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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Teradyne Inc | NASDAQ:TER | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-3.72 | -3.20% | 112.60 | 112.56 | 112.61 | 115.72 | 111.79 | 115.05 | 1,001,698 | 18:26:28 |
☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Massachusetts
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04-2272148
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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600 Riverpark Drive, North Reading,
Massachusetts
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01864
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
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Trading
Symbol(s)
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Name of each exchange
on which registered
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Common Stock
, par value $0.125 per share
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TER
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Nasdaq Stock Market LLC
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Emerging growth company
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☐
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Smaller reporting company
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☐
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Page No.
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Item 1.
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6
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Item 2.
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33
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Item 3.
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44
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Item 4.
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44
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Item 1.
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45
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Item 1A.
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45
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Item 2.
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45
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Item 4.
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46
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Item 6.
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46
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Item 1:
|
Financial Statements
|
|
September 29,
2019 |
|
December 31,
2018 |
|
||||
|
(in thousands,
except per share amount)
|
|||||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
||||||
Cash and cash equivalents
|
$ |
593,939
|
$ |
926,752
|
||||
Marketable securities
|
342,538
|
190,096
|
||||||
Accounts receivable, less allowance for doubtful accounts of $1,770 and $1,673 at September 29, 2019 and December 31, 2018, respectively
|
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
|
|
|
|
|
||||
Current 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
|
||||||
Commitments and contingencies (See Note S)
|
|
|
||||||
SHAREHOLDERS’ EQUITY
|
|
|
|
|
||||
Common stock, $0.125 par value, 1,000,000 shares authorized; 168,490 and 175,522 shares issued and outstanding at September 29, 2019 and December 31, 2018, respectively
|
21,061
|
21,940
|
||||||
Additional
paid-in
capital
|
1,712,185
|
1,671,645
|
||||||
Accumulated other comprehensive loss
|
(24,221
|
) |
(13,040
|
) | ||||
Accumulated deficit
|
(226,390
|
) |
(158,191
|
) | ||||
Total shareholders’ equity
|
1,482,635
|
1,522,354
|
||||||
Total liabilities and shareholders’ equity
|
$ |
2,698,791
|
$ |
2,706,606
|
||||
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
||||||||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
|
||||||||
|
(in thousands, except per share amount)
|
|||||||||||||||
Revenues:
|
|
|
|
|
||||||||||||
Products
|
$ |
488,170
|
$ |
470,994
|
$ |
1,339,123
|
$ |
1,308,969
|
||||||||
Services
|
93,868
|
95,854
|
301,192
|
272,275
|
||||||||||||
Total revenues
|
582,038
|
566,848
|
1,640,315
|
1,581,244
|
||||||||||||
Cost of revenues:
|
|
|
|
|
||||||||||||
Cost of products
|
197,196
|
195,339
|
555,863
|
557,074
|
||||||||||||
Cost of services
|
39,804
|
37,816
|
127,861
|
113,311
|
||||||||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)
|
237,000
|
233,155
|
683,724
|
670,385
|
||||||||||||
Gross profit
|
345,038
|
333,693
|
956,591
|
910,859
|
||||||||||||
Operating expenses:
|
|
|
|
|
||||||||||||
Selling and administrative
|
109,166
|
100,199
|
319,990
|
290,115
|
||||||||||||
Engineering and development
|
77,804
|
77,049
|
236,030
|
226,799
|
||||||||||||
Acquired intangible assets amortization
|
9,647
|
11,142
|
30,363
|
28,633
|
||||||||||||
Restructuring and other
|
(6,500
|
) |
1,710
|
(11,792
|
) |
3,785
|
||||||||||
Total operating expenses
|
190,117
|
190,100
|
574,591
|
549,332
|
||||||||||||
Income from operations
|
154,921
|
143,593
|
382,000
|
361,527
|
||||||||||||
Non-operating
(income) expense:
|
|
|
|
|
||||||||||||
Interest income
|
(5,159
|
) |
(6,213
|
) |
(18,641
|
) |
(17,620
|
) | ||||||||
Interest expense
|
5,682
|
5,557
|
17,195
|
18,087
|
||||||||||||
Other (income) expense, net
|
2,665
|
3,405
|
6,557
|
4,385
|
||||||||||||
Income before income taxes
|
151,733
|
140,844
|
376,889
|
356,675
|
||||||||||||
Income tax provision
|
15,873
|
20,863
|
34,494
|
48,684
|
||||||||||||
Net income
|
$ |
135,860
|
$ |
119,981
|
$ |
342,395
|
$ |
307,991
|
||||||||
Net income per common share:
|
|
|
|
|
||||||||||||
Basic
|
$ |
0.80
|
$ |
0.65
|
$ |
2.00
|
$ |
1.62
|
||||||||
Diluted
|
$ |
0.75
|
$ |
0.63
|
$ |
1.92
|
$ |
1.57
|
||||||||
Weighted average common shares—basic
|
169,641
|
185,744
|
171,471
|
190,576
|
||||||||||||
Weighted average common shares—diluted
|
180,494
|
190,505
|
178,685
|
196,300
|
||||||||||||
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
||||||||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
|
||||||||
|
(in thousands)
|
|||||||||||||||
Net income
|
$ |
135,860
|
$ |
119,981
|
$ |
342,395
|
$ |
307,991
|
||||||||
Other comprehensive income, net of tax:
|
|
|
|
|
||||||||||||
Foreign currency translation adjustment, net of tax of $0
|
(18,002
|
) |
7,213
|
(17,019
|
) |
(11,568
|
) | |||||||||
Available-for-sale
marketable securities:
|
|
|
|
|
||||||||||||
Unrealized gains (losses) on marketable securities arising during period, net of
tax of $507, $(62), $1,762, $(806), respectively |
1,754
|
(66
|
) |
6,391
|
(2,555
|
) | ||||||||||
Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $(99), $(17), $(125), $(6), respectively
|
(345
|
) |
(57
|
) |
(442
|
) |
1,411
|
|||||||||
|
1,409
|
(123
|
) |
5,949
|
(1,144
|
) | ||||||||||
Defined benefit pension and post-retirement plans:
|
|
|
|
|
||||||||||||
Amortization of prior service benefit included in net periodic pension and post-retirement benefit, net of tax of $(11), $(18), $(32), $(53), respectively
|
(37
|
) |
(61
|
) |
(111
|
) |
(184
|
) | ||||||||
Other comprehensive
(loss)
income
|
(16,630
|
) |
7,029
|
(11,181
|
) |
(12,896
|
) | |||||||||
Comprehensive income
|
$ |
119,230
|
$ |
127,010
|
$ |
331,214
|
$ |
295,095
|
||||||||
|
|
Common
Stock
Shares
Issued
|
Common
Stock
Value
|
Additional
Paid-in
Capital |
Accumulated
Other Comprehensive
(
Loss
) Income
|
Accumulated
Deficit |
Total
Shareholders’ Equity |
|
||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||
For the Three Months Ended September 29, 2019
|
|
|||||||||||||||||||||||
Balance, June 30, 2019
|
170,436
|
$ |
21,305
|
$ |
1,688,211
|
|
$ |
(7,591
|
) | $ |
(222,513
|
) | $ |
1,479,412
|
||||||||||
Net issuance of common stock under stock-based plans
|
377
|
46
|
14,041
