Form 8-K

 

 

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): July 24, 2018

 

 

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 July 24, 2018, Teradyne, Inc. (“Teradyne”) issued a press release regarding its financial results for the second quarter ended July 1, 2018. 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 July 24, 2018.


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: July 25, 2018     By:  

/S/ GREGORY R. BEECHER

    Name:   Gregory R. Beecher
    Title:   Vice President, Chief Financial Officer and Treasurer
EX-99.1

Exhibit 99.1

Teradyne Reports Second Quarter 2018 Results

 

   

Revenue of $527 million, above high end of guidance

 

   

Memory Test Q2’18 revenue of $67 million, up 34% from Q2’17 and 1H’18 revenue of $139 million, up 90% from 1H’17

 

   

Universal Robots revenue of $57 million, up 45% from Q2’17

 

 

     Q2’18      Q1’18      Q2’17  

Revenue (mil)

   $ 527      $ 487      $ 697  

GAAP EPS

   $ 0.52      $ 0.43      $ 0.87  

Non-GAAP EPS

   $ 0.59      $ 0.45      $ 0.90  

NORTH READING, Mass. – July 24, 2018 – Teradyne, Inc. (NYSE: TER) reported revenue of $527 million for the second quarter of 2018 of which $360 million was in Semiconductor Test, $70 million in System Test, $62 million in Industrial Automation, and $35 million in Wireless Test. GAAP net profit for the second quarter was $101.0 million or $0.52 per share. On a non-GAAP basis, Teradyne’s net income in the second quarter was $112.8 million, or $0.59 per diluted share, which excluded acquired intangible asset amortization, restructuring and other charges, non-cash convertible debt interest, discrete income tax adjustments, and included the related tax impact on non-GAAP adjustments.

“Second quarter sales and earnings exceeded guidance as our test businesses strengthened through the quarter,” said CEO and President Mark Jagiela. “Despite the slowdown in test demand for mobile devices, other test markets grew in the quarter led by memory in Semiconductor Test, connectivity in Wireless Test at LitePoint, and storage in System Test. In Industrial Automation, Universal Robots continued its high growth with sales up 45% from Q2 of 2017. At newly acquired Mobile Industrial Robots (MiR), full quarter sales grew over 85% from the year ago quarter on a standalone basis.”

“Reflecting a continued strong outlook in both our Test and Industrial Automation segments, Q3 company sales are expected to grow over 10% compared to Q3 2017 at the midpoint of our guidance.”

Guidance for the third quarter of 2018 is revenue of $540 million to $570 million, with GAAP net income of $0.51 to $0.59 per diluted share and non-GAAP net income of $0.59 to $0.66 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization, non-cash convertible debt interest, restructuring and other charges and includes the related tax impact on non-GAAP adjustments.

Webcast

A conference call to discuss the second quarter results, along with management’s business outlook, will follow at 10:00 a.m. ET, Wednesday, July 25. Interested investors should access the webcast at investors.teradyne.com/events-presentations at least five minutes before the call begins. Presentation materials will be available starting at 10:00 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, fair value inventory step-up related to Mobile Industrial Robots, and restructuring and other, and includes the related tax impact on Non-GAAP adjustments. 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 as a percentage of revenue, 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 fair value inventory step-up related to Mobile Industrial Robots. GAAP requires that this item 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. Non-GAAP diluted shares include the impact of Teradyne’s call option on its shares. 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.

 

Page 2


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, autonomous mobile robots and sensing and simulation software, used by global manufacturing and light industrial customers to improve quality and increase manufacturing efficiency. In 2017, Teradyne had revenue of $2.14 billion and currently employs approximately 4,700 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 repurchase program, use of proceeds and potential dilution from the senior convertible notes offering, potential borrowings under a senior secured credit facility, and the impact of the U.S. tax reform, export and tariff laws. 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, availability of, or borrowing under, the credit facility, or the impact of the U.S. tax reform, export and tariff laws. 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 the Industrial Automation 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; additional U.S. tax regulations or IRS guidance; the impact of any tariffs or export controls imposed in the U.S. or China; 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, 2017 and the Quarterly Report on Form 10-Q for the period ended April 1, 2018. 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 SECOND FISCAL QUARTER OF 2018

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

 

 

 

     Quarter Ended     Six Months Ended  
     July 1,
2018
    April 1,
2018
    July 2,
2017 (1)
    July 1,
2018
    July 2,
2017 (1)
 

