10-Q
falseP3YP3YP60YP7YP3Y0000097210Q2--12-31P3YIncludes $2.5 million and $1.7 million in 2020 and 2019, respectively, for leases of Teradyne’s systems recognized outside Accounting Standards Codification (“ASC”) 606 “Revenue from Contracts with Customers.”Includes $4.3 million and $3.4 million in 2020 and 2019, respectively, for leases of Teradyne’s systems recognized outside ASC 606 “Revenue from Contracts with Customers.”Incremental shares from assumed conversion of the convertible notes was calculated using the difference between the average Teradyne stock price for the period and the conversion price of $31.59, multiplied by 14.6 million shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period.Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price of $39.64, multiplied by 14.6 million shares. 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Table of Contents
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM
10-Q
 
 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 28, 2020
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File
No. 001-06462
 
 
TERADYNE, INC.
(Exact name of registrant as specified in its charter)
 
 
 
Massachusetts
 
04-2272148
(State or Other Jurisdiction of
Incorporation or Organization)
 
(I.R.S. Employer
Identification No.)
600 Riverpark DriveNorth Reading,
Massachusetts
 
01864
(Address of Principal Executive Offices)
 
(Zip Code)
978-370-2700
(Registrant’s Telephone Number, Including Area Code)
 
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
Common Stock, par value $0.125 per share
 
TER
 
Nasdaq Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files)    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in
Rule 12b-2
of the Exchange Act (check one):
 
Large accelerated filer      Accelerated filer  
Non-accelerated
filer
     Emerging growth company  
Smaller reporting 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.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act).    Yes  ☐    No  
The number of shares outstanding of the registrant’s only class of Common Stock as of July 24, 2020 was 166,032,335 shares.
 
 
 

Table of Contents
TERADYNE, INC.
INDEX
 
 
 
 
  
Page No.
 
 
 
  
     
     
Item 1.
 
  
     
     
 
 
  
 
1
 
     
 
 
  
 
2
 
     
 
 
  
 
3
 
     
 
 
  
 
4
 
     
 
 
  
 
5
 
     
 
 
  
 
6
 
     
Item 2.
 
  
 
30
 
     
Item 3.
 
  
 
4
2
 
     
Item 4.
 
  
 
4
2
 
     
 
 
  
     
     
Item 1.
 
  
 
4
3
 
     
Item 1A.
 
  
 
4
3
 
     
Item 2.
 
  
 
4
5
 
     
Item 4.
 
  
 
4
5
 
     
Item 6.
 
  
 
4
6
 

Table of Contents
PART I
 
Item 1:
Financial Statements
TERADYNE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
    
June 28,
2020
   
December 31,
2019
 
    
(in thousands,
except per share amount)
 
ASSETS
    
Current assets:
    
Cash and cash equivalents
   $ 725,431     $ 773,924  
Marketable securities
     229,791       137,303  
Accounts receivable, less allowance for doubtful accounts of $1,829 and $1,736 at June 28, 2020 and December 31, 2019, respectively
     694,521       362,368  
Inventories, net
     206,088       196,691  
Prepayments and other current assets
     238,176       188,598  
  
 
 
   
 
 
 
Total current assets
     2,094,007       1,658,884  
Property, plant and equipment, net
     353,595       320,216  
Operating lease
right-of-use
assets, net
     56,172       57,539  
Marketable securities
     106,968       104,490  
Deferred tax assets
     79,210       75,185  
Retirement plans assets
     17,817       18,457  
Other assets
     11,854       10,332  
Acquired intangible assets, net
     107,563       125,480  
Goodwill
     422,003       416,431  
  
 
 
   
 
 
 
Total assets
   $ 3,249,189     $ 2,787,014  
  
 
 
   
 
 
 
LIABILITIES
    
Current liabilities:
    
Accounts payable
   $ 184,163     $ 126,617  
Accrued employees’ compensation and withholdings
     175,589       163,883  
Deferred revenue and customer advances
     124,224       104,876  
Other accrued liabilities
     119,732       70,871  
Operating lease liabilities
     20,000       19,476  
Contingent consideration
     16,789       9,106  
Income taxes payable
     89,216       44,200  
  
