Teledyne Technologies Reports Second Quarter Results.Business Editors LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--July 25, 2002 Teledyne Teledyne Technologies Inc. NYSE: TDY is an industrial conglomerate primarily based in the United States but with global operations. It was founded in 1960 by Henry Singleton and George Kozmetsky. Technologies Incorporated (NYSE NYSE See: New York Stock Exchange :TDY TDY abbr. temporary duty ): -- Revenues of $188.0 million -- Earnings per share of $0.19 -- Cash flow from operations of $25.3 million Teledyne Technologies Incorporated (NYSE:TDY) today reported second quarter 2002 sales of $188.0 million, compared with sales of $184.0 million for the same period in 2001. Net income for the second quarter of 2002 was $6.2 million ($0.19 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share), compared with a net loss of $10.4 million ($0.33 per diluted share) in the second quarter of 2001. During the second quarter of 2001, the company recorded a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern charge of $26.4 million for asset impairments, restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and other charges, inventory write-downs and a pretax charge for discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Net income was $5.5 million ($0.17 per diluted share) for the second quarter of 2001, excluding total pretax charges of $26.4 million ($0.50 per diluted share). "Our multiple cost reduction efforts continue to generate improved financial performance," said Robert Mehrabian Robert Mehrabian (born July 31, 1941, in Tehran, Iran) is an American materials scientist and the Chair, President, and Chief Executive Officer of Teledyne Technologies Incorporated. , chairman, president and chief executive officer. "Despite the weak commercial economic environment, operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: in the Electronics and Communications segment, excluding non-cash pension income, improved for the fourth consecutive quarter. In the second quarter, we achieved record operating margin in our Systems Engineering segment, while receiving multiple contract wins in both our core defense and NASA NASA: see National Aeronautics and Space Administration. NASA in full National Aeronautics and Space Administration Independent U.S. markets. Our improved operating performance, coupled with a tax refund Tax refund Money back from the government when too much tax has been paid or withheld from a salary. and efficient management of working capital, helped the company achieve cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of $25.3 million. While Teledyne is currently benefiting from increased defense spending, we believe that the company is well positioned to achieve significant earnings growth when the commercial markets that we serve rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective . "Given the current crisis in investor confidence, I want to emphasize that our management is committed to continuing the highest standards of accurate financial disclosure," Robert Mehrabian added. Review of Operations Electronics and Communications The Electronics and Communications segment's second quarter 2002 sales were $94.2 million, compared with second quarter 2001 sales of $90.1 million. Second quarter 2002 operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. was $9.0 million, compared with an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $11.9 million in the second quarter of 2001. Second quarter 2001 operating profit would have been $3.7 million excluding pretax charges of $15.6 million related to asset impairments, restructuring and other charges. Second quarter 2002 sales, compared with the same period of 2001, reflected revenue growth in electronic manufacturing services, electronic instruments and defense electronics products. The revenue growth in electronic manufacturing services was primarily driven by increased sales from the medical and military markets. The revenue growth in electronic instruments resulted from the acquisition of Advanced Pollution Instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. in the fourth quarter of 2001 and stronger demand for geophysical ge·o·phys·ics n. (used with a sing. verb) The physics of the earth and its environment, including the physics of fields such as meteorology, oceanography, and seismology. sensors
Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). growth initiatives. Systems Engineering Solutions The Systems Engineering Solutions segment's second quarter 2002 sales were $51.5 million, compared with second quarter 2001 sales of $52.8 million. Second quarter 2002 operating profit was $5.7 million, compared with an operating loss of $0.5 million in the second quarter of 2001. Second quarter 2001 operating profit would have been $3.9 million excluding pretax charges of $4.4 million related to asset impairments, restructuring and other charges. Second quarter 2002 sales, compared with the same period of 2001, reflected growth in core defense programs offset by reduced work for environmental programs, primarily chemical weapons demilitarization de·mil·i·ta·rize tr.v. de·mil·i·ta·rized, de·mil·i·ta·riz·ing, de·mil·i·ta·riz·es 1. To eliminate the military character of. 2. . The improvement in operating profit, despite a $0.2 million reduction in non-cash pension income, primarily reflected the receipt of government award fees based on collective performance achievements. Aerospace Engines and Components The Aerospace Engines and Components segment's second quarter 2002 sales were $39.0 million, compared with second quarter 2001 sales of $38.4 million. Second quarter 2002 operating profit was $0.1 million, compared with second quarter 2001 operating profit of $3.7 million, including a pretax restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. for employee termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. costs of $0.3 million, in the second quarter of 2001. Excluding this charge, second quarter 2001 operating profit would have been $4.0 million. Second quarter 2002 sales, compared with the same period of 2001, reflected revenue growth in OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and piston engines, partially offset by reduced sales of aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. products and services. Operating profit in the piston engine business was negatively impacted by net charges totaling $2.1 million related to higher aircraft product liability reserves, increased insurance premiums and crankshaft litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. costs (net of settlement awards). Sales in the turbine turbine, rotary engine that uses a continuous stream of fluid (gas or liquid) to turn a shaft that can drive machinery. A water, or hydraulic, turbine is used to drive electric generators in hydroelectric power stations. engine business were negatively impacted by reduced development phase work, offset by higher revenues of spare parts Spare parts, also referred to as Service Parts is a term used to indicate extra parts available and in proximity to the mechanical item, such as a automobile, boat, engine, for which they might be used. Spare parts are also called “spares. for Air Force training aircraft. In addition, segment operating profit was negatively impacted by a $0.3 million reduction in non-cash pension income. Energy Systems The Energy Systems segment's second quarter 2002 sales were $3.3 million, compared with second quarter 2001 sales of $2.7 million. The second quarter 2002 operating loss was $0.9 million, compared with an operating loss of $5.8 million in the second quarter of 2001. Second quarter 2001 operating loss would have been $0.2 million, excluding pretax charges of $5.6 million related to asset impairments, restructuring and other charges. Second quarter 2002 sales, compared with the same period of 2001, reflected growth in hydrogen hydrogen (hī`drəjən) [Gr.,=water forming], gaseous chemical element; symbol H; at. no. 1; at. wt. 1.00794; m.p. −259.14°C;; b.p. −252.87°C;; density 0.08988 grams per liter at STP; valence usually +1. generator generator, in electricity, machine used to change mechanical energy into electrical energy. It operates on the principle of electromagnetic induction, discovered (1831) by Michael Faraday. and government program sales. The second quarter 2002 operating loss reflected additional research and development expenses for fuel cell programs, higher general and administrative expense and program cost adjustments. Second Quarter 2001 Charge During the second quarter of 2001, the company recorded a pretax charge of $26.4 million related to exiting non-core, underperforming product lines, workforce reductions and manufacturing consolidations, inventory write-downs and the formation of Teledyne Energy Systems, Inc. While the total projected charges remained at $26.4 million at both December December: see month. 30, 2001 and June June: see month. 30, 2002, there were some changes in income statement classification as follows. At December 20, 2001 the estimated charge included $7.5 million for asset impairments, $8.8 million for restructuring and other charges, $9.8 million for inventory write-downs and a $0.3 million pretax charge for discontinued operations. Based on actual spending and current projections, the $26.4 million pretax charge consists of $7.5 million for asset impairments, $8.2 million for restructuring and other charges, $10.4 million for inventory write-downs and $0.3 million for discontinued operations. Additional Financial Information Second quarter 2002 earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 142, goodwill is no longer subject to amortization in 2002. Second quarter 2002 cash from operating activities was $25.3 million, compared with a cash usage of $4.1 million for the same period in 2001. Free cash flow (cash from operating activities less capital expenditures) was $21.8 million