Net revenues

   $ 526,929     $ 487,467     $ 696,901     $ 1,014,396     $ 1,153,814  

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

     219,595       217,635       306,263       437,230       498,159  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     307,334       269,832       390,638       577,166       655,655  

Operating expenses:

          

Selling and administrative

     99,410       90,505       90,111       189,916       174,903  

Engineering and development

     75,342       74,408       82,270       149,750       158,248  

Acquired intangible assets amortization

     9,793       7,698       8,166       17,491       16,118  

Restructuring and other (3)

     2,389       (313     2,288       2,076       4,799  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

     186,934       172,298       182,835       359,233       354,068  

Income from operations

     120,400       97,534       207,803       217,933       301,587  

Interest and other (4)

     (388     (1,714     (926     (2,102     (2,694
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     120,012       95,820       206,877       215,831       298,893  

Income tax provision

     18,975       8,846       31,901       27,821       38,696  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 101,037     $ 86,974     $ 174,976     $ 188,010     $ 260,197  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income per common share:

          

Basic

   $ 0.53     $ 0.45     $ 0.88     $ 0.97     $ 1.30  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.52     $ 0.43     $ 0.87     $ 0.94     $ 1.29  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares — basic

     190,730       195,255       198,774       192,992       199,390  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares — diluted (5)

     194,909       203,484       201,529       199,197       201,732  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash dividend declared per common share

   $ 0.09     $ 0.09     $ 0.07     $ 0.18     $ 0.14  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(1)   Certain prior period amounts were reclassified to conform with the first quarter 2018 adoption of new accounting guidance for the presentation of pension and post retirement costs.

    

(2)   Cost of revenues includes:

    

     Quarter Ended     Six Months Ended  
     July 1,
2018
    April 1,
2018
    July 2,
2017
    July 1,
2018
    July 2,
2017
 

Provision for excess and obsolete inventory

   $ 2,653     $ 3,522     $ 2,569     $ 6,175     $ 5,295  

Sale of previously written down inventory

     (1,922     (2,243     (2,149     (4,165     (3,283
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 731     $ 1,279     $ 420     $ 2,010     $ 2,012  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(3)   Restructuring and other consists of:

    

     Quarter Ended     Six Months Ended  
     July 1,
2018
    April 1,
2018
    July 2,
2017
    July 1,
2018
    July 2,
2017
 

Employee severance

   $ 2,398     $ 3,881     $ 789     $ 6,279     $ 1,372  

Acquisition related expenses

     2,544       774       —         3,318       —    

Other

     947       —         —         947       1,294  

Contingent consideration fair value adjustment

     (3,500     (4,968     1,499       (8,468     2,133  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 2,389     $ (313   $ 2,288     $ 2,076     $ 4,799  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(4)   Interest and other includes:

          
     Quarter Ended     Six Months Ended  
     July 1,
2018
    April 1,
2018
    July 2,
2017
    July 1,
2018
    July 2,
2017
 

Non-cash convertible debt interest

   $ 3,245     $ 3,206     $ 3,088     $ 6,451     $ 6,138  

Pension actuarial gains

     (71     —         (2,504     (71     (2,504
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 3,174     $ 3,206     $ 584     $ 6,380     $ 3,634  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(5)   Under GAAP, when calculating diluted earnings per share, convertible debt must be assumed to have converted if the effect on EPS would be dilutive. Diluted shares assume the conversion of the convertible debt as the effect would be dilutive. Accordingly, for the quarters ended July 1, 2018, April 1, 2018 and July 2, 2017, 2.6 million, 4.4 million and 0.7 million shares, respectively, have been included in diluted shares. For the six months ended July 1, 2018 and July 2, 2017, 3.5 million and 0.3 million shares, respectively, have been included in diluted shares. For the quarter ended April 1, 2018 and the six months ended July 1, 2018, diluted shares also included 1.8 million and 0.9 million shares, respectively, from the convertible note hedge transaction.

    


CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

 

 

     July 1,
2018
     December 31,
2017
 

Assets

     

Cash and cash equivalents

   $ 480,384      $ 429,843  

Marketable securities

     712,309        1,347,979  

Accounts receivable, net

     454,122        272,783  

Inventories, net

     135,550        107,525  

Prepayments and other current assets

     111,820        112,151  
  

 

 

    

 

 

 

Total current assets

     1,894,185        2,270,281  

Property, plant and equipment, net

     285,302        268,447  

Marketable securities

     111,417        125,926  

Deferred tax assets

     73,574        84,026  

Other assets

     12,192        12,275  

Retirement plans assets

     18,252        17,491  

Acquired intangible assets, net

     148,173        79,088  

Goodwill

     388,625        252,011  
  

 