 
 
   
 
 
 
Total current liabilities
     729,713       539,029  
Retirement plans liabilities
     130,826       134,471  
Long-term deferred revenue and customer advances
     55,634       45,974  
Long-term contingent consideration
     32,948       30,599  
Long-term other accrued liabilities
     22,703       19,535  
Deferred tax liabilities
     11,997       14,070  
Long-term operating lease liabilities
     43,582       45,849  
Long-term income taxes payable
     74,930       82,642  
Debt
     402,305       394,687  
  
 
 
   
 
 
 
Total liabilities
     1,504,638       1,306,856  
  
 
 
   
 
 
 
Commitments and contingencies (See Note Q)
    
SHAREHOLDERS’ EQUITY
    
Common stock, $0.125 par value, 1,000,000 shares authorized: 165,806 and 166,410 shares issued and outstanding at June 28, 2020 and December 31, 2019, respectively
     20,725       20,801  
Additional
paid-in
capital
     1,730,716       1,720,129  
Accumulated other comprehensive loss
     (8,500     (18,854
)
Retained earnings (accumulated deficit)
     1,610       (241,918
  
 
 
   
 
 
 
Total shareholders’ equity
     1,744,551       1,480,158  
  
 
 
   
 
 
 
Total liabilities and shareholders’ equity
   $ 3,249,189     $ 2,787,014  
  
 
 
   
 
 
 
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s
Annual Report on Form
10-K
for the year ended December 31, 2019, are an integral part of the
condensed
consolidated financial statements.
 
1

Table of Contents
TERADYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
    
For the Three Months

Ended
   
For the Six Months

Ended
 
    
June 28,
2020
   
June 30,
2019
   
June 28,
2020
   
June 30,
2019
 
    
(in thousands, except per share amount)
 
Revenues:
        
Products
   $ 734,630     $ 457,511     $ 1,345,536     $ 850,953  
Services
     104,031       106,667       197,480       207,324  
  
 
 
   
 
 
   
 
 
   
 
 
 
Total revenues
     838,661       564,178       1,543,016       1,058,277  
Cost of revenues:
        
Cost of products
     322,732       193,299       582,728       358,667  
Cost of services
     44,456       46,961       83,265       88,057  
  
 
 
   
 
 
   
 
 
   
 
 
 
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)
     367,188       240,260       665,993       446,724  
  
 
 
   
 
 
   
 
 
   
 
 
 
Gross profit
     471,473       323,918       877,023       611,553  
Operating expenses:
        
Selling and administrative
     113,259       108,811       224,647       210,824  
Engineering and development
     94,102       81,434       179,261       158,225  
Acquired intangible assets amortization
     8,941       10,083       18,832       20,717  
Restructuring and other
     37,222       (10,404     29,616       (5,292
  
 
 
   
 
 
   
 
 
   
 
 
 
Total operating expenses
     253,524       189,924       452,356       384,474  
  
 
 
   
 
 
   
 
 
   
 
 
 
Income from operations
     217,949       133,994       424,667       227,079  
Non-operating
(income) expense:
        
Interest income
     (1,368     (4,384     (4,119     (9,373
Interest expense
     6,043       5,800       11,594       11,320  
Other (income) expense, net
     (4,017     1,401       2,833       (24
  
 
 
   
 
 
   
 
 
   
 
 
 
Income before income taxes
     217,291       131,177       414,359       225,156  
Income tax provision
     28,383       33,780       49,261       18,621  
  
 
 
   
 
 
   
 
 
   
 
 
 
Net income
   $ 188,908     $ 97,397     $ 365,098     $ 206,535  
  
 
 
   
 
 
   
 
 
   
 
 
 
Net income per common share:
        
Basic
   $ 1.14     $ 0.57     $ 2.20     $ 1.20  
  
 
 
   
 
 
   
 
 
   
 
 
 
Diluted
   $ 1.05     $ 0.55     $ 2.02     $ 1.16  
  
 
 
   
 
 
   
 
 
   
 
 
 
Weighted average common shares—basic
     165,789       171,241       166,189       172,387  
  
 
 
   
 
 
   
 
 
   
 
 
 
Weighted average common shares—diluted
     180,257       178,590       180,497       177,781  
  
 
 
   
 
 
   
 
 
   
 
 
 
Cash dividend declared per common share
   $ 0.10     $ 0.09     $ 0.20     $ 0.18  
  
 
 
   
 
 
   
 
 
   
 
 
 
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s
Annual Report on Form
10-K
for the year ended December 31, 2019, are an integral part of the condensed
consolidated financial statements.
 
