Teradyne, Inc.
TERADYNE, INC (Form: 8-K, Received: 10/26/2017 06:11:32)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): October 25, 2017

 

 

TERADYNE, INC.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Massachusetts   001-06462   04-2272148

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

600 Riverpark Drive, North Reading, MA   01864
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (978) 370-2700

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On October 25, 2017, Teradyne, Inc. (“Teradyne”) issued a press release regarding its financial results for the third quarter ended October 1, 2017. Teradyne’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

  

Description

99.1    Press Release dated October 25, 2017.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

    TERADYNE, INC.
Dated: October 26, 2017     By:  

/ S / G REGORY R. B EECHER

    Name:   Gregory R. Beecher
    Title:   Vice President, Chief Financial Officer and Treasurer

Exhibit 99.1

Teradyne Reports Third Quarter 2017 Results

 

    Q3’17 revenue and earnings exceeded guidance on strength of Semiconductor Test shipments

 

    Semiconductor Test revenue up 23% compared with Q3’16 and for the first 9 months compared with 2016

 

    Universal Robots revenue up 70% compared with Q3’16, up 77% for the first 9 months compared with 2016

 

 

     Q3’17      Q3’16      Q2’17  

Orders (mil)

   $ 410      $ 378      $ 462  

Revenue (mil)

   $ 503      $ 410      $ 697  

GAAP EPS

   $ 0.52      $ 0.31      $ 0.87  

Non-GAAP EPS

   $ 0.54      $ 0.33      $ 0.90  

NORTH READING, Mass. – October 25, 2017 – Teradyne, Inc. (NYSE: TER) reported revenue of $503 million for the third quarter of 2017 of which $397 million was in Semiconductor Test, $40 million in Industrial Automation, $35 million in System Test, and $31 million in Wireless Test. GAAP net income for the third quarter was $103.4 million or $0.52 per share. On a non-GAAP basis, Teradyne’s net income in the third quarter was $107.7 million, or $0.54 per diluted share, which excluded acquired intangible assets amortization, non-cash convertible debt interest, restructuring and other charges, and included the related tax impact on non-GAAP adjustments.

Orders in the third quarter of 2017 were $410 million of which $295 million were in Semiconductor Test, $40 million in Industrial Automation, $42 million in System Test, and $33 million in Wireless Test.

“Strong Semiconductor Test performance, with greater than expected image sensor test system shipments, drove Q3 revenue and earnings above the high end of our guidance,” said CEO and President Mark Jagiela. “Additionally, Universal Robots growth remained strong with Q3 revenue up 70% over the Q3’16 period and up 77% for the first 9 months of the year.”

On the demand front, Semiconductor Test achieved its highest third quarter orders in over a decade driven mainly by record memory test orders. This, combined with continued strong growth at Universal Robots, positions the Company for full year sales over $2 billion and net income of over $2 per share at the mid-point of our Q4 guidance.”

Guidance for the fourth quarter of 2017 is revenue of $420 million to $450 million, with GAAP net income of $0.27 to $0.33 per diluted share and non-GAAP net income of $0.31 to $0.37 per diluted share. Non-GAAP guidance excludes acquired intangible assets amortization, non-cash convertible debt interest, and includes the related tax impact on non-GAAP adjustments.

Webcast

A conference call to discuss the third quarter results, along with management’s business outlook, will follow at 10 a.m. ET, Thursday, October 26. Interested investors should access the webcast at www.teradyne.com and click on “Investors” at least five minutes before the call begins. Presentation materials will be available starting at 10 a.m. ET. A replay will be available on the Teradyne website at www.teradyne.com/investors .

