- Semiconductor Test demand for 5G infrastructure remained strong
- Memory test shipments grew 23% sequentially on Flash demand
- Industrial Automation revenue up 4% from Q3’18
- Q3’19 GAAP earnings per share grew 19% and Non-GAAP earnings per share grew 8% from Q3’18
- Full year GAAP earnings per share expected to grow 11% and Non-GAAP earnings per share to grow 16% from 2018 at mid-point of guidance
Q3’19 | Q3’18 | Q2’19 | |
Revenue (mil) | $582 | $567 | $564 |
GAAP EPS | $0.75 | $0.63 | $0.55 |
Non-GAAP EPS | $0.77 | $0.71 | $0.66 |
==========================================
“Our Semiconductor Test business continued to deliver strong results in the quarter driving company sales and earnings above the July guidance ranges, despite Industrial Automation’s lower than expected revenue growth of 4% compared to last year’s Q3 level,” said
Guidance for the fourth quarter of 2019 is revenue of
“In Q4, our strong outlook is driven mainly by continued 5G and memory related Semiconductor Test demand and improved storage test shipments,” Jagiela commented. “For the full year, at the mid-point of our guidance, we expect our year-over-year sales to grow more than 7% to over
Webcast
A conference call to discuss the third quarter results, along with management's business outlook, will follow at
Non-GAAP Results
In addition to disclosing results that are determined in accordance with GAAP,
About Teradyne
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 THIRD FISCAL QUARTER OF 2019 | |||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
September 29, 2019 | June 30, 2019 |
September 30, 2018 | September 29, 2019 | September 30, 2018 | |||||||||||||||||||||||||||
Net revenues | $ | 582,038 | $ | 564,178 | $ | 566,848 | $ | 1,640,315 | $ | 1,581,244 | |||||||||||||||||||||
Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1) | 237,000 | 240,260 | 233,155 | 683,724 | 670,385 | ||||||||||||||||||||||||||
Gross profit | 345,038 | 323,918 | 333,693 | 956,591 | 910,859 | ||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||
Selling and administrative (2) | 109,166 | 108,811 | 100,199 | 319,990 | 290,115 | ||||||||||||||||||||||||||
Engineering and development | 77,804 | 81,434 | 77,049 | 236,030 | 226,799 | ||||||||||||||||||||||||||
Acquired intangible assets amortization | 9,647 | 10,083 | 11,142 | 30,363 | 28,633 | ||||||||||||||||||||||||||
Restructuring and other (3) | (6,500) | (10,404) | 1,710 | (11,792) | 3,785 | ||||||||||||||||||||||||||
Operating expenses | 190,117 | 189,924 | 190,100 | 574,591 | 549,332 | ||||||||||||||||||||||||||
Income from operations | 154,921 | 133,994 | 143,593 | 382,000 | 361,527 | ||||||||||||||||||||||||||
Interest and other expense (4) | 3,188 | 2,817 | 2,749 | 5,111 | 4,852 | ||||||||||||||||||||||||||
Income before income taxes | 151,733 | 131,177 | 140,844 | 376,889 | 356,675 | ||||||||||||||||||||||||||
Income tax provision (5) | 15,873 | 33,780 | 20,863 | 34,494 | 48,684 | ||||||||||||||||||||||||||
Net income | $ | 135,860 | $ | 97,397 | $ | 119,981 | $ | 342,395 | $ | 307,991 | |||||||||||||||||||||
Net income per common share: | |||||||||||||||||||||||||||||||
Basic | $ | 0.80 | $ | 0.57 | $ | 0.65 | $ | 2.00 | $ | 1.62 | |||||||||||||||||||||
Diluted | $ | 0.75 | $ | 0.55 | $ | 0.63 | $ | 1.92 | $ | 1.57 | |||||||||||||||||||||
