Teledyne Technologies Reports First Quarter Results

-- Revenues of $330.2 million increased 11.0% compared to last year

-- Earnings per share of $0.51 increased 10.9% compared to last year

-- Completed acquisition of Benthos, Inc.

-- Raising 2006 earnings per share outlook

Teledyne Technologies today reported first quarter 2006 sales of$330.2 million, compared with sales of $297.5 million for the sameperiod of 2005. Net income for the first quarter of 2006 was $17.9million ($0.51 per diluted share), compared with net income of $15.8million ($0.46 per diluted share) in the first quarter of 2005.

"Teledyne began 2006 with a great quarter. Both revenue andearnings per share were at record levels," said Robert Mehrabian,chairman, president and chief executive officer. "Furthermore, marginimprovement offset new expense resulting from the adoption of SFAS No.123(R). First quarter 2006 earnings per share increased 10.9% despite$1.4 million ($0.03 per share) of stock option compensation expense.Due to strong execution, as well as focused acquisitions, we continueto believe that Teledyne is well positioned in a number of attractivemarkets, including defense electronics, commercial aviation andenvironmental and marine instrumentation."

Review of Operations

Electronics and Communications

The Electronics and Communications segment's first quarter 2006sales were $202.0 million, compared with first quarter 2005 sales of$173.5 million, an increase of 16.4%. First quarter 2006 operatingprofit was $23.2 million, compared with operating profit of $20.1million in the first quarter of 2005, an increase of 15.4%.

The first quarter 2006 sales improvement resulted primarily fromrevenue growth in defense electronics and electronic instruments. Therevenue growth in defense electronics was driven by increased sales oftraveling wave tubes, printed circuit card assemblies, connectors andthe acquisitions of Cougar Components in June 2005 and the assets ofthe microwave technical solutions business of Avnet, Inc. in October2005. The revenue growth in electronic instruments was primarilydriven by the acquisitions of RD Instruments, Inc. in August 2005 andBenthos, Inc. in January 2006 and also reflected increased sales ofgeophysical sensors for the energy exploration market. The increase inrevenue in the first quarter of 2006 from businesses acquired sincethe first quarter of 2005 was $19.9 million. Segment operating profitwas favorably impacted by revenue from acquisitions, as well asorganic sales growth. Segment operating profit was negatively impactedby $0.6 million of stock option compensation expense in the firstquarter of 2006 in accordance with the requirements of FinancialAccounting Standards Board ("FASB") Statement of Financial AccountingStandard ("SFAS") No. 123(R), "Share Based Payment" ("SFAS No.123(R)"). The company adopted the expense provisions of SFAS No.123(R) in the first quarter of 2006. No stock option compensationexpense was recorded in the first quarter of 2005. The company alsorecorded $0.7 million in charges in its commercial electronicsbusiness for warranty reserves and inventory obsolescence related tothe termination of a product line. Pension expense, in accordance withthe pension accounting requirements of SFAS No. 87, was $1.2 millionin the first quarter of 2006, compared with $1.1 million in the firstquarter of 2005. Pension expense allocated to contracts pursuant toU.S. Government Cost Accounting Standards ("CAS") was $0.3 million inthe first quarter of 2006, compared with $0.4 million in the firstquarter of 2005.

Systems Engineering Solutions

The Systems Engineering Solutions segment's first quarter 2006sales were $68.9 million, compared with first quarter 2005 sales of$70.5 million, a decrease of 2.3%. First quarter 2006 operating profitwas $5.9 million, compared with operating profit of $7.5 million forthe first quarter of 2005, a decrease of 21.3%.

First quarter 2006 sales, compared with the same period of 2005,reflected lower revenue in core defense programs, partially offset byrevenue growth in aerospace programs. Operating profit in the firstquarter of 2006, compared with the same period of 2005, reflectedlower segment revenue and lower margins in aerospace programs due tohigher sales on certain contracts which carry lower profit margins.Segment operating profit was impacted by $0.2 million of stock optioncompensation expense in the first quarter of 2006 compared with nostock option compensation expense in the first quarter of 2005.Segment operating profit also included pension expense under SFAS No.87 of $2.4 million in the first quarter of 2006, compared with $1.7million of pension expense in the first quarter of 2005. Pensionexpense allocated to contracts pursuant to CAS was $2.1 million in thefirst quarter of 2006 compared with $1.9 million in the first quarterof 2005.