 


Non-GAAP Results

In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses non-GAAP results of operations that exclude certain income items and charges. These results are provided as a complement to results provided in accordance with GAAP. Non-GAAP income from operations and non-GAAP net income exclude acquired intangible assets amortization, non-cash convertible debt interest, pension actuarial gains and losses, discrete income tax adjustments, goodwill impairment, acquired intangible assets impairment, and restructuring and other. GAAP requires that these items be included in determining income from operations and net income. Non-GAAP income from operations, non-GAAP net income, non-GAAP income from operations and non-GAAP net income as a percentage of revenue, and non-GAAP net income per share are non-GAAP performance measures presented to provide meaningful supplemental information regarding Teradyne’s baseline performance before gains, losses or other charges that may not be indicative of Teradyne’s current core business or future outlook. These non-GAAP performance measures are used to make operational decisions, to determine employee compensation, to forecast future operational results, and for comparison with Teradyne’s business plan, historical operating results and the operating results of Teradyne’s competitors. Non-GAAP gross margin excludes pension actuarial gains and losses. GAAP requires that these items be included in determining gross margin. Non-GAAP gross margin dollar amount and percentage are non-GAAP performance measures that management believes provide useful supplemental information for management and the investor. Management uses non-GAAP gross margin as a performance measure for Teradyne’s current core business and future outlook and for comparison with Teradyne’s business plan, historical gross margin results and the gross margin results of Teradyne’s competitors. Management believes each of these non-GAAP performance measures provides useful supplemental information for investors, allowing greater transparency to the information used by management in its operational decision making and in the review of Teradyne’s financial and operational performance, as well as facilitating meaningful comparisons of Teradyne’s results in the current period compared with those in prior and future periods. A reconciliation of each available GAAP to non-GAAP financial measure discussed in this press release is contained in the attached exhibits and on the Teradyne website at www.teradyne.com by clicking on “Investors” and then selecting the “GAAP to Non-GAAP Reconciliation” link. The non-GAAP performance measures discussed in this press release may not be comparable to similarly titled measures used by other companies. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.

About Teradyne

Teradyne (NYSE:TER) is a leading supplier of automation equipment for test and industrial applications. Teradyne Automatic Test Equipment (ATE) is used to test semiconductors, wireless products, data storage and complex electronic systems, which serve consumer, communications, industrial and government customers. Our Industrial Automation products include collaborative robots used by global manufacturing and light industrial customers to improve quality and increase manufacturing efficiency. In 2016, Teradyne had revenue of $1.75 billion and currently employs approximately 4,400 people worldwide. For more information, visit www.teradyne.com . Teradyne (R) is a registered trademark of Teradyne, Inc. in the U.S. and other countries.

Safe Harbor Statement

This release contains forward-looking statements regarding Teradyne’s future business prospects, results of operations, market conditions, earnings per share, the payment of a quarterly dividend, the repurchase of Teradyne common stock pursuant to a share

 

Page 2


repurchase program, use of proceeds and potential dilution from the senior convertible notes offering and potential borrowings under a senior secured credit facility. Such statements are based on the current assumptions and expectations of Teradyne’s management and are neither promises nor guarantees of future performance, events, earnings per share, use of cash, payment of dividends, repurchases of common stock, payment of the senior convertible notes or availability of, or borrowing under, the credit facility. There can be no assurance that management’s estimates of Teradyne’s future results or other forward-looking statements will be achieved. Additionally, the current dividend and share repurchase programs may be modified, suspended or discontinued at any time. Important factors that could cause actual results, earnings per share, use of cash, dividend payments, repurchases of common stock, payment of the senior convertible notes or borrowings under the credit facility to differ materially from those presently expected include: conditions affecting the markets in which Teradyne operates; decreased or delayed product demand from one or more significant customers; development, delivery and acceptance of new products; the ability to grow Universal Robots’ business; increased research and development spending; deterioration of Teradyne’s financial condition; the consummation and success of any mergers or acquisitions; unexpected cash needs; insufficient cash flow to make required payments and pay the principal amount on the senior convertible notes; the business judgment of the board of directors that a declaration of a dividend, the repurchase of common stock or borrowing under the credit facility is not in the company’s best interests; and other events, factors and risks disclosed in filings with the SEC, including, but not limited to, the “Risk Factors” section of Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and the Quarterly Report on Form 10-Q for the period ended July 2, 2017. The forward-looking statements provided by Teradyne in this press release represent management’s views as of the date of this release. Teradyne anticipates that subsequent events and developments may cause management’s views to change. However, while Teradyne may elect to update these forward-looking statements at some point in the future, Teradyne specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Teradyne’s views as of any date subsequent to the date of this release.