2

Table of Contents
TERADYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
    
For the Three Months

Ended
   
For the Six Months

Ended
 
    
June 28,
   
June 30,
   
June 28,
   
June 30,
 
    
2020
   
2019
   
2020
   
2019
 
    
(in thousands)
 
Net income
   $ 188,908     $ 97,397     $ 365,098     $ 206,535  
Other comprehensive income, net of tax:
        
Foreign currency translation adjustment, net of tax of $0, $0, $0, $0, respectively
     15,805       5,642       7,026       983  
Available-for-sale
marketable securities:
        
Unrealized gains on debt securities arising during period, net of tax of $1,084, $678, $1,271, $1,256, respectively
     3,793       2,537       4,830       4,637  
Less: Reclassification adjustment for gains included in net income, net of tax of $(277), $(6), $(421), $(26), respectively
     (983     (27     (1,499     (97
  
 
 
   
 
 
   
 
 
   
 
 
 
     2,810       2,510       3,331       4,540  
Defined benefit retirement plans:
        
Amortization of prior service credit, net of tax
of $0, $(11), $(1), $(21), respectively
     (2     (37     (3     (74
  
 
 
   
 
 
   
 
 
   
 
 
 
Other comprehensive income
     18,613       8,115       10,354       5,449  
  
 
 
   
 
 
   
 
 
   
 
 
 
Comprehensive income
   $ 207,521     $ 105,512     $ 375,452     $ 211,984  
  
 
 
   
 
 
   
 
 
   
 
 
 
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s
Annual Report on Form
10-K
for the year ended December 31, 2019, are an integral part of the condensed
consolidated financial statements.
 
3

Table of Contents
TERADYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
 
    
Common
Stock
Shares
   
Common
Stock
Par
Value
   
Additional
Paid-in

Capital
   
Accumulated
Other
Comprehensive
Loss
   
(Accumulated
Deficit)
Retain
ed

Earnings
   
Total
Shareholders’
Equity
 
    
(in thousands)
 
For the Three Months Ended June 28, 2020
            
Balance, March 29, 2020
     165,938     $ 20,742     $ 1,721,367     $ (27,113   $ (164,323   $ 1,550,673  
Net issuance of common stock under stock-based plans
     41       5       (451                     (446
Stock-based compensation expense
                   9,800                       9,800  
Repurchase of common stock
     (173     (22                     (6,379     (6,401
Cash dividends ($0.10 per share)
                                   (16,596     (16,596
Net income
                                   188,908       188,908  
Other comprehensive income
                           18,613               18,613  
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance, June 28, 2020
     165,806     $ 20,725     $ 1,730,716     $ (8,500   $ 1,610     $ 1,744,551  
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
For the Three Months Ended June 30, 2019
            
Balance, March 31, 2019
     172,353     $ 21,544     $ 1,679,997     $ (15,706   $ (215,607   $ 1,470,228  
Net issuance of common stock under stock-based plans
     99       13       679                       692  
Stock-based compensation expense
                   7,535                       7,535  
Repurchase of common stock
     (2,016     (252                     (88,902     (89,154
Cash dividends ($0.09 per share)
                                   (15,401     (15,401
Net income
                                   97,397       97,397  
Other comprehensive income
                           8,115               8,115  
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance, June 30, 2019
     170,436     $ 21,305     $ 1,688,211     $ (7,591   $ (222,513   $ 1,479,412  
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
For the Six Months Ended June 28, 2020
            
