Teledyne Technologies Q3 2024 Earnings Call Transcript

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Provided by AlphaStreet
October 23, 2024
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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Teledyne Third Quarter Earnings Conference Call. [Operator Instructions] And as a reminder, your conference call today is being recorded.

I will now turn the conference call over to your first speaker, Jason VanWees. Please go ahead.

Jason VanWees
Vice Chairman at Teledyne Technologies

Thank you. Hello, and good morning, everyone. This is Jason VanWees, Vice Chairman, and I'd like to welcome everyone to Teledyne's Third Quarter 2024 Earnings Release Conference Call. We released our earnings earlier this morning.

Joining us today are Teledyne's Executive Chairman, Robert Mehrabian; CEO, Edwin Roks; President and COO, George Bobb; and SVP, CFO, Steve Blackwood; and Melanie Cibik, EVP, General Counsel, Chief Compliance Officer and Secretary. After remarks by Robert, Edwin, George and Steve, we will answer your questions.

But of course, before we get started, our 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.

Here is Robert.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Thank you, Jason, and good morning, and thank you for joining our earnings call.

Teledyne achieved all-time record sales in the third quarter, with revenues sequentially greater in each segment, allowing us to report overall year-over-year growth as we expected. We continue to see robust demand in our longer cycle defense, space and energy businesses. And at the same time, while year-over-year comparison remains challenging, sales for most of our short-cycle commercial businesses have either stabilized or have begun to recover sequentially.

Year-to-date, we approximately repurchased about $354 million of our stock. We completed two acquisitions for $125 million and repaid $450 million of gross debt. But our quarter end leverage has remained in the 1.7x, given record free cash flow over the last nine months. Orders were greater than sales for the fourth consecutive quarter, and we once again ended the period with record backlog.

Nevertheless, given the timing of future shipments against this backdrop and some sales, we were able to accelerate into the third quarter. We continue to remain reasonably confident that quarterly sales will again increase sequentially in the fourth quarter, but only modestly compared with the third quarter.

I will now turn the call over to Edwin, our CEO, who will further comment on the performance of our four business segments.

Edwin Roks
Chief Executive Officer at Teledyne Technologies

Thank you, Robert.

This is Edwin, and I will first report on the Digital Imaging segment, which represents a bit over 50% of Telene's portfolio. And like Teledyne as a whole, this segment is a mix of longer-cycle businesses such as defense, space and health care, combined with shorter cycle markets, including industrial automation, semiconductor inspection and infrared components and cameras for applications ranging from factory condition monitoring to maritime navigation.

Third quarter 2024 sales declined less than 1% compared with last year. Sales to industrial machine vision market declined year-over-year. However, this was partially offset by increased sales from FLIR, both its commercial infrared imaging and defense businesses as well as for Teledyne space-based infrared imaging detectors. Furthermore, for the fifth consecutive quarter, healthy margins across the entire FLIR business portfolio helped us protect overall operating margin even given the significant year-over-year reduction in sales of our typically highest contribution margin product lines.

George will now report on the other three segments, which represents the balance of Teledyne.

George C. Bobb
President and Chief Operating Officer at Teledyne Technologies

Thanks, Edwin.

The Instrumentation segment consists of our Marine, Environmental and Test & Measurement businesses, which contributed a little under 25% of sales. For the total segment, overall third quarter sales increased 6.3% versus last year. Sales of Marine Instruments increased 24.1% in the quarter, primarily due to both strong offshore energy and subsea defense sales. Sales of Environmental Instruments decreased 3.5%, primarily due to greater sales of water quality instruments, offset by lower sales of select laboratory instruments and emission monitoring systems. Sales in electronic custom measurement systems, which include oscilloscopes, digitizers and protocol analyzers, decreased 8.6% year-over-year on a tough quarterly comparison versus 2023. Instrumentation operating margin increased in each product family in the third quarter, with overall operating margin increasing 155 basis points to 27.5% and 152 basis points on a non-GAAP basis to 28.6%.

In the Aerospace and Defense Electronics segment, which represents roughly 15% of Teledyne sales, third quarter sales increased 9.2%, driven by growth in both commercial aerospace and defense electronics products. Overall segment operating profit increased year-over-year with GAAP segment margin increasing 117 basis points to 28.1% and 116 basis points on a non-GAAP basis to 28.2%.