 

    

 

 

 

Total assets

   $ 2,931,720      $ 3,109,545  
  

 

 

    

 

 

 

Liabilities

     

Accounts payable

   $ 102,737      $ 86,393  

Accrued employees’ compensation and withholdings

     115,264        141,694  

Deferred revenue and customer advances

     82,491        83,614  

Other accrued liabilities

     83,681        59,083  

Contingent consideration

     35,911        24,497  

Income taxes payable

     32,226        59,055  
  

 

 

    

 

 

 

Total current liabilities

     452,310        454,336  

Retirement plans liabilities

     124,258        119,776  

Long-term deferred revenue and customer advances

     25,375        30,127  

Deferred tax liabilities

     22,281        6,720  

Long-term other accrued liabilities

     22,296        10,273  

Long-term contingent consideration

     25,003        20,605  

Long-term income taxes payable

     147,360        148,075  

Long-term debt

     372,897        365,987  
  

 

 

    

 

 

 

Total liabilities

     1,191,780        1,155,899  

Shareholders’ equity

     1,739,940        1,953,646  
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 2,931,720      $ 3,109,545  
  

 

 

    

 

 

 


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

 

 

     Quarter Ended     Six Months Ended  
     July 1,
2018
    July 2,
2017
    July 1,
2018
    July 2,
2017
 

Cash flows from operating activities:

        

Net income

   $ 101,037     $ 174,976     $ 188,010     $ 260,197  

Adjustments to reconcile net income to net cash provided by operating activities:

        

Depreciation

     16,820       16,331       33,156       32,474  

Amortization

     10,973       11,342       20,177       22,412  

Deferred taxes

     8,616       (86     17,312       (3,563

Stock-based compensation

     8,081       8,367       17,625       17,312  

Provision for excess and obsolete inventory

     2,653       2,569       6,175       5,295  

Contingent consideration fair value adjustment

     (3,500     1,499       (8,468     2,133  

Retirement plan actuarial gains

     (71     (2,504     (71     (2,504

Other

     (225     1,151       1,168       1,153  

Changes in operating assets and liabilities, net of businesses acquired:

        

Accounts receivable

     (40,332     (90,397     (179,403     (214,189

Inventories

     (266     54,003       (21,283     (8,149

Prepayments and other assets

     2,320       3,321       1,641       4,425  

Accounts payable and accrued expenses

     38,551       22,002       (8,155     34,504  

Deferred revenue and customer advances

     874       8,645       10,518       5,312  

Retirement plans contributions

     (1,153     (1,036     (2,173     (1,983

Income taxes

     (14,203     20,130       (26,308     14,363  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     130,175       230,313       49,921       169,192  

Cash flows from investing activities:

        

Purchases of property, plant and equipment

     (27,866     (23,901     (62,663     (45,967

Purchases of marketable securities

     (156,747     (181,502     (647,071     (334,819

Proceeds from sales of marketable securities

     28,382       99,661       829,053       313,254  

Proceeds from maturities of marketable securities

     257,164       219,423       469,862       307,607  

Acquisition of businesses, net of cash acquired

     (145,276     —         (170,632     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash (used for) provided by investing activities

     (44,343     113,681       418,549       240,075  

Cash flows from financing activities:

        

Issuance of common stock under stock purchase and stock option plans

     27       131       10,681       15,215  

Repurchase of common stock

     (226,519     (56,598     (360,795     (94,328

Dividend payments

     (17,094     (13,904     (34,682     (27,925

Payment related to net settlement of employee stock compensation awards

     (122     (149     (19,751     (12,438

Payment of contingent consideration

     —         —         (13,571     (1,050
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used for financing activities

     (243,708     (70,520     (418,118     (120,526

Effects of exchange rate changes on cash and cash equivalents

     387       129       189       1,724  

(Decrease) increase in cash and cash equivalents

     (157,489     273,603       50,541       290,465  

Cash and cash equivalents at beginning of period

     637,873       324,746       429,843       307,884  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 480,384     $ 598,349     $ 480,384     $ 598,349  
  

 

 

   

 

 

   

 

 

   

 

 

 


GAAP to Non-GAAP Earnings Reconciliation

(In millions, except per share amounts)

 

    Quarter Ended  
    July 1,
2018
    % of Net
Revenues
                April 1,
2018
    % of Net
Revenues
                July 2,
2017 (1)
    % of Net
Revenues
             

