 2026, we plan to invest approximately $150 million for capital expenditures, principally to upgrade facilities and manufacturing equipment as well as to support internal growth initiatives.

Current wording

Net cash used in investing activities was $118.8 million for the first six months of 2026 compared with net cash used in investing activities of $805.2 million. During the first six months of 2026, we spent $53.4 million on acquisitions compared with $757.6 million. Capital expenditures for the first six months of 2026 and 2025 were $60.2 million and $48.3 million, respectively. During 2026, we plan to invest approximately $150 million for capital expenditures, principally to upgrade facilities and manufacturing equipment as well as to support internal growth initiatives.

Previous wording

Net cash provided by financing activities was $18.4 million for the first three months of 2026 compared with net cash provided by financing activities of $339.6 million. The first three months of 2025 included net proceeds from our credit facility of $315.0 million. Subsequent to the end of the quarter, the Company repaid $450.0 million of its Fixed Rate Senior Notes due April 2026 primarily from cash on hand.

Current wording

Net cash used in financing activities was $436.7 million for the first six months of 2026 compared with net cash used in financing activities of $4.8 million. In the second quarter of 2026, the Company repaid $450.0 million of its Fixed Rate Senior Notes due April 2026.

Previous wording

All forward-looking statements speak only as of the date they are made and are based on information available at that time. We assume no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events, except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

Current wording

All forward-looking statements speak only as of the date they are made and are based on information available at that time. Teledyne assumes no obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.