For the Engineered Systems segment, which contributes less than 10% to overall sales, third quarter revenue increased 9.4%. Segment operating profit also grew with segment margin increasing 78 basis points due to higher sales and a greater mix of manufacturing programs.

I will now pass the call back to Robert.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Thank you, George. I'll conclude with a few comments on strategy and capital allocation. Over the last several quarters, some of our markets have experienced weakness, but we lowered costs to protect margins in these businesses while growing and increasing margin in those businesses where the environment was more favorable. During this period, we also opportunistically purchased our own stock. While our current $1.25 billion stock repurchase authorization remains active, we're also fortunate that our near-term acquisition pipeline is healthy.

While there are always new challenges, I'm optimistic that we have begun to exit some of our more difficult quarterly comparisons, and we will continue to grow both organically and through acquisitions.

I'll now turn the call over to our CFO, Steve.

Stephen F. Blackwood
Senior Vice President and Chief Financial Officer at Teledyne Technologies

Thank you, Robert, and good morning. I will first discuss some additional financials for the quarter not covered by Robert, and then I will discuss our fourth quarter and full year 2024 outlook.

In the third quarter, cash flow from operating activities was $249.8 million compared with $278.2 million in 2023. Free cash flow, that is cash flow from operating activities less capital expenditures, was $228.7 million in the third quarter of 2024 compared to $255.2 million in 2023. Cash flow decreased in the third quarter due to higher income tax payments. Capital expenditures were $21.1 million in the third quarter of 2024 compared with $23 million in 2023. Depreciation and amortization expense was $76.9 million for both the third quarters of 2024 and 2023.

For the first nine months of 2024, cash flow from operating activities and free cash flow were $859.5 million and $804.8 million, respectively. We ended the quarter with approximately $2.24 billion of net debt. That is approximately $2.80 billion of debt less cash of $561 million.

Now turning to our outlook. Management currently believes that GAAP earnings per share in the fourth quarter of 2024 will be in the range of $4.27 to $4.41 per share, with non-GAAP earnings per share in the range of $5.13 to $5.23.

And for the full year of 2024, we are raising our GAAP earnings per share outlook to $17.28 to $17.42, and we are narrowing our non-GAAP outlook to $19.35 to $19.45, the top end of our prior outlook range.

I will now pass the call back to Robert.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Thank you. We would now like to take your questions. Operator, if you're ready to proceed with the question and answers, please go ahead. Did I lose our operator?

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Operator

No, I'm sorry. [Operator Instructions] Our first question will come from the line of Jim Ricchiuti with Needham. Go ahead.

James Ricchiuti
Analyst at Needham & Company LLC

Hi. Thank you. Good morning, Robert. I think you alluded to some acceleration in sales perhaps coming pull-ins from -- in Q4. Was that mainly in the defense area? Or were there some other markets where you saw that?

Robert Mehrabian
Executive Chairman at Teledyne Technologies

No, I think it was primarily where we have the largest backlog, which would be the Defense businesses, a little bit from energy, but primarily defense, right, Jim.

James Ricchiuti
Analyst at Needham & Company LLC

Got it. And just with respect to -- it sounds like you had a good quarter from an order standpoint. Can you give us any more color in terms of book-to-bill as it relates to the segments? And maybe how you're thinking about overall revenue growth versus what you maybe were thinking about a few months back?

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Yes. Let me start with the book-to-bill. Let me start with the overall first. Book-to-bill at the end of Q3 was about 1.08. Almost all of the businesses had healthy book-to-bill, except for one of our environmental businesses. Let me now go over those. In Instruments, book-to-bill was about 1 with Marine, of course, being much higher and T&M coming along too at over 1 and Environmental below 1. In Digital Imaging, we are experiencing good book-to-bill numbers in what we call historical Teledyne, book-to-bill was 1.08 and FLIR had excellent book-to-bill of 1.17. Aerospace and Defense, 1.04. And Engineered Systems, 1.02.

Now regarding the revenue, we've decided that with all the uncertainty in the world today, starting with elections and then, of course, the various conflicts in the Middle East and Europe, we've decided that it's prudent to maintain the number -- the revenue number that we had in -- at the end of Q2 that we projected, which is about $5.620 [Phonetic] million or $5.6 billion. And we might do better. But right now, Jim, with all the uncertainty, it's prudent not to be too effervescent.

James Ricchiuti
Analyst at Needham & Company LLC

Got it. Makes sense. Just one quick follow-up and I'll turn it over. Just with respect to the Test & Measurement business, are you seeing now -- it looked like you had some nice sequential growth. Do you feel that the weakness in the scopes business is behind you? Or is this still the protocol analog business strength contributing to this overall better results?

