Safe Harbor Statement
This release contains forward-looking
statements regarding future business prospects, Teradyne’s results of
operations, market conditions, the payment of a quarterly dividend, the
repurchase of Teradyne common stock pursuant to a share repurchase
program and 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, future
events, future payment of dividends, future repurchases of common stock
or future availability of, or borrowing under, a 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, dividend payments, repurchases of common
stock 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; market
acceptance of new products; the ability to grow Universal Robots’
business; increased research and development spending; deterioration of
Teradyne’s financial condition; the business judgment of the board of
directors that a declaration of a dividend, the repurchase of common
stock or debt 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, 2015. 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.
CONDENSED CONSOLIDATED OPERATING STATEMENTS | ||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||
April 3, 2016 | December 31, 2015 | April 5, 2015 | ||||||||||||||||||
Net revenues | $ | 430,994 | $ | 318,444 | $ | 342,401 | ||||||||||||||
Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1) (2) | 200,662 | 152,418 | 149,978 | |||||||||||||||||
Gross profit | 230,332 | 166,026 | 192,423 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Engineering and development (1) | 73,464 | 70,941 | 71,450 | |||||||||||||||||
Selling and administrative (1) | 79,174 | 79,718 | 72,041 | |||||||||||||||||
Acquired intangible assets amortization | 19,994 | 19,911 | 13,808 | |||||||||||||||||
Restructuring and other (3) | 1,587 | 5,204 | - | |||||||||||||||||
Operating expenses | 174,219 | 175,774 | 157,299 | |||||||||||||||||
Income (loss) from operations | 56,113 | (9,748 | ) | 35,124 | ||||||||||||||||
Interest and other (4) | 1,079 | 891 | 7,314 | |||||||||||||||||
Income (loss) before income taxes | 57,192 | (8,857 | ) | 42,438 | ||||||||||||||||
Income tax provision (benefit) | 7,206 | (8,216 | ) | 9,651 | ||||||||||||||||
Net income (loss) | $ | 49,986 | $ | (641 | ) | $ | 32,787 | |||||||||||||
Net income (loss) per common share: |
||||||||||||||||||||
Basic | $ | 0.24 | $ | (0.00 | ) | $ | 0.15 | |||||||||||||
Diluted | $ | 0.24 | $ | (0.00 | ) | $ | 0.15 | |||||||||||||
Weighted average common shares - basic | 204,271 | 205,113 | 217,187 | |||||||||||||||||
Weighted average common shares - diluted | 205,732 | 205,113 | 218,812 | |||||||||||||||||
Cash dividend declared per common share | $ | 0.06 | $ | 0.06 | $ | 0.06 | ||||||||||||||
Net orders | $ | 389,417 | $ | 522,240 | $ | 490,357 | ||||||||||||||
(1) Pension actuarial (gains) losses included in our operating results were as follows: |
Quarter Ended | |||||||||||||||||||
April 3, 2016 | December 31, 2015 | April 5, 2015 | ||||||||||||||||||
Cost of revenues | $ | (393 | ) | $ | 8,271 | $ | - | |||||||||||||
Engineering and development | (394 | ) | 4,658 | - | ||||||||||||||||
Selling and administrative | (406 | ) | 4,826 | - | ||||||||||||||||
$ | (1,193 | ) | $ | 17,755 | $ | - | ||||||||||||||
(2) Cost of revenues includes: |
Quarter Ended | |||||||||||||||||||
April 3, 2016 | December 31, 2015 | April 5, 2015 | ||||||||||||||||||
Provision for excess and obsolete inventory | $ | 4,373 | $ | 2,393 | $ | 1,440 | ||||||||||||||