Balance, December 31, 2019
     166,410     $ 20,801     $ 1,720,129     $ (18,854   $ (241,918   $ 1,480,158  
Net issuance of common stock under stock-based plans
     913       114       (10,496                     (10,382
Stock-based compensation expense
                   21,083                       21,083  
Repurchase of common stock
     (1,517     (190                     (88,275     (88,465
Cash dividends ($0.10 per share)
                                   (33,295     (33,295
Net income
                                   365,098       365,098  
Other comprehensive income
                           10,354               10,354  
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance, June 28, 2020
     165,806     $ 20,725     $ 1,730,716     $ (8,500   $ 1,610     $ 1,744,551  
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
For the Six Months Ended June 30, 2019
            
Balance, December 31, 2018
     175,522     $ 21,940     $ 1,671,645     $ (13,040   $ (158,191   $ 1,522,354  
Net issuance of common stock under stock-based plans
     1,385       174       469                       643  
Stock-based compensation expense
                   16,097                       16,097  
Repurchase of common stock
     (6,471     (809                     (239,815     (240,624
Cash dividends ($0.09 per share)
                                   (31,042     (31,042
Net income
                                   206,535       206,535  
Other comprehensive income
                           5,449               5,449  
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Balance, June 30, 2019
     170,436     $ 21,305     $ 1,688,211     $ (7,591   $ (222,513   $ 1,479,412  
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s
Annual Report on Form
10-K
for the year ended December 31, 2019, are an integral part of the condensed
consolidated financial statements.
 
4

Table of Contents
TERADYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
    
For the Six Months Ended
 
    
June 28,
2020
   
June 30,
2019
 
    
(in thousands)
 
Cash flows from operating activities:
    
Net income
   $ 365,098     $ 206,535  
Adjustments to reconcile net income from operations to net cash provided by operating activities:
    
Depreciation
     38,305       33,882  
Amortization
     26,234       24,976  
Stock-based compensation
     21,367       18,109  
Contingent consideration adjustment
     19,239       (8,701
Provision for excess and obsolete inventory
     9,637       5,799  
Deferred taxes
     (7,163     515  
Gains on investments
     (469     (3,741
Retirement plan actuarial (gains) losses
     (99     448  
Other
     523       429  
Changes in operating assets and liabilities, net of businesses acquired:
    
Accounts receivable
     (331,040     (79,478
Inventories
     (3,728     (2,447
Prepayments and other assets
     (49,479     (17,067
Accounts payable and other liabilities
     113,578       (14,424
Deferred revenue and customer advances
     28,655       15,826  
Retirement plans contributions
     (2,501     (2,414
Income taxes
     37,842       (14,973
  
 
 
   
 
 
 
Net cash provided by operating activities
     265,999       163,274  
  
 
 
   
 
 
 
Cash flows from investing activities:
    
Purchases of property, plant and equipment
     (84,014     (58,956
Purchases of marketable securities
     (299,548     (484,181
Proceeds from maturities of marketable securities
     182,984       233,193  
Proceeds from sales of marketable securities
     26,661       42,454  
Proceeds from life insurance
     546       273  
Acquisition of businesses, net of cash acquired
     149       (21,970
  
 
 
   
 
 
 
Net cash used for investing activities
     (173,222     (289,187
  
 
 
   
 
 
 
Cash flows from financing activities:
    
Issuance of common stock under stock purchase and stock option plans
     12,757       15,089  
Repurchase of common stock
     (88,465     (247,222
Dividend payments
     (33,266     (31,019
Payments related to net settlement of employee stock compensation awards
     (22,519     (14,446
Payments of contingent consideration
     (8,852     (27,615
  
 
 
   
 
 
 
Net cash used for financing activities
     (140,345     (305,213
  
 
 
   
 
 
 
Effects of exchange rate changes on cash and cash equivalents
     (925     (519
  
 
 
   
 
 
 
Decrease in cash and cash equivalents
     (48,493     (431,645
Cash and cash equivalents at beginning of period
     773,924       926,752  
  
 
 
   
 
 
 
Cash and cash equivalents at end of period
   $ 725,431     $ 495,107  
  
 
 
   
 
 
 
Supplemental cash flow disclosure
    
Non-cash investing activities:
    
Capital expenditures incurred but not yet paid
   $ 6,281     $ 4,068  
The accompanying notes, together with the Notes to Consolidated Financial Statements included in Teradyne’s
Annual Report on Form
10-K
for the year ended December 31, 2019, are an integral part of the condensed
consolidated financial statements.
 