Weighted average common shares - basic | 169,641 | 171,241 | 185,744 | 171,471 | 190,576 | ||||||||||||||||||||||||||
Weighted average common shares - diluted (6) | 180,494 | 178,590 | 190,505 | 178,685 | 196,300 | ||||||||||||||||||||||||||
Cash dividend declared per common share | $ | 0.09 | $ | 0.09 | $ | 0.09 | $ | 0.27 | $ | 0.27 | |||||||||||||||||||||
(1) | Cost of revenues includes: | Quarter Ended | Nine Months Ended | ||||||||||||||||||||||||||||
September 29, 2019 | June 30, 2019 |
September 30, 2018 | September 29, 2019 | September 30, 2018 | |||||||||||||||||||||||||||
Provision for excess and obsolete inventory | $ | 3,049 | $ | 3,402 | $ | 3,347 | $ | 8,848 | $ | 9,522 | |||||||||||||||||||||
Sale of previously written down inventory | (821) | (363) | (1,013) | (1,962) | (5,178) | ||||||||||||||||||||||||||
Inventory step-up | - | 383 | - | 383 | 372 | ||||||||||||||||||||||||||
$ | 2,228 | $ | 3,422 | $ | 2,334 | $ | 7,269 | $ | 4,716 | ||||||||||||||||||||||
(2) | For the quarter and nine months ended September 29, 2019, selling and administrative expenses include an equity charge of $2,109 for the modification of Teradyne's retired CFO's outstanding equity awards to allow continued vesting and maintain the original term in connection with his July 17, 2019 retirement. | ||||||||||||||||||||||||||||||
(3) | Restructuring and other consists of: | Quarter Ended | Nine Months Ended | ||||||||||||||||||||||||||||
September 29, 2019 | June 30, 2019 |
September 30, 2018 | September 29, 2019 | September 30, 2018 | |||||||||||||||||||||||||||
Contingent consideration fair value adjustment | $ | (7,759) | $ | (11,671) | $ | (768) | $ | (16,460) | $ | (9,236) | |||||||||||||||||||||
Employee severance | 808 | 803 | 1,667 | 2,410 | 7,945 | ||||||||||||||||||||||||||
Acquisition related expenses and compensation | 451 | 464 | 811 | 2,258 | 4,129 | ||||||||||||||||||||||||||
Other | - | - | - | - | 947 | ||||||||||||||||||||||||||
$ | (6,500) | $ | (10,404) | $ | 1,710 | $ | (11,792) | $ | 3,785 | ||||||||||||||||||||||
(4) | Interest and other includes: | Quarter Ended | Nine Months Ended | ||||||||||||||||||||||||||||
September 29, 2019 | June 30, 2019 |
September 30, 2018 | September 29, 2019 | September 30, 2018 | |||||||||||||||||||||||||||
Non-cash convertible debt interest | $ | 3,453 | $ | 3,410 | $ | 3,286 | $ | 10,231 | $ | 9,737 | |||||||||||||||||||||
Pension actuarial loss | - | 448 | 267 | 448 | 196 | ||||||||||||||||||||||||||
$ | 3,453 | $ | 3,858 | $ | 3,553 | $ | 10,679 | $ | 9,933 | ||||||||||||||||||||||
(5) | For the quarter ended June 30, 2019, income tax provision includes a $15 million tax provision related to the finalization of our toll tax charge. For the nine months ended September 29, 2019, income tax provision includes a $26 million tax benefit from the release of uncertain tax position reserves due to the IRS completion of its audit of Teradyne's 2015 Federal tax return and a $15 million tax provision related to the finalization of our toll tax charge. | ||||||||||||||||||||||||||||||