Sale of previously written down inventory | (1,168 | ) | (1,196 | ) | (1,931 | ) | ||||||||||||||
$ | 3,205 | $ | 1,197 | $ | (491 | ) | ||||||||||||||
(3) Restructuring and other consists of: |
Quarter Ended | |||||||||||||||||||
April 3, 2016 | December 31, 2015 | April 5, 2015 | ||||||||||||||||||
Contingent consideration fair value adjustment | $ | 1,173 | $ | 5,089 | $ | - | ||||||||||||||
Employee severance | 414 | 115 | - | |||||||||||||||||
$ | 1,587 | $ | 5,204 | $ | - | |||||||||||||||
(4) Interest and other includes: |
Quarter Ended | |||||||||||||||||||
April 3, 2016 | December 31, 2015 | April 5, 2015 | ||||||||||||||||||
Gain from the sale of an equity investment | $ | - | $ | - | $ | (4,782 | ) | |||||||||||||
$ | - | $ | - | $ | (4,782 | ) | ||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) |
|||||||||||||
April 3, 2016 | December 31, 2015 | ||||||||||||
Assets | |||||||||||||
Cash and cash equivalents | $ | 319,358 | $ | 264,705 | |||||||||
Marketable securities | 410,003 | 477,696 | |||||||||||
Accounts receivable, net | 253,976 | 211,293 | |||||||||||
Inventories, net | 160,687 | 153,588 | |||||||||||
Deferred tax assets | - | 54,973 | |||||||||||
Prepayments | 95,185 | 91,519 | |||||||||||
Other current assets | 3,513 | 6,194 | |||||||||||
Total current assets | 1,242,722 | 1,259,968 | |||||||||||
Net property, plant and equipment | 266,907 | 273,414 | |||||||||||
Marketable securities | 246,072 | 265,928 | |||||||||||
Deferred tax assets | 59,119 | 7,404 | |||||||||||
Other assets | 13,041 | 13,080 | |||||||||||
Retirement plans assets | 1,968 | 636 | |||||||||||
Intangible assets, net | 223,274 | 239,831 | |||||||||||
Goodwill | 495,871 | 488,413 | |||||||||||
Total assets | $ | 2,548,974 | $ | 2,548,674 | |||||||||
Liabilities | |||||||||||||
Accounts payable | $ | 84,104 | $ | 92,358 | |||||||||
Accrued employees' compensation and withholdings | 71,838 | 113,994 | |||||||||||
Deferred revenue and customer advances | 72,095 | 85,527 | |||||||||||
Other accrued liabilities | 92,617 | 43,727 | |||||||||||
Contingent consideration | 500 | 15,500 | |||||||||||
Accrued income taxes | 23,368 | 21,751 | |||||||||||
Total current liabilities | 344,522 | 372,857 | |||||||||||
Long-term deferred revenue and customer advances | 25,468 | 25,745 | |||||||||||
Retirement plans liabilities | 106,921 | 103,531 | |||||||||||
Deferred tax liabilities | 18,300 | 26,663 | |||||||||||
Long-term other accrued liabilities | 34,753 | 32,156 | |||||||||||
Long-term contingent consideration | 23,109 | 21,936 | |||||||||||
Total liabilities | 553,073 | 582,888 | |||||||||||
Shareholders' equity | 1,995,901 | 1,965,786 | |||||||||||
Total liabilities and shareholders' equity | $ | 2,548,974 | $ | 2,548,674 | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | |||||||||||||||
Quarter Ended | |||||||||||||||
April 3, 2016 | April 5, 2015 | ||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | $ | 49,986 | $ | 32,787 | |||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation | 16,192 | 19,345 | |||||||||||||
Amortization | 20,470 | 15,139 | |||||||||||||
Stock-based compensation | 7,925 | 7,963 | |||||||||||||
Provision for excess and obsolete inventory | 4,373 | 1,440 | |||||||||||||
Retirement plans actuarial gain | (1,193 | ) | - | ||||||||||||
Deferred taxes | (5,496 | ) | (1,831 | ) | |||||||||||
Contingent consideration adjustment | 1,173 | - | |||||||||||||
Gain from the sale of an equity investment | - | (4,782 | ) | ||||||||||||