|
—
|
—
|
14,087
|
||||||||||||||||||
Stock-based compensation expense
|
—
|
—
|
9,933
|
—
|
—
|
9,933
|
||||||||||||||||||
Repurchase of common stock
|
(2,323
|
) |
(290
|
) |
—
|
—
|
(124,473
|
) |
(124,763
|
) | ||||||||||||||
Cash dividends ($0.09 per share)
|
—
|
—
|
—
|
—
|
(15,264
|
) |
(15,264
|
) | ||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
135,860
|
135,860
|
||||||||||||||||||
Other comprehensive
loss
|
—
|
—
|
—
|
(16,630
|
) |
—
|
(16,630
|
) | ||||||||||||||||
Balance, September
29
, 2019
|
168,490
|
$ |
21,061
|
$ |
1,712,185
|
$ |
(24,221
|
) | $ |
(226,390
|
) | $ |
1,482,635
|
|||||||||||
For the Three Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance, July 1, 2018
|
187,962
|
$ |
23,495
|
$ |
1,645,679
|
$ |
(3,504
|
) | $ |
74,270
|
$ |
1,739,940
|
||||||||||||
Net issuance of common stock under stock-based plans
|
332
|
42
|
10,056
|
—
|
—
|
10,098
|
||||||||||||||||||
Stock-based compensation expense
|
—
|
—
|
8,833
|
—
|
—
|
8,833
|
||||||||||||||||||
Repurchase of common stock
|
(5,005
|
) |
(626
|
) |
—
|
—
|
(200,846
|
) |
(201,472
|
) | ||||||||||||||
Cash dividends ($0.09 per share)
|
—
|
—
|
—
|
—
|
(16,648
|
) |
(16,648
|
) | ||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
119,981
|
119,981
|
||||||||||||||||||
Other comprehensive income
|
—
|
—
|
—
|
7,028
|
—
|
7,028
|
||||||||||||||||||
Balance, September 30, 2018
|
183,289
|
$ |
22,911
|
$ |
1,664,568
|
$ |
3,524
|
$ |
(23,243
|
) | $ |
1,667,760
|
||||||||||||
For the Nine Months Ended September 29, 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
|
1,762
|
220
|
14,511
|
—
|
—
|
14,731
|
||||||||||||||||||
Stock-based compensation expense
|
—
|
—
|
26,029
|
—
|
—
|
26,029
|
||||||||||||||||||
Repurchase of common stock
|
(8,794
|
) |
(1,099
|
) |
—
|
—
|
(364,287
|
) |
(365,386
|
) | ||||||||||||||
Cash dividends ($0.09 per share)
|
—
|
—
|
—
|
—
|
(46,307
|
) |
(46,307
|
) | ||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
342,395
|
342,395
|
||||||||||||||||||
Other comprehensive
loss
|
—
|
—
|
—
|
(11,181
|
) |
—
|
(11,181
|
) | ||||||||||||||||
Balance, September
29
, 2019
|
168,490
|
$ |
21,061
|
$ |
1,712,185
|
$ |
(24,221
|
) | $ |
(226,390
|
) | $ |
1,482,635
|
|||||||||||
For the Nine Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance, December 31, 2017
|
195,548
|
$ |
24,444
|
$ |
1,638,413
|
$ |
18,776
|
$ |
272,013
|
$ |
1,953,646
|
|||||||||||||
Net issuance of common stock under stock-based plans
|
1,584
|
197
|
1,813
|
—
|
—
|
2,010
|
||||||||||||||||||
Stock-based compensation expense
|
—
|
—
|
24,342
|
—
|
—
|
24,342
|
||||||||||||||||||
Repurchase of common stock
|
(13,843
|
) |
(1,730
|
) |
—
|
—
|
(566,930
|
) |
(568,660
|
) | ||||||||||||||
Cash dividends ($0.09 per share)
|
—
|
—
|
—
|
—
|
(51,352
|
) |
(51,352
|
) | ||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
307,991
|
307,991
|
||||||||||||||||||
Other comprehensive
loss
|
—
|
—
|
—
|
(12,896
|
) |
—
|
(12,896
|
) | ||||||||||||||||
Reclassification of unrealized gains on equity securities
|
—
|
—
|
—
|
(3,125
|
) |
3,125
|
—
|
|||||||||||||||||
Reclassification of tax effects resulting from the Tax Reform Act
|
—
|
—
|
—
|
769
|
(769
|
) |
—
|
|||||||||||||||||
Cumulative effect of changes in accounting principle related to
recognition |
—
|
—
|
—
|
—
|
12,679
|
12,679
|
||||||||||||||||||
Balance, September 30, 2018
|
183,289
|
$ |
22,911
|
$ |
1,664,568
|
$ |
3,524
|
$ |
(23,243
|
) | $ |
1,667,760
|
||||||||||||
|
For the Nine Months Ended
|
|||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
||||
|
(in thousands)
|
|||||||
Cash flows from operating activities:
|
|
|
||||||
Net income
|
$ |
342,395
|
$ |
307,991
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
||||||
Depreciation
|
51,508
|
49,930
|
||||||
Amortization
|
36,849
|
32,909
|
||||||
Stock-based compensation
|
28,822
|
25,327
|
||||||
Deferred taxes
|
(2,977
|
) |
24,442
|
|||||
Provision for excess and obsolete inventory
|
8,848
|
9,522
|
||||||
Contingent consideration fair value adjustment
|
(16,460
|
) |
(9,236
|
) | ||||
Gains on marketable securities
|
(4,158
|
) |
(420
|
) | ||||
Retirement plan
s
actuarial losses
|
448
|
196
|
||||||
Other
|
610
|
936
|
||||||
Changes in operating assets and liabilities, net of businesses acquired:
|
|
|
||||||
Accounts receivable
|
(66,789
|
) |
(77,807
|
) | ||||
Inventories
|
(14,143
|
) |
(34,117
|
) | ||||
Prepayments and other assets
|
(16,118
|
) |
(28,719
|
) | ||||
Accounts payable and other liabilities
|
20,807
|
16,124
|
||||||
Deferred revenue and customer advances
|
27,779
|
9,823
|
||||||
Retirement plans contributions
|
(3,775
|
) |
(3,244
|
) | ||||
Income taxes
|
(31,224
|
) |
(33,152
|
) | ||||
Net cash provided by operating activities
|
362,422
|
290,505
|
||||||
Cash flows from investing activities:
|
|
|
||||||
Purchases of property, plant and equipment
|
(96,048
|
) |
(88,269
|
) | ||||
Proceeds from government subsidy for property, plant and equipment
|
—
|
7,920
|
||||||
Purchases of marketable securities
|
(605,539
|
) |
(809,521
|
) | ||||
Proceeds from sales of marketable securities
|
60,274
|
843,164
|
||||||
Proceeds from maturities of marketable securities
|
393,472
|
934,100
|
||||||
Proceeds from life insurance
|
2,912
|
1,126
|
||||||
Purchase of investment and acquisition of businesses, net of cash acquired
|
(21,970
|
) |
(169,474
|
) | ||||
Net cash (used for) provided by investing activities
|
(266,899
|
) |
719,046
|
|||||
Cash flows from financing activities:
|
|
|
||||||
Issuance of common stock under stock purchase and stock option plans
|
29,280
|
20,959
|
||||||
Repurchase of common stock
|
(368,782
|
) |
(562,263
|
) | ||||
Dividend payments
|
(46,269
|
) |
(51,320
|
) | ||||
Payments related to net settlement of employee stock compensation awards
|
(14,550
|
) |
(19,841
|
) | ||||
Payments of contingent consideration
|
(27,615
|
) |
(13,571
|
) | ||||
Net cash used for financing activities
|
(427,936
|
) |
(626,036
|
) | ||||
Effects of exchange rate changes on cash and cash equivalents
|
(400
|
) |
661
|
|||||
(Decrease) increase in cash and cash equivalents
|
(332,813
|
) |
384,176
|
|||||
Cash and cash equivalents at beginning of period
|
926,752
|
429,843
|
||||||
Cash and cash equivalents at end of period
|
$ |
593,939
|
$ |
814,019
|
||||
• | semiconductor test (“Semiconductor Test”) systems; |
• | industrial automation (“Industrial Automation”) products; |
• | defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, storage test (“Storage Test”) systems, and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”); and |
• | wireless test (“Wireless Test”) systems. |
|
Purchase Price
Allocation
|
|
||
|
(in thousands)
|
|
||
Goodwill
|
$ |
135,976
|
||
Intangible assets
|
80,670
|
|||
Tangible assets acquired and liabilities assumed:
|
|
|||
Current assets
|
6,039
|
|||
Non-current
assets
|
1,336
|
|||
Accounts payable and current liabilities
|
(7,336
|
) | ||
Long-term deferred tax liabilities
|
(18,007
|
) | ||
Other long-term liabilities
|
(900
|
) | ||
Total purchase price
|
$ |
197,778
|
||
|
Fair Value
|
|
Estimated Useful
Life
|
|
||||
|
(in
thousands)
|
|
(in years)
|
|
||||
Developed technology
|
$ |
58,900
|
7.0
|
|||||
Trademarks and tradenames
|
13,240
|
11.0
|
||||||
Customer relationships
|
8,500
|
2.5
|
||||||
Backlog
|
30
|
0.2
|
||||||
Total intangible assets
|
$ |
80,670
|
7.2
|
|||||
|
For the Nine Months
Ended |
|
||
|
September 30,
2018
|
|
||
|
(in thousands)
|
|
||
Revenue
|
$ |
1,588,042
|
||
Net income
|
306,768
|
|||
Net income per common share:
|
|
|||
Basic
|
$ |
1.61
|
||
Diluted
|
$ |
1.56
|
||
|
For the Three Months Ended September 29, 2019
|
|||||||||||||||||||||||||||||||||||||||||||
|
Semiconductor
Test