Robert Mehrabian
Executive Chairman at Teledyne Technologies

In the third quarter, it was primarily the protocol. I think we're a little hesitant about projecting the oscilloscope businesses. But usually, what happens at year-end, which would be our Q4, people do capital expenditures, and we pick up business in that domain. So we're hopeful that this year would be a repeat of last year with Q4 being higher than Q3.

James Ricchiuti
Analyst at Needham & Company LLC

Okay. Thanks very much.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Thank you, Jim.

Operator

We will next go to the line of Greg Konrad with Jefferies. Go ahead.

Greg Konrad
Analyst at Jefferies & Company, Inc

Good morning.

Edwin Roks
Chief Executive Officer at Teledyne Technologies

Good morning.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Hi, Greg.

Greg Konrad
Analyst at Jefferies & Company, Inc

Hi. Is there any way -- or can you parse Digital Imaging for the quarter and maybe what you're seeing across the different businesses? I mean, going into the quarter, we did see a couple of negative pre-announcements from some of your peers on the vision side. Any color on what you're seeing across the different vision end markets either from an order or just trend perspective?

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Yes. Let me slice it on the larger picture first, if I may. If you look at our two segments within that Digital Imaging, you have our historical Digital Imaging, which is DALSA, e2v as well as our Scientific Imaging here. And then you have FLIR. So if I look at the big picture for Q3, on the -- what we call our traditional historical Digital Imaging, revenue was declined. Organic growth was negative, almost 9.8%, 9.9%.

On the other hand, FLIR did exceptionally well. In the defense businesses in FLIR, which is 40% of FLIR, the growth was 8.2% with all the subdivisions within there growing very healthy. In the FLIR commercial businesses, we were essentially flat, but we have to keep in mind that in the commercial FLIR businesses, we also do have a camera vision system, which is basically an area camera, two-dimensional area camera, which had much lower sales, just like the rest of our vision camera systems in DALSA, e2v. So if we took that negative out, FLIR Industrial also grew. And overall, FLIR grew 3.2% with that negative coming.

We had -- now we also -- going to DALSA, e2v, what we're looking at there is basically a range of businesses, some positive and some negative. Let me give you the positives first and the negatives, which we've talked about before. Interestingly enough, our micro electromechanical systems or MEMS is experiencing really good growth. Maybe that's the canary in the mind because they're making a lot of products that are of relevance to the semiconductor industry. Also, as you may recall, we have an Aerospace and Defense business within our historical Digital Imaging that did very well, grew almost 13%.

Where we had decreases were primarily in scientific and industrial vision systems and somewhat in health care. I think the health care is going to recover. And I think in the industrial and scientific vision systems, we believe that at least in the camera domain, we've bottomed out and we have a slow recovery. There is a portion of that, that deals with sensors where we make sensors for ourselves and other people. That's going to lag a little more. It may have bottomed out, but we don't see a recovery at this point.

So overall, I would say DALSA, e2v, Teledyne Imaging were lagged a little bit with mixed progress in the different businesses, FLIR carried the day for the overall Digital Imaging.

Greg Konrad
Analyst at Jefferies & Company, Inc

And then, I mean, maybe it's a little bit early to talk about 2025, but it seems at least on the long-cycle, whether that's defense or on marine, you've experienced positive book-to-bill on ramping sales. If you look out over the next year, can you maybe talk about how much visibility you have on the long-cycle businesses versus how you're thinking about the recovery in short-cycle over the next year?

Robert Mehrabian
Executive Chairman at Teledyne Technologies

The long-cycle businesses, Greg, assuming there is no catastrophes because anything like that can affect our long-cycle businesses. They're healthy. And we think it's -- they're going to grow year-over-year. We have some really good program wins, both in our FLIR Defense as well as in our Teledyne Imaging here in space and other programs. So we think those are going to grow.

On the short-cycle businesses, we're just going through the first cut of our plans for next year. I think I have to say it's a little too early to predict how that's going to work. I'll wait another couple of months and see if what happens to the elections here, but more importantly, what kind of capital expenditures people exercise as they get near the end of the quarter, Q4.

Greg Konrad
Analyst at Jefferies & Company, Inc

And then maybe just sneaking in one last one. I mean, if you think about defense across FLIR and engineered and A&D Electronics, what was defense up in the quarter?

