What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-02-24 compared with 2022-02-25 · 72 added, 78 removed, 154 unchanged (49% of the section changed)

Teledyne Technologies Incorporated (“Teledyne” or the “Company”), a Delaware company that became an independent public company effective November 29, 1999, provides enabling technologies for industrial growth markets that require advanced technology and high reliability.

Teledyne Technologies Incorporated is a Delaware corporation that became an independent public company effective November 29, 1999.

We provide enabling technologies for industrial growth markets that require advanced technology and high reliability.

These markets include factory automation and condition monitoring, aerospace and defense, air and water quality environmental monitoring, electronics design and development, medical imaging and pharmaceutical research, oceanographic research, and deepwater energy exploration and production.

Following the 2021 acquisition of FLIR Systems, Inc.

( “FLIR”), we further evolved into a global sensing and decision-support technology company:

providing specialty sensors, cameras, instrumentation, algorithms and software across the electromagnetic spectrum, as well as unmanned systems, in the subsea, land and air domains.

(“FLIR”), we further evolved into a global sensing and decision-support technology company, providing specialty sensors, cameras, instrumentation, algorithms and software across the electromagnetic spectrum, as well as unmanned systems, in the subsea, land and air domains.

We differentiate ourselves from many of our direct competitors by having a customer- and Company-sponsored applied research center that augments our product development expertise.

We believe that technological capabilities and innovation and the ability to invest in the development of new and enhanced products are critical to obtaining and maintaining leadership in our markets and the industries in which we compete.

For discussion on our business and strategy for 2020 and 2019 see our Annual Report on Form 10-K for the fiscal year ended January 3, 2021;

for a discussion of our 2020 acquisition, see Item 7.

Management's Discussion and Analysis of Results of Operations and Financial Condition.

We believe our technological capabilities, innovation and the ability to invest in the development of new and enhanced products are critical to obtaining and maintaining leadership in our markets and the industries in which we compete.

The following description of our business should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within Item 7 of this Form 10-K.

Recent Developments

Acquisition of FLIR Systems, Inc.

On May 14, 2021, Teledyne acquired the outstanding stock of FLIR for approximately $8.1 billion, comprising of net cash payments of $3.7 billion, Teledyne share issuances of $3.9 billion, and the assumption of FLIR debt of $0.5 billion.

FLIR stockholders received $28.00 per share in cash and 0.0718 shares of Teledyne common stock for each FLIR share, and Teledyne issued approximately 9.5 million shares at $409.41 per share.

See Note 10 to these Notes to Consolidated Financial Statements for information regarding financing activities undertaken in connection with the FLIR acquisition.

FLIR is an industrial technology company focused on intelligent sensing solutions for defense and industrial applications.

FLIR offers a diversified portfolio that serves a number of applications in government and defense, industrial, and commercial markets.

FLIR technologies include thermal imaging systems, visible-light imaging systems, locater systems, measurement and diagnostic systems, and advanced threat-detection solutions.

FLIR is part of the Digital Imaging segment.

Consistent with our strategy, we completed two acquisitions in 2022 and one acquisition in 2021.

Our May 2021 acquisition of FLIR was our largest acquisition to date.

The financial results of these acquisitions have been included since the respective date of each acquisition.

All acquisitions in 2022 and 2021 were part of the Digital Imaging segment.

See Note 3 for additional information about our recent acquisitions.

As discussed in Note 18 , we have completed one acquisition in early 2023, which is part of the Digital Imaging segment.

Our Business Segments

1 unchanged sentence

Digital Imaging, Instrumentation, Aerospace and Defense Electronics and Engineered Systems.

Financial information about our business segments can be found in Note 12 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for the fiscal year ended January 2, 2022 (this “Form 10-K”).

Additional financial information about our business segments can be found in Note 4 .

Percentage of Total Net Sales

Segment contribution to total net sales:

2022 2021 2020

Digital Imaging 57 % 52 % 32 %

Instrumentation 23 % 25 % 35 %

Aerospace and Defense Electronics 12 % 14 % 19 %

Engineered Systems 8 % 9 % 14 %

100 % 100 % 100 %

Digital Imaging Segment

2 unchanged sentences

This segment also includes our sponsored and centralized research laboratories.

Our Digital Imaging segment represented approximately 52% of our net sales for 2021, and includes the net sales contribution from the May 14, 2021 acquisition of FLIR.

Through this segment, we provide visible spectrum sensors and digital cameras for industrial machine vision and automated quality control, as well as for medical, research and scientific applications.