 

Page 3


TERADYNE, INC. REPORT FOR THIRD FISCAL QUARTER OF 2017

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

 

 

     Quarter Ended     Nine Months
Ended
 
     October 1,
2017
    July 2,
2017
    October 2,
2016
    October 1,
2017
    October 2,
2016
 

Net revenues

   $ 503,378     $ 696,901     $ 410,475     $ 1,657,191     $ 1,373,261  

Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1) (2)

     208,592       305,682       183,116       706,253       632,700  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     294,786       391,219       227,359       950,938       740,561  

Operating expenses:

          

Selling and administrative (1)

     86,244       89,131       78,794       260,282       239,393  

Engineering and development (1)

     77,190       81,728       71,400       235,101       220,973  

Acquired intangible assets amortization

     7,028       8,166       8,487       23,145       44,725  

Restructuring and other (3)

     (4,407     2,288       12,177       392       16,372  

Goodwill impairment (4)

     —         —         —         —         254,946  

Acquired intangible assets impairment (4)

     —         —         —         —         83,339  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

     166,055       181,313       170,858       518,920       859,748  

Income (loss) from operations

     128,731       209,906       56,501       432,018       (119,187

Interest and other (5)

     (1,294     (3,029     3,180       (5,689     5,242  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     127,437       206,877       59,681       426,329       (113,945

Income tax provision (benefit)

     24,017       31,901       (4,113     62,713       (4,178
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 103,420     $ 174,976     $ 63,794     $ 363,616     $ (109,767
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per common share:

          

Basic

   $ 0.52     $ 0.88     $ 0.32     $ 1.83     $ (0.54
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.52     $ 0.87     $ 0.31     $ 1.81     $ (0.54
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares — basic

     197,485       198,774       202,211       198,755       203,167  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares — diluted

     200,775       201,529       203,929       201,413       203,167  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash dividend declared per common share

   $ 0.07     $ 0.07     $ 0.06     $ 0.21     $ 0.18  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net orders

   $ 410,229     $ 461,606     $ 378,461     $ 1,466,567     $ 1,238,862  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(1)    Pension actuarial (gains) losses included in our operating results were as follows:

          
     Quarter Ended     Nine Months
Ended
 
     October 1,
2017
    July 2,
2017
    October 2,
2016
    October 1,
2017
    October 2,
2016
 
Cost of revenues    $ —       $ (664   $ 364     $ (664   $ (250
Selling and administrative      —         (1,094     192       (1,094     (441
Engineering and development      —         (746     106       (746     (509
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ —       $ (2,504   $ 662     $ (2,504   $ (1,200
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(2)    Cost of revenues includes:

          
     Quarter Ended     Nine Months
Ended
 
     October 1,
2017
    July 2,
2017
    October 2,
2016
    October 1,
2017
    October 2,
2016
 
Provision for excess and obsolete inventory    $ 1,859     $ 2,569     $ 3,033     $ 7,154     $ 15,148  
Sale of previously written down inventory      (3,121     (2,149     (1,794     (6,404     (8,113
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ (1,262   $ 420     $ 1,239     $ 750     $ 7,035  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


(3)    Restructuring and other consists of:

            
     Quarter Ended      Nine Months
Ended
 
     October 1,
2017
    July 2,
2017
     October 2,
2016
     October 1,
2017
    October 2,
2016
 
Employee severance    $ 581     $ 789      $ 4,203      $ 1,953     $ 5,920  
Contingent consideration fair value adjustment      (286     1,499        7,974        1,847       10,452  
Facility related      (393     —          —          901       —    
Property insurance recovery      (5,064     —          —          (5,064     (5,051
Expenses and impairment of fixed assets related to Japan earthquake      755       —          —          755       5,051  
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 
   $ (4,407   $ 2,288      $ 12,177      $ 392     $ 16,372  
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

(4)    Goodwill and acquired intangible assets impairment related to Teradyne’s Wireless Test business segment.