(6) | 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 September 29, 2019, June 30, 2019 and September 30, 2018, 5.8 million, 4.4 million and 3.0 million shares, respectively, have been included in diluted shares. For the nine months ended September 29, 2019 and September 30, 2018, 4.1 million and 3.4 million shares, respectively, have been included in diluted shares. For the three months ended September 29, 2019, June 30, 2019 and September 30, 2018, diluted shares also included 3.6 million, 1.8 million and 0.1 million shares, respectively, from the convertible note hedge transaction. For the nine months ended September 29, 2019 and September 30, 2018, diluted shares included 1.8 million and 0.6 million shares, respectively, from the convertible note hedge transaction. | ||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) | |||||||||||||||||||||||||||||||
September 29, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 593,939 | $ | 926,752 | |||||||||||||||||||||||||||
Marketable securities | 342,538 | 190,096 | |||||||||||||||||||||||||||||
Accounts receivable, net | 357,886 | 291,267 | |||||||||||||||||||||||||||||
Inventories, net | 178,203 | 153,541 | |||||||||||||||||||||||||||||
Prepayments and other current assets | 182,013 | 170,826 | |||||||||||||||||||||||||||||
Total current assets | 1,654,579 | 1,732,482 | |||||||||||||||||||||||||||||
Property, plant and equipment, net | 307,567 | 279,821 | |||||||||||||||||||||||||||||
Operating lease right-of-use assets, net | 57,595 | - | |||||||||||||||||||||||||||||
Marketable securities | 103,558 | 87,731 | |||||||||||||||||||||||||||||
Deferred tax assets | 69,120 | 70,848 | |||||||||||||||||||||||||||||
Other assets | 22,724 | 11,509 | |||||||||||||||||||||||||||||
Retirement plans assets | 16,358 | 16,883 | |||||||||||||||||||||||||||||
Acquired intangible assets, net | 96,573 | 125,482 | |||||||||||||||||||||||||||||
Goodwill | 370,717 | 381,850 | |||||||||||||||||||||||||||||
Total assets | $ | 2,698,791 | $ | 2,706,606 | |||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||
Accounts payable | $ | 117,936 | $ | 100,688 | |||||||||||||||||||||||||||
Accrued employees' compensation and withholdings | 127,912 | 148,566 | |||||||||||||||||||||||||||||
Deferred revenue and customer advances | 95,936 | 77,711 | |||||||||||||||||||||||||||||
Other accrued liabilities | 93,736 | 78,272 | |||||||||||||||||||||||||||||
Operating lease liabilities | 18,386 | - | |||||||||||||||||||||||||||||
Contingent consideration | 6,297 | 34,865 | |||||||||||||||||||||||||||||
Income taxes payable | 33,508 | 36,185 | |||||||||||||||||||||||||||||
Total current liabilities | 493,711 | 476,287 | |||||||||||||||||||||||||||||
Retirement plans liabilities | 121,340 | 117,456 | |||||||||||||||||||||||||||||
Long-term deferred revenue and customer advances | 42,592 | 32,750 | |||||||||||||||||||||||||||||
Deferred tax liabilities | 15,390 | 20,662 | |||||||||||||||||||||||||||||
Long-term other accrued liabilities | 9,803 | 37,547 | |||||||||||||||||||||||||||||
Long-term contingent consideration | 11,783 | 35,678 | |||||||||||||||||||||||||||||
Long-term operating lease liabilities | 46,813 | - | |||||||||||||||||||||||||||||
Long-term income taxes payable | 83,782 | 83,891 | |||||||||||||||||||||||||||||
Debt | 390,942 | 379,981 | |||||||||||||||||||||||||||||
Total liabilities | 1,216,156 | 1,184,252 | |||||||||||||||||||||||||||||
Shareholders' equity | 1,482,635 | 1,522,354 | |||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 2,698,791 | $ | 2,706,606 | |||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | |||||||||||||||||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||||||||||