Aerospace Engines and Components

The Aerospace Engines and Components segment's first quarter 2006sales were $53.1 million, compared with first quarter 2005 sales of$46.4 million, an increase of 14.4%. The first quarter 2006 operatingprofit was $6.3 million, compared with operating profit of $3.3million in the first quarter of 2005, an increase of 90.9%.

The higher first quarter 2006 sales, compared with the same periodof 2005, primarily resulted from higher OEM piston engine and sparepart sales. Segment operating profit for the first quarter of 2006,compared to the first quarter of 2005, reflected the impact of highersales, improved operating performance and lower warranty costs.Segment operating profit for both the first quarter of 2006 and thefirst quarter of 2005, included the receipt of $2.5 million pursuantto an agreement with Honda Motor Co., Ltd. related to the pistonengine business. The $2.5 million receipt in the first quarter of 2006was the final payment under the agreement. Segment operating profitwas impacted by $0.1 million of stock option compensation expense inthe first quarter of 2006 compared with no stock option compensationexpense in the first quarter of 2005. Segment operating profit alsoincluded pension expense, under SFAS No. 87 of $0.3 million in thefirst quarter of 2006, compared with $0.2 million for the firstquarter of 2005.

Energy Systems

The Energy Systems segment's first quarter 2006 sales were $6.2million, compared with first quarter 2005 sales of $7.1 million, adecrease of 12.7%. Operating profit was break even for the firstquarter of 2006, compared with operating profit of $0.5 million in thefirst quarter of 2005.

The decrease in first quarter 2006 sales, compared with the firstquarter of 2005, primarily resulted from reduced work on certaingovernment contracts. Segment operating profit was impacted by thelower government sales and differences in contract fees. Segmentoperating profit also included pension expense, under SFAS No. 87 of$0.1 million for both the first quarter of 2006 and the first quarterof 2005. No pension expense was allocated to contracts pursuant to CASfor the first quarter of 2006, compared with $0.1 million for thefirst quarter of 2005.

Additional Financial Information

Cash Flow

Cash provided by operating activities was $8.0 million for thefirst quarter 2006, compared with $2.0 million for the first quarterof 2005. The higher cash provided by operating activities in 2006,compared with 2005, was primarily due to operating cash flow fromacquisitions made since the first quarter of 2005 and higher netincome, partially offset by higher pension contributions. In addition,the first quarter of 2005 cash flow from operations included $1.7million in excess tax benefits related to stock-based compensation. Inaccordance with SFAS No. 123(R), excess tax benefits of $3.9 million,in the first quarter of 2006, for stock-based compensation have beenclassified as a financing cash flow instead of an operating cash flow.Free cash flow (cash from operating activities less capitalexpenditures) was $3.6 million for the first quarter of 2006, comparedwith negative free cash flow of $1.3 million for the same period of2005. In January 2006, Teledyne acquired Benthos, Inc. for $17.50 pershare in cash. The aggregate consideration for the outstanding Benthosshares was approximately $40.6 million (including payments for thesettlement of outstanding stock options) or $32.2 million taking intoconsideration $8.4 million in cash acquired. The acquisition wasfunded primarily from borrowings under the $280.0 million creditfacility. At April 2, 2006, total debt was $66.8 million, whichincludes $63.0 million drawn on available credit lines, as well asother debt and capital lease obligations. Cash and cash equivalentswere $9.2 million at April 2, 2006. The company also received $5.0million from the exercise of employee stock options in the firstquarter of 2006, compared with $4.3 million for the first quarter of2005. Capital expenditures for the first quarter of 2006 were $4.4million, compared with $3.3 million for the first quarter of 2005.Depreciation and amortization expense for the first quarter of 2006was $6.6 million, compared with $6.1 million for the first quarter of2005.