     

(5)    Interest and other includes:

            
     Quarter Ended      Nine Months
Ended
 
     October 1,
2017
    July 2,
2017
     October 2,
2016
     October 1,
2017
    October 2,
2016
 
Non-cash convertible debt interest expense    $ 3,127     $ 3,088      $ —        $ 9,265     $ —    


CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

 

 

     October 1,
2017
     December 31,
2016
 

Assets

     

Cash and cash equivalents

   $ 418,677      $ 307,884  

Marketable securities

     1,217,830        871,024  

Accounts receivable, net

     268,068        192,444  

Inventories, net

     125,183        135,958  

Prepayments

     105,309        108,454  

Other current assets

     5,021        8,039  
  

 

 

    

 

 

 

Total current assets

     2,140,088        1,623,803  

Property, plant and equipment, net

     259,080        253,821  

Marketable securities

     211,943        433,843  

Deferred tax assets

     120,228        107,405  

Other assets

     12,028        12,165  

Retirement plans assets

     10,954        7,712  

Acquired intangible assets, net

     85,729        100,401  

Goodwill

     249,277        223,343  
  

 

 

    

 

 

 

Total assets

   $ 3,089,327      $ 2,762,493  
  

 

 

    

 

 

 

Liabilities

     

Accounts payable

   $ 79,429      $ 95,362  

Accrued employees’ compensation and withholdings

     113,634        109,944  

Deferred revenue and customer advances

     111,506        84,478  

Other accrued liabilities

     62,611        51,382  

Contingent consideration

     21,818        1,050  

Accrued income taxes

     42,377        30,480  
  

 

 

    

 

 

 

Total current liabilities

     431,375        372,696  

Retirement plans liabilities

     114,316        106,938  

Long-term deferred revenue and customer advances

     31,686        23,463  

Deferred tax liabilities

     10,543        12,144  

Long-term other accrued liabilities

     11,604        28,642  

Long-term contingent consideration

     17,311        37,282  

Long-term debt

     362,595        352,669  
  

 

 

    

 

 

 

Total liabilities

     979,430        933,834  

Shareholders’ equity

     2,109,897        1,828,659  
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 3,089,327      $ 2,762,493  
  

 

 

    

 

 

 


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

 

 

     Quarter Ended     Nine Months Ended  
     October 1,
2017
    October 2,
2016
    October 1,
2017
    October 2,
2016
 

Cash flows from operating activities:

        

Net income (loss)

   $ 103,420     $ 63,794     $ 363,616     $ (109,767

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

        

Depreciation

     16,769       16,269       49,243       48,437  

Amortization

     9,901       9,095       32,313       46,275  

Stock-based compensation

     8,308       7,555       25,620       23,012  

Deferred taxes

     2,884       (21,110     (679     (42,568

Provision for excess and obsolete inventory

     1,859       3,033       7,154       15,148  

Contingent consideration fair value adjustment

     (286     7,974       1,847       10,452  

Property insurance recovery

     (4,309     —         (4,309     (5,051

Impairment of fixed assets

     —         —         —         4,179  

Retirement plans actuarial losses (gains)

     —         662       (2,504     (1,200

Tax benefit related to employee stock compensation awards

     —         (3,399     —         (3,399

Goodwill impairment

     —         —         —         254,946  

Acquired intangible assets impairment

     —         —         —         83,339  

Other

     36       (426     429       151  

Changes in operating assets and liabilities:

        