for the second quarter of 2002, compared with a cash usage of $12.0 million for the same period of 2001. The second quarter of 2002 included the receipt of a $5.7 million planned income tax refund. Capital expenditures for the first six months of 2002 were $7.0 million, compared with $17.3 million for the first six months of 2001. The first six months of 2001 included $7.4 million of capital expenditures that were committed in 2000. Outlook Teledyne Technologies maintains a balanced portfolio of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 45% government and 55% commercial businesses. In its government and defense businesses as a whole, the company expects modest revenue growth in the second half of 2002 compared to the first half of 2002 and the second half of 2001, primarily driven by demand for defense electronics products and systems engineering services. Given the current state of the commercial aviation market, Teledyne expects sales of avionics avionics (ā'vēŏn`ĭks), electronic instruments used in air or space flight; also the design and production of such instruments. Early planes had few instruments, but as aviation and aircraft became more complex, so did instrumentation. equipment to be flat in the second half of 2002 relative to the first half of 2002, but decline compared to the second half of 2001. However, the company expects revenue growth in its commercial instrumentation businesses to offset the sales decline in avionics. Orders and sales for several of the company's short cycle electronics product lines, which include relays sold to the semiconductor and communications markets, were flat in the second quarter of 2002 compared to the first quarter of 2002. Teledyne Technologies currently expects orders and revenues in these businesses to be flat in the second half of 2002, relative to the first half of 2002. Given the current state of the economy, rising pilot insurance costs, and the company's dependence on aftermarket aviation sales, the company expects 2002 sales for the Aerospace Engines and Components segment to be flat relative to 2001. However, the company anticipates that operating profit in its Aerospace Engines and Components segment will improve slightly in the second half of 2002, compared to the first half of 2002, due to reduced legal expenses following the conclusion of the crankshaft litigation, partially offset by increased insurance premiums. In addition, the company continues to explore strategic alternatives for the product lines in this segment, including a possible divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of one or more product lines. Full year 2001 earnings included $9.5 million or $0.18 per share in non-cash pension income. The company currently expects approximately $2.3 million or $0.04 per share of non-cash pension income in 2002. The reduction in non-cash pension income reflected the completion of income associated with FAS 87 transition asset amortization as well as the decline in the value of the company's pension assets during 2000 and 2001. The company continues to anticipate approximately $10 million of cost savings in 2002 relative to 2001, which should offset the reduction in non-cash pension income. Based on its current outlook, the company estimates that third quarter and full year 2002 earnings per share will be in the range of approximately $0.18 to $0.20 and $0.70 to $0.78, respectively, including approximately $0.04 per share of non-cash pension income for the full year 2002. Full year 2001 earnings per share from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $0.69 (excluding asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. , restructuring and other charges) would have been $0.51 per share, excluding $0.18 per share in non-cash pension income. Given the further decline in the value of the company's pension assets during 2002, non-cash pension expense in 2003 is projected to be $5.5 million, compared with non-cash pension income of $2.3 million in 2002. As of June 30, 2002, Teledyne Technologies did not anticipate making a cash contribution to the pension plan until the first quarter of 2004. The present volatile With regard to computer memory, it means "temporary" and not "highly changeable," which is the usual meaning of the word. See volatile memory. 1. (programming) volatile - volatile variable. 2. (storage) volatile - See non-volatile storage. and declining market may accelerate this contribution. Although earnings visibility into 2003 is limited, the company believes that earnings per share, excluding pension expense, will grow given continued demand for defense electronics and government engineering services coupled with a modest return in some of the company's short cycle electronics product lines. Based on its current outlook, the company estimates that full year 2003 earnings per share will be in the range of approximately $0.70 to $0.85, respectively, including approximately $0.10 per share of non-cash pension expense.