Other | 484 | (1,417 | ) | ||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Accounts receivable | (42,552 | ) | (24,749 | ) | |||||||||||
Inventories | (702 | ) | 5,960 | ||||||||||||
Prepayments and other assets | (1,148 | ) | 3,146 | ||||||||||||
Accounts payable and other accrued expenses | (7,626 | ) | (20,150 | ) | |||||||||||
Deferred revenue and customer advances | (13,836 | ) | 1,038 | ||||||||||||
Retirement plans contributions | (1,250 | ) | (1,019 | ) | |||||||||||
Accrued income taxes | (52 | ) | 4,662 | ||||||||||||
Net cash provided by operating activities | 26,748 | 37,532 | |||||||||||||
Cash flows from investing activities: | |||||||||||||||
Purchases of property, plant and equipment | (20,334 | ) | (21,149 | ) | |||||||||||
Purchases of available-for-sale marketable securities | (221,778 | ) | (335,635 | ) | |||||||||||
Proceeds from maturities of available-for-sale marketable securities | 73,458 | 140,222 | |||||||||||||
Proceeds from sales of available-for-sale marketable securities | 239,370 | 148,639 | |||||||||||||
Proceeds from the sale of an equity investment | - | 4,782 | |||||||||||||
Proceeds from life insurance | - | 1,098 | |||||||||||||
Net cash provided by (used for) investing activities | 70,716 | (62,043 | ) | ||||||||||||
Cash flows from financing activities: | |||||||||||||||
Issuance of common stock under employee stock purchase and stock option plans | 9,140 | 8,899 | |||||||||||||
Repurchase of common stock | (28,001 | ) | (46,650 | ) | |||||||||||
Dividend payments | (12,253 | ) | (13,049 | ) | |||||||||||
Payments of contingent consideration | (11,697 | ) | - | ||||||||||||
Net cash used for financing activities | (42,811 | ) | (50,800 | ) | |||||||||||
Increase (decrease) in cash and cash equivalents | 54,653 | (75,311 | ) | ||||||||||||
Cash and cash equivalents at beginning of period | 264,705 | 294,256 | |||||||||||||
Cash and cash equivalents at end of period | $ | 319,358 | $ | 218,945 | |||||||||||
GAAP to Non-GAAP Earnings Reconciliation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarter Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
April 3, 2016 |
% of Net
|
December 31,
2015 |
% of Net
|
April 5,
2015 |
% of Net
|
||||||||||||||||||||||||||||||||||||||||||||||||||
Net revenues | $ | 431.0 | $ | 318.4 | $ | 342.4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Gross profit - GAAP | $ | 230.3 | 53.4 | % | $ | 166.0 | 52.1 | % | $ | 192.4 | 56.2 | % | |||||||||||||||||||||||||||||||||||||||||||
Pension mark-to-market adjustments (1) | (0.4 | ) | -0.1 | % | 8.3 | 2.6 | % | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Gross profit - non-GAAP | $ | 229.9 | 53.3 | % | $ | 174.3 | 54.7 | % | $ | 192.4 | 56.2 | % | |||||||||||||||||||||||||||||||||||||||||||
Income (loss) from operations - GAAP | $ | 56.1 | 13.0 | % | $ | (9.7 | ) | -3.0 | % | $ | 35.1 | 10.3 | % | ||||||||||||||||||||||||||||||||||||||||||
Acquired intangible assets amortization | 20.0 | 4.6 | % | 19.9 | 6.3 | % | 13.8 | 4.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and other (2) | 1.6 | 0.4 | % | 5.2 | 1.6 | % | - | - | |||||||||||||||||||||||||||||||||||||||||||||||
Pension mark-to-market adjustments (1) | (1.2 | ) | -0.3 | % | 17.8 | 5.6 | % | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Income from operations - non-GAAP | $ | 76.5 | 17.7 | % | $ | 33.2 | 10.4 | % | $ | 48.9 | 14.3 | % | |||||||||||||||||||||||||||||||||||||||||||
Net Income
per Common Share |
Net Income
per Common Share |
Net Income
per Common Share |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