Accounts receivable

     137,807       183,890       (75,623     45,660  

Inventories

     31,919       18,378       23,770       48,600  

Prepayments and other assets

     2,937       384       7,362       (13,273

Accounts payable and accrued expenses

     (27,778     (32,672     5,298       (38,712

Deferred revenue and customer advances

     29,223       (52,692     34,535       53,380  

Retirement plans contributions

     (2,875     (3,573     (4,858     (5,871

Income taxes

     15       4,221       15,808       4,227  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     309,830       201,383       479,022       417,965  

Cash flows from investing activities:

        

Purchases of property, plant and equipment

     (27,280     (19,659     (73,247     (66,252

Purchases of available-for-sale marketable securities

     (701,704     (438,526     (1,036,523     (875,837

Proceeds from sales of available-for-sale marketable securities

     129,915       131,946       443,169       466,744  

Proceeds from maturities of available-for-sale marketable securities

     165,648       74,138       473,255       202,162  

Proceeds from property insurance

     5,064       —         5,064       5,051  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used for investing activities

     (428,357     (252,101     (188,282     (268,132

Cash flows from financing activities:

        

Issuance of common stock under stock purchase and stock option plans

     9,247       2,189       24,462       20,085  

Repurchase of common stock

     (57,493     (28,309     (151,821     (85,092

Dividend payments

     (13,805     (12,123     (41,730     (36,548

Tax benefit related to employee stock compensation awards

     —         3,399       —         3,399  

Payments related to net settlement of employee stock compensation awards

     (146     (77     (12,584     (9,229

Payments of contingent consideration

     —         —         (1,050     (11,697
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used for financing activities

     (62,197     (34,921     (182,723     (119,082

Effects of exchange rate changes on cash and cash equivalents

     1,052       2,481       2,776       2,481  

(Decrease) increase in cash and cash equivalents

     (179,672     (83,158     110,793       33,232  

Cash and cash equivalents at beginning of period

     598,349       381,095       307,884       264,705  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 418,677     $ 297,937     $ 418,677     $ 297,937  
  

 

 

   

 

 

   

 

 

   

 

 

 


GAAP to Non-GAAP Earnings Reconciliation

(In millions, except per share amounts)

 

    Quarter Ended              
    October 1,
2017
    % of Net
Revenues
                July 2,
2017
    % of Net
Revenues
                October 2,
2016
    % of Net
Revenues
             

Net revenues

  $ 503.4           $ 696.9           $ 410.5        

Gross profit - GAAP

  $ 294.8       58.6       $ 391.2       56.1       $ 227.4       55.4    

Pension mark-to-market adjustment (1)

    —         —             (0.7     -0.1         0.4       0.1    
 

 

 

   

 

 

       

 

 

   

 

 

       

 

 

   

 

 

     

Gross profit - non-GAAP

  $ 294.8       58.6       $ 390.5       56.0       $ 227.8       55.5    

Income from operations - GAAP

  $ 128.7       25.6       $ 209.9       30.1       $ 56.5       13.8    

Acquired intangible assets amortization

    7.0       1.4         8.2       1.2         8.5       2.1    

Restructuring and other (2)

    (4.4     -0.9         2.3       0.3         12.2       3.0    

Pension mark-to-market adjustment (1)

    —         —             (2.5     -0.4         0.7       0.2    
 

 

 

   

 

 

       

 

 

   

 

 

       

 

 

   

 

 

     

Income from operations - non-GAAP

  $ 131.3       26.1       $ 217.9       31.3       $ 77.9       19.0    
 

 

 

   

 

 

       

 

 

   

 

 

       

 

 

   

 

 

     
                Net Income
per Common
Share
                Net Income
per Common
Share
                Net Income
per Common
Share
 
    October 1,
2017
    % of Net
Revenues
    Basic     Diluted     July 2,
2017
    % of Net
Revenues
    Basic     Diluted     October 2,
2016
    % of Net
Revenues
    Basic     Diluted  

Net income - GAAP

  $ 103.4       20.5   $ 0.52     $ 0.52     $ 175.0       25.1   $ 0.88     $ 0.87     $ 63.8       15.5   $ 0.32     $ 0.31  