Net income | $ | 135,860 | $ | 119,981 | $ | 342,395 | $ | 307,991 | |||||||||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||||||||||||||
Depreciation | 17,626 | 16,774 | 51,508 | 49,930 | |||||||||||||||||||||||||||
Amortization | 11,873 | 12,732 | 36,849 | 32,909 | |||||||||||||||||||||||||||
Deferred taxes | (3,492) | 7,130 | (2,977) | 24,442 | |||||||||||||||||||||||||||
Stock-based compensation | 10,713 | 7,702 | 28,822 | 25,327 | |||||||||||||||||||||||||||
Provision for excess and obsolete inventory | 3,049 | 3,347 | 8,848 | 9,522 | |||||||||||||||||||||||||||
Contingent consideration fair value adjustment | (7,759) | (768) | (16,460) | (9,236) | |||||||||||||||||||||||||||
Retirement plans actuarial loss | - | 267 | 448 | 196 | |||||||||||||||||||||||||||
Gains on marketable securities | (417) | (1,182) | (4,158) | (420) | |||||||||||||||||||||||||||
Other | 181 | 530 | 610 | 936 | |||||||||||||||||||||||||||
Changes in operating assets and liabilities, net of businesses acquired: | |||||||||||||||||||||||||||||||
Accounts receivable | 12,689 | 101,596 | (66,789) | (77,807) | |||||||||||||||||||||||||||
Inventories | (11,696) | (12,834) | (14,143) | (34,117) | |||||||||||||||||||||||||||
Prepayments and other assets | 949 | (30,360) | (16,118) | (28,719) | |||||||||||||||||||||||||||
Accounts payable and other liabilities | 35,231 | 24,279 | 20,807 | 16,124 | |||||||||||||||||||||||||||
Deferred revenue and customer advances | 11,953 | (695) | 27,779 | 9,823 | |||||||||||||||||||||||||||
Retirement plans contributions | (1,361) | (1,071) | (3,775) | (3,244) | |||||||||||||||||||||||||||
Income taxes | (16,251) | (6,844) | (31,224) | (33,152) | |||||||||||||||||||||||||||
Net cash provided by operating activities | 199,148 | 240,584 | 362,422 | 290,505 | |||||||||||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||||||||||
Purchases of property, plant and equipment | (37,092) | (25,606) | (96,048) | (88,269) | |||||||||||||||||||||||||||
Proceeds from government subsidy for property, plant and equipment | - | 7,920 | - | 7,920 | |||||||||||||||||||||||||||
Purchases of marketable securities | (121,358) | (162,450) | (605,539) | (809,521) | |||||||||||||||||||||||||||
Proceeds from sales of marketable securities | 17,820 | 14,111 | 60,274 | 843,164 | |||||||||||||||||||||||||||
Proceeds from maturities of marketable securities | 160,279 | 464,238 | 393,472 | 934,100 | |||||||||||||||||||||||||||
Proceeds from life insurance | 2,639 | 1,126 | 2,912 | 1,126 | |||||||||||||||||||||||||||
Purchase of investments and acquisition of businesses, net of cash acquired | - | 1,158 | (21,970) | (169,474) | |||||||||||||||||||||||||||
Net cash provided by (used for) investing activities | 22,288 | 300,497 | (266,899) | 719,046 | |||||||||||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||||||||||
Issuance of common stock under stock purchase and stock option plans | 14,191 | 10,278 | 29,280 | 20,959 | |||||||||||||||||||||||||||
Repurchase of common stock | (121,560) | (201,468) | (368,782) | (562,263) | |||||||||||||||||||||||||||
Dividend payments | (15,250) | (16,638) | (46,269) | (51,320) | |||||||||||||||||||||||||||
