Teledyne Technologies Incorporated (TDY) Earnings Call Transcript & Summary

Hello, and welcome to the 2021 Annual Meeting of Stockholders of Teledyne Technologies Incorporated. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Robert Mehrabian, Executive Chairman of Teledyne. Dr. Mehrabian, the floor is yours.

Thank you very much. As the operator said, my name is Robert Mehrabian, Executive Chairman of Teledyne Technologies Incorporated, and it's my pleasure to welcome you to this meeting. It's 9 am, and in accordance with the notice of the meeting, I call to order Teledyne Technologies Annual Meeting of Stockholders. This year, we're holding our annual meeting virtually due to the potential health concerns caused by COVID-19. Stockholders participating virtually in this meeting may submit questions at any time during the meeting in the space provided on the website used to access the meeting. This annual meeting is also being made available to the public in a listen-only webcast mode. An agenda for the meeting has been posted on our virtual meeting site. You will note that under Item 5 in the agenda, an opportunity is provided for questions, which will be answered after the meeting. All stockholders entitled to vote at this meeting have the ability to do so online. If you are a stockholder entitled to vote and have not yet voted or if you want to change your vote previously cast, please do so via the website used to access the meeting. Please also remember that you have already voted by proxy, it is not necessary to vote again. After voting has been completed on all matters on the agenda, we'll close the polls and ask Ms. Cibik to present the preliminary report of the inspector of election. I will now make certain introductions. Let me first introduce our directors who are also participating virtually. The directors who are candidates for reelection are: Denise R. Cade, Senior Vice President and General Counsel and Corporate Secretary of IDEX Corporation; Simon Lorne, Vice Chairman and Chief Legal Officer of Millennium Management LLC and Former General Counsel, U.S. Securities and Exchange Commission; and Wesley Von Schack, Chairman of AEGIS Insurance Services and the Former Chairman, President and CEO of Energy East Corporation. Directors whose terms are continuing, in addition to myself, are Charles Crocker, Chairman and CEO, Crocker Capital and Retired Chairman and CEO of BEI Technologies, Inc.; Kenneth C. Dahlberg, retired Chairman and CEO of Science Applications International Corporation; Michelle A. Kumbier, Former Chief Operating Officer of Harvey-Davidson Motor -- Harley-Davidson Motor Company; Robert A. Malone, Executive Chairman, President and CEO of First Sonora Bancshares, Inc. and retired Chairman and President of BP America, Inc.; Jane C. Sherburne, Principal of Sherburne PLLC and Former Senior Executive Vice President, General Counsel and Corporate Secretary of Bank of New York Mellon Corporation; and Michael T. Smith, retired Chairman and CEO of Hughes Corporation and Teledyne's Lead Director. I would like to also recognize Roxanne S. Austin, who is retiring from Teledyne's Board at this meeting, and Admiral Paul D. Miller who retired as a Teledyne Director in August of 2020. Ms. Austin has been a Director of Teledyne since 2006, and Admiral Miller served as Teledyne's Director for 19 years. I thank both Ms. Austin and Admiral Miller for their outstanding service, guidance and dedication over the years. I would also like to introduce Teledyne's President and Chief Executive Officer, Aldo Pichelli; Susan L. Main, Senior Vice President and Chief Financial Officer; and Melanie S. Cibik, Senior Vice President, General Counsel, Chief Compliance Officer and Secretary. Also present today virtually is [ Jeff Kalud ] of Deloitte & Touche, the company's independent auditor. If questions arise during the discussion period that Jeff should appropriately answer after the meeting, he'd be glad to respond. We're also assisted today virtually by representatives of Computershare. Mr. Mark Cano will serve as inspector of election. I will now move to the second agenda item. Melanie Cibik will report on the mailing of the notice of the meeting and the presence of a quorum.

This meeting is held pursuant to notice dated and mailed or made available to stockholders on March 12, 2021 to each stockholder of record on March 3, 2021, who is entitled to vote. A list of stockholders entitled to vote at this meeting has been made available at company headquarters for the past 10 days and is available for examination by any stockholder desiring to do so on the website used to access this meeting. All documents concerning the call and notice of the meeting will be filed with the records of the meeting. The preliminary count of shares present immediately before the start of this meeting indicated 92.44% of the outstanding voting stock of the company present in person or by proxy. This represents a quorum.