We provide a range of cooled and uncooled infrared or thermal products, including sensors, camera cores and camera systems based on long wave infrared, mid-wave infrared, and short wave infrared technologies.

Products and applications include space-based imaging, factory condition monitoring, optical gas leak detection, laboratory research and maritime thermal imaging.

We develop high-resolution, low-dose X-Ray sensors for medical, dental and industrial applications.

Products and applications include space-based imaging, factory condition monitoring, optical and acoustic-based gas leak detection, laboratory research and maritime thermal imaging.

We develop high-resolution, low-dose X-ray sensors as well as high-power microwave and high-energy X-ray subsystems for medical, dental and industrial applications.

We also provide instruments for the measurement of physical properties and other maritime products for recreational and commercial customers globally.

We provide research and engineering capabilities primarily in the areas of electronics, materials, optical systems, and information science to military, aerospace and industrial customers, as well as to various businesses throughout Teledyne.

For defense applications, we also develop and manufacture multi-spectrum electro-optic/infrared imaging systems and associated products such as lasers, optics, and radars;

Chemical, Biological, Radiological, Nuclear and Explosive detectors and unmanned air and ground systems.

For defense applications, we also develop and manufacture multi-spectrum electro-optic/infrared imaging systems and associated products such as lasers, optics, and radars, CBRNE ("Chemical, Biological, Radiological, Nuclear and Explosive detectors") and unmanned air and ground systems.

These sensors and instruments can be deployed as integrated solutions and with advanced target detection, identification and classification capabilities.

3 unchanged sentences

We also provide power and communications connectivity devices for distributed instrumentation systems and sensor networks deployed in mission critical, harsh environments.

Our Instrumentation segment represented approximately 25% of our net sales for 2021.

Below is a description of the product lines that comprise the Instrumentation segment.

15 unchanged sentences

Our instrumentation is used to detect a variety of water quality parameters and in applications found in petrochemical and refinery facilities.

We also manufacture and provide complementary laboratory instrumentation including through laboratory automation and sample introduction systems which automates the preparation and concentration of organic samples.

We also manufacture and provide complementary laboratory instrumentation including through laboratory automation and sample introduction systems that automate the preparation and concentration of organic samples.

Our advanced elemental analysis products are used by environmental and quality control laboratories to detect trace levels of inorganic contaminants in water, foods, soils and other environmental and geological samples.

4 unchanged sentences

We believe our test and measurement products provide unique, world-class capabilities that enable the designers of complex electronic systems in many industry sectors to bring their products to market reliably and quickly.

Our customers use our equipment in the design, development, manufacture, installation, deployment and operation of electronics equipment in broad range of industries, including aerospace and defense, internet infrastructure, automotive, industrial, computer and semiconductor, consumer electronics mobile and power electronics.

Our customers use our equipment in the design, development, manufacture, installation, deployment and operation of electronics equipment in a broad range of industries, including aerospace and defense, internet infrastructure, automotive, industrial, computer and semiconductor, consumer electronics mobile and power electronics.

We develop, manufacture, sell and license high-performance oscilloscopes, high-speed protocol analyzers, and related test and measurement solutions for a wide range of industries.

1 unchanged sentence

We also make high-speed, high-resolution modular analog-to-digital conversion systems for applications, including test and measurement, scientific instruments, medical imaging, and distributed sensing systems.

Design and test engineers use our protocol analysis solutions to monitor accurately and reliably high data-rate communication interfaces and diagnose operational problems in a wide range of systems and devices to ensure that they comply with industry standards, including the area of cloud computing, storage and networks.

Our leadership in USB and video technologies provides a unique base to service the mobile, internet of things, automotive and consumer electronics test markets.

In 2021, Teledyne introduced the CrossSync™ PHY interposers and software options, enabling the first-ever link between an oscilloscope and a protocol analyzer to allow engineers to get a complete picture when testing the PCI Express interface standard.

Our acquisition of OakGate Technology, Inc.

(“OakGate”) in 2020 supplements our broad product offerings with protocol validation and test tools for high-performance solid-state storage devices used in both enterprise-grade data centers and in consumer computing applications.

We also produce protocol validation and test tools for high-performance solid-state storage devices used in both enterprise-grade data centers and in consumer computing applications.

Our recently introduced interposers and software options allow engineers to get a complete picture when testing the PCI Express interface standard by enabling a link between an oscilloscope and a protocol analyzer.

We also manufacture torque sensors and automatic data acquisition systems that are used to test critical control valves in nuclear power and industrial plants.

