Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Teledyne first quarter earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be given at that time. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mr. Jason VanWees. Please go ahead.

Good morning, everyone. This is Jason VanWees, Vice President, Corporate Development and Investor Relations at Teledyne Technologies. I would like to welcome everyone to Teledyne's first-quarter 2008 earnings release conference call. We released our earnings earlier this morning before the market opened. Joining me today are Teledyne's Chairman, President, and CEO, Robert Mehrabian; Senior Vice President and CFO, Dale Schnittjer; and Executive Vice President, General Counsel, and Secretary, John Kuelbs. After remarks by Robert and Dale, we will answer your questions. However, before we get started, our attorneys have reminded me to tell everyone that all forward-looking statements made this morning are subject to various risks, assumptions, caveats, noted in the earnings release and our periodic SEC filings; and of course, actual results may differ materially. In addition, in order to avoid potential selective disclosures, this call is simultaneously being webcast and a replay, both via webcast and dial-in will be available for about one month. Here is Robert.

Thank you, Jason. Good morning, everyone. I will start with some introductory comments about the overall performance of the company, and then follow up with more detailed observations about each of our business segments and markets. First, we are very pleased with our operational performance of our company. In the first quarter, Teledyne achieved all-time record quarterly sales of $451.8 million, driven by overall organic growth of 8.9% and achieved an all-time record quarterly earnings of $0.77 per share, which increased 35.1% from last year. This was the 25th consecutive quarterly year-over-year growth in earnings per share and the 16th consecutive quarter of double-digit growth in earnings per share. During the first quarter also, our overall GAAP operating margin increased 99 basis points to 10.6%. Now, in addition to our financial performance, the first quarter was also strategically significant to Teledyne. During this quarter, we completed four acquisitions within our core markets. Three of these acquisitions were announced before our January 2008 earnings call. Since I discussed these companies in more detail then, I will only make a few comments as a reminder. Teledyne Judson Technologies, which serves the electro-optical sensor market in both the visible light and infrared spectrums, increased our sensor portfolio and imaging subsystem capabilities in this domain. The acquisition of Teledyne Impulse was our third acquisition, in the harsh environment marine connector market. Compared to our existing lines of marine connectors, which are often used at full ocean depth, Impulse provides a range of connectors primarily for shallower depth or splash zone applications. The third acquisition, Teledyne Storm Products, specializes in harsh environment interconnect products for both the marine and defensive microwave markets. Shortly after our last earnings call, we announced a fourth deal, the acquisition of TSS International Limited. Teledyne TSS adds inertial positioning and…

Thank you, Robert, and good morning. I will first discuss some additional financials for the quarter and full year not covered by Robert. Then I will give an update on pension costs and discuss our 2008 outlook. In the first quarter, cash provided from operating activities was $22.6 million compared to cash provided from operating activities of $36.5 million for the same period of 2007. The lower operating cash flow was primarily due to increased working capital requirements and higher pension contributions. Free cash flow, that is, cash from operating activities less capital expenditures, for the first quarter was $13.9 million compared to $24.2 million for the same period of 2007. Capital expenditures were $8.7 million in the first quarter compared to $12.3 million for the same period of 2007. We ended the quarter with $279.2 million of net debt. Our balance sheet remains strong with a net debt-to-capital ratio of 33.1%. Despite tighter credit markets, we were able to increase available borrowings under our credit facility from $400 million to $590 million during the quarter with no increase in marginal borrowing costs. So far, we have been largely unaffected by problems in the credit markets. In fact, Teledyne has recently benefited from the reduction in interest rates, which lowered the borrowing cost on our floating-rate facility. As noted in our press release, depreciation and amortization expense for the first quarter of 2008 was $10.7 million compared to depreciation and amortization expense of $7.7 million in the first quarter of 2007. Moving to pension, in the first quarter of 2008, FAS 87 and FAS 158 pension expense was $2.3 million or a negative earnings per share impact of $0.04. This compares to a FAS 87 and FAS 158 pension expense of $3 million or negative earnings per share impact of…

Thank you, Dale. We would like to take your questions now. Operator, if you are ready to proceed with questions and answers, please go ahead

(Operator Instructions) And we will take the first question from John Harmon with Needham & Company. John Harmon - Needham & Company: Hello and good morning.

Good morning, John. John Harmon - Needham & Company: I would just like to ask two questions, please. First of all, given that you closed four acquisitions in the first quarter, does that exhaust your acquisition integration capacity? Or maybe you could talk about the outlook for the rest of the year. And secondly, your second-quarter earnings guidance is below the first quarter. You talked about some margin pressure. Where do you think that will hit you on the P&L, please? Thank you.

Thanks, John. First, in vis-a-vis our integration capabilities, I don't think that that’s is a serious issue. Of course, four acquisitions in the span of three months is significant even for a company like ours. But I don't think it is going to tax us that much. On the second question, which is the second quarter, in the first quarter we had about $0.03 to $0.04 of tax benefit from our 2007 R&D tax credit. So, if you take that out, those quarters are essentially flat sequentially. And, with the economic environment that we have now and we think we are going to have some decrease in margins, especially in our Engineered Systems, some tightening of margins, we think that’s a good assumption, the $0.72 to $0.74 that we've guided. John Harmon - Needham & Company: That helps. Thank you.

Thank you, John.

Our next question if from the line of Michael Lewis with BB&T Capital Markets. Please go ahead. Mike Smith - BB&T Capital Markets: Good morning, actually this is Mike Smith in for Mike Lewis. Just a quick question. What are the expectations for free cash flow in fiscal '08? Thanks.

For the whole year? I will let Dale answer that.

It's approximately $100 million.

Did you get that, Mike? Mike Smith - BB&T Capital Markets: Yes, I did. Thanks a lot.