I hereby declare a quorum is present at this meeting. Now we will proceed to agenda item #3, which is election of directors. The first matter to be acted upon by the stockholders is the election of the 3 Class I directors to serve until the 2024 annual meeting as provided in the proxy statement. Melanie Cibik will now put into nomination the names of the slate of Directors listed in the proxy statement.

I hereby nominate for election as directors of the company the following directors: Denise R. Cade, Senior Vice President, General Counsel and Corporate Secretary, IDEX Corporation; Simon M. Lorne, Vice Chairman and Chief Legal Officer of Millennium Management LLC and Former General Counsel, U.S. Securities and Exchange Commission; and Wesley W. Von Schack, Chairman of AEGIS Insurance Services and Former Chairman, President and CEO of Energy East Corporation.

I second the motion.

Thank you, Ms. Main. No written notice was received by Teledyne that any other nomination would be made at this meeting pursuant to the nomination procedure provided for the -- for in the company's restated certificate of incorporation and bylaws. Therefore, I declare the nominations closed. The next matter being submitted to stockholders for action is the ratification of the appointment by the audit committee of our Board of Directors of Deloitte & Touche LLP as independent registered public accounting firm. The audit committee was assigned the responsibility of appointing the auditors for 2021. This committee consists entirely of directors who are independent of the corporate management. It has had direct access to both the outside auditors and internal auditors. In its deliberations, the committee has worked regularly with Deloitte & Touche LLP and has had opportunity to evaluate their work. I move for the ratification of the appointment of Deloitte & Touche LLP to audit the financial statements of the company and its subsidiaries for the year 2021.

I second the motion.

Thank you, Ms. Main. The final matter being submitted to stockholders for action is the advisory resolution on executive compensation, commonly referred to as say on pay. We're asking stockholders to approve the nonbinding advisory resolution on executive compensation as described and set forth in the proxy statement. The Board has recommended a vote in favor of this nonbinding resolution. Therefore, I move for the approval of this resolution.

I second the motion.

Thank you, Ms. Cibik. Is there any other business that this quorum should consider?

Management knows of no matters to be properly presented for consideration at this annual meeting other than those stated in the notice of the annual meeting and described in the proxy statement.

I will now make a brief few comments about our first quarter earnings and the pending acquisition of FLIR Systems. Earlier this morning, we released our first quarter 2021 earnings results. 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 significant expenses related to the pending acquisition of FLIR. Regarding the pending acquisition of FLIR, permanent financing for the acquisition was completed in March. Teledyne and FLIR have both scheduled meetings of the stockholders to approve merger-related matters on May 13, 2021. Pending stockholder approval and satisfaction of other closing conditions, we expect to complete the transaction the following morning. I remain exceptionally excited about Teledyne's future, both individually and even more so when combined with FLIR. Voting has now been closed. We will now have a report from the Secretary, Melanie S. Cibik.

Mr. Chairman, the ballots have been counted, and between 83% and 97% of the shares present in person or by proxy at this meeting have been voted for the election of each of the 3 Class 1 Director nominees named in the proxy statement. Over 99% of the shares present in person or by proxy at this meeting have voted in favor of ratifying the appointment of Deloitte & Touche LLP as Teledyne's independent registered accounting firm to audit our financial statements for fiscal 2021. Finally, over 96% of these shares present in person or by proxy at this meeting have been voted in favor of approving the advisory vote on executive compensation.

Thank you, Ms. Cibik. I hereby declare that the names for Directors have been duly elected, the appointment of Deloitte & Touche LLP to audit Teledyne's financial statements for our fiscal year 2021 has been duly ratified and the advisory resolution on executive compensation has been duly approved. We have now come to that part of the agenda providing for general questions and discussions. Again, if you're a stockholder entitled to vote at this meeting and thus wish to ask a question, please submit your question by clicking on the Messages icon in the upper right corner of your screen and type your question accordingly. We will answer any questions submitted after the meeting. As there is no other business, this concludes our meeting. I want to thank everyone for joining us and for your support and interest in Teledyne. This meeting is now adjourned. Thank you.

This concludes the meeting. You may now disconnect.