1/ Seems people liked my Teledyne AR teardown (more attention than an @aplusk shoutout 😂)… so here’s 1962 (yr2). If there’s interest, may continue doing these… (at least until I find missing reports + finish compilation) cc: @brentbeshore @trengriffin @wolfejosh @zebulgar 
2/ Sales: $10.4MM (+132%), Earnings: $331k (+148%), EPS: 50c/share (+100%), 1500 shareholders, backlog: $12MM
3/ “From its inception the company has planned to become a major supplier, for military and industrial applications, of electronic end-item equipment and systems, and of the specialized electronic components that make up such systems.”
4/ Electronic Systems Division classified into 3 principal categories: 1) communications equipment, 2) computers and data systems, 3) guidance and control systems
Work spans from very advanced theoretical + experimental studies + research, through development + production.
Work spans from very advanced theoretical + experimental studies + research, through development + production.
5/ Clients included NASA (advanced monopulse tracking receivers), army (R-390 receivers and ARC-73 transmitter/receivers), Navy (navigation for anti-submarine patrol aircraft)
Systems and equipment accounted for 2/3 of sales volume
Systems and equipment accounted for 2/3 of sales volume
6/ Precision components made up 1/3 of total sales. Classified into: 1) electromechanical devices, 2) hydraulic and pneumatic aircraft and missile fittings (from acquisition), 3) transformers (from acquisition), 4) semiconductor devices and integrated circuits
7/ Began developing + producing high performance silicon planar transistors for their own computers + data systems… which became very popular with other equipment manufacturers (remember good old days of “made in America?”).
8/ “We believe that our achievement of successful volume production of silicon field effect transistors represents a major step forward in device technology, and that these field effect devices may some day be as widely used as conventional transistor are today”
9/ Electron Devices Division has continued substantial program in development of integrated circuits… developing processes and techniques for applying electronic solid state tech directly to production of complete circuits rather than individual circuit elements
10/ At least 6 acquisitions, a minority investment (with the option of acquiring the rest under specified conditions), one proposed acquisition, and more in the works.
2 acquisitions all stock. Proposed acquisition shareholders to vote on issuing preferred. No info on others.
2 acquisitions all stock. Proposed acquisition shareholders to vote on issuing preferred. No info on others.
11/ Selected by Navy as one of three firms to proceed with program definition phase of Integrated Helicopter Avionics System program (expected $B effort), to use advanced computer tech…
11a/ Selected over many much larger corps. Based on outstanding technical proposal (like @anduriltech today). Be so good they can't ignore you.
12/ “the use of stock options to attract outstanding key personnel to our company has proven to be particularly effective”
Interestingly, none of the directors have stock options???
Interestingly, none of the directors have stock options???
13/ Financial highlights: CA: $8MM. PPE: $1.7MM. Total Assets: $10.8MM. CL: $5.5MM. Debt: $1.8MM. Capital and Stock Surplus: $3.5MM. Sales $10.8MM. GP: $1.9MM. Income: $331k.
14/ Long term debt included: 5.75% bank note payable in quarterly installments due 1965 ($1.5MM), 6% note payable in annual installments due 1965 ($286k), noninterest-bearing notes due 1965 (500k)
14a/ Debt terms: minimum amounts of consolidated et worth plus subordinated debt, working capital, and a ratio of consolidated debt to net worth plus subordinated debt
14b/ Other agreements:
1) assign proceeds of defense production contracts to bank as security for loan
2) sell min $500k in subordinated debentures to subordinate bank borrowings
3) don’t pay/declare dividends except payable in capital stock of company
1) assign proceeds of defense production contracts to bank as security for loan
2) sell min $500k in subordinated debentures to subordinate bank borrowings
3) don’t pay/declare dividends except payable in capital stock of company
14c/ not like Singleton ever paid dividends anyways… smart man… or was it because of these types of provisions that he never paid them? How wild would it be if Singleton is known as a master allocator when in reality it was a result of bank restrictions? #hereticonhereicome
14d/ Before you value investors call me blasphemous… it was just his second year. But given his track record, the more likely case is he never planned on paying out dividends anyways.
Result? Bank gets 3 terms. Singleton gets one less “real” term. Both sides happy. Genius.
Result? Bank gets 3 terms. Singleton gets one less “real” term. Both sides happy. Genius.
15/ Some fun pictures:
End/ As always, compilations here: 12mv2.com/compilations
If you want more defense…
1) hit up @joe_philleo. He will give you a masterclass (best defense thinker I know, second best I’ve met (behind @peterthiel))
2) follow @wolfejosh + @palmerluckey; watch them on Futura
If you want more defense…
1) hit up @joe_philleo. He will give you a masterclass (best defense thinker I know, second best I’ve met (behind @peterthiel))
2) follow @wolfejosh + @palmerluckey; watch them on Futura