Free Cash Flow(a) First First
Quarter Quarter
(in millions, brackets indicate use of funds) 2006 2005
=================================================== ======== ========

Cash provided by operating activities $ 8.0 $ 2.0
Capital expenditures for property, plant and
equipment (4.4 ) (3.3 )
-------- --------
Free cash flow $ 3.6 $ (1.3 )
=================================================== ======== ========

(a) The company defines free cash flow as cash provided by operating
activities (a measure prescribed by generally accepted accounting
principles) less capital expenditures for property, plant and
equipment. Free cash flow provides supplemental information to assist
management and the investment community in analyzing the company's
ability to generate cash flow.

Pension

Pension expense for the first quarter of 2006 was $4.1 million,compared with pension expense of $3.2 million for the same period of2005, in accordance with the pension accounting requirements of SFASNo. 87. Pension expense allocated to contracts pursuant to CAS was$2.4 million for both the first quarter of 2006 and the first quarterof 2005. Pension expense determined under CAS can generally berecovered through the pricing of products and services sold to theU.S. Government.

Income Taxes

The effective tax rate for the first quarter of 2006 and firstquarter of 2005 was 37.5%.

Stock Option Compensation Expense

In the first quarter of 2006, the company adopted the provisionsof SFAS No. 123(R) using the modified prospective method and beganrecording stock option compensation expense. Stock option compensationexpense is recorded on a straight line basis over the appropriatevesting period, generally three years. For the first quarter of 2006,the company recorded a total of $1.4 million ($0.03 per share) instock option expense related to stock options granted after theadoption of SFAS No. 123(R) and for stock options which were notvested by the date of adoption of SFAS No. 123(R). Of the amount, $0.5million was recorded as corporate expense and $0.9 million wasrecorded in the operating segment results. No compensation expenserelated to stock options was recorded in 2005 or in prior years.

Other

Interest expense, net of interest income, was $1.1 million for thefirst quarter of 2006, compared with $0.8 million for the firstquarter of 2005, and primarily reflected higher average interest ratesin the first quarter of 2006, compared with the first quarter of 2005.Other income in the first quarter of 2006 included $0.8 millionrelated to insurance proceeds.

Outlook

Based on its current outlook, the company's management believesthat second quarter 2006 earnings per share will be in the range ofapproximately $0.44 to $0.46. The full year 2006 earnings per shareoutlook is expected to be in the range of approximately $1.90 to$1.95, an increase from prior guidance of $1.85 to $1.90. Thecompany's estimated effective income tax rate for 2006 is 37.5%.

The company's 2006 outlook reflects anticipated sales growth inits defense electronics and instrumentation businesses, due primarilyto the contribution of the company's acquisitions completed in 2005and the Benthos acquisition in the first quarter of 2006.

The full year 2006 earnings outlook includes approximately $16.4million ($0.28 per share) in pension expense under SFAS No. 87, or$6.6 million ($0.11 per share) in net pension expense after recoveryof allowable pension costs from our CAS covered government contracts.Full year 2005 earnings included $12.7 million ($0.23 per share) inpension expense under SFAS No. 87, or $3.4 million ($0.06 per share)in net pension expense after recovery of allowable pension costs fromour CAS covered government contracts. The increase in full year 2006pension expense reflects, in part, the reduction of the discount rateassumption for the company's defined benefit plan from 6.25% in 2005to 6.00% in 2006. The company's 2006 earnings outlook also reflects$5.8 million ($0.10 per share) in stock option compensation expensebased on the fair value of stock options granted after the adoption ofSFAS No. 123(R) and stock options which were not vested by the date ofadoption of SFAS No. 123(R), as well as, current assumptions regardingthe estimated fair value of expected stock option grants during theremainder of the year.