EARNINGS PER SHARE SUMMARY
(Diluted earnings per common share from continuing operations)
2003 Full Year 2002 Full Year 2001
Outlook Outlook Results
----------------- --------------- ---------
Low High Low High Actual
========================= ======== ======== ======= ======= ========
Earnings per share
(excluding net pension
income (expense) and
asset impairment,
restructuring and
other charges) $ 0.80 $ 0.95 $ 0.66 $ 0.74 $ 0.51
Net pension income
(expense) (0.10) (0.10) 0.04 0.04 0.18
-------- -------- ------- ------- --------
Earnings per share
(excluding asset
impairment,
restructuring and
other charges) 0.70 0.85 0.70 0.78 0.69
Asset impairment,
restructuring and
other charges -- -- -- -- (0.48)
-------- -------- ------- ------- --------
Earnings per share $ 0.70 $ 0.85 $ 0.70 $ 0.78 $ 0.21
========================= ======== ======== ======= ======= ========
Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Cautionary Notice This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc earnings, cost-savings, growth opportunities, capital expenditures, pension contributions and strategic plans. Actual results could differ materially from these forward-looking statements. Many factors, including changes in demand for products sold to the semiconductor and communications markets, timely development of acceptable and competitive fuel cell products and systems, funding, continuation continuation - continuation passing style and award of government programs, and economic and political conditions, could change the anticipated results. While Teledyne Technologies' growth strategy includes possible acquisitions, the company cannot provide any assurance as to when, if or on what terms any acquisitions will be made. Acquisitions involve various inherent risks, such as, among others, the company's ability to integrate acquired businesses and to achieve identified financial and operating synergies. Also, the company may not be able to sell or exit timely or on acceptable terms its remaining non-core or under-performing product lines, particularly given the current economic environment. Additional information concerning factors that could cause actual results to differ materially from those projected in the forward-looking statements is contained in Teledyne Technologies' periodic filings with the Securities and Exchange Commission, including its 2001 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Forms 10-Q. Teledyne Technologies is a leading provider of sophisticated electronic components, instruments and communication products, systems engineering solutions, aerospace engines and components and on-site on-site adj. Done or located at the site, as of a particular activity: on-site monitoring of a production run; an on-site film shoot. gas and power generation systems. Teledyne Technologies has operations in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , the United Kingdom and Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. . For more information, visit Teledyne Technologies' website at www.teledyne.com. A live webcast of Teledyne Technologies' second quarter earnings conference call will be held at 11:00 a.m. (Eastern) on Thursday Thursday: see week. , July July: see month. 25. To access the call, go to www.companyboardroom.com or www.teledyne.com approximately ten minutes before the scheduled start time. A replay will also be available for one month at these same sites starting at 1:00 p.m. (Eastern) on Thursday, July 25.
TELEDYNE TECHNOLOGIES INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002
AND FOR THE THREE AND SIX MONTHS ENDED JULY 1, 2001
(Unaudited - In millions, except per share amounts)
Second Second Six Six
Quarter Quarter Months Months
2002(a) 2001(b) 2002(a) 2001(b)
============================= ========= ========= ========= ==========
Net sales $ 188.0 $ 184.0 $ 371.3 $ 373.7
Costs and expenses:
Costs of sales 141.7 147.9 280.7 294.2
Selling, general and
administrative expenses 36.6 37.9 72.3 73.2
Asset impairment charge -- 7.4 -- 7.4
Restructuring and other
charges (0.6) 8.7 (0.6) 8.7
--------- --------- --------- ----------
Income (loss) before other
income and expense and taxes 10.3 (17.9) 18.9 (9.8)
Other income 0.2 1.8 0.4 1.9
Interest expense, net 0.2 0.8 0.5 1.1
--------- --------- --------- ----------
Income (loss) before taxes 10.3 (16.9) 18.8 (9.0)
Provision (benefit) for taxes 4.1 (6.7) 7.5 (3.6)
--------- --------- --------- ----------
Income (loss) from
continuing operations 6.2 (10.2) 11.3 (5.4)
Discontinued operations,
net -- (0.2) -- (0.2)
--------- --------- --------- ----------
Net income (loss) $ 6.2 $ (10.4) $ 11.3 $ (5.6)
========= ========= ========= ==========
Diluted earnings (loss) per
common share(c):
Income (loss) from
continuing operations $ 0.19 $ (0.32) $ 0.35 $ (0.17)
Discontinued operations,
net -- (0.01) -- (0.01)
--------- --------- --------- ----------
Diluted earnings (loss) per
common share $ 0.19 $ (0.33) $ 0.35 $ (0.18)
========= ========= ========= ==========
Weighted average basic common
shares outstanding 32.0 31.6 32.0 31.6
Weighted average diluted
common shares outstanding 32.9 31.6 32.7 31.6
EBITDA-continuing
operations(d) $ 16.2 $ 15.1 $ 30.1 $ 28.7
============================= ========= ========= ========= ==========
(a) The second quarter and first six months of 2002 reflect the
revised income statement classification of the second quarter 2001
pretax charges of $26.4 million for asset impairments and
restructuring and other charges. The resulting classification
increased cost of sales by $0.6 million and decreased
restructuring and other charges by $0.6 million but had no impact
on income before taxes in 2002.