|
System Test
|
Industrial Automation
|
Wireless
Test |
|
Corporate
and Other |
|
Consolidated
|
|
|||||||||||||||||||||||||||||||||||
|
System
a
chip
(“SOC”)
|
|
Memory
|
|
Defense/
Aerospace
|
|
Storage
Test |
|
Production
Board Test |
|
Universal
Robots |
|
M
iR
|
|
Energid
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||||||||||||||||||||||
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Point in time
|
$ |
6,307
|
$ |
3,464
|
$ |
22,861
|
$ |
2,232
|
$ |
2,165
|
$ |
16,294
|
$ |
2,820
|
$ |
—
|
$ |
5,621
|
$ |
(160
|
) | $ |
61,604
|
|||||||||||||||||||||
Over time
|
8,497
|
621
|
5,814
|
—
|
796
|
293
|
—
|
188
|
723
|
—
|
16,932
|
|||||||||||||||||||||||||||||||||
Europe, Middle East
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Point in time
|
6,894
|
274
|
742
|
—
|
4,354
|
25,557
|
5,011
|
—
|
1,220
|
—
|
44,052
|
|||||||||||||||||||||||||||||||||
Over time
|
5,189
|
255
|
469
|
—
|
1,613
|
459
|
—
|
615
|
48
|
—
|
8,648
|
|||||||||||||||||||||||||||||||||
Asia Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Point in time
|
259,909
|
63,483
|
99
|
22,696
|
6,751
|
15,575
|
1,800
|
—
|
33,032
|
—
|
403,345
|
|||||||||||||||||||||||||||||||||
Over time
|
37,680
|
3,874
|
299
|
1,496
|
830
|
280
|
—
|
—
|
1,545
|
—
|
46,004
|
|||||||||||||||||||||||||||||||||
Lease Revenue
|
1,290
|
—
|
—
|
—
|
88
|
—
|
—
|
—
|
75
|
—
|
1,453
|
|||||||||||||||||||||||||||||||||
Total
|
$ |
325,766
|
$
|
71,971
|
$ |
30,284
|
$ |
26,424
|
$ |
16,597
|
$
|
58,458
|
$
|
9,631
|
$ |
803
|
$
|
42,264
|
$ |
(160
|
) | $ |
582,038
|
|||||||||||||||||||||
|
For the Three Months Ended September 30, 2018
|
|||||||||||||||||||||||||||||||||||||||||||
|
Semiconductor
Test
|
System Test
|
Industrial Automation
|
Wireless
Test |
|
Corporate
and Other |
|
Consolidated
|
|
|||||||||||||||||||||||||||||||||||
|
SOC
|
|
Memory
|
|
Defense/
Aerospace
|
|
Storage
Test |
|
Production
Board Test |
|
Universal
Robots |
|
M
iR
|
|
Energid
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||||||||||||||||||||||
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Point in time
|
$ |
8,866
|
$ |
4,600
|
$ |
15,423
|
$ |
—
|
$ |
2,625
|
$ |
17,834
|
$ |
1,810
|
$ |
104
|
$ |
3,820
|
$ |
(272
|
) | $ |
54,810
|
|||||||||||||||||||||
Over time
|
8,810
|
686
|
6,037
|
—
|
789
|
190
|
—
|
167
|
146
|
—
|
16,825
|
|||||||||||||||||||||||||||||||||
Europe, Middle East
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Point in time
|
9,728
|
2,080
|
161
|
—
|
3,223
|
26,445
|
2,647
|
—
|
1,504
|
—
|
45,788
|
|||||||||||||||||||||||||||||||||
Over time
|
5,336
|
301
|
505
|
—
|
1,510
|
282
|
—
|
457
|
318
|
—
|
8,709
|
|||||||||||||||||||||||||||||||||
Asia Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Point in time
|
258,898
|
76,429
|
931
|
9,916
|
5,201
|
13,656
|
2,087
|
10
|
26,851
|
—
|
393,979
|
|||||||||||||||||||||||||||||||||
Over time
|
36,722
|
2,794
|
212
|
2,116
|
885
|
145
|
—
|
79
|
1,494
|
—
|
44,447
|
|||||||||||||||||||||||||||||||||
Lease Revenue
|
2,047
|
—
|
—
|
—
|
72
|
—
|
—
|
—
|
171
|
—
|
2,290
|
|||||||||||||||||||||||||||||||||
Total
|
$ |
330,407
|
$
|
86,890
|
$ |
23,269
|
$ |
12,032
|
$ |
14,305
|
$
|
58,552
|
$
|
6,544
|
$ |
817
|
$
|
34,304
|
$ |
(272
|
) | $ |
566,848
|
|||||||||||||||||||||
|
For the Nine Months Ended September 29, 2019
|
|||||||||||||||||||||||||||||||||||||||||||
|
Semiconductor
Test
|
System Test
|
Industrial Automation
|
Wireless
Test |
|
Corporate
and Other |
|
Consolidated
|
|
|||||||||||||||||||||||||||||||||||
|
SOC
|
|
Memory
|
|
Defense/
Aerospace
|
|
Storage
Test |
|
Production
Board Test |
|
Universal
Robots |
|
M
iR
|
|
Energid
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||||||||||||||||||||||
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Point in time
|
$ |
21,830
|
$ |
19,574
|
$ |
54,870
|
$ |
7,528
|
$ |
6,760
|
$ |
48,529
|
$ |
9,152
|
$ |
—
|
$ |
12,961
|
$ |
(402
|
) | $ |
180,802
|
|||||||||||||||||||||
Over time
|
24,862
|
2,056
|
19,116
|
—
|
2,317
|
793
|
—
|
1,235
|
1,550
|
—
|
51,929
|
|||||||||||||||||||||||||||||||||
Europe, Middle East
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Point in time
|
27,934
|
2,443
|
992
|
—
|
12,391
|
78,007
|
13,883
|
—
|
2,575
|
—
|
138,225
|
|||||||||||||||||||||||||||||||||
Over time
|
15,681
|
819
|
1,442
|
—
|
4,782
|
1,274
|
—
|
1,381
|
140
|
—
|
25,519
|
|||||||||||||||||||||||||||||||||
Asia Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Point in time
|
727,035
|
143,163
|
525
|
66,974
|
17,235
|
48,284
|
6,208
|
—
|
91,029
|
—
|
1,100,453
|
|||||||||||||||||||||||||||||||||
Over time
|
113,158
|
10,447
|
1,391
|
5,860
|
2,526
|
786
|
—
|
221
|
4,146
|
—
|
138,535
|
|||||||||||||||||||||||||||||||||
Lease Revenue
|
4,487
|
—
|
—
|
—
|
225
|
—
|
—
|
—
|
140
|
—
|
4,852
|
|||||||||||||||||||||||||||||||||
Total
|
$ |
934,987
|
$ |
178,502
|
$ |
78,336
|
$ |
80,362
|
$ |
46,236
|
$ |
177,673
|
$ |
29,243
|
$ |
2,837
|
$ |
112,541
|
$ |
(402
|
) | $ |
1,640,315
|
|||||||||||||||||||||
|
For the Nine Months Ended September 30, 2018
|
|||||||||||||||||||||||||||||||||||||||||||
|
Semiconductor Test
|
System Test
|
Industrial Automation
|
Wireless
Test |
|
Corporate
and Other |
|
Consolidated
|
|
|||||||||||||||||||||||||||||||||||
|
SOC
|
|
Memory
|
|
Defense/
Aerospace
|
|
Storage
Test |
|
Production
Board Test |
|
Universal
Robots |
|
M
iR
|
|
Energid
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||||||||||||||||||||||
Americas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Point in time
|
$ |
30,577
|
$ |
10,291
|
$ |
42,276
|
$ |
284
|
$ |
5,814
|
$ |
48,025
|
$ |
3,009
|
$ |
104
|
$ |
13,515
|
$ |
(602
|
) | $ |
153,293
|
|||||||||||||||||||||
Over time
|
26,536
|
2,092
|
18,462
|
—
|
2,342
|
431
|
—
|
578
|
379
|
—
|
50,820
|
|||||||||||||||||||||||||||||||||
Europe, Middle East
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Point in time
|
32,079
|
3,066
|
2,104
|
—
|
12,109
|
75,631
|
4,647
|
—
|
2,570
|
—
|
132,206
|
|||||||||||||||||||||||||||||||||
Over time
|
16,240
|
824
|
1,596
|
—
|
4,781
|
675
|
—
|
732
|
802
|
—
|
25,650
|
|||||||||||||||||||||||||||||||||
Asia Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Point in time
|
702,097
|
202,336
|
1,417
|
51,863
|
10,804
|
39,135
|
3,397
|
10
|
68,180
|
—
|
1,079,239
|
|||||||||||||||||||||||||||||||||
Over time
|
108,011
|
7,401
|
678
|
5,077
|
2,364
|
350
|
—
|
79
|
5,893
|
—
|
129,853
|
|||||||||||||||||||||||||||||||||
Lease Revenue
|
9,162
|
—
|
—
|
—
|
337
|
—
|
—
|
—
|
684
|
—
|
10,183
|
|||||||||||||||||||||||||||||||||
Total
|
$ |
924,702
|
$ |
226,010
|
$ |
66,533
|
$ |
57,224
|
$ |
38,551
|
$ |
164,247
|
$ |
11,053
|
$ |
1,503
|
$ |
92,023
|
$ |
(602
|
) | $ |
1,581,244
|
|||||||||||||||||||||
|
September 29,
2019 |
|
December 31,
2018 |
|
||||
|
(in thousands)
|
|||||||
Raw material
|
$ |
114,162
|
$ |
89,365
|
||||
Work-in-process
|
28,460
|
31,014
|
||||||
Finished goods
|
35,581
|
33,162
|
||||||
|
$ |
178,203
|
$ |
153,541
|
||||
|
September 29, 2019
|
|||||||||||||||
|
Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
|
||||||||
|
(in thousands)
|
|||||||||||||||
Assets
|
|
|
|
|
||||||||||||
Cash
|
$ |
257,235
|
$ |
—
|
$ |
—
|
$ |
257,235
|
||||||||
Cash equivalents
|
198,519
|
138,185
|
—
|
336,704
|
||||||||||||
Available-for-sale
securities:
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
—
|
185,025
|
—
|
185,025
|
||||||||||||
Commercial paper
|
—
|
117,714
|
—
|
117,714
|
||||||||||||
Corporate debt securities
|
—
|
90,898
|
—
|
90,898
|
||||||||||||
Certificates of deposit and time deposits
|
—
|
14,086
|
—
|
14,086
|
||||||||||||
U.S. government agency securities
|
—
|
8,024
|
—
|
8,024
|
||||||||||||
Debt mutual funds
|
3,968
|
—
|
—
|
3,968
|
||||||||||||
Non-U.S.