3 unchanged sentences

Such applications include aircraft, radar, electronic countermeasures, weapon systems, space, wireless and satellite communications and terminals and test equipment.

Our Aerospace and Defense Electronics segment represented approximately 14% of our net sales for 2021.

We provide onboard avionics systems and ground-based applications that allow civil and military aircraft software operators to access, manage and utilize their data more efficiently.

4 unchanged sentences

This segment also designs and manufactures electrochemical energy systems and manufactures specialty electronics for demanding military applications.

Our Engineered Systems segment represented approximately 9% of our net sales for 2021.

Our core business base includes National Aeronautics and Space Administration (“NASA”), the U.S.

3 unchanged sentences

We have a large number of customers in the various industries we serve.

No commercial customer in 2021 or 2020 accounted for more than 3% of total net sales or more than 10% of any segment’s net sales.

Sales to international customers accounted for approximately 47% of total sales in 2021 compared with 45% in 2020.

No commercial customer in 2022 or 2021 accounted for more than 10% of net sales for any of our segments or for the total Company.

Total sales to international customers were $2,586.0 million in 2022 and $2,147.9 million in 2021.

Of these sales to international customers, our businesses in the United States accounted for $837.9 million in 2022 and $723.9 million in 2021.

There were no sales to individual countries outside of the United States in excess of 10% of the Company’s sales.

In both 2022 and 2021, we sold products to customers in over 100 foreign countries.

Approximately 90% of our net sales to international customers during 2022 were made to customers in 30 foreign countries.

In 2021, the top five countries for sales to international customers, ranked by net sales, were China, the United Kingdom, Germany, Japan and France and represented approximately 20% of our total net sales.

Approximately 26% of our total net sales for both 2021 and 2020 were derived from contracts with agencies of, and prime contractors to, the U.S.

In 2022, the top five countries for sales to international customers, ranked by net sales, were China, Germany, Japan, the United Kingdom and France and represented approximately 20% of our total net sales.

Approximately 25% and 26% of our total net sales in 2022 and 2021, respectively, were derived from contracts with agencies of, and prime contractors to, the U.S.

Information on our sales to the U.S.

9 unchanged sentences

Government customer is the U.S.

Department of Defense, which totaled approximately $876.6 million and $578.4 million of our total net sales for 2021 and 2020, respectively.

In 2021 and 2020, our largest program with the U.S.

Government was the Mission Operations and Integration (“MO&I”) contract with the NASA Marshall Space Flight Center, which represented 1.0% and 1.5% of our total net sales, respectively.

Department of Defense, which totaled $1,065.1 million and $876.6 million of our total net sales for 2022 and 2021, respectively.

With the exception of the Engineered Systems segment, no U.S Government program in 2022 or 2021 accounted for more than 10% of net sales for any of our segments or for the total Company.

In 2022 and 2021, the largest program with the U.S.

Government within the Engineered Systems segment was the Mission Operations and Integration (“MO&I”) contract with the NASA Marshall Space Flight Center, which represented approximately 11% of Engineered Systems net sales in both 2022 and 2021.

As described in greater detail under Item 1A.

Risk Factors of this Form 10-K, there are risks associated with doing business with the U.S.

Risk Factors, there are risks associated with doing business with the U.S.

In 2022, approximately 80% of our U.S.

Government prime contracts and subcontracts were fixed-price type contracts, compared to 67% in 2020.

Under these types of contracts, we bear the inherent risk that actual performance cost may exceed the fixed contract price.

Government prime contracts and subcontracts were fixed-price type contracts, compared to 76% in 2021, with the remaining U.S.

Government contracts related to cost-reimbursable contracts ("cost-type").

Under fixed-price type contracts, we bear the inherent risk that actual performance cost may exceed the fixed contract price.

Such contracts are typically not subject to renegotiation of profits if we fail to anticipate technical problems, estimate costs accurately or control costs during performance.

1 unchanged sentence

Government contracts are subject to termination by the U.S.

Government at its convenience, without identification of any

Government at its convenience, without identification of any default.

When contracts are terminated for convenience, we can recover costs incurred or committed, settlement expenses and profit on work completed prior to termination.

We had no U.S.

Government contracts terminated for convenience or default in 2021 or 2020.

Many of our government contracts are awarded after a competitive bidding process in which we seek to emphasize our ability to provide superior products and technical solutions in addition to competitive pricing.

During 2022 and 2021, contracts terminated by the U.S.

Government have not materially impacted our results of operations.