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Defense, U.S. government business was up organically maybe 2.5% plus. But we do have programs overseas that are doing really well. For example, Ukraine. We supply a whole range of products to them, also some to Middle East. And those programs have been very healthy, and we seem to be winning new programs, especially with offers that we have in counter UAV systems as well as our miniature out own UAVs, the small Black Hornet, which are doing really well. So we're overall very positive in that domain.

Greg Konrad
Analyst at Jefferies & Company, Inc

Thank you.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

For sure.

Operator

We'll move on to the line of Andrew Buscaglia with BNP. Go ahead.

Andrew Buscaglia
Analyst at Exane BNP Paribas

Hey. Good morning, everyone.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Good morning, Andrew.

Andrew Buscaglia
Analyst at Exane BNP Paribas

I wanted to touch on -- Marine has been strong all year, and you seem to have good visibility in that. I'm just wondering what the sustainability of that growth is through next year. How much visibility do you have that you can maintain such a strong segment and then not -- maybe not see -- people are a little bit worried about challenging comps. So how do you see that playing out?

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Yes. Let me -- that's a good question. Marine has had a bit of variation in their book-to-bill with Q1 being very strong at 1.27, and then Q3 being around 1.04. Here's the story on Marine. We acquired about 23 small businesses to form our marine group. Those range from interconnect for commercial oil exploration and oil production to defense. We have underwater vehicles, a whole range of them from floats to gliders to what we call the Gavia vehicles that are being used both in this country and in Europe. And then we have military programs that deal with haul penetrators for the Virginia-class submarine as an example.

So the mix is very interesting. It's offshore energy, maybe 30%, maybe more. If you put in exploration, it's close to 40%. But then we have science, construction, which are about 27%. And then we have defense, which is as much as 28%. So it's a distributor -- it kind of mirrors in some ways, Teledyne as a whole. Our expectation are that, that will remain strong. It is possible, though, that with the current projections, oil prices may decline significantly, not as much as they did in 2014 to '16, but may decline. And if that happens, some of our production interconnects will go down, but the other businesses that we have there should remain healthy. So I'm positive about marine for next year.

Andrew Buscaglia
Analyst at Exane BNP Paribas

Okay. No, that's helpful. And you guys made the comment in your press release about you've been buying back stock, but maybe M&A looks like it's perking up here. Can you comment a little bit more on that? And then specifically on any -- what are the size of these deals you might be seeing?

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Yes. Andrew, that's a very good question. And the reason it's timely, is for the first time, I would say since we acquired FLIR. We've done a couple of acquisitions every year. Like this year, we've got a small business for our marine and we bought Atomic, which is an imaging business for our overall imaging DALSA, e2v. But there hasn't been that much activity or opportunity for us to do acquisition.

Suddenly in the last month or so, the funnel seems to have opened up. And we are seeing more opportunities, especially outside Digital Imaging. For example, in our Aerospace and Defense as well our Instruments. So we're kind of positively inclined to look at what we can do, how much power we have to make acquisitions.

And frankly, we bought our stock when it was close to 52 weeks low, and we've continued buying it through Q3. But no, I think it's more likely that we will focus more highly on acquisitions since we have the wherewithal to spend up to, I don't know, $2 billion to $3 billion if we want to. I don't know if we'll do that much, but we certainly are in the market to buy some smaller companies, which would be, let's say, in the $50 million range and maybe some things that are closer to $0.5 billion or more. It won't be anything as large as FLIR at this time, but there are many opportunities.

Andrew Buscaglia
Analyst at Exane BNP Paribas

Okay. Very helpful. Thank you.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

For sure.

Operator

We'll move on to the line of George Yarno [Phonetic] from TD Cowen. Go ahead.

Unidentified Participant
at Teledyne Technologies

Hey, guys. Good morning.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Good morning.

Unidentified Participant
at Teledyne Technologies

Can you just talk us through like what's contemplated in the guide for next quarter and how you're thinking going forward about what's going on in Boeing?

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Let me start with Boeing because that's a subject that we kind of study and follow. In our Aerospace business, which serves Boeing as well as other Airbus and a whole bunch of airline customers, we think the strike could have risk for us. I'm hoping that it settles. But the risk for us is in the 737 MAX, where we have the data acquisition systems, that could hit us -- that's assuming the strike goes through the year, through the quarter, that could hit us as much as on the upside, maybe $5 million in revenue from Q3 to Q4. But if the strike is settled, depending on timing, it could be less than that, maybe $2 million or $3 million. So it's a little bit of a headwind for us.