Acquired intangible assets amortization

    7.0       1.4     0.04       0.04       8.2       1.2     0.04       0.04       8.5       2.1     0.04       0.04  

Interest and other (3)

    3.1       0.6     0.02       0.02       3.1       0.4     0.02       0.02       —         —         —         —    

Restructuring and other (2)

    (4.4     -0.9     (0.02     (0.02     2.3       0.3     0.01       0.01       12.2       3.0     0.06       0.06  

Pension mark-to-market adjustment (1)

    —         —         —         —         (2.5     -0.4     (0.01     (0.01     0.7       0.2     0.00       0.00  

Exclude discrete tax adjustments (4)

    0.3       0.1     0.00       0.00       0.5       0.1     0.00       0.00       (10.7     -2.6     (0.05     (0.05

Non-GAAP tax adjustments (5)

    (1.7     -0.3     (0.01     (0.01     (5.1     -0.7     (0.03     (0.03     (6.8     -1.7     (0.03     (0.03
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income - non-GAAP

  $ 107.7       21.4   $ 0.55     $ 0.54     $ 181.5       26.0   $ 0.91     $ 0.90     $ 67.7       16.5   $ 0.33     $ 0.33  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP and non-GAAP weighted average common shares - basic

    197.5             198.8             202.2        

GAAP weighted average common shares - diluted

    200.8             201.5             203.9        

Exclude dilutive shares from convertible note

    (1.1           (0.7           —          
 

 

 

         

 

 

         

 

 

       

Non-GAAP weighted average common shares - diluted

    199.7             200.8             203.9        
 

 

 

         

 

 

         

 

 

       

(1)    Actuarial (gains) losses recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting.

     

(2)    Restructuring and other consists of:

     

    Quarter Ended                    
    October 1,
2017
                      July 2,
2017
                      October 2,
2016
                   

Employee severance

  $ 0.6           $ 0.8           $ 4.2        

Contingent consideration fair value adjustment

    (0.3           1.5             8.0        

Facility related

    (0.4           —               —          

Property insurance recovery

    (5.1           —               —          

Expenses and Impairment of fixed assets related to Japan earthquake

    0.8             —               —          
 

 

 

         

 

 

         

 

 

       
  $ (4.4         $ 2.3           $ 12.2        
 

 

 

         

 

 

         

 

 

       

(3)    For the quarters ended October 1, 2017 and July 2, 2017, interest and other included non-cash convertible debt interest expense.

     

(4)    For the quarters ended October 1, 2017, July 2, 2017 and October 2, 2016 adjustment to exclude discrete income tax items.

     


(5)    For periods after December 31, 2016, the non-GAAP annual effective tax rate is based on a with and without calculation with respect to non-GAAP reconciling items.

     

 
    Nine Months Ended                                      
    October 1,
2017
    % of Net
Revenues
                October 2,
2016
    % of Net
Revenues
                                     

Net Revenues

  $ 1,657.2           $ 1,373.3                

Gross profit - GAAP

  $ 950.9       57.4       $ 740.6       53.9            

Pension mark-to-market adjustment (1)

    (0.7     0.0         (0.3     0.0            
 

 

 

   

 

 

       

 

 

   

 

 

             

Gross profit - non-GAAP

  $ 950.2       57.3       $ 740.3       53.9            

Income (loss) from operations - GAAP

  $ 432.0       26.1       $ (119.2     -8.7            

Acquired intangible assets amortization

    23.1       1.4         44.7       3.3            

Restructuring and other (2)

    0.4       0.0         16.4       1.2            

Pension mark-to-market adjustment (1)

    (2.5     -0.2         (1.2     -0.1            

Goodwill impairment (3)

    —         —             254.9       18.6            

Acquired intangible assets impairment (3)

    —         —             83.3       6.1            
 

 

 

   

 

 

       

 

 

   

 

 

             

Income from operations - non-GAAP

  $ 453.0       27.3       $ 278.9       20.3            
 

 

 

   

 

 

       

 

 

   

 

 