April 3, 2016 |
% of Net
|
Basic | Diluted |
December 31,
2015 |
% of Net
|
Basic | Diluted |
April 5,
2015 |
% of Net
|
Basic | Diluted | ||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) - GAAP | $ | 50.0 | 11.6 | % | $ | 0.24 | $ | 0.24 | $ | (0.6 | ) | -0.2 | % | $ | (0.00 | ) | $ | (0.00 | ) | $ | 32.8 | 9.6 | % | $ | 0.15 | $ | 0.15 | ||||||||||||||||||||||||||||
Acquired intangible assets amortization | 20.0 | 4.6 | % | 0.10 | 0.10 | 19.9 | 6.3 | % | 0.10 | 0.10 | 13.8 | 4.0 | % | 0.06 | 0.06 | ||||||||||||||||||||||||||||||||||||||||
Pension mark-to-market adjustments (1) | (1.2 | ) | -0.3 | % | (0.01 | ) | (0.01 | ) | 17.8 | 5.6 | % | 0.09 | 0.09 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
Restructuring and other (2) | 1.6 | 0.4 | % | 0.01 | 0.01 | 5.2 | 1.6 | % | 0.03 | 0.03 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
Exclude discrete tax items (3) | (2.5 | ) | -0.6 | % | (0.01 | ) | (0.01 | ) | (6.3 | ) | -2.0 | % | (0.03 | ) | (0.03 | ) | (1.8 | ) | -0.5 | % | (0.01 | ) | (0.01 | ) | |||||||||||||||||||||||||||||||
Tax effect of non-GAAP adjustments | (3.5 | ) | -0.8 | % | (0.02 | ) | (0.02 | ) | (9.9 | ) | -3.1 | % | (0.05 | ) | (0.05 | ) | (2.4 | ) | -0.7 | % | (0.01 | ) | (0.01 | ) | |||||||||||||||||||||||||||||||
Interest and other (4) | - | - | - | - | - | - | - | - | (4.8 | ) | -1.4 | % | (0.02 | ) | (0.02 | ) | |||||||||||||||||||||||||||||||||||||||
Net income - non-GAAP | $ | 64.4 | 14.9 | % | $ | 0.32 | $ | 0.31 | $ | 26.1 | 8.2 | % | $ | 0.13 | $ | 0.13 | $ | 37.6 | 11.0 | % | $ | 0.17 | $ | 0.17 | |||||||||||||||||||||||||||||||
GAAP and non-GAAP weighted average common shares - basic | 204.3 | 205.1 | 217.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP weighted average common shares - diluted | 205.7 | 205.1 | 218.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Include dilutive shares | - | 2.1 | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP weighted average common shares - diluted | 205.7 | 207.2 | 218.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
April 3, 2016 |
December 31,
2015 |
April 5,
2015 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingent consideration fair value adjustment | $ | 1.2 | $ | 5.1 | $ | - | |||||||||||||||||||||||||||||||||||||||||||||||||
Employee severance | 0.4 | 0.1 | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | 1.6 | $ | 5.2 | $ | - | ||||||||||||||||||||||||||||||||||||||||||||||||||
(3) For the quarters ended April 3, 2016, December 31, 2015, and April 5, 2015, adjustment to exclude discrete income tax items. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
(4) For the quarter ended April 5, 2015, Interest and other included a gain from the sale of an equity investment. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP to Non-GAAP Reconciliation of Second Quarter 2016 guidance: |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP and non-GAAP second quarter revenue guidance: | $510 million to $540 million | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP net income per diluted share | $ | 0.38 | $ | 0.45 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Exclude acquired intangible assets amortization | 0.10 | 0.10 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Tax effect of non-GAAP adjustment | (0.02 | ) | (0.02 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP net income per diluted share | $ | 0.46 | $ | 0.53 | |||||||||||||||||||||||||||||||||||||||||||||||||||