The other part of your question was -- forgive me, I kind of lost the trend of...

Unidentified Participant
at Teledyne Technologies

Boeing was the first question, I can move. You also mentioned in Instrumentation, I think you indicated that there was a piece of that business on the environmental side that was weak with like orders below revenues. Can you give us a little bit more color on what that is and what type of applications or end markets that's facing?

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Yes. In the environmental side, we have two sets of businesses. One set deals with drug discovery and water quality, et cetera. And that business has been okay. Where we've seen a little weakness is in our air quality monitoring, stack monitoring and basically looking at quality of products. There, we've had a little weakening. And we depend a little bit on Middle East where they buy our systems, large systems. I think it might be a little weak, a few million dollars, but I'm not that concerned about it. There's nothing bad is going to happen. It's just -- we think Q4 should be a little better than Q3. So it doesn't concern me right now. And instrument, as George said, includes Marine, Test & Measurement as well as Environmental.

Unidentified Participant
at Teledyne Technologies

And just last for me. The margins in DI were good. I think probably better than some expected. Can you give us maybe some color on to what drove that? And how are you thinking about margins to wrap up the year across the portfolio here?

Robert Mehrabian
Executive Chairman at Teledyne Technologies

I think what you have is FLIR's margins really improved very much, and we're very healthy. And Digital Imaging as a whole remained relatively flat in margins. I would say maybe went down 30 basis points if you look at the whole year, '24 versus '23. The savior, of course, as I mentioned, was FLIR.

On the flip side, Edwin and his people were able to take cost out in our camera, especially in our camera and some health care businesses to compensate for lower revenue. And that helped protect some of the margins in those businesses. Some of our very high-margin businesses are in the camera business. So there's been a combination.

FLIR, very strong Digital Imaging, the rest of Digital Imaging taking the cost out. And I'm hoping that as the recovery comes, we will not put that cost back in, because we've had really good experience with defense and of course, with marine in the past, where we took the cost out, didn't put the cost back in very quickly and the margins there have turned out to be very healthy. So overall, I'm positive about Digital Imaging.

Unidentified Participant
at Teledyne Technologies

Is there a way if you just kind of scale like how big a drag because I know those cameras and sensor businesses are very high margin. So like how much of a drag would you say currently those businesses are on what you're reporting for margins?

Robert Mehrabian
Executive Chairman at Teledyne Technologies

I would say overall those businesses account for maybe $300 million, the ones that we're seeing the drag on. And I would say it changes, but I'd say maybe $50 million in a drag in those businesses overall. It doesn't sound like a lot, but those are our highest margin businesses. And so when the revenue goes down, then the margin overall declines because of that. But as we've said before, we think the cameras have bottomed out. Book-to-bill is better than 1. Of course, remember, bill is low compared to last year. And sensors will come eventually, but not right away.

Unidentified Participant
at Teledyne Technologies

Thanks, guys.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

For sure.

Operator

We'll go next to the line of Jordan Lyonnais with Bank of America. Go ahead.

Jordan Lyonnais
Analyst at Bank of America Merrill Lynch

Hey, good morning. Could you just give us some color around how you're thinking about FLIR's opportunity for new programs like Replicator 2.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Let me take this. We have a whole bunch of programs for FLIR that are doing really well. Let's start with the small UAVs. The small UAVs, we have the best system in the world. These are UAVs that are about six to seven inches in size. If they were flying in the room we do, you probably wouldn't hear it or notice it, but your picture can go automatically, you'd get a good video of it up to 25 kilometers away. So that's really good.

But we -- on the other side, we also have a counter UAV system that's being used in Europe. And another example is we have loitering UAVs that we're introducing, which can carry munitions. The difference between these and other people's munition-enabled UAVs is that we can call these back if they reach the target, and it's not an opportune time, so we can't recover the system.

So overall, I think the whole UAV business for us is very strong. We also have a whole bunch of other programs like we just announced a program win in a suite of sensors that go on -- for chemical, biological, nuclear. We announced that we just won a program for $168 million. So FLIR, especially defense, we're very positive. We have an excellent leader there in and we're very positive about that business.

Jordan Lyonnais
Analyst at Bank of America Merrill Lynch

Got it. And then sorry, I mean for Replicator 2 specifically counter UAS systems.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

We have a system in Europe right now with Kongsberg which is being deployed, and it's successful. That's all I can say about that at this time.