             
                Net Income
per Common
Share
                Net (Loss) Income
per Common
Share
                         
    October 1,
2017
    % of Net
Revenues
    Basic     Diluted     October 2,
2016
    % of Net
Revenues
    Basic     Diluted                          

Net income (loss) - GAAP

  $ 363.6       21.9   $ 1.83     $ 1.81     $ (109.8     -8.0   $ (0.54   $ (0.54        

Acquired intangible assets amortization

    23.1       1.4     0.12       0.12       44.7       3.3     0.22       0.22          

Interest and other (4)

    9.3       0.6     0.05       0.05       —         —         —         —            

Restructuring and other (2)

    0.4       0.0     0.00       0.00       16.4       1.2     0.08       0.08          

Pension mark-to-market adjustment (1)

    (2.5     -0.2     (0.01     (0.01     (1.2     -0.1     (0.01     (0.01        

Goodwill impairment (3)

    —         —         —         —         254.9       18.6     1.25       1.24          

Acquired intangible assets impairment (3)

    —         —         —         —         83.3       6.1     0.41       0.41          

Exclude discrete tax adjustments (5)

    (6.1     -0.4     (0.03     (0.03     11.8       0.9     0.06       0.06          

Non-GAAP tax adjustments (6)

    (9.9     -0.6     (0.05     (0.05     (55.7     -4.1     (0.27     (0.27        
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

         

Net income — non-GAAP

  $ 377.9       22.8   $ 1.90     $ 1.88     $ 244.4       17.8   $ 1.20     $ 1.19          
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

         

GAAP and non-GAAP weighted average common shares — basic

    198.8             203.2                

GAAP weighted average common shares — diluted

    201.4             203.2                

Exclude dilutive shares from convertible note

    (0.6           —                  

Include dilutive shares

    —               1.7                
 

 

 

         

 

 

               

Non-GAAP weighted average common shares — diluted

    200.8             204.9                
 

 

 

         

 

 

         

 

 

   

 

 

   

 

 

   

 

 

 

(1)    Actuarial gains recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting.

     

       

(2)    Restructuring and other consists of:

     

       
    Nine Months Ended                                            
    October 1,
2017
                      October 2,
2016
                                           

   Employee severance

  $ 2.0           $ 5.9                

   Contingent consideration fair value adjustment

    1.8             10.5                

   Facility related

    0.9             —                  

   Expenses and impairment of fixed assets related to Japan earthquake

    0.8             5.1                

   Property insurance recovery

    (5.1           (5.1              
 

 

 

         

 

 

               
  $ 0.4           $ 16.4                
 

 

 

         

 

 

               

 

(3) Goodwill and acquired intangible assets impairment related to Teradyne’s Wireless Test business segment.


(4) For the nine months ended October 1, 2017, Interest and other included non-cash convertible debt interest expense.

 

(5) For the nine months ended October 1, 2017 and October 2, 2016, adjustment to exclude discrete income tax items. For the nine months ended October 2, 2016, adjustment to treat Wireless Test business segment goodwill and intangible assets impairments as discrete tax items.

 

(6) For periods after December 31, 2016, the non-GAAP annual effective tax rate is based on a with and without calculation with respect to non-GAAP reconciling items.

GAAP to Non-GAAP Reconciliation of Fourth Quarter 2017 guidance:

 

GAAP and non-GAAP fourth quarter revenue guidance:

   $ 420 million       to      $ 450 million  

GAAP net income per diluted share

   $ 0.27        $ 0.33  

Exclude acquired intangible assets amortization

     0.04          0.04  

Exclude non-cash convertible debt interest

     0.02          0.02  

Non-GAAP tax adjustment

     (0.01        (0.01
  

 

 

      

 

 

 

Non-GAAP net income per diluted share

   $ 0.31        $ 0.37  

For press releases and other information of interest to investors, please visit Teradyne’s homepage at http://www.teradyne.com.

Contact: Teradyne, Inc.

              Andy Blanchard 978-370-2425

              Vice President of Corporate Relations