Payments related to net settlement of employee stock compensation awards | (104) | (90) | (14,550) | (19,841) | |||||||||||||||||||||||||||
Payments of contingent consideration | - | - | (27,615) | (13,571) | |||||||||||||||||||||||||||
Net cash used for financing activities | (122,723) | (207,918) | (427,936) | (626,036) | |||||||||||||||||||||||||||
Effects of exchange rate changes on cash and cash equivalents |
119 | 472 | (400) | 661 | |||||||||||||||||||||||||||
Increase (decrease) in cash and cash equivalents | 98,832 | 333,635 | (332,813) | 384,176 | |||||||||||||||||||||||||||
Cash and cash equivalents at beginning of period | 495,107 | 480,384 | 926,752 | 429,843 | |||||||||||||||||||||||||||
Cash and cash equivalents at end of period | $ | 593,939 | $ | 814,019 | $ | 593,939 | $ | 814,019 | |||||||||||||||||||||||
GAAP to Non-GAAP Earnings Reconciliation |
|||||||||||||||||||||||||||||||||||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||
Quarter Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 29, 2019 |
% of Net Revenues | June 30, 2019 |
% of Net Revenues | September 30, 2018 |
% of Net Revenues | ||||||||||||||||||||||||||||||||||||||||||||
Net revenues | $ | 582.0 | $ | 564.2 | $ | 566.8 | |||||||||||||||||||||||||||||||||||||||||||
Gross profit GAAP | $ | 345.0 | 59.3 | % | $ | 323.9 | 57.4 | % | $ | 333.7 | 58.9 | % | |||||||||||||||||||||||||||||||||||||
Inventory step-up | - | - | 0.4 | 0.1 | % | - | - | ||||||||||||||||||||||||||||||||||||||||||
Gross profit non-GAAP | $ | 345.0 | 59.3 | % | $ | 324.3 | 57.5 | % | $ | 333.7 | 58.9 | % | |||||||||||||||||||||||||||||||||||||
Income from operations - GAAP | $ | 154.9 | 26.6 | % | $ | 134.0 | 23.8 | % | $ | 143.6 | 25.3 | % | |||||||||||||||||||||||||||||||||||||
Acquired intangible assets amortization | 9.6 | 1.6 | % | 10.1 | 1.8 | % | 11.1 | 2.0 | % | ||||||||||||||||||||||||||||||||||||||||
Equity modification charge (1) | 2.1 | 0.4 | % | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
Restructuring and other (2) | (6.5 | ) | -1.1 | % | (10.4 | ) | -1.8 | % | 1.7 | 0.3 | % | ||||||||||||||||||||||||||||||||||||||
Inventory step-up | - | - | 0.4 | 0.1 | % | - | - | ||||||||||||||||||||||||||||||||||||||||||
Income from operations - non-GAAP | $ | 160.1 | 27.5 | % | $ | 134.1 | 23.8 | % | $ | 156.4 | 27.6 | % | |||||||||||||||||||||||||||||||||||||
Net Income per Common Share |
Net Income per Common Share |
Net Income per Common Share |
|||||||||||||||||||||||||||||||||||||||||||||||
September 29, 2019 |
% of Net Revenues | Basic | Diluted | June 30, 2019 | % of Net Revenues | Basic | Diluted | September 30, 2018 |
% of Net Revenues | Basic | Diluted | ||||||||||||||||||||||||||||||||||||||
Net income - GAAP | $ | 135.9 | 23.4 | % | $ | 0.80 | $ | 0.75 | $ | 97.4 | 17.3 | % | $ | 0.57 | $ | 0.55 | $ | 120.0 | 21.2 | % | $ | 0.65 | $ | 0.63 | |||||||||||||||||||||||||
Acquired intangible assets amortization | 9.6 | 1.6 | % | 0.06 | 0.05 | 10.1 | 1.8 | % | 0.06 | 0.06 | 11.1 | 2.0 | % | 0.06 | 0.06 | ||||||||||||||||||||||||||||||||||
Interest and other (3) | 3.5 | 0.6 | % | 0.02 | 0.02 | 3.4 | 0.6 | % | 0.02 | 0.02 | 3.3 | 0.6 | % | 0.02 | 0.02 | ||||||||||||||||||||||||||||||||||
Equity modification charge (1) | 2.1 | 0.4 | % | 0.01 | 0.01 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Restructuring and other (2) | (6.5 | ) | -1.1 | % | (0.04 | ) | (0.04 | ) | (10.4 | ) | -1.8 | % | (0.06 | ) | (0.06 | ) | 1.7 | 0.3 | % | 0.01 | 0.01 | ||||||||||||||||||||||||||||