Jordan Lyonnais
Analyst at Bank of America Merrill Lynch

Got it. Thank you so much.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

For sure.

Operator

[Operator Instructions] We'll go next to Guy Hardwick with Freedom Capital Markets. Go ahead.

Guy Hardwick
Analyst at Freedom Capital Markets

Hi, good morning.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Hi, good morning.

Guy Hardwick
Analyst at Freedom Capital Markets

Hi. A lot of my questions have been answered, but just sort of big picture, Digital Imaging margins peaked at 24% a few years back. If short-cycle does recover some point next year, what is the potential you think in terms of given kind of what you've said about incremental margins and the higher margin mix of short-cycle?

Edwin Roks
Chief Executive Officer at Teledyne Technologies

Yes. Right now, if I look at Q3, our margins in overall Digital Imaging are about 22.6%. Last year this time, they were more like 24.2%. So I would hazard a guess that as a minimum should be as good as last year. And if the short-cycle businesses do come back strongly, there's an opportunity for us to go above 25%, which would be very healthy for us. But I would maintain that with the uncertainty, especially in our longer recovery of our longer recovery of our sensors.

Guy Hardwick
Analyst at Freedom Capital Markets

I didn't realize you weren't done. Sorry. We bless you.

Edwin Roks
Chief Executive Officer at Teledyne Technologies

We'd go probably more to 24-plus percent, 24.2%, 24.5%. But if the sensors recover, then the margin would go higher.

Guy Hardwick
Analyst at Freedom Capital Markets

Okay. And thank you. Just as a follow-up. Obviously, you indicated in the statement that you see short-cycle has stabilized and maybe improving I assume that's because of booking trends. Can you maybe just give us a bit more color on booking trends in short-cycle?

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Yes. In the last two to three months, our book-to-bill is above 1, let's say, 1.1. But I have to always keep in mind that when we talk book-to-bill, we're talking about bill that's lower than it used to be. So I don't want to overstate that. It's not like book-to-bill at the height of the system. But what that tells us is that we have reached the bottom and we're recovering. The flip side on sensors themselves, the book-to-bill has not recovered yet. So we're a little -- people are a little more hesitant to spend money on sensors because then they have the longer haul of developing cameras, whereas it's easier for them to acquire cameras.

The flip side, I have to say, again, going back to FLIR because FLIR has been so successful is that they have both long-cycle and short-cycle infrared cameras. In the long-cycle, they're fixed cameras. In the short-cycle, they're handheld cameras. And we're very pleased that FLIR Industrial has done really well in that domain. And we expect that they'll continue to do so with new products, with artificial intelligence enabled cameras that bring decision make decisions easier for the customers. We're positive there as we are with the FLIR defense business.

Guy Hardwick
Analyst at Freedom Capital Markets

And Robert, is that the point what we used to be called Point Grey? Is that what you're referring to?

Robert Mehrabian
Executive Chairman at Teledyne Technologies

No. Point Grey is the one that's more matched to the cameras that we have in DALSA, e2v. Actually, while we kind of put it in FLIR, it's more aligned with DALSA, e2v and from an organization standpoint, it reports to the leader there. What I was talking about was the infrared offering is substantial.

Guy Hardwick
Analyst at Freedom Capital Markets

Okay. Not visible light. Okay. Thank you, Robert.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Thank you.

Operator

We have no further questions in queue at this time.

Robert Mehrabian
Executive Chairman at Teledyne Technologies

Thank you. Operator, thank you very much. I'll now ask Jason to conclude our conference call, please.

Jason VanWees
Vice Chairman at Teledyne Technologies

Thanks, everyone. And thanks, Robert. If you have any follow-up questions, of course, my number is on the earnings release, please feel free to call me. And then, Alan, if you please give the replay information at the end of the call, that would be ideal. Thanks, everyone. Goodbye.

Operator

Thank you. Ladies and gentlemen, this conference is available for replay, and that will be beginning today, October 20 -- pardon me, October 23, 2024 at 10:00 Pacific daylight time through November 23, 2024 at midnight. To access the AT&T playback service during that time, you can dial toll-free (866)207-1041 and the access code is 128-4672. International participants may dial area code (402)970-0847 using the same access code. Those numbers again are (866) 207-1041 and area code (402) 970-0847. The access cold once again is 128-4672.

[Operator Closing Remarks]

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