EARNINGS PER SHARE SUMMARY (a)
(Diluted earnings per common share from continuing operations)

2006 Full Year
Outlook 2005 2004
---------------- ------ -------
Low High Actual Actual
===================================== ======= ======= ======= =======

Earnings per share (excluding net
pension expense and stock option
expense) $ 2.11 $ 2.16 $ 1.91 $ 1.39
Pension expense - SFAS No. 87 (0.28 ) (0.28 ) (0.23 ) (0.16 )
Pension expense - CAS (b) 0.17 0.17 0.17 0.01
------- ------- ------- -------
Earnings per share (excluding stock
option expense) 2.00 2.05 1.85 1.24
Stock option expense (c) (0.10 ) (0.10 ) -- --
------- ------- ------- -------
Earnings per share - GAAP $ 1.90 $ 1.95 $ 1.85 $ 1.24
===================================== ======= ======= ======= =======

(a) The company believes that this supplemental non-GAAP information
is useful to assist management and the investment community in
analyzing the financial results and trends of ongoing operations. The
table facilitates comparisons with prior periods and reflects a
measurement management uses to analyze financial performance.

(b) Under one of its spin-off agreements, after November 29, 2004,
the company is able to charge pension costs to the U.S. Government
under certain government contracts. Pension expense determined under
CAS can generally be recovered through the pricing of products and
services sold to the U.S. Government.

(c) In the first quarter of 2006, the company adopted the provisions
of SFAS No. 123(R) and began recording stock option compensation
expense. No compensation expense related to stock options was recorded
in 2005 or in prior years.

Forward-Looking Statements Cautionary Notice

This press release contains forward-looking statements, as definedin the Private Securities Litigation Reform Act of 1995, relating toearnings, growth opportunities, pension matters and strategic plans.All statements made in this press release that are not historical innature should be considered forward-looking. Actual results coulddiffer materially from these forward-looking statements. Many factors,including changes in demand for products sold to the semiconductor,communications, commercial aviation and energy exploration markets,funding, continuation and award of government programs, changes ininsurance expense, continued liquidity of our customers (includingcommercial airline customers) and economic and political conditions,could change the anticipated results. In addition, financial marketfluctuations affect the value of the company's pension assets.

Global responses to terrorism and other perceived threats increaseuncertainties associated with forward-looking statements about ourbusinesses. Various responses to terrorism and perceived threats couldrealign government programs, and affect the composition, funding ortiming of our programs. Flight restrictions would negatively impactthe market for general aviation aircraft piston engines andcomponents.

The company continues to take action to assure compliance with theinternal controls, disclosure controls and other requirements of theSarbanes-Oxley Act of 2002. While the company believes its controlsystems are effective, there are inherent limitations in all controlsystems, and misstatements due to error or fraud may occur and not bedetected.

While Teledyne Technologies' growth strategy includes possibleacquisitions, the company cannot provide any assurance as to when, ifor on what terms any acquisitions will be made. Acquisitions involvevarious inherent risks, such as, among others, our ability tointegrate acquired businesses and to achieve identified financial andoperating synergies.

Additional information concerning factors that could cause actualresults to differ materially from those projected in theforward-looking statements is contained in Teledyne Technologies'periodic filings with the Securities and Exchange Commission,including its 2005 Annual Report on Form 10-K. The company assumes noduty to update forward-looking statements.

A live webcast of Teledyne Technologies' first quarter earningsconference call will be held at 11:00 a.m. (Eastern) on Wednesday,April 26, 2006. To access the call, go to www.companyboardroom.com orwww.teledyne.com approximately ten minutes before the scheduled starttime. A replay will also be available for one month at these samesites starting at 12:00 p.m. (Eastern) on Wednesday, April 26, 2006.

TELEDYNE TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED APRIL 2, 2006 AND APRIL 3, 2005
(Unaudited - In millions, except per share amounts)

First First
Quarter Quarter
2006(a) 2005
================================================= ========= =========
Net sales $ 330.2 $ 297.5
Costs and expenses:
Costs of sales 236.8 214.5
Selling, general and administrative expenses 67.1 59.4
--------- ---------
Total costs and expenses 303.9 273.9
--------- ---------
Income before other income and taxes 26.3 23.6
Other income, net (b) 3.5 2.5
Interest expense, net (1.1 ) (0.8 )
--------- ---------
Income before income taxes 28.7 25.3
Provision for income taxes 10.8 9.5
--------- ---------
Net income $ 17.9 $ 15.8
========= =========

Diluted earnings per common share $ 0.51 $ 0.46
========= =========
Weighted average diluted common shares
outstanding 35.1 34.4
================================================= ========= =========

(a) In the first quarter of 2006, the company adopted the provisions
of SFAS No. 123(R) and began recording stock option compensation
expense and recorded $1.4 million of compensation expense. No
compensation expense related to stock options was recorded in 2005 or
in prior years.

