Teledyne Technologies Incorporated

Ladies and gentlemen, thank you for standing by, and welcome to the Teledyne first quarter earnings call. At this time, all participants are in a listen-only mode. Later, we'll have a question and answer session. Instructions will be given at that time. If you should require assistance during today's call, please press star, then zero. As a reminder, today's call is being recorded. Now, to the counsel of your host, Jason Van Huys, please go ahead. Good morning.

Thank you, everyone. This is Jason Van Huys, Executive Vice President, and I'd like to welcome folks to our first quarter 2021 Earnings Release Conference Call. We released our earnings earlier this morning before the market opened. Joining me today are Teledyne's Executive Chairman, Robert Morabian, President and CEO, Al Pacelli, Senior Vice President and CFO, Sue Main, and SVP General Counsel, Chief Compliance Officer and Secretary, Melanie Sivic. After remarks by Robert, Al, and Sue, we will ask for your questions. have reminded me to tell you that all forward-looking statements made this morning are subject to various assumptions and caveats, as noted in our SEC filings and our periodic earnings releases. 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.

Thank you, Jason, and good morning, and thank you for joining our earnings call. We began 2021 with the best first quarter sales, earnings, operating margin, and cash flow in the company's history. Furthermore, we achieved these GAAP results despite incurring $39 million, or 79 cents per share, of expenses related to the pending acquisition of FLIR. Excluding these non-recurring charges, earnings increased 39.2% compared to last year. Operating margin increased 426 basis points and free cash flow nearly doubled. In addition, I'm very pleased with the breadth of our financial performance across Teledyne. Year-over-year sales increased in nearly every major business category except commercial aerospace which is now only 4% of our total sales. The recovery in our short-cycle commercial business is unfolding nicely, and our government businesses are also growing and performing well, in both cases, strongest within our digital imaging segment. Also in the first quarter, we received all-time record orders with a book-to-bill of 1.15x resulting in quarter-end backlog of approximately $1.8 billion. Given our strong first quarter, we now think a reasonable outlook for the total company organic sales growth in 2021 is approximately 6 percent, led by forecasted growth of about 10 percent in digital imaging excluding FLIR. And now, with respect to the FLIR acquisition. Over the last few months, while transaction certainty progressively increased, Teledyne performed in-person visits covering 90% of all FLIR-owned sites, several on multiple occasions. Most importantly, We were also granted access to the operating management in all key functional areas. To summarize, FLIR's people, products, technology, and manufacturing are outstanding. I am now even more excited about the prospect for FLIR as part of the Teledyne family. Regarding timing, Our respective stockholder votes are scheduled for Thursday, May 13, and pending approval, we expect to close early the following morning. Assuming closing occurs as planned, we expect to update our outlook in the July earnings release and include FLIR. We remain confident of immediate pre-tax annual synergies greater than $40 million, and we continue to expect EPS accretion even on a gap basis in 2022 with EPS accretion excluding amortization being substantially greater. Al will now comment on the performance of our four business segments. Al?