Net revenues

  $ 526.9           $ 487.5           $ 696.9        

Gross profit GAAP

  $ 307.3       58.3       $ 269.8       55.3       $ 390.6       56.0    

Inventory step-up

    0.4       0.1         —         —             —         —        
 

 

 

   

 

 

       

 

 

   

 

 

       

 

 

   

 

 

     

Gross profit non-GAAP

  $ 307.7       58.4       $ 269.8       55.3       $ 390.6       56.0    

Income from operations - GAAP

  $ 120.4       22.9       $ 97.5       20.0       $ 207.8       29.8    

Acquired intangible assets amortization

    9.8       1.9         7.7       1.6         8.2       1.2    

Restructuring and other (2)

    2.4       0.5         (0.3     -0.1         2.3       0.3    

Inventory step-up

    0.4       0.1         —         —             —         —        
 

 

 

   

 

 

       

 

 

   

 

 

       

 

 

   

 

 

     

Income from operations - non-GAAP

  $ 133.0       25.2       $ 104.9       21.5       $ 218.3       31.3    
 

 

 

   

 

 

       

 

 

   

 

 

       

 

 

   

 

 

     
                Net Income
per Common
Share
                Net Income
per Common
Share
                Net Income
per Common
Share
 
    July 1,
2018
    % of Net
Revenues
    Basic     Diluted     April 1,
2018
    % of Net
Revenues
    Basic     Diluted     July 2,
2017
    % of Net
Revenues
    Basic     Diluted  

Net income - GAAP

  $ 101.0       19.2   $ 0.53     $ 0.52     $ 87.0       17.8   $ 0.45     $ 0.43     $ 175.0       25.1   $ 0.88     $ 0.87  

Acquired intangible assets amortization

    9.8       1.9     0.05       0.05       7.7       1.6     0.04       0.04       8.2       1.2     0.04       0.04  

Interest and other (3)

    3.2       0.6     0.02       0.02       3.2       0.7     0.02       0.02       3.1       0.4     0.02       0.02  

Restructuring and other (2)

    2.4       0.5     0.01       0.01       (0.3     -0.1     (0.00     (0.00     2.3       0.3     0.01       0.01  

Inventory step-up

    0.4       0.1     0.00       0.00       —         —         —         —         —         —         —         —    

Pension mark-to-market adjustment (3)

    (0.1     0.0     (0.00     (0.00     —         —         —         —         (2.5     -0.4     (0.01     (0.01

Exclude discrete tax adjustments (4)

    (0.5     -0.1     (0.00     (0.00     (6.3     -1.3     (0.03     (0.03     0.5       0.1     0.00       0.00  

Non-GAAP tax adjustments

    (3.4     -0.6     (0.02     (0.02     (1.9     -0.4     (0.01     (0.01     (5.1     -0.7     (0.03     (0.03

Convertible share adjustment

    —         —         —         0.01       —         —         —         0.01       —         —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income - non-GAAP

  $ 112.8       21.4   $ 0.59     $ 0.59     $ 89.4       18.3   $ 0.46     $ 0.45     $ 181.5       26.0   $ 0.91     $ 0.90  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP and non-GAAP weighted average common shares - basic

    190.7             195.3             198.8        

GAAP weighted average common shares - diluted

    194.9             203.5             201.5        

Exclude dilutive shares related to convertible note transaction

    (2.6           (6.2           (0.7      
 

 

 

         

 

 

         

 

 

       

Non-GAAP weighted average common shares - diluted

    192.3             197.3             200.8        
 

 

 

         

 

 

         

 

 

       

(1)   Certain prior period amounts were reclassified to conform with the first quarter 2018 adoption of new accounting guidance for the presentation of pension and post retirement costs.

    

(2)   Restructuring and other consists of:

    

    Quarter Ended                    
    July 1,
2018
                      April 1,
2018
                      July 2,
2017
                   

Employee severance

  $ 2.4           $ 3.9           $ 0.8        

Acquisition related expenses

    2.5             0.8             —          

Other

    0.9             —               —          

Contingent consideration fair value adjustment

    (3.5           (5.0           1.5        
 

 

 

         

 

 

         

 

 

       
  $ 2.4           $ (0.3         $ 2.3        
 

 

 

         

 

 

         

 

 

       

(3)   For the quarters ended July 1, 2018, April 1, 2018 and July 2, 2017, adjustment to exclude non-cash convertible debt interest expense. For the quarters ended July 1, 2018 and July 2, 2017, adjustments to exclude actuarial gains recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting.

    

(4)   For the quarters ended July 1, 2018, April 1, 2018 and July 2, 2017, adjustment to exclude discrete income tax items.