Pension mark-to-market adjustment (3) | - | - | - | - | 0.4 | 0.1 | % | 0.00 | 0.00 | 0.3 | 0.1 | % | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||||
Inventory step-up | - | - | - | - | 0.4 | 0.1 | % | 0.00 | 0.00 | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Exclude discrete tax adjustments (4) | (7.7 | ) | -1.3 | % | (0.05 | ) | (0.04 | ) | 13.9 | 2.5 | % | 0.08 | 0.08 | 0.3 | 0.1 | % | 0.00 | 0.00 | |||||||||||||||||||||||||||||||
Non-GAAP tax adjustments | (3.5 | ) | -0.6 | % | (0.02 | ) | (0.02 | ) | (2.0 | ) | -0.4 | % | (0.01 | ) | (0.01 | ) | (3.4 | ) | -0.6 | % | (0.02 | ) | (0.02 | ) | |||||||||||||||||||||||||
Convertible share adjustment | - | - | - | 0.02 | - | - | - | 0.02 | - | - | - | 0.01 | |||||||||||||||||||||||||||||||||||||
Net income - non-GAAP | $ | 133.4 | 22.9 | % | $ | 0.79 | $ | 0.77 | $ | 113.2 | 20.1 | % | $ | 0.66 | $ | 0.66 | $ | 133.3 | 23.5 | % | $ | 0.72 | $ | 0.71 | |||||||||||||||||||||||||
GAAP and non-GAAP weighted average common shares - basic | 169.6 | 171.2 | 185.7 | ||||||||||||||||||||||||||||||||||||||||||||||
GAAP weighted average common shares - diluted | 180.5 | 178.6 | 190.5 | ||||||||||||||||||||||||||||||||||||||||||||||
Exclude dilutive shares related to convertible note transaction | (5.8 | ) | (6.2 | ) | (3.1 | ) | |||||||||||||||||||||||||||||||||||||||||||
Non-GAAP weighted average common shares - diluted | 174.7 | 172.4 | 187.4 | ||||||||||||||||||||||||||||||||||||||||||||||
(1) | For the quarter ended September 29, 2019, selling and administrative expenses include an equity charge for the modification of Teradyne's retired CFO's outstanding equity awards to allow continued vesting and maintain the original term in connection with his July 17, 2019 retirement. | ||||||||||||||||||||||||||||||||||||||||||||||||
(2) | Restructuring and other consists of: | ||||||||||||||||||||||||||||||||||||||||||||||||
Quarter Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 29, 2019 |
June 30, 2019 |
September 30, 2018 |
|||||||||||||||||||||||||||||||||||||||||||||||
Contingent consideration fair value adjustment | $ | (7.8 | ) | $ | (11.7 | ) | $ | (0.8 | ) | ||||||||||||||||||||||||||||||||||||||||
Acquisition related expenses and compensation | 0.5 | 0.5 | 0.8 | ||||||||||||||||||||||||||||||||||||||||||||||
Employee severance | 0.8 | 0.8 | 1.7 | ||||||||||||||||||||||||||||||||||||||||||||||
$ | (6.5 | ) | $ | (10.4 | ) | $ | 1.7 | ||||||||||||||||||||||||||||||||||||||||||
(3) | For the quarters ended September 29, 2019, June 30, 2019 and September 30, 2018, adjustment to exclude non-cash convertible debt interest expense. For the quarters ended June 30, 2019 and September 30, 2018, adjustment to exclude actuarial losses recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting. | ||||||||||||||||||||||||||||||||||||||||||||||||
(4) | For the quarters ended September 29, 2019, June 30, 2019 and September 30, 2018, adjustment to exclude discrete income tax items. For the quarter ended June 30, 2019, GAAP income tax provision includes a $15 million tax provision related to the finalization of our toll tax charge. | ||||||||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
September 29, 2019 |