government securities
|
—
|
380
|
—
|
380
|
||||||||||||
Equity securities:
|
|
|
|
|
||||||||||||
Mutual funds
|
26,001
|
—
|
—
|
26,001
|
||||||||||||
|
$ |
485,723
|
$ |
554,312
|
$ |
—
|
$ |
1,040,035
|
||||||||
Derivative assets
|
—
|
119
|
—
|
119
|
||||||||||||
Total
|
$ |
485,723
|
$ |
554,431
|
$ |
—
|
$ |
1,040,154
|
||||||||
Liabilities
|
|
|
|
|
||||||||||||
Contingent consideration
|
$ |
—
|
$ |
—
|
$ |
18,080
|
$ |
18,080
|
||||||||
Derivative liabilities
|
—
|
489
|
—
|
489
|
||||||||||||
Total
|
$ |
—
|
$ |
489
|
$ |
18,080
|
$ |
18,569
|
||||||||
|
(Level 1)
|
(Level 2)
|
|
(Level 3)
|
Total
|
|
||||||||||
|
(in thousands)
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$ |
455,754
|
$
|
138,185
|
$ |
—
|
$ |
593,939
|
||||||||
Marketable securities
|
—
|
342,538
|
—
|
342,538
|
||||||||||||
Long-term marketable securities
|
29,969
|
73,589
|
—
|
103,558
|
||||||||||||
Prepayments
|
—
|
119
|
—
|
119
|
||||||||||||
Total
|
$
|
485,723
|
$ |
554,431
|
$
|
—
|
$ |
1,040,154
|
||||||||
Liabilities
|
|
|
|
|
||||||||||||
Other current liabilities
|
$ |
—
|
$ |
489
|
$ |
—
|
$ |
489
|
||||||||
Contingent consideration
|
—
|
—
|
6,297
|
6,297
|
||||||||||||
Long-term contingent consideration
|
—
|
—
|
11,783
|
11,783
|
||||||||||||
Total
|
$ |
—
|
$ |
489
|
$ |
18,080
|
$ |
18,569
|
||||||||
|
December 31, 2018
|
|||||||||||||||
|
Quoted
in Active
Markets for
Identical
Instruments
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
|
||||||||
|
(in thousands)
|
|||||||||||||||
Assets
|
|
|
|
|
||||||||||||
Cash
|
$ |
312,512
|
$ |
—
|
$ |
—
|
$ |
312,512
|
||||||||
Cash equivalents
|
253,525
|
360,715
|
—
|
614,240
|
||||||||||||
Available-for-sale
securities:
|
|
|
|
|
||||||||||||
U.S. Treasury securities
|
—
|
109,721
|
—
|
109,721
|
||||||||||||
Commercial paper
|
—
|
86,117
|
—
|
86,117
|
||||||||||||
Corporate debt securities
|
—
|
40,020
|
—
|
40,020
|
||||||||||||
U.S. government agency securities
|
—
|
9,611
|
—
|
9,611
|
||||||||||||
Certificates of deposit and time deposits
|
—
|
7,604
|
—
|
7,604
|
||||||||||||
Debt mutual funds
|
3,187
|
—
|
—
|
3,187
|
||||||||||||
Non-U.S.
government securities
|
—
|
376
|
—
|
376
|
||||||||||||
Equity securities:
|
|
|
|
—
|
||||||||||||
Mutual funds
|
21,191
|
—
|
—
|
21,191
|
||||||||||||
|
$ |
590,415
|
$ |
614,164
|
$ |
—
|
$ |
1,204,579
|
||||||||
Derivative assets
|
—
|
79
|
—
|
79
|
||||||||||||
Total
|
$ |
590,415
|
$ |
614,243
|
$ |
—
|
$ |
1,204,658
|
||||||||
Liabilities
|
|
|
|
|
||||||||||||
Contingent consideration
|
$ |
—
|
$ |
—
|
$ |
70,543
|
$ |
70,543
|
||||||||
Derivative liabilities
|
—
|
514
|
—
|
514
|
||||||||||||
Total
|
$ |
—
|
$ |
514
|
$ |
70,543
|
$ |
71,057
|
||||||||
|
|
|
|
)
|
Total
|
|
||||||||||
|
(in thousands)
|
|||||||||||||||
Assets
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
566,037
|
$
|
360,715
|
$ |
—
|
$ |
926,752
|
||||||||
Marketable securities
|
—
|
190,096
|
—
|
190,096
|
||||||||||||
Long-term marketable securities
|
24,378
|
63,353
|
—
|
87,731
|
||||||||||||
Prepayments
|
—
|
79
|
—
|
79
|
||||||||||||
Total
|
$ |
590,415
|
$ |
614,243
|
$ |
—
|
$ |
1,204,658
|
||||||||
Liabilities
|
|
|
|
|
||||||||||||
Other accrued liabilities
|
$ |
—
|
$ |
514
|
$ |
—
|
$ |
514
|
||||||||
Contingent consideration
|
—
|
—
|
34,865
|
34,865
|
||||||||||||
Long-term contingent consideration
|
—
|
—
|
35,678
|
35,678
|
||||||||||||
Total
|
$ |
—
|
$ |
514
|
$
|
70,543
|
$ |
71,057
|
||||||||
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
||||||||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
|
||||||||
|
(in thousands)
|
|||||||||||||||
Balance at beginning of period
|
$ |
26,847
|
$ |
60,914
|
$ |
70,543
|
$ |
45,102
|
||||||||
Fair value adjustment (a)
|
(7,759
|
) |
(768
|
) |
(16,460
|
) |
(9,236
|
) | ||||||||
Foreign currency impact
|
(1,008
|
) |
796
|
(1,413
|
) |
(1,770
|
) | |||||||||
Payments (b)
|
—
|
—
|
(34,590
|
) |
(24,553
|
) | ||||||||||
Acquisition of MiR
|
—
|
—
|
—
|
51,399
|
||||||||||||
Balance at end of period
|
$ |
18,080
|
$ |
60,942
|
$ |
18,080
|
$ |
60,942
|
||||||||
(a) |
In the three and nine months ended September 29, 2019, the fair value of contingent consideration for the
earn-out
in connection with the acquisition of MiR was decreased by $7.8 million and $16.5 million, respectively, primarily due to a decrease in the forecasted revenue
, partially offset by impact from the modification, in the three months ended September 29, 2019, of the earn-out structure
. In the three and nine months ended September 30, 2018, the fair value of contingent consideration for the
earn-out
in connection with the acquisition of Universal Robots A/S (“Universal Robots”) was decreased by $0.8 million and $9.2 million, respectively, primarily due to a decrease in forecasted revenue.
|
(b) |
In the nine months ended September 29, 2019, Teradyne paid $30.8 million and $3.8 million of contingent consideration for the earn-outs in connection with the acquisition of MiR and Universal Robots, respectively. In the nine months ended September 30, 2018, Teradyne paid $24.6 million of contingent consideration for the
earn-out
in connection with the acquisition of Universal Robots.
