To Our Shareholders:
This report presents the results of your company’s first year of operation. Sales for the year totalled $4,491,431. Consolidated net after-tax earnings amounted to $183,190, or twenty-five cents per share on the 519,550 shares outstanding at year-end. Additional income of $40,485, excluded in consolidation, raise earnings to $173,675, or thirty-three cents per share. Backlog of the company increased throughout the year, and at present totals more than $10,000,000.
Your company’s objective has been from the beginning to become a major developer and manufacturer of a broad line of electronic systems and equipments, and of the electronic instruments and components that go into such systems. Key elements supporting this objective are (1) the establishment of a profitable and expanding operating base, and (2) the assembly and effective utilization of a strong research and development organization. The company made substantial progress in both of these areas during the year.
The company’s operating base was expanded steadily throughout the year by a combination of acquisitions and internal growth. In October of 1960, Teledyne acquired 87½% of the outstanding stock of Amelco, Inc. and all of the outstanding stock of Handley, Inc. and Mercury Transformer Corporation. These acquisitions gave the company eighty thousand square feet of floor space devoted to the development and manufacture of electronic systems, data entry and readout equipment, magnetic devices and transformers, high-quality etched circuits and miniature trimmer potentiometers. Total employment in these corporations was about 200 people in November of 1960 and had more than doubled by year-end.
In July of 1961, Teledyne acquired Palmer Instruments of South Pasadena, California, with its excellent precision shop facilities and strong proprietary position in temperature control techniques and low-frequency quartz crystals used in crystal filters and stable oscillators. In August of 1961, the acquisition of the company's interest in Amelco was completed, making all of the minority subsidiaries wholly owned. Subsequent to the close of the fiscal year, the company acquired the assets and businesses of Linaïr Engineering, Inc., a leader in aircraft and missile pneumatic and hydraulic fittings, and through its subsidiaries a manufacturer of a variety of electronic components, including precision potentiometers, relays, switches, and electronic motors. The trimester potentiometer business of Handley, Inc. and the quartz crystal business of Palmer Instruments have been consolidated with the electronic components business of Linaïr in a separate building in Hawthorne, California, under the name of Teledyne Precision, Inc.
Paralleling the growth of the company's physical assets and capabilities has been the growth of its technical and development staff. The company now employs more than fifty engineers and scientists. During the year our technical people have been responsible for the acquisition of a variety of prime and subcontracts in the fields of electronic communications, data processing, computers, and automatic control equipment. Some of these contracts are for advanced research and development, others are for technical studies, while still others are for production of advanced equipment. Typical of these programs are the following: production of navigation computers for carrier-based antisubmarine aircraft, development of data processors for scientific satellites, an instrumentation study for design of space communication antennas, an adaptive (learning) computer for stimulating neural networks, an air defense study, and an antisubmarine warfare study.
Subsequent to the close of the fiscal year the company received a $5 million contract for production of FADAC digital computers, scheduled to be used in the Army's new artillery fire direction centers. This program, widely sought after in the industry, is expected to be of considerable significance to the company's future.
In February of 1961, the company opened its Electron Devices Division in Mountain View, California, with the objective of developing proprietary manufacturing processes for the direct application of electronic solid-state technology to the manufacture of electronic systems and equipment. Under the leadership of an outstanding group of scientists, this division has made notable progress. The division now employs fifty people. In addition to actively supporting the programs of the systems division in Los Angeles, at this writing the division is completing development of a number of new solid-state devices and special assemblies for sale to the industry.
During its first year, the company invested more than $350,000 in research and development. This program of company-sponsored research and development will be expanded in the future, as we continue with the development of proprietary products and the preparation of technical studies and proposals. The field of advanced electronics invites this kind of investment, and in return offers unlimited opportunities for growth. With the support of our shareholders and the dedicated efforts of our employees, we are confident that the company’s continued growth will be assured.
Henry E. Singleton PRESIDENT.