% of Net Revenues | September 30, 2018 |
% of Net Revenues | ||||||||||||||||||||||||||||||||||||||||||||||
Net Revenues | $ | 1,640.3 | $ | 1,581.2 | |||||||||||||||||||||||||||||||||||||||||||||
Gross profit GAAP | $ | 956.6 | 58.3 | % | $ | 910.9 | 57.6 | % | |||||||||||||||||||||||||||||||||||||||||
Inventory step-up | 0.4 | 0.0 | % | 0.4 | 0.0 | % | |||||||||||||||||||||||||||||||||||||||||||
Gross profit non-GAAP | $ | 957.0 | 58.3 | % | $ | 911.3 | 57.6 | % | |||||||||||||||||||||||||||||||||||||||||
Income from operations - GAAP | $ | 382.0 | 23.3 | % | $ | 361.5 | 22.9 | % | |||||||||||||||||||||||||||||||||||||||||
Acquired intangible assets amortization | 30.4 | 1.9 | % | 28.6 | 1.8 | % | |||||||||||||||||||||||||||||||||||||||||||
Equity modification charge (1) | 2.1 | 0.1 | % | - | - | ||||||||||||||||||||||||||||||||||||||||||||
Restructuring and other (2) | (11.8 | ) | -0.7 | % | 3.8 | 0.2 | % | ||||||||||||||||||||||||||||||||||||||||||
Inventory step-up | 0.4 | 0.0 | % | 0.4 | 0.0 | % | |||||||||||||||||||||||||||||||||||||||||||
Income from operations - non-GAAP | $ | 403.1 | 24.6 | % | $ | 394.3 | 24.9 | % | |||||||||||||||||||||||||||||||||||||||||
Net Income per Common Share |
Net Income per Common Share |
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September 29, 2019 |
% of Net Revenues | Basic | Diluted | September 30, 2018 | % of Net Revenues | Basic | Diluted | ||||||||||||||||||||||||||||||||||||||||||
Net income - GAAP | $ | 342.4 | 20.9 | % | $ | 2.00 | $ | 1.92 | $ | 308.0 | 19.5 | % | $ | 1.62 | $ | 1.57 | |||||||||||||||||||||||||||||||||
Acquired intangible assets amortization | 30.4 | 1.9 | % | 0.18 | 0.17 | 28.6 | 1.8 | % | 0.15 | 0.15 | |||||||||||||||||||||||||||||||||||||||
Interest and other (3) | 10.2 | 0.6 | % | 0.06 | 0.06 | 9.7 | 0.6 | % | 0.05 | 0.05 | |||||||||||||||||||||||||||||||||||||||
Equity modification charge (1) | 2.1 | 0.1 | % | 0.01 | 0.01 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Restructuring and other (2) | (11.8 | ) | -0.7 | % | (0.07 | ) | (0.07 | ) | 3.8 | 0.2 | % | 0.02 | 0.02 | ||||||||||||||||||||||||||||||||||||
Inventory step-up | 0.4 | 0.0 | % | 0.00 | 0.00 | 0.4 | 0.0 | % | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||||||||
Pension mark-to-market adjustment (3) | 0.4 | 0.0 | % | 0.00 | 0.00 | 0.2 | 0.0 | % | 0.00 | 0.00 | |||||||||||||||||||||||||||||||||||||||
Exclude discrete tax adjustments (4) | (23.9 | ) | -1.5 | % | (0.14 | ) | (0.13 | ) | (6.5 | ) | -0.4 | % | (0.03 | ) | (0.03 | ) | |||||||||||||||||||||||||||||||||
Non-GAAP tax adjustments | (9.0 | ) | -0.5 | % | (0.05 | ) | (0.05 | ) | (8.7 | ) | -0.6 | % | (0.05 | ) | (0.04 | ) | |||||||||||||||||||||||||||||||||
Convertible share adjustment | - | - | - | 0.06 | - | - | - | 0.03 | |||||||||||||||||||||||||||||||||||||||||
Net income - non-GAAP | $ | 341.2 | 20.8 | % | $ | 1.99 | $ | 1.97 | $ | 335.5 | 21.2 | % | $ | 1.76 | $ | 1.74 | |||||||||||||||||||||||||||||||||
GAAP and non-GAAP weighted average common shares - basic | 171.5 | 190.6 | |||||||||||||||||||||||||||||||||||||||||||||||
GAAP weighted average common shares - diluted | 178.7 | 196.3 | |||||||||||||||||||||||||||||||||||||||||||||||
Exclude dilutive shares from convertible note | (5.9 | ) | (4.0 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP weighted average common shares - diluted | 172.8 | 192.3 | |||||||||||||||||||||||||||||||||||||||||||||||