(b) Both the first quarter of 2006 and 2005, includes the receipt of
$2.5 million, pursuant to an agreement with Honda Motor Co., Ltd.
related to the piston engine business.


TELEDYNE TECHNOLOGIES INCORPORATED
SUMMARY OF SEGMENT NET SALES AND OPERATING PROFIT
FOR THE THREE MONTHS ENDED APRIL 2, 2006 AND APRIL 3, 2005
(Unaudited - In millions)

First First
Quarter Quarter
2006(a) 2005 % Change
================================================= ======== =========
Net sales:
Electronics and Communications $ 202.0 $ 173.5 16.4 %
Systems Engineering Solutions 68.9 70.5 (2.3 )%
Aerospace Engines and Components 53.1 46.4 14.4 %
Energy Systems 6.2 7.1 (12.7 )%
-------- --------
Total net sales $ 330.2 $ 297.5 11.0 %
======== ========

Operating profit and other segment
income:
Electronics and Communications $ 23.2 $ 20.1 15.4 %
Systems Engineering Solutions 5.9 7.5 (21.3 )%
Aerospace Engines and Components (b) 6.3 3.3 90.9 %
Energy Systems -- 0.5 (NM)
-------- --------
Segment operating profit and other
segment income $ 35.4 $ 31.4 12.7 %
Corporate expense (6.6 ) (5.3 ) 24.5 %
Other income, net 1.0 -- (NM)
Interest expense, net (1.1 ) (0.8 ) 37.5 %
-------- --------
Income before income taxes 28.7 25.3 13.4 %
Provision for income taxes 10.8 9.5 13.7 %
-------- --------
Net income $ 17.9 $ 15.8 13.3 %
================================================= ========

(a) In the first quarter of 2006, the company adopted the provisions
of SFAS No. 123(R) and began recording stock option compensation
expense and recorded $1.4 million of compensation expense. Of this
amount, $0.5 million was recorded as corporate expense and $0.9
million was recorded in the operating segment results. No compensation
expense related to stock options was recorded in 2005.

(b) Both the first quarter of 2006 and 2005, includes the receipt of
$2.5 million, pursuant to an agreement with Honda Motor Co., Ltd.
related to the piston engine business.

(NM) not meaningful


TELEDYNE TECHNOLOGIES INCORPORATED
CONSOLIDATED CONDENSED BALANCE SHEETS AS OF
APRIL 2, 2006 AND JANUARY 1, 2006
(Current period unaudited - In millions)

April 2, January 1,
2006 2006
================================================ ========= ===========

ASSETS
Cash and cash equivalents $ 9.2 $ 9.3
Accounts receivable, net 183.3 167.6
Inventories, net 137.7 117.3
Deferred income taxes, net 27.3 25.4
Prepaid expenses and other assets 14.2 11.9
--------- -----------
Total current assets 371.7 331.5

Property, plant and equipment, net 99.7 96.7
Deferred income taxes, net 43.1 42.9
Goodwill and acquired intangible assets, net 254.5 230.6
Other assets, net 26.3 26.5
--------- -----------
Total assets $ 795.3 $ 728.2
========= ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 82.4 $ 76.2
Accrued liabilities 109.0 101.1
Current portion of long-term debt and capital
lease 0.2 0.2
--------- -----------
Total current liabilities 191.6 177.5

Long-term debt and capital lease obligation 66.6 47.0
Other long-term liabilities 180.7 177.7
--------- -----------
Total liabilities 438.9 402.2
Total stockholders' equity 356.4 326.0
--------- -----------

Total liabilities and stockholders' equity $ 795.3 $ 728.2
================================================ ========= ===========