|
Liability
|
September 29,
2019 Fair Value |
|
|
Valuation
Technique
|
|
Unobservable Inputs
|
|
Weighted
Average
|
|
|||
|
(in thousands)
|
|
|
|
|
|
||||||
Contingent consideration
(MiR)
|
$ |
18,080
|
Monte Carl
o
s
imulation
|
Revenue volatility
|
15.0
|
% | ||||||
|
|
|
Discount
r
ate
|
0.1
|
% |
|
September 29, 2019
|
December 31, 2018
|
||||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
||||||||
|
(in thousands)
|
|||||||||||||||
Assets
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$ |
593,939
|
$ |
593,939
|
$ |
926,752
|
$ |
926,752
|
||||||||
Marketable securities
|
446,096
|
446,096
|
277,827
|
277,827
|
||||||||||||
Derivative assets
|
119
|
119
|
79
|
79
|
||||||||||||
Liabilities
|
|
|
|
|
||||||||||||
Contingent consideration
|
18,080
|
18,080
|
70,543
|
70,543
|
||||||||||||
Derivative liabilities
|
489
|
489
|
514
|
514
|
||||||||||||
Convertible debt (1)
|
390,942
|
867,388
|
379,981
|
547,113
|
(1) | The carrying value represents the bifurcated debt component only, while the fair value is based on quoted market prices for the convertible note, which includes the equity conversion features. |
|
September 29, 2019
|
|||||||||||||||||||
|
Available-for-Sale
|
|
|
|||||||||||||||||
|
Cost
|
|
Unrealized
Gain
|
|
Unrealized
(Loss)
|
|
Fair Market
Value
|
|
Fair Market
Value of
Investments
with Unrealized
Losses
|
|
||||||||||
|
(in thousands)
|
|||||||||||||||||||
U.S. Treasury securities
|
$ |
184,229
|
$ |
847
|
$ |
(51
|
) | $ |
185,025
|
$ |
25,814
|
|||||||||
Commercial paper
|
117,618
|
99
|
(3
|
) |
117,714
|
30,704
|
||||||||||||||
Corporate debt securities
|
86,718
|
4,229
|
(49
|
) |
90,898
|
3,079
|
||||||||||||||
Certificates of deposit and time deposits
|
14,083
|
3
|
—
|
14,086
|
—
|
|||||||||||||||
U.S. government agency securities
|
8,009
|
17
|
(2
|
) |
8,024
|
1,150
|
||||||||||||||
Debt mutual funds
|
3,820
|
148
|
—
|
3,968
|
—
|
|||||||||||||||
Non-U.S.
government securities
|
380
|
—
|
—
|
380
|
—
|
|||||||||||||||
|
$ |
414,857
|
$ |
5,343
|
$ |
(105
|
) | $ |
420,095
|
$ |
60,747
|
|||||||||
|
Cost
|
|
Unrealized
Gain
|
|
Unrealized
(Loss)
|
|
Fair Market
Value
|
|
Fair Market
Value of
Investments
with Unrealized
Losses
|
|
||||||||||
|
(in thousands)
|
|||||||||||||||||||
Marketable securities
|
$ |
342,234
|
$ |
313
|
$ |
(9
|
) | $ |
342,538
|
$ |
46,115
|
|||||||||
Long-term marketable securities
|
72,623
|
5,030
|
(96
|
) |
77,557
|
14,632
|
||||||||||||||
|
$ |
414,857
|
$ |
5,343
|
$ |
(105
|
) | $ |
420,095
|
$ |
60,747
|
|||||||||
|
December 31, 2018
|
|||||||||||||||||||
|
Available-for-Sale
|
|
|
|||||||||||||||||
|
Cost
|
|
Unrealized
Gain
|
|
Unrealized
(Loss)
|
|
Fair Market
Value
|
|
Fair Market
Value of
Investments
with Unrealized
Losses
|
|
||||||||||
|
(in thousands)
|
|||||||||||||||||||
U.S. Treasury securities
|
$ |
110,969
|
$ |
112
|
$ |
(1,360
|
) | $ |
109,721
|
$ |
75,040
|
|||||||||
Commercial paper
|
86,130
|
13
|
(26
|
) |
86,117
|
85,094
|
||||||||||||||
Corporate debt securities
|
41,133
|
432
|
(1,545
|
) |
40,020
|
24,767
|
||||||||||||||
U.S. government agency securities
|
9,646
|
1
|
(36
|
) |
9,611
|
7,077
|
||||||||||||||
Certificates of deposit and time deposits
|
7,604
|
—
|
—
|
7,604
|
—
|
|||||||||||||||
Debt mutual funds
|
3,153
|
34
|
—
|
3,187
|
—
|
|||||||||||||||
Non-U.S.
government securities
|
376
|
—
|
—
|
376
|
—
|
|||||||||||||||
|
$ |
259,011
|
$ |
592
|
$ |
(2,967
|
) | $ |
256,636
|
$ |
191,978
|
|||||||||
|
Cost
|
|
Unrealized
Gain
|
|
Unrealized
(Loss)
|
|
Fair Market
Value
|
|
Fair Market
Value of
Investments
with Unrealized
Losses
|
|
||||||||||
|
(in thousands)
|
|||||||||||||||||||
Marketable securities
|
$ |
190,100
|
$ |
88
|
$ |
(92
|
) | $ |
190,096
|
$ |
140,262
|
|||||||||
Long-term marketable securities
|
68,911
|
504
|
(2,875
|
) |
66,540
|
51,716
|
||||||||||||||
|
$ |
259,011
|
$ |
592
|
$ |
(2,967
|
) | $ |
256,636
|
$ |
191,978
|
|||||||||
|
September 29, 2019
|
|||||||
|
Cost
|
|
Fair Market
Value
|
|
||||
|
(in thousands)
|
|||||||
Due within one year
|
$ |
342,234
|
$ |
342,538
|
||||
Due after 1 year through 5 years
|
16,609
|
16,718
|
||||||
Due after 5 years through 10 years
|
15,002
|
15,297
|
||||||
Due after 10 years
|
37,192
|
41,574
|
||||||
Total
|
$ |
411,037
|
$ |
416,127
|
||||
|
Balance Sheet
Location
|
|
September 29,
2019 |
|
December 31,
2018 |
|
||||||
|
|
|
(in thousands)
|
|||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|||||||||
Foreign exchange contracts - derivative assets
|
Prepayments
|
$ |
119
|
$ |
79
|
|||||||
Foreign exchange contracts - derivative liabilities
|
Other current liabilities
|
(489
|
) |
(514
|
) | |||||||
Total derivatives
|
|
$ |
(370
|
) | $ |
(435
|
) | |||||
|
Location of Losses (Gains)
Recognized in
Statement of Operations
|
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
||||||||||||||
|
September 29,
2019 |
|
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
|
|||||||||
|
|
(in thousands)
|
||||||||||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|||||||||||||
Foreign exchange contracts
|
Other (income) expense, net
|
$ |
3,699
|
$ |
(899
|
) | $ |
7,872
|
$ |
2,502
|
(1) | The table does not reflect the corresponding gains and losses from the remeasurement of monetary assets and liabilities denominated in foreign currencies. |
(2) | For the three months ended September 29, 2019, net gains from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $1.5 million. For the nine months ended September 29, 2019, net gains from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $3.4 million. |
(3) | For the three and nine months ended September 30, 2018, net losses from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $3.7 million and $1.2 million, respectively. |
|
For the Three Months
Ended |
|
For the Nine Months
Ended |
|
||||
|
September 29, 2019
|
|
September 29, 2019
|
|
||||
|
(in thousands)
|
|||||||
Cash paid for amounts included in the measurement of lease liabilities included in operating cash flows:
|
$ |
4,946
|
$ |
14,998
|
||||
Right-of-use
assets obtained in exchange for new lease obligations
|
8,315
|
23,727
|
|
Operating Lease
|
|
||
|
(in thousands)
|
|
||
2019
|
$ |
5,520
|
||
2020
|
20,368
|
|||
2021
|
16,045
|
|||
2022
|
11,603
|
|||
2023
|
6,135
|
|||
Thereafter
|
13,285
|
|||
Total lease payments
|
72,956
|
|||
Less imputed interest
|
(7,757
|
) | ||
Total lease liabilities
|
$ |
65,199
|
||
|
Operating Lease
|
|
||
|
(in thousands)
|
|
||
2019
|
$ |
19,570
|
||
2020
|
18,293
|
|||
2021
|
13,578
|
|||
2022
|
9,693
|
|||
2023
|
5,449
|
|||
Thereafter
|
9,472
|
|||
Total lease payments
|
$ |
76,055
|
||
|
September 29,
2019 |
|
December 31,
2018 |
|
||||
|
(in thousands)
|
|||||||
Debt Principal
|
$ |
460,000
|
$ |
460,000
|
||||
Unamortized discount
|
69,058
|
80,019
|
||||||
Net Carrying amount of convertible debt
|
$ |
390,942
|
$ |
379,981
|
||||
|
For the Three Months Ended
|
For the Nine Months Ended
|
||||||||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
|
||||||||
|
(in thousands)
|
|||||||||||||||
Contractual interest expense on the coupon
|
$ |
1,438
|
$ |
1,438
|
$ |
4,313
|
$ |
4,313
|
||||||||
Amortization of the discount component recognized as interest expense
|
3,699
|
3,520
|
10,961
|
10,431
|
||||||||||||
Total interest expense on the convertible debt
|
$ |
5,137
|
$ |
4,958
|
$ |
15,274
|
$ |
14,744
|
||||||||
|
September 29,
2019 |
|
December 31,
2018 |
|
||||
|
(in thousands)
|
|||||||
Contract manufacturer and supplier prepayments
|
$ |
136,470
|
$ |
131,642
|
||||
Prepaid taxes
|
9,754
|
9,646
|
||||||
Prepaid maintenance and other services
|
8,310
|
8,487
|
||||||
Other prepayments
|
17,180
|
12,744
|
||||||
Total prepayments
|
$ |
171,714
|
$ |
162,519
|
||||
|
September 29,
2019 |
|
December 31,
2018 |
|
||||
|
(in thousands)
|
|||||||