Our next question is from the line Mark Jordan with Noble Financial Group. Please go ahead.

Yes, good morning. This is actually Matthew Crews standing in for Mark this morning. Just a question on the Electronics and Communications. There was some strong organic growth, so it doesn't surprise me, I guess, that the margins showed some improvement there. There has historically been some seasonality in the first quarter for that segment. Is that something that's going to dissipate a little bit with the growth in the marine business? Could you give any color there?

Yes, Matt. I think the first quarter was strong. I think the remainder of the year is going to be of the same order, maybe a little down. So I think year-over-year around 12%, 13% in growth is what we expect. Maybe a little higher.

Okay, great. Thank you.

Our next question is from the line of Steve Levenson with Stifel Nicolaus. Please go ahead, sir.

Thank you. Good morning. I first want to say thanks for all the detail you provide in your disclosure. It's really helpful. I wanted to ask a question about the margin improvement. Can you say that a certain portion came from your waste reduction, warranty and rework production plans? Or did most of this come from just the fact that you had the better revenue growth?

Good morning, Stephen. This is a little different in the different segment. In the Electronics segment, the improvements are primarily because of the higher revenue we are experiencing in some of our higher-margin products. Those would be our harsh environment connectors, both for defense and marine, and some of our other marine businesses. Some basis point improvements we saw in our engineered products. We think that's going to be, that’s more seasonal. They did experience some improvement in revenue in high-margin products, but we think that might go down to more, as the year progresses that might go down to more historical margins of between 8% and 9%. And usually, as you well know, as revenue goes up, if we do the operational improvements that we focus on in our manufacturing, we always expect to improve our margins 20 to 25, 30 basis points just because of our focus on manufacturing.

Okay, thanks very much. Second item has to do with the fact that there are a lot of solicitations out there now for the tactical infrared products and systems. So where exactly does Teledyne fit in there and how is the acquisition of Judson expected to help you there?

First, let me start with Judson, and then back into the tactical domain of infrared products. In the Judson acquisition, we achieved two things. First, we have been primarily mercad telluride providers for focal plane arrays. The Judson acquisition broadens our focal plane array capabilities to include indium antimonide and InGaAs, indium gallium arsenide. So we have a broader FPA product line because of that and the packaging capabilities. The second part of Judson is that they do bring capabilities in dewars and coolers which moves us up in the subassembly and assembly area to be able to actually move up to the camera level potentially. So that is the Judson part. On the, going back to the warfighters' needs, if you look at our mercad telluride products, we have now developed a two-colors capability, the long wavelength range infrared, which is about, averages about 10 micron meters and the mid-wavelength range which is about 5 micron meters. Historically, warfighters want to be able to first detect an enemy, which you use the long infrared which is able to go through smoke and dust. And the second part is they want to identify the enemy. And there, you use a closer-in infrared which is the medium wavelength infrared. So heretofore, people have used single colors. Going forward, the two colors is going to be more important, and we do have capabilities in that domain now. I don't know if that answers your question fully but that is the best I can do.

That answers it fully. Thanks very much.

Thank you.

Our next question is from the line of Ryan Rackley with Raymond James. Please go ahead.

Good morning, gentlemen.

Good morning, Ryan.

I believe, at last quarter you'd mentioned that defense electronics should grow organically around 7% or so, and instrumentation should grow in the high single digit range. Obviously, numbers came in this quarter a little different. Would you expect over the course of the year for the organic growth rates to revert back to those original estimates?

That just shows how much I know about predicting numbers. But I would say that I still expect full-year organic growth in the defense electronics being the single digit ranges of 6% to 7%. And I think instruments would probably go down, the organic part, from the high that we just experienced up 16% down to closer to higher single digits. So we might end up with the year in the instrumentation in 8% to 9%. So, each of them went in the other direction. I think defense electronics was a little lower than we anticipated and instruments were a little higher than we anticipated.

Great, thank you.

(Operator Instructions) We’ll take the next question from Michael Smith with BB&T Capital Markets. Please go ahead. Mike Lewis - BB&T Capital Markets: Hey, Robert. It's actually Mike Lewis. We are playing flip-flop with you here. Excuse me. Okay, if I could just follow up on Steve's questions about Judson, and I was interested to find out what space-based applications Judson would offer that you would be able to leverage with Rockwell.

In the space-based, I think we covered that pretty much, Michael, with our mercad telluride line. We were previously announced late in 2007 we received a major program called HIGH STARE, which is for the next generation of space-based sensors; and that’s primarily mercad telluride based system. What Judson provides is some of the technology that we can apply to space in conjunction with our imaging systems. They provide some of the packaging technologies. Some of the, it's potentially the InGaAs could be also useful there. So, that is the space-based part. Mike Lewis - BB&T Capital Markets: That's very helpful. And then just a quick follow-up with regard to the E&C segment. Very strong quarter, margin-wise. Do you believe that we will see sustainable margin at 13% or above through the rest of this year and into 2009? And then just a second part of that question, do you think it is going to be driven specifically by electronic instruments within there?

I think, Michael, 13% is a reasonably good number for the rest of the year. If my predictions are going to be accurate, I think that is okay. I think we can sustain that, only because our business mix is improved significantly in that domain. Mike Lewis - BB&T Capital Markets: Okay, thank you. Keep up the great work.

Thanks, Michael

We have no further questions in queue, so please continue.

Thank you, operator. I will now ask Jason to conclude our conference call.

Thanks, Robert, and again, thanks to everyone for joining us this morning. If you have any follow-up questions, please call me at the number listed on the earnings release. And of course, all news releases are available on our website, Teledyne.com. Operator, if you could please close the conference call and give the replay information, we would appreciate it.

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