Teledyne Technologies Incorporated

Welcome to Teledyne's Third Quarter Earnings Call. Here is our first speaker, Mr. Jason Van Weese.

Thank you, and good morning, everyone. This is Jason Van Weese, Vice Chairman, and I'd like to welcome everyone to Teledyne's Third Quarter 2025 Earnings Release Conference Call. We released our earnings earlier this morning before the market opened. Joining me today are Teledyne's Executive Chairman, Robert Moravian, President and CEO, George Bob, EVP and CFO Steve Blackwood, and Melanie Sivek, EVP, General Counsel, Chief Compliance Officer, and Secretary. After remarks by Robert, George, and Steve, we'll ask for your questions. But, of course, before we get started, 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 via webcast and island will be available for approximately one month. Here's Robert.

Good morning, everyone, and welcome to our conference call. First, I must say I'm very pleased to announce that we had record, all-time record quarterly sales, non-gap earnings per share, and free cash flows. Sales increased 6.7% from last year. Non-gap earnings increased 9.2%, and free cash flow was a record $314 million. Furthermore, total company new orders were also a quarterly record, due in part to continued backlog growth at Teledyne Fleer. Given our strong third quarter performance, recovering commercial short cycle businesses, and also robust backlog growth, we're raising our full year earnings outlook at both the bottom and the top of the forecasted range. Likewise, last quarter we expected 2025 full year sales to be about 6.03 billion, But now we believe we may achieve sales of $6.06 billion. Our defense-related businesses, including our new acquisitions, are performing extremely well. And we continue to pursue a number of significant contract opportunities not yet formally awarded or reflected in our backlog. Given the current US government shutdown, we're a bit measured on expectations for new contract awards or acceptance of allowance of shipments that we need export licenses for. And of course, cash collections from the government will be somewhat delayed. The prior shutdown in December 2018 and early 2019 lasted about 35 days. I believe today we're in the 22nd or 23rd day. At that time, between 2018 and 19, we didn't really experience any significant impact from the shutdown. And we similarly don't expect to have much impact, except if the shutdown were to stretch for months and years. God forbid, to the end of the year. It may affect about, if it goes that long, it may affect about 25% of our sales somewhat, which are related to the government. But any temporary impact to commercial sales for which we may be dependent on U.S. government exports may be somewhat affected. Overall, I do not think this is going to affect Teledyne significantly. Also, you may have noted that China has designated Teledyne FLIR LLC as an unreliable entity. While customers in China represent only 4% of our sales in 2024-25, Such sales by Teledyne FLIR LLC were less than 0.4%. So we don't expect much effect from there. Actually, Teledyne Brown Engineering was added to the same list in December of 2024, but its sales to customers in China are zero. Finally, I must note, despite spending $770 million in cash years to date on acquisitions. Our current balance sheet is the strongest since prior to the FLIR acquisition in 2021. We also expect to close a small transponder tech Carbot from Saab very soon. Having recently received approval from the government of Sweden, Furthermore, we continue to pursue a number of other acquisition activities. George will now briefly comment on the performance of our business segments.