Maintenance and training
|
$ |
61,048
|
$ |
58,362
|
||||
Extended warranty
|
29,937
|
27,422
|
||||||
Customer advances, undelivered performance obligations and other
|
47,543
|
24,677
|
||||||
Total deferred revenue and customer advances
|
$ |
138,528
|
$ |
110,461
|
||||
|
|
For the Three Months
Ended
|
|
|
For the Nine Months
Ended
|
|
||||||||||
|
|
September 29,
|
|
|
September 30,
|
|
|
September 29,
|
|
|
September 30,
|
|
||||
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
|
|
(in thousands)
|
|
|||||||||||||
Balance at beginning of period
|
|
$
|
8,133
|
|
|
$
|
7,136
|
|
|
$
|
7,909
|
|
|
$
|
8,200
|
|
Acquisition
|
|
|
—
|
|
|
|
—
|
|
|
|
14
|
|
|
|
41
|
|
Accruals for warranties issued during the period
|
|
|
3,508
|
|
|
|
2,760
|
|
|
|
10,008
|
|
|
|
9,171
|
|
Accruals related to
pre-existing
warranties
|
|
|
1,132
|
|
|
|
282
|
|
|
|
3,156
|
|
|
|
109
|
|
Settlements made during the period
|
|
|
(4,265
|
)
|
|
|
(2,675
|
)
|
|
|
(12,579
|
)
|
|
|
(10,018
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of period
|
|
$
|
8,508
|
|
|
$
|
7,503
|
|
|
$
|
8,508
|
|
|
$
|
7,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
||||||||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
|
||||||||
|
(in thousands)
|
|||||||||||||||
Balance at beginning of period
|
$ |
28,716
|
$ |
25,971
|
$ |
27,422
|
$ |
24,438
|
||||||||
Deferral of new extended warranty revenue
|
5,666
|
7,232
|
16,962
|
19,072
|
||||||||||||
Recognition of extended warranty deferred revenue
|
(4,445
|
) |
(5,586
|
) |
(14,447
|
) |
(15,893
|
) | ||||||||
Balance at end of period
|
$ |
29,937
|
$ |
27,617
|
$ |
29,937
|
$ |
27,617
|
||||||||
|
For the Nine Months
Ended
|
|||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
||||
Risk-free interest rate
|
2.6
|
% |
2.2
|
% | ||||
Teradyne volatility-historical
|
31.9
|
% |
26.8
|
% | ||||
NYSE Composite Index volatility-historical
|
11.9
|
% |
12.4
|
% | ||||
Dividend yield
|
1.0
|
% |
0.8
|
% |
|
For the Nine Months
Ended
|
|||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
||||
Expected life (years)
|
5.0
|
5.0
|
||||||
Risk-free interest rate
|
2.5
|
% |
2.4
|
% | ||||
Volatility-historical
|
30.1
|
% |
26.4
|
% | ||||
Dividend yield
|
1.0
|
% |
0.8
|
% |
|
Foreign
Currency
Translation
Adjustment
|
|
Unrealized
Gains
(Losses) on
Marketable
Securities
|
|
Retirement
Plans Prior
Service
Credit
|
|
Total
|
|
||||||||
|
(in thousands)
|
|||||||||||||||
Nine Months Ended September 29, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at December 31, 2018, net of tax of $0, $(521), $(1,081),
|
$ |
(12,523
|
) | $ |
(1,845
|
) | $ |
1,328
|
$ |
(13,040
|
) | |||||
Other comprehensive
loss
before reclassifications, net of tax of $0, $1,762, $0, respectively
|
(17,019
|
) |
6,391
|
—
|
(10,628
|
) | ||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(
125
), $(32), respectively
|
—
|
(442
|
) |
(111
|
) |
(553
|
) | |||||||||
Net current period other comprehensive income (loss), net of tax of $0, $1,637, $(32), respectively
|
(17,019
|
) |
5,949
|
(111
|
) |
(11,181
|
) | |||||||||
Balance at September 29, 2019, net of tax of $0, $1,116, $(1,113),
|
$ |
(29,542
|
) | $ |
4,104
|
$ |
1,217
|
$ |
(24,221
|
) | ||||||
|
Foreign
Currency
Translation
Adjustments
|
|
Unrealized
Gains
(Losses) on
Marketable
Securities
|
|
Retirement
Plans Prior
Service
Credit
|
|
Total
|
|
||||||||
|
(in thousands)
|
|||||||||||||||
Nine Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at December 31, 2017, net of tax of $0, $1,815, $(932), respectively
|
$ |
15,919
|
$ |
1,362
|
$ |
1,495
|
$ |
18,776
|
||||||||
Other comprehensive income (loss) before reclassifications, net of tax of $0, $(806), $0, respectively
|
(11,568
|
) |
(2,555
|
) |
—
|
(14,123
|
) | |||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(6), $(53), respectively
|
—
|
1,411
|
(184
|
) |
1,227
|
|||||||||||
Net current period other comprehensive income (loss), net of tax of $0, $(812), $(53), respectively
|
(11,568
|
) |
(1,144
|
) |
(184
|
) |
(12,896
|
) | ||||||||
Reclassification of income tax effects from the Tax Reform Act, net of tax of $0, $(691), $(78), respectively
|
—
|
691
|
78
|
769
|
||||||||||||
Reclassification of unrealized gains on equity securities, net of tax of $0, $(902), $0, respectively
|
—
|
(3,125
|
) |
—
|
(3,125
|
) | ||||||||||
Balance a
t
September 30, 2018, net of tax of $0, $(590), $(1,063), respectively
|
$ |
4,351
|
$ |
(2,216
|
) | $ |
1,389
|
$ |
3,524
|
|||||||
|
|
For the Three Months
Ended
|
|
|
For the Nine Months
Ended
|
|
|
Affected Line Item
in the Statements
of Operations
|
|
||||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
|
|
|
|||||||||
Details about Accumulated Other Comprehensive Income
|
(in thousands)
|
|
|
||||||||||||||||
Available-for-sale
marketable securities:
|
|
|
|
|
|
|
|||||||||||||
Unrealized gains (losses), net of tax of $99, $17, $125, $6, respectively
|
$ |
345
|
$ |
57
|
$ |
442
|
$ |
(1,411
|
) |
Interest
income
(expense)
|
|
||||||||
Defined benefit pension and postretirement plans:
|
|
|
|
|
|
|
|||||||||||||
Amortization of prior service benefit, net of tax of $11, $18, $32, $53 respectively
|
37
|
61
|
111
|
184
|
(a)
|
|
|||||||||||||
|
|||||||||||||||||||
Total reclassifications, net of tax of $110, $35, $157, $59, respectively
|
$ |
382
|
$ |
118
|
$ |
553
|
$ |
(1,227
|
) |
Net income
|
|
||||||||
|
(a) | The amortization of prior service benefit is included in the computation of net periodic pension cost and postretirement benefit. See Note R: “Retirement Plans.” |
|
Industrial
Automation
|
|
System
Test
|
|
Wireless
Test
|
|
Semiconductor
Test
|
|
Total
|
|
||||||||||
|
(in thousands)
|
|||||||||||||||||||
Balance at December 31, 2018
|
|
|
|
|
|
|||||||||||||||
Goodwill
|
$ |
363,358
|
$ |
158,699
|
$ |
361,819
|
$ |
260,540
|
$ |
1,144,416
|
||||||||||
Accumulated impairment losses
|
—
|
(148,183
|
) |
(353,843
|
) |
(260,540
|
) |
(762,566
|
) | |||||||||||
|
363,358
|
10,516
|
7,976
|
—
|
381,850
|
|||||||||||||||
Lemsys acquisition
|
—
|
—
|
—
|
1,428
|
1,428
|
|||||||||||||||
Foreign currency translation adjustment
|
(12,572
|
) |
—
|
—
|
11
|
(12,561
|
) | |||||||||||||
Balance at September 29, 2019
|
|
|
|
|
|
|||||||||||||||
Goodwill
|
350,786
|
158,699
|
361,819
|
261,979
|
1,133,283
|
|||||||||||||||
Accumulated impairment losses
|
—
|
(148,183
|
) |
(353,843
|
) |
(260,540
|
) |
(762,566
|
) | |||||||||||
|
$ |
350,786
|
$ |
10,516
|
$ |
7,976
|
$ |
1,439
|
$ |
370,717
|
||||||||||
|
September 29, 2019
|
|||||||||||||||
|
Gross
Carrying
Amount
(1)
(2)
|
|
Accumulated
Amortization (2)
|
|
Foreign Currency
Translation Adjustment |
|
Net
Carrying
Amount
|
|
||||||||
|
(in thousands)
|
|||||||||||||||
Developed technology
|
$ |
337,198
|
$ |
(272,317
|
) | $ |
(6,461
|
) |
$
|
58,420
|
||||||
Customer relationships
|
100,313
|
(89,540
|
) |
(562
|
) |
10,211
|
||||||||||
Tradenames and trademarks
|
64,670
|
(35,368
|
) |
(1,360
|
) |
27,942
|
||||||||||
Total intangible assets
|
$ |
502,181
|
$ |
(397,225
|
) | $ |
(8,383
|
) | $ |
96,573
|
||||||
|
December 31, 2018
|
|||||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Foreign Currency
Translation Adjustment |
|
Net
Carrying
Amount
|
|
||||||||
|
(in thousands)
|
|||||||||||||||
Developed technology
|
$
|
336,308
|
$
|
(252,080
|
) | $ |
(4,079
|
) | $ |
80,149
|
||||||
Customer relationships
|
97,153
|
(83,448
|
) |
(340
|
) |
13,365
|
||||||||||
Tradenames and trademarks
|
64,420
|
(31,653
|
) |
(799
|
) |
31,968
|
||||||||||
Non-compete
agreement
|
320
|
(320
|
) |
—
|
—
|
|||||||||||
Backlog
|
30
|
(30
|
) |
—
|
—
|
|||||||||||
Total intangible assets
|
$ |
498,231
|
$ |
(367,531
|
) | $ |
(5,218
|
) | $ |
125,482
|
||||||
(1) |
$4.6 million of intangible assets from Lemsys acquisition
have been added in January 2019
.