    


    Six Months Ended  
    July 1,
2018
    % of Net
Revenues
                July 2,
2017 (1)
    % of Net
Revenues
             

Net Revenues

  $ 1,014.4           $ 1,153.8        

Gross profit GAAP

  $ 577.2       56.9       $ 655.7       56.8    

Inventory step-up

    0.4       0.0         —         —        
 

 

 

   

 

 

       

 

 

   

 

 

     

Gross profit non-GAAP

  $ 577.6       56.9       $ 655.7       56.8    

Income from operations - GAAP

  $ 217.9       21.5       $ 301.6       26.1    

Acquired intangible assets amortization

    17.5       1.7         16.1       1.4    

Restructuring and other (2)

    2.1       0.2         4.8       0.4    

Inventory step-up

    0.4       0.0         —         —        
 

 

 

   

 

 

       

 

 

   

 

 

     

Income from operations - non-GAAP

  $ 237.9       23.5       $ 322.5       28.0    
 

 

 

   

 

 

       

 

 

   

 

 

     
                Net Income
per Common
Share
                Net Income
per Common
Share
 
    July 1,
2018
    % of Net
Revenues
    Basic     Diluted     July 2,
2017
    % of Net
Revenues
    Basic     Diluted  

Net income - GAAP

  $ 188.0       18.5   $ 0.97     $ 0.94     $ 260.2       22.6   $ 1.30     $ 1.29  

Acquired intangible assets amortization

    17.5       1.7     0.09       0.09       16.1       1.4     0.08       0.08  

Interest and other (3)

    6.5       0.6     0.03       0.03       6.1       0.5     0.03       0.03  

Restructuring and other (2)

    2.1       0.2     0.01       0.01       4.8       0.4     0.02       0.02  

Inventory step - up

    0.4       0.0     0.00       0.00       —         —         —         —    

Pension mark - to-market adjustment (3)

    (0.1     0.0     (0.00     (0.00     (2.5     -0.2     (0.01     (0.01

Exclude discrete tax adjustments (4)

    (6.8     -0.7     (0.04     (0.03     (6.5     -0.6     (0.03     (0.03

Non-GAAP tax adjustments

    (5.3     -0.5     (0.03     (0.03     (8.2     -0.7     (0.04     (0.04

Convertible share adjustment

    —         —         —         0.02       —         —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income - non-GAAP

  $ 202.3       19.9   $ 1.05     $ 1.04     $ 270.0       23.4   $ 1.35     $ 1.34  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP and non-GAAP weighted average common shares - basic

    193.0             199.4        

GAAP weighted average common shares - diluted

    199.2             201.7        

Exclude dilutive shares from convertible note

    (4.4           (0.3      
 

 

 

         

 

 

       

Non-GAAP weighted average common shares - diluted

    194.8             201.4        
 

 

 

         

 

 

       

(1)   Certain prior period amounts were reclassified to conform with the first quarter 2018 adoption of new accounting guidance for the presentation of pension and post retirement costs.

    

(2)   Restructuring and other consists of:

               
    Six Months Ended                    
    July 1,
2018
                      July 2,
2017
                   

Employee severance

  $ 6.3           $ 1.4        

Acquisition related expenses

    3.3             —          

Other

    0.9             1.3        

Contingent consideration fair value adjustment

    (8.5           2.1        
 

 

 

         

 

 

       
  $ 2.1           $ 4.8        
 

 

 

         

 

 

       

(3)   For the six months ended July 1, 2018 and July 2, 2017, Interest and other included non-cash convertible debt interest expense. For the six months ended July 1, 2018 and July 2, 2017, adjustments to exclude actuarial gains recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting.

    

(4)   For the six months ended July 1, 2018 and July 2, 2017, adjustment to exclude discrete income tax items.

    

GAAP to Non-GAAP Reconciliation of Third Quarter 2018 guidance:

 

GAAP and non-GAAP third quarter revenue guidance:

  $ 540 million       to     $ 570 million            

GAAP net income per diluted share

  $ 0.51       $ 0.59            

Exclude acquired intangible assets amortization

    0.06         0.06            

Exclude non-cash convertible debt interest

    0.02         0.02            

Exclude restructuring and other

    0.01         0.01            

Tax effect of non-GAAP adjustments

    (0.02       (0.02          

Convertible share adjustment

    0.01         0.01            
 

 

 

     

 

 

           

Non-GAAP net income per diluted share

  $ 0.59       $ 0.66            

 

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