- 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 |
“Second quarter sales and earnings exceeded guidance as our test businesses strengthened through the quarter,” said CEO and President
"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
Webcast
A conference call to discuss the second quarter results, along with management's business outlook, will follow at
A replay will be available on the
Non-GAAP Results
In addition to disclosing results that are determined in accordance with GAAP,
About
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, 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 |
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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 | ||||||||||||||||||||||||||||||||||||||||||||||
Contact:
Vice President of Corporate Relations
Source: Teradyne, Inc.