|
(2) |
$0.7 million of amortizable intangible assets became fully amortized and have been
removed
from the gross carrying amount and accumulated amortization.
|
|
Amortization Expense
|
|
||
Year
|
(in thousands)
|
|
||
2019 (remainder)
|
8,694
|
|||
2020
|
24,232
|
|||
2021
|
14,340
|
|||
2022
|
13,447
|
|||
2023
|
12,976
|
|||
Thereafter
|
22,884
|
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
||||||||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
|
||||||||
|
(in thousands, except per share amounts)
|
|||||||||||||||
Net income for basic and diluted net income per share
|
$ |
135,860
|
$ |
119,981
|
$ |
342,395
|
$ |
307,991
|
||||||||
Weighted average common shares-basic
|
169,641
|
185,744
|
171,471
|
190,576
|
||||||||||||
Effect of dilutive potential common shares:
|
|
|
|
|
||||||||||||
Incremental shares from assumed conversion of convertible notes (1)
|
5,800
|
3,025
|
4,117
|
3,356
|
||||||||||||
Convertible note hedge warrant shares (2)
|
3,580
|
108
|
1,786
|
646
|
||||||||||||
Restricted stock units
|
1,313
|
1,331
|
1,112
|
1,406
|
||||||||||||
Stock options
|
155
|
275
|
186
|
290
|
||||||||||||
Employee stock purchase plan
|
5
|
22
|
13
|
26
|
||||||||||||
Dilutive potential common shares
|
10,853
|
4,761
|
7,214
|
5,724
|
||||||||||||
Weighted average common shares-diluted
|
180,494
|
190,505
|
178,685
|
196,300
|
||||||||||||
Net income per common share-basic
|
$ |
0.80
|
$ |
0.65
|
$ |
2.00
|
$ |
1.62
|
||||||||
Net income per common share-diluted
|
$ |
0.75
|
$ |
0.63
|
$ |
1.92
|
$ |
1.57
|
||||||||
(1) | Incremental shares from assumed conversion of the convertible notes were calculated using the difference between the average Teradyne stock price for the period and the conversion price of $31.70, multiplied by 14.5 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. |
(2) | Convertible note hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price of $39.78, multiplied by 14.5 million shares. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period. |
|
For the Three Months Ended
|
|||||||||||||||
|
September
|
September 30, 2018
|
||||||||||||||
|
United
States
|
|
Foreign
|
|
United
States
|
Foreign
|
|
|||||||||
|
(in thousands)
|
|||||||||||||||
Service cost
|
$ |
402
|
$ |
183
|
$ |
538
|
$ |
203
|
||||||||
Interest cost
|
1,797
|
168
|
1,750
|
177
|
||||||||||||
Expected return on plan assets
|
(1,510
|
) |
(7
|
) |
(1,551
|
) |
(5
|
) | ||||||||
Amortization of prior service cost
|
—
|
—
|
14
|
—
|
||||||||||||
Settlement loss
|
—
|
—
|
267
|
—
|
||||||||||||
Total net periodic pension cost
|
$ |
689
|
$ |
344
|
$ |
1,018
|
$ |
375
|
||||||||
|
For the Nine Months Ended
|
|||||||||||||||
|
September 29, 2019
|
September 30, 2018
|
||||||||||||||
|
United
States
|
|
Foreign
|
|
United
States
|
|
Foreign
|
|
||||||||
|
(in thousands)
|
|||||||||||||||
Service cost
|
$ |
1,206
|
$ |
550
|
$ |
1,657
|
$ |
609
|
||||||||
Interest cost
|
5,392
|
505
|
7,188
|
532
|
||||||||||||
Expected return on plan assets
|
(4,531
|
) |
(21
|
) |
(7,484
|
) |
(15
|
) | ||||||||
Amortization of prior service cost
|
—
|
—
|
43
|
—
|
||||||||||||
Net actuarial loss (gain)
|
252
|
—
|
(189
|
) |
—
|
|||||||||||
Settlement loss
|
—
|
—
|
345
|
—
|
||||||||||||
Total net periodic pension cost
|
$ |
2,319
|
$ |
1,034
|
$ |
1,560
|
$ |
1,126
|
||||||||
|
For the Three Months
|
For the Nine Months
Ended
|
||||||||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
|
||||||||
|
(in thousands)
|
|||||||||||||||
Service cost
|
$ |
10
|
$ |
10
|
$ |
31
|
$ |
29
|
||||||||
Interest cost
|
87
|
49
|
260
|
147
|
||||||||||||
Amortization of prior service credit
|
(48
|
) |
(93
|
) |
(143
|
) |
(280
|
) | ||||||||
Net actuarial loss
|
—
|
—
|
196
|
40
|
||||||||||||
Special termination benefits
|
—
|
601
|
—
|
3,419
|
||||||||||||
Total net periodic postretirement benefit cost
|
$ |
49
|
$ |
567
|
$ |
344
|
$ |
3,355
|
||||||||
|
For the Three Months Ended
|
For the Nine Months Ended
|
||||||||||||||
|
September 29,
2019 |
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
|
|||||||||
US statutory federal tax rate
|
21.0
|
% |
21.0
|
% |
21.0
|
% |
21.0
|
% | ||||||||
Discrete expense related to U.S. transition tax
|
—
|
—
|
3.9
|
0.0
|
||||||||||||
Foreign taxes
|
(5.1
|
) |
(4.4
|
) |
(4.9
|
) |
(3.7
|
) | ||||||||
International provisions of the U.S. Tax Cuts and Jobs
|
(2.8
|
) |
(1.4
|
) |
(0.6
|
) |
(1.4
|
) | ||||||||
Tax credits
|
(1.8
|
) |
(1.9
|
) |
(2.2
|
) |
(2.1
|
) | ||||||||
Discrete benefit related to equity compensation
|
(0.7
|
) |
(0.1
|
) |
(1.5
|
) |
(2.2
|
) | ||||||||
Discrete benefit related to release of reserves for uncertain tax positions
|
|
|
—
|
|
|
|
(0.1
|
)
|
|
|
(6.9
|
)
|
|
|
—
|
|
Other, net
|
(0.1
|
) |
1.7
|
0.4
|
2.0
|
|||||||||||
Effective tax rate
|
10.5
|
%
|
14.8
|
%
|
9.2
|
%
|
13.6
|
% | ||||||||
|
Semiconductor
Test
|
|
Industrial
Automation
|
|
System
Test
|
|
Wireless
Test
|
|
Corporate
and
Other
|
|
Consolidated
|
|
||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||
Three Months Ended September 29, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
$ |
397,737
|
$ |
68,892
|
$ |
73,305
|
$ |
42,264
|
$ |
(160
|
) | $ |
582,038
|
|||||||||||
Income (loss) before income taxes (1)(2)
|
116,633
|
(1,645
|
) |
24,381
|
11,182
|
1,182
|
151,733
|
|||||||||||||||||
Total assets (3)
|
757,422
|
580,635
|
126,452
|
94,789
|
1,139,493
|
2,698,791
|
||||||||||||||||||
Three Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
$ |
417,297
|
$ |
65,913
|
$ |
49,606
|
$ |
34,304
|
$ |
(272
|
) | $ |
566,848
|
|||||||||||
Income (loss) before income taxes (1)(2)
|
126,638
|
940
|
9,056
|
7,843
|
(3,633
|
) |
140,844
|
|||||||||||||||||
Total assets (3)
|
709,616
|
617,741
|
83,160
|
79,986
|
1,391,984
|
2,882,487
|
||||||||||||||||||
Nine Months Ended September 29, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
$ |
1,113,489
|
$ |
209,753
|
$ |
204,934
|
$ |
112,541
|
$ |
(402
|
) | $ |
1,640,315
|
|||||||||||
Income (loss) before income taxes (1)(2)
|
291,037
|
(10,670
|
) |
63,254
|
25,740
|
7,528
|
376,889
|
|||||||||||||||||
Total assets (3)
|
757,422
|
580,635
|
126,452
|
94,789
|
1,139,493
|
2,698,791
|
||||||||||||||||||
Nine Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
$ |
1,150,712
|
$ |
176,803
|
$ |
162,308
|
$ |
92,023
|
$ |
(602
|
) | $ |
1,581,244
|
|||||||||||
Income (loss) before income taxes (1)(2)
|
305,876
|
(1,198
|
) |
35,296
|
18,615
|
(1,914
|
) |
356,675
|
||||||||||||||||
Total assets (3)
|
709,616
|
617,741
|
83,160
|
79,986
|
1,391,984
|
2,882,487
|
(1) |
Included in
Corporate and Other are: contingent consideration adjustments, severance charges, interest income and expense, net foreign exchange gains (losses), intercompany eliminations, acquisition related expenses and compensation, pension and postretirement plans actuarial losses and an expense for the modification of Teradyne’s former chief financial officer’s outstanding equity awards.