(b) The second quarter and first six months of 2001 results include
pretax charges of $26.4 million for asset impairments and
restructuring and other charges, of which, a pretax charge of $0.3
million is included in discontinued operations.
(c) For the second quarter and first six months of 2001, fully diluted
earnings per share were calculated excluding the effect of
employee stock options because the impact was antidilutive as a
result of the company's loss for the respective periods.
(d) The second quarter and first six months of 2001 results exclude
pretax charges of $26.1 million for asset impairments and
restructuring and other charges.
TELEDYNE TECHNOLOGIES INCORPORATED
SUMMARY OF SEGMENT NET SALES AND OPERATING PROFIT
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002
AND FOR THE THREE AND SIX MONTHS ENDED JULY 1, 2001
(Unaudited - In millions)
Second Second Six Six
Quarter Quarter Months Months
2002 2001(a) 2002 2001(a)
=============================== ========= ========= ======== =========
Net Sales:
Electronics and Communications $ 94.2 $ 90.1 $ 184.7 $ 181.9
Systems Engineering Solutions 51.5 52.8 98.4 108.0
Aerospace Engines and Components 39.0 38.4 80.9 77.2
Energy Systems 3.3 2.7 7.3 6.6
--------- --------- -------- ---------
Total Net Sales $ 188.0 $ 184.0 $ 371.3 $ 373.7
========= ========= ======== =========
Operating Profit (Loss):
Electronics and
Communications(b) $ 9.0 $ 3.7 $ 17.3 $ 9.9
Systems Engineering Solutions(c) 5.7 3.9 9.5 8.1
Aerospace Engines and
Components(d) 0.1 4.0 0.8 4.9
Energy Systems(e) (0.9) (0.2) (1.2) --
--------- --------- -------- ---------
Total Operating Profit $ 13.9 $ 11.4 $ 26.4 $ 22.9
=============================== ========= ========= ======== =========
(a) Previously reported 2001 results were recast to reflect a
realignment of the company's business units, which included a
change in the business units reporting structure. The previously
reported 2001 results were also recast to reflect the revised
estimates for the second quarter 2001 charge. The revised amounts
are noted below in footnotes (b) through (e).
(b) The second quarter and first six months of 2001 results exclude
pretax charges of $15.6 million for asset impairments and
restructuring and other charges.
(c) The second quarter and first six months of 2001 results exclude
pretax charges of $4.4 million for asset impairments and
restructuring and other charges.
(d) The second quarter and first six months of 2001 results exclude
pretax charges of $0.3 million for employee termination costs.
(e) The second quarter and first six months of 2001 results exclude
pretax charges of $5.6 million for asset impairments and
restructuring and other charges.
TELEDYNE TECHNOLOGIES INCORPORATED
BALANCE SHEET AS OF
JUNE 30, 2002 AND DECEMBER 30, 2001
(Current period unaudited - In millions)
June 30, Dec. 30,
2002 2001
================================================= ========= =========
ASSETS
Cash and cash equivalents $ 10.1 $ 11.9
Accounts receivable, net 117.7 108.7
Inventories, net 61.9 56.1
Deferred income taxes, net 18.6 18.4
Prepaid income taxes, expenses and other assets 5.9 14.2
--------- ---------
Total Current Assets 214.2 209.3
Property, plant and equipment, net 77.4 80.2
Deferred income taxes, net 7.4 7.9
Goodwill, net 26.2 26.2
Other assets, net 27.4 25.7
--------- ---------
Total Assets $ 352.6 $ 349.3
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 44.1 $ 36.9
Accrued liabilities 69.2 57.1
--------- ---------
Total Current Liabilities 113.3 94.0
Long-term debt -- 30.0
Other long-term liabilities 53.8 52.3
--------- ---------
Total Liabilities 167.1 176.3
Total Stockholders' Equity 185.5 173.0
--------- ---------
Total Liabilities and Stockholders' Equity $ 352.6 $ 349.3
================================================= ========= =========
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