5

Table of Contents
TERADYNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A. THE COMPANY
Teradyne, Inc. (“Teradyne”) is a leading global supplier of automation equipment for test and industrial applications. Teradyne designs, develops, manufactures and sells automatic test systems used to test semiconductors, wireless products, data storage and complex electronics systems in the consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Teradyne’s industrial automation products include collaborative robotic arms, autonomous mobile robots, and advanced robotic control software used by global manufacturing and light industrial customers to improve quality, increase manufacturing and material handling efficiency and decrease
manufacturing
costs. Teradyne’s automatic test equipment and industrial automation products and services include:
 
 
semiconductor test (“Semiconductor Test”) systems;
 
 
defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, storage and system level test (“Storage Test”) systems, and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”);
 
 
industrial automation (“Industrial Automation”) products; and
 
 
wireless test (“Wireless Test”) systems.
B. ACCOUNTING POLICIES
Basis of Presentation
The consolidated interim financial statements include the accounts of Teradyne and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. These interim financial statements are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for the fair statement of such interim financial statements. Certain prior year amounts were reclassified to conform to the current year presentation. The December 31, 2019 condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by United States of America generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. The accompanying financial information should be read in conjunction with the consolidated financial statements and notes thereto contained in Teradyne’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 2, 2020, for the year ended December 31, 2019.
Preparation of Financial Statements and Use of Estimates
The preparation of consolidated financial statements requires management to make estimates and judgments that affect the amounts reported in the financial statements. Due to the
COVID-19
pandemic, there has been uncertainty and disruption in the global economy and our markets. Teradyne is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of August 3, 2020, the date of issuance of this Quarterly Report on Form
10-Q.
These estimates may change, as new events occur and additional information is obtained. Actual results could differ significantly from these estimates under different assumptions or conditions.
Goodwill
On January 26, 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
2017-04,
“Intangibles—Goodwill and Other (Topic
 350): Simplifying the Accounting for Goodwill Impairment.”
The new guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Teradyne adopted this standard on January 1, 2020, on a prospective basis. The adoption of ASU
2017-04
did not have a material impact on the consolidated statement of operations, cash flows, or earnings per share. Teradyne assesses goodwill for impairment at least annually in the fourth quarter, as of December 31, on a reporting unit basis, or more frequently, when events and circumstances occur indicating that the recorded goodwill may be impaired. Under ASU
2017-04,
goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. All other goodwill impairment guidance will remain largely unchanged. Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The same
one-step
impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts.
 
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Table of Contents
Credit Losses
In June 2016, the FASB issued ASU
2016-13,
“Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This standard introduced the expected credit losses methodology for the measurement of credit losses on financial assets that are not measured at fair value through net income and replaces the “incurred loss” model with an “expected credit loss” model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of the asset. Teradyne adopted this standard on January 1, 2020 on a modified retrospective basis. The adoption of ASU
2016-13
did not have a material impact on the consolidated statement of operations, balance sheets, cash flows, or earnings per share.
C. ACQUISITIONS
AutoGuide LLC
On November 13, 2019, Teradyne acquired 100% of the membership interests of AutoGuide, LLC (“AutoGuide”), a maker of high-payload autonomous mobile robots (“AMRs”), based in Chelmsford, MA, an emerging and fast growing segment of the global forklift market. The total purchase price was approximately $81.6 million, which included cash paid of approximately $57.6 million and $24.0 million in fair value of contingent consideration payable upon achievement of certain performance targets, extending potentially through 2022. At June 28, 2020, the maximum contingent consideration that could be paid is $106.9 million.
The contingent consideration is payable upon achievement of certain thresholds and targets for revenue and earnings before interest and taxes for periods from January 1, 2019 to December 31, 2020, January 1, 2019 to December 31, 2021, and January 1, 2019 to December 31, 2022.
The valuation of the contingent consideration is dependent on the following assumptions: forecasted revenues, revenue volatility, earnings before interest and taxes, and discount rate. These assumptions were estimated based on a review of the historical and projected results.
The AutoGuide acquisition was accounted for as a bu
s
iness combination and, accordingly, the results have been included in Teradyne’s consolidated results of operations from the date of acquisition. AutoGuide’s AMRs are used for material transport of payloads up to 4,500
kg in manufacturing, warehouse and logistics applications. These products complement Mobile Industrial Robots Aps (“MiR”) lower payload products and expand the Industrial Automation segment, which is a key component of Teradyne’s growth strategy.
The allocation of the total purchase price to AutoGuide’s net tangible assets and identifiable intangible assets was based on their estimated fair values as of the acquisition date. The excess of the purchase price over the identifiable intangible assets and net tangible assets in the amount of $41.2 million was allocated to goodwill, which is deductible for tax purposes. AutoGuide’s results have been included in Teradyne’s Industrial Automation segment from the date of acquisition.
The following table represents the final allocation of the purchase price:
 