Many of our government contracts are awarded after a competitive bidding process in which we seek to emphasize our ability to provide superior products and technical solutions.

Raw Materials and Suppliers

Generally, most raw materials used in our operations are readily available;

however, during 2021, we experienced supply chain constraints and price volatility on some raw materials.

While the current supply chain constraints have not significantly affected our business, to reduce current and future supply disruptions, we have implemented short-term and long-term supplier actions to reduce disruptions and prioritize mitigation.

Most raw materials used in our operations are readily available;

however, during 2022, we experienced supply chain challenges, including increased lead times, as well as cost inflation for parts and components, logistics and labor due to availability constraints and high demand.

While the current supply chain constraints have not materially affected our business, we have implemented short-term and long-term supplier actions to reduce disruptions and prioritize mitigation.

Some raw materials are purchased from a limited set of suppliers, including international sources, due to technical capability, price, and other factors.

We leverage our existing supplier relationships and are not dependent on any one supplier for a material amount of our purchases.

Prices of certain key raw materials and electronic components are expected to fluctuate in the future.

We mitigate raw material cost increases with long-term supply agreements, customer price increases, and isolating the market driven raw material component of the products we buy.

We anticipate that supply chain constraints for some raw materials will continue in 2022.

Prices of certain key raw materials and electronic components have fluctuated in the past and are expected to fluctuate in the future.

We mitigate raw material cost increases primarily with long-term supply agreements and customer price increases.

We expect inflationary and supply chain constraint trends to continue in 2023.

However, we believe our short-term and long-term supplier actions position us well to mitigate and reduce the impact these factors may have on our businesses.

1 unchanged sentence

A shared fundamental tenet is the commitment to work closely with our customers to understand their needs, with an aim to secure preferred supplier and longer-term relationships.

Given the technical nature of our products, we conduct our domestic and international marketing

activities through a direct internal sales force, as well as third-party sales representatives and distributors, both in the United

States and in other countries.

Given the technical nature of our products, we conduct our marketing activities through a direct internal sales force as well as third-party sales representatives.

Several Teledyne businesses, including across our segments, have been marketing and selling products collaboratively to similar customers.

Because of the diversity of products sold and the number of markets we serve, we encounter a wide variety of

1 unchanged sentence

Although we have certain advantages that we believe help us compete effectively in our markets, each of our markets is highly competitive.

With regard to our defense businesses, it is common in the defense industry for work on programs to be shared among several companies, including competitors.

Our businesses vigorously compete on quality, product performance and reliability, technical expertise, price and service.

12 unchanged sentences

Information with respect to environmental matters is set forth under “Other Matters – Environmental” of “ Item 7 .

Management’s Discussion and Analysis of Results of Operation and Financial Condition” and Note 14 of the Notes to Consolidated Financial Statements in this Form 10-K.

Management’s Discussion and Analysis of Results of Operation and Financial Condition” and Note 1 7 .

No material capital expenditures relating to environmental or other government regulatory compliance are presently anticipated.

3 unchanged sentences

We provide a broad range of precision measurement technologies for environmental monitoring and climate research.

Our sensors and instruments are deployed everywhere, in space, on aircraft and drones, on land, on the sea surface, in the water column, and on the seafloor.

They operate around the clock, measuring greenhouse gases from space, precisely monitoring air and water quality throughout the world, and continuously profiling all of Earth’s oceans.

Our sensors and instruments are deployed everywhere:

in space, on aircraft and drones, on land, on the sea surface, in the water column, and on the seafloor.

They operate around the clock, measuring greenhouse gases from space, precisely monitoring air and water quality throughout the world, and continuously profiling the Earth’s oceans.

Applications of our instruments provide scientists information that spans time from the origin of the universe to providing real-time data regarding air pollution and dangerous storms, such as time-critical warning of hurricanes and tsunamis.

Recently, the prominence and importance of sustainability and Environmental, Social and Governance (“ESG”) initiatives have dramatically increased.

In February 2022, we published our inaugural Corporate Social Responsibility (“CSR”) report, in which we disclose and highlight some of Teledyne’s most recent efforts focused and sustainability and ESG.

The CSR report is available at the Corporate Social Responsibility link on our website at www.teledyne.com under the tab “Who We Are”.

In 2021, we compiled the first global inventory of our greenhouse gas (“GHG”) emissions (starting with fiscal year 2020) and are developing a GHG monitoring and management plan.

We have set a goal to reduce our combined direct emissions (“Scope 1”) and indirect emissions from purchased energy (“Scope 2”) in company operations, normalized for revenue, by 40% from 2020 levels by the end of 2040.

