Safe Harbor Statement
This release contains forward-looking
statements regarding future business prospects, Teradyne’s 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 and a senior secured credit facility. Such
statements are based on the current assumptions and expectations of
Teradyne’s management and are neither promises nor guarantees of future
performance, future events, future earnings per share, future payment of
dividends, future repurchases of common stock or future availability of,
or borrowing under, a credit facility. There can be no assurance that
management’s estimates of Teradyne’s future results or other
forward-looking statements will be achieved. Additionally, the current
dividend and share repurchase programs may be modified, suspended or
discontinued at any time. Important factors that could cause actual
results, earnings per share, dividend payments, repurchases of common
stock or borrowings under the credit facility to differ materially from
those presently expected include: conditions affecting the markets in
which Teradyne operates; decreased or delayed product demand; market
acceptance of new products; the ability to grow Universal Robots’
business; increased research and development spending; deterioration of
Teradyne’s financial condition; the consummation and success of any
mergers or acquisitions; the business judgment of the board of directors
that a declaration of a dividend, the repurchase of common stock or debt
under the credit facility is not in the company’s best interests; and
other events, factors and risks disclosed in filings with the SEC,
including, but not limited to, the “Risk Factors” section of Teradyne’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2015
and the Quarterly Report on Form 10-Q for the period ended July 3, 2016.
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.
TERADYNE, INC. REPORT FOR THIRD FISCAL QUARTER OF 2016 | |||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||||||||||
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Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||
October 2, 2016 | July 3, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | |||||||||||||||||||||||||||
Net revenues | $ | 410,475 | $ | 531,792 | $ | 465,994 | $ | 1,373,261 | $ | 1,321,133 | |||||||||||||||||||||
Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1) (2) | 183,116 | 248,922 | 207,368 | 632,700 | 571,517 | ||||||||||||||||||||||||||
Gross profit | 227,359 | 282,870 | 258,626 | 740,561 | 749,616 | ||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||
Engineering and development (1) | 71,400 | 76,109 | 74,027 | 220,973 | 221,309 | ||||||||||||||||||||||||||
Selling and administrative (1) | 78,794 | 81,425 | 77,481 | 239,393 | 226,595 | ||||||||||||||||||||||||||
Acquired intangible assets amortization | 8,487 | 16,244 | 20,053 | 44,725 | 49,119 | ||||||||||||||||||||||||||
Acquired intangible assets impairment (3) | - | 83,339 | - | 83,339 | - | ||||||||||||||||||||||||||
Goodwill impairment (3) | - | 254,946 | - | 254,946 | - | ||||||||||||||||||||||||||
Restructuring and other (4) | 12,177 | 2,608 | 261 | 16,372 | (124 | ) | |||||||||||||||||||||||||
Operating expenses | 170,858 | 514,671 | 171,822 | 859,748 | 496,899 | ||||||||||||||||||||||||||
Income (loss) from operations | 56,501 | (231,801 | ) | 86,804 | (119,187 | ) | 252,717 | ||||||||||||||||||||||||
Interest and other (5) | 3,180 | 984 | 604 | 5,242 | 9,264 | ||||||||||||||||||||||||||
Income (loss) before income taxes | 59,681 | (230,817 | ) | 87,408 | (113,945 | ) | 261,981 | ||||||||||||||||||||||||
Income tax (benefit) provision | (4,113 | ) | (7,271 | ) | 15,955 | (4,178 | ) | 54,863 | |||||||||||||||||||||||
Net income (loss) | $ | 63,794 | $ | (223,546 | ) | $ | 71,453 | $ | (109,767 | ) | $ | 207,118 | |||||||||||||||||||
Net income (loss) per common share: |
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Basic | $ | 0.32 | $ | (1.10 | ) | $ | 0.34 | $ | (0.54 | ) | $ | 0.97 | |||||||||||||||||||
Diluted | $ | 0.31 | $ | (1.10 | ) | $ | 0.34 | $ | (0.54 | ) | $ | 0.96 | |||||||||||||||||||
Weighted average common shares - basic | 202,211 | 203,018 | 210,032 | 203,167 | 213,688 | ||||||||||||||||||||||||||
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Weighted average common shares - diluted | 203,929 | 203,018 | 211,736 | 203,167 | 215,348 | ||||||||||||||||||||||||||
Cash dividend declared per common share | $ | 0.06 | $ | 0.06 | $ | 0.06 | $ | 0.18 | $ | 0.18 | |||||||||||||||||||||
Net orders | $ | 378,461 | $ | 471,026 | $ | 314,222 | $ | 1,238,904 | $ | 1,333,272 | |||||||||||||||||||||
(1 | ) | Pension actuarial losses (gains) included in our operating results were as follows: | |||||||||||||||||||||||||||||
Quarter Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
October 2, 2016 | July 3, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | |||||||||||||||||||||||||||
Cost of revenues | $ | 364 | $ | (221 | ) | $ | - | $ | (250 | ) | $ | - | |||||||||||||||||||
Engineering and development | 106 | (221 | ) | - | (509 | ) | - | ||||||||||||||||||||||||
Selling and administrative | 192 | (227 | ) | - | (441 | ) | - | ||||||||||||||||||||||||
$ | 662 | $ | (669 | ) | $ | - | $ | (1,200 | ) | $ | - | ||||||||||||||||||||
(2 | ) | Cost of revenues includes: | Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||
October 2, 2016 | July 3, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | |||||||||||||||||||||||||||
Provision for excess and obsolete inventory | $ | 3,033 | $ | 7,742 | $ | 3,058 | $ | 15,148 | $ | 18,939 | |||||||||||||||||||||
Sale of previously written down inventory | (1,794 | ) | (5,151 | ) | (1,983 | ) | (8,113 | ) | (6,659 | ) | |||||||||||||||||||||
Inventory step-up | - | - | 972 | - | 1,567 | ||||||||||||||||||||||||||
$ | 1,239 | $ | 2,591 | $ | 2,047 | $ | 7,035 | $ | 13,847 | ||||||||||||||||||||||
(3 | ) | Goodwill and acquired intangible assets impairment related to Teradyne's Wireless Test business segment. | |||||||||||||||||||||||||||||
(4 | ) | Restructuring and other consists of: | Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||
October 2, 2016 | July 3, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | |||||||||||||||||||||||||||
Contingent consideration fair value adjustment | $ | 7,974 | $ | 1,305 | $ | (1,000 | ) | $ | 10,452 | $ | (2,600 | ) | |||||||||||||||||||
Employee severance | 4,203 | 1,303 | 1,117 | 5,920 | 1,372 | ||||||||||||||||||||||||||
Impairment of fixed assets and expenses related to Japan earthquake | 312 | 5,051 | - | 5,363 | - | ||||||||||||||||||||||||||
Property insurance recovery | (312 | ) | (5,051 | ) | - | (5,363 | ) | - | |||||||||||||||||||||||
Acquisition costs | - | - | 144 | - | 1,104 | ||||||||||||||||||||||||||
$ | 12,177 | $ | 2,608 | $ | 261 | $ | 16,372 | $ | (124 | ) | |||||||||||||||||||||
(5 | ) | Interest and other includes: | Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||
October 2, 2016 | July 3, 2016 | October 4, 2015 | October 2, 2016 | October 4, 2015 | |||||||||||||||||||||||||||
Gain from the sale of an equity investment | $ | - | $ | - | $ | - | $ | - | $ | (5,406 | ) | ||||||||||||||||||||