    
Purchase Price

Allocation
 
    
(in thousands)
 
Goodwill
   $ 41,223  
Intangible assets
     37,660  
Tangible assets acquired and liabilities assumed:
  
Other current assets
     3,661  
Non-current
assets
     1,227  
Accounts payable and current liabilities
     (1,223
Long-term other liabilities
     (949
  
 
 
 
Total purchase price
   $ 81,599  
  
 
 
 
 
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Table of Contents
Teradyne estimated the fair value of intangible assets using the income approach. Forecasted revenues is the key assumption for estimating the fair value. Acquired intangible assets are amortized on a straight-line basis over their estimated useful lives. Components of these intangible assets and their estimated useful lives at the acquisition date are as follows:
 
    
Fair Value
    
Estimated Useful

Life
 
    
(in thousands)
    
(in years)
 
Developed technology
   $ 24,590        6.0  
Trademarks and tradenames
     7,360        6.0  
Customer relationships
     5,450        7.0  
Backlog
     260        0.3  
  
 
 
    
Total intangible assets
   $ 37,660        6.1  
  
 
 
    
The following unaudited pro forma information gives effect to the acquisition of AutoGuide as if the acquisition occurred on January 1, 2018. The unaudited pro forma results are not necessarily indicative of what actually would have occurred had the acquisition been in effect for the periods presented:
 
    
For the Three Months
Ended
    
For the Six Months
Ended
 
    
June 30,

2019
    
June 30,

2019
 
    
(in thousands)
 
Revenue
   $ 565,978      $ 1,061,577  
Net income
     95,948        203,237  
Net income per common share:
     
Basic
   $ 0.56      $ 1.18  
Diluted
   $ 0.54      $ 1.14  
Lemsys SA
On January 30, 2019, Teradyne acquired all of the issued and outstanding shares of Lemsys SA (“Lemsys”) for a total purchase price of approximately $9.1 million. Lemsys strengthens Teradyne’s position in the electrification trends of vehicles, solar and wind power, and industrial applications. The Lemsys acquisition was accounted for as a business combination and, accordingly, the results have been included in Teradyne’s Semiconductor Test segment from the date of acquisition. Teradyne’s final allocation of the purchase price was goodwill of $1.4 million, which is not deductible for tax purposes, acquired intangible assets of $4.6 million with an average estimated useful life of 5.2 years, and $3.1 million of net tangible assets. The acquisition was not material to Teradyne’s consolidated financial statements.
D. REVENUE
Disaggregation of Revenue
The following table provides information about disaggregated revenue by timing of revenue recognition, primary geographical market, and major product lines.
 
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Table of Contents
    
Semiconductor
 
Test
           
Industrial
 
Automation
                     
    
System on
a Chip
    
Memory
    
System

Test
    
Universal
Robots
    
Mobile
Industrial
Robots
    
AutoGuide
    
Wireless

Test
    
Corporate

and

Other
   
Total
 
    
(in thousands)
 
For the Three Months Ended June 28, 2020 (1)
                         
Timing of Revenue Recognition
                         
Point in Time
   $ 520,496      $ 80,032      $ 57,741      $ 41,804      $ 11,196      $ 3,408      $ 46,347      $ (253   $ 760,771