(1) | For the nine months ended September 29, 2019, selling and administrative expenses include an equity charge for the modification of Teradyne's retired CFO's outstanding equity awards to allow continued vesting and maintain the original term in connection with his July 17, 2019 retirement. | ||||||||||||||||||||||||||||||||||||||||||||||||
(2) | Restructuring and other consists of: | ||||||||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended |
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September 29, 2019 |
September 30, 2018 |
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Contingent consideration fair value adjustment | $ | (16.5 | ) | $ | (9.2 | ) | |||||||||||||||||||||||||||||||||||||||||||
Acquisition related expenses and compensation | 2.3 | 4.1 | |||||||||||||||||||||||||||||||||||||||||||||||
Employee severance | 2.4 | 7.9 | |||||||||||||||||||||||||||||||||||||||||||||||
Other | - | 0.9 | |||||||||||||||||||||||||||||||||||||||||||||||
$ | (11.8 | ) | $ | 3.8 | |||||||||||||||||||||||||||||||||||||||||||||
(3) | For the nine months ended September 29, 2019 and September 30, 2018, interest and other included non-cash convertible debt interest expense. For the nine months ended September 29, 2019 and September 30, 2018, adjustments to exclude actuarial losses recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting. | ||||||||||||||||||||||||||||||||||||||||||||||||
(4) | For the nine months ended September 29, 2019 and September 30, 2018, adjustment to exclude discrete income tax items. For the nine months ended September 29, 2019, GAAP income tax provision includes a $26 million tax benefit from the release of uncertain tax position reserves due to the IRS completion of its audit of Teradyne's 2015 Federal tax return and includes a $15 million tax provision related to the finalization of our toll tax charge. | ||||||||||||||||||||||||||||||||||||||||||||||||
GAAP to Non-GAAP Reconciliation of Fourth Quarter 2019 guidance: | |||||||||||||||||||||||||||||||||||||||||||||||||
GAAP and non-GAAP fourth quarter revenue guidance: | $590 million | to | $630 million | ||||||||||||||||||||||||||||||||||||||||||||||
GAAP net income per diluted share | $ | 0.63 | $ | 0.74 | |||||||||||||||||||||||||||||||||||||||||||||
Exclude acquired intangible assets amortization | 0.06 | 0.06 | |||||||||||||||||||||||||||||||||||||||||||||||
Exclude non-cash convertible debt interest | 0.02 | 0.02 | |||||||||||||||||||||||||||||||||||||||||||||||
Tax effect of non-GAAP adjustments | (0.01 | ) | (0.01 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Convertible share adjustment | 0.03 | 0.03 | |||||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP net income per diluted share | $ | 0.73 | $ | 0.84 | |||||||||||||||||||||||||||||||||||||||||||||
For press releases and other information of interest to investors, please visit Teradyne's homepage at http://www.teradyne.com. |
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Contact: Teradyne, Inc. | | ||||||||||||||||||||||||||||||||||||||||||||||||
Andy Blanchard 978-370-2425 | |||||||||||||||||||||||||||||||||||||||||||||||||
Vice President of Corporate Relations | |||||||||||||||||||||||||||||||||||||||||||||||||
Source: Teradyne, Inc.