In November 2022, we published our second Corporate Social Responsibility (“CSR”) report, in which we disclose and highlight some of Teledyne’s most recent efforts focused on sustainability and ESG.

The CSR report,

which is not incorporated by reference in this document, is available at the Corporate Social Responsibility link on our website at www.teledyne.com under the tab “Who We Are”.

The CSR Report includes data on Teledyne’s combined direct emissions (“Scope 1”) and indirect emissions from purchased energy (“Scope 2”), workplace safety, water usage, waste generation and recycling and workplace demographics.

In 2021, we compiled the first global inventory of our greenhouse gas (“GHG”) emissions (starting with fiscal year 2020) and have developed a GHG monitoring and management plan.

We have set a goal to reduce our combined Scope 1 and Scope 2 in company operations, normalized for revenue, by 40% from 2020 levels by the end of 2040.

Going forward, we will continue to evaluate our emission reduction goals, while at the same time providing the tools and technologies enabling environmental science and climatology across the globe.

More information about our carbon footprint and GHG emission reduction efforts and goals, and the contributions that Teledyne products make to carbon monitoring and environmental and climate science, can be found in our CSR report.

Please note that information posted or accessible through websites referenced in this report is not incorporated by reference or otherwise included in this report.

Board Oversight

5 unchanged sentences

Workforce demographics for various regions are provided below:

Percent to Total Employees Average Age Average Years of Service Male Female Not Specified

Gender (Self-Reported)

Percent of Total Employees Average Age Average Years of Service Male Female Not Specified

Americas 69% 48.8 9.9 62% 32% 6%

7 unchanged sentences

We are focused on attracting, developing, and retaining employees through competitive compensation and benefits, workforce and management development, diversity and inclusion initiatives, succession planning, corporate culture and leadership quality.

In 2020, we formed a committee to oversee our equality, diversity and inclusion efforts.

Teledyne has a Corporate-led committee to oversee our equality, diversity and inclusion efforts.

We are committed to building a more diverse and inclusive workplace, and we actively monitor diversity metrics on a global basis.

We are piloting an anonymized review/resume redaction process and we expanded our recruitment sources to attract more diverse candidates.

We work with many outreach programs, including the National Society of Black Engineers and the Society of Women Engineers.

We also began working with INROADS, a non-profit organization that creates pathways to careers for ethnically diverse high school and college students across the country, to improve our access to diverse candidates.

We regularly review our policies, processes and practices to ensure that they promote inclusivity for all applicants and employees.

We continue to focus on several activities and initiatives to actively increase diverse representation and progression within our company.

We advertise vacancies and strive to recruit the best possible candidate for the role.

Various initiatives include developing relationships with universities with higher underrepresentation, creating diverse talent pools, and increasing networking and referrals with diverse professional organizations.

We advertise vacancies and strive to recruit the best possible candidate for each role.

Employee Well-Being

4 unchanged sentences

based employees have access to third-party counseling and mental health services at no cost to the employee when life events impact an employee.

Talent Acquisition

We appreciate the benefits of diversity and support programs increasing the inclusion of underrepresented and minority groups, including the enablement of persons with disabilities, and the advancement of women in professional fields, particularly in science, technology, engineering and math (“STEM”).

We work with various organizations to increase diversity in our pool of available candidates to fill our STEM-based and other hard-to-fill positions.

As part of our outreach and development efforts for women in the science, technology, and engineering fields, we have participated in the Women in Science and Engineering Conference for Girls in various locations in the U.S.

We have also been a consistent sponsor of the Young Woman Engineer of the Year Awards in the United Kingdom (“U.K.”).

This event helps young students, school leavers and degree students understand more about engineering by learning about day-to-day jobs and personal experiences.

It is also designed to encourage young talent to pursue a career in STEM.

Talent Development

4 unchanged sentences

We invest in employee skills development in various ways, including through educational expense reimbursement.

These reimbursements help employees advance their education.

Specialized training in a job related field gives employees new skills and a strong foundation of knowledge that can serve them throughout their career and that may allow them to progress to more responsible positions at Teledyne.

In 2020, we launched Teledyne University, a learning platform for employees.

Specialized training in a job-related field gives employees new skills and a strong foundation of knowledge that can serve them throughout their career and that may allow them to progress to more responsible

positions at Teledyne.

Our employees have access to Teledyne University, a learning platform.

The database of courses, webinars, and certification programs has hundreds of targeted training programs on management, technical competencies, soft skills development, and compliance.

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business