|
(2) | Included in the income (loss) before income taxes for each of the segments are charges and credits related to restructuring and other and inventory charges. |
(3) | Total business assets are directly attributable to each business. Corporate assets consist of cash and cash equivalents, marketable securities and certain other assets. |
|
|
For the Three Months
Ended
|
|
|
For the Nine Months
Ended
|
|
||||||||||
|
|
September 29,
|
|
|
September 30,
|
|
|
September 29,
|
|
|
September 30,
|
|
||||
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
|
||||
|
|
(in thousands)
|
|
|||||||||||||
Semiconductor Test:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues—inventory charge
|
|
$
|
1,867
|
|
|
$
|
2,071
|
|
|
$
|
5,319
|
|
|
$
|
5,851
|
|
Restructuring and other—employee severance
|
|
|
—
|
|
|
|
1,716
|
|
|
|
1,009
|
|
|
|
7,657
|
|
Industrial Automation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other—acquisition related expenses
|
|
$
|
—
|
|
|
$
|
811
|
|
|
$
|
1,330
|
|
|
$
|
811
|
|
Restructuring and other—employee severance
|
|
|
—
|
|
|
|
—
|
|
|
|
604
|
|
|
|
—
|
|
Cost of revenues—inventory charge
|
|
|
—
|
|
|
|
—
|
|
|
|
508
|
|
|
|
680
|
|
System Test:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues—inventory charge
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,129
|
|
|
$
|
812
|
|
Wireless Test:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues—inventory charge
|
|
$
|
724
|
|
|
$
|
716
|
|
|
$
|
1,892
|
|
|
$
|
2,179
|
|
Corporate and Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other—MiR contingent consideration adjustment
|
|
$
|
(7,759
|
)
|
|
$
|
—
|
|
|
$
|
(16,427
|
)
|
|
$
|
—
|
|
Selling and administrative – equity modification charge
|
|
|
2,108
|
|
|
|
—
|
|
|
|
2,108
|
|
|
|
—
|
|
Restructuring and other—acquisition related expenses and compensation
|
|
|
816
|
|
|
|
—
|
|
|
|
928
|
|
|
|
3,318
|
|
Restructuring and other—Universal Robots contingent consideration adjustment
|
|
|
—
|
|
|
|
(768
|
)
|
|
|
—
|
|
|
|
(9,236
|
)
|
Item 2:
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
• | semiconductor test (“Semiconductor Test”) systems; |
• | industrial automation (“Industrial Automation”) products; |
• | defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, storage test (“Storage Test”) systems, and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”); and |
• | wireless test (“Wireless Test”) systems. |
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
||||||||||||||
|
September 29,
|
|
September 30,
|
|
September 29,
|
|
September 30,
|
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||
Percentage of revenues:
|
|
|
|
|
||||||||||||
Revenues:
|
|
|
|
|
||||||||||||
Products
|
84
|
% |
83
|
% |
82
|
% |
83
|
% | ||||||||
Services
|
16
|
17
|
18
|
17
|
||||||||||||
Total revenues
|
100
|
100
|
100
|
100
|
||||||||||||
Cost of revenues:
|
|
|
|
|
||||||||||||
Cost of products
|
34
|
34
|
34
|
35
|
||||||||||||
Cost of services
|
7
|
7
|
8
|
7
|
||||||||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)
|
41
|
41
|
42
|
42
|
||||||||||||
Gross profit
|
59
|
59
|
58
|
58
|
||||||||||||
Operating expenses:
|
|
|
|
|
||||||||||||
Selling and administrative
|
19
|
18
|
20
|
18
|
||||||||||||
Engineering and development
|
13
|
14
|
14
|
14
|
||||||||||||
Acquired intangible assets amortization
|
2
|
2
|
2
|
2
|
||||||||||||
Restructuring and other
|
(1
|
) |
—
|
(1
|
) |
—
|
||||||||||
Total operating expenses
|
33
|
34
|
35
|
35
|
||||||||||||
Income from operations
|
27
|
25
|
23
|
23
|
||||||||||||
Non-operating
(income) expense:
|
|
|
|
|
||||||||||||
Interest income
|
(1
|
) |
(1
|
) |
(1
|
) |
(1
|
) | ||||||||
Interest expense
|
1
|
1
|
1
|
1
|
||||||||||||
Other (income) expense, net
|
—
|
1
|
—
|
—
|
||||||||||||
Income before income taxes
|
26
|
25
|
23
|
23
|
||||||||||||
Income tax provision
|
3
|
4
|
2
|
3
|
||||||||||||
Net income
|
23
|
% |
21
|
% |
21
|
% |
19
|
% | ||||||||
|
For the Three Months
Ended
|
|
|
|||||||||
|
September 29,
|
|
September 30,
|
|
Dollar
|
|
||||||
|
2019
|
|
2018
|
|
Change
|
|
||||||
|
(in millions)
|
|||||||||||
Semiconductor Test
|
$ |
397.7
|
$ |
417.3
|
$ |
(19.6
|
) | |||||
System Test
|
73.3
|
49.6
|
23.7
|
|||||||||
Industrial Automation
|
68.9
|
65.9
|
3.0
|
|||||||||
Wireless Test
|
42.3
|
34.3
|
8.0
|
|||||||||
Corporate and Other
|
(0.2
|
) |
(0.3
|
) |
0.1
|
|||||||
|
$ |
582.0
|
$ |
566.8
|
$ |
15.2
|
||||||
(1) | Revenues attributable to a country are based on location of customer site. |
|
For the Three Months
Ended
|
|
|
|||||||||
|
September 29,
|
|
September 30,
|
|
Dollar/Point
|
|
||||||
|
2019
|
|
2018
|
|
Change
|
|
||||||
|
(in millions)
|
|||||||||||
Gross profit
|
$ |
345.0
|
$ |
333.7
|
$ |
11.3
|
||||||
Percent of total revenues
|
59.3
|
% |
58.9
|
% |
0.4
|
|
For the Three Months
Ended
|
|
|
|||||||||
|
September 29,
|
|
September 30,
|
|
Dollar
|
|
||||||
|
2019
|
|
2018
|
|
Change
|
|
||||||
|
(in millions)
|
|||||||||||
Selling and administrative
|
$ |
109.2
|
$ |
100.2
|
$ |
9.0
|
||||||
Percent of total revenues
|
18.8
|
% |
17.7
|
% |
|
|
For the Three Months
Ended
|
|
|
|||||||||
|
September 29,
|
|
September 30,
|
|
Dollar
|
|
||||||
|
2019
|
|
2018
|
|
Change
|
|
||||||
|
(in millions)
|
|||||||||||
Engineering and development
|
$ |
77.8
|
$ |
77.0
|
$ |
0.8
|
||||||
Percent of total revenues
|
13.4
|
% |
13.6
|
% |
|
|
For the Three Months
Ended
|
|
|
|||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
Dollar
Change |
|
||||||
|
(in millions)
|
|||||||||||
Interest income
|
$ |
(5.2
|
) | $ |
(6.2
|
) | $ |
1.0
|
||||
Interest expense
|
5.7
|
5.6
|
0.1
|
|||||||||
Other (income) expense, net
|
2.7
|
3.4
|
(0.7
|
) |
|
For the Three Months
Ended
|
|
|
|||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
Dollar
Change |
|
||||||
|
(in millions)
|
|||||||||||
Semiconductor Test
|
$ |
116.6
|
$ |
126.6
|
$ |
(10.0
|
) | |||||
System Test
|
24.4
|
9.1
|
15.3
|
|||||||||
Wireless Test
|
11.2
|
7.8
|
3.3
|
|||||||||
Industrial Automation
|
(1.6
|
) |
0.9
|
(2.6
|
) | |||||||
Corporate and Other (1)
|
1.2
|
(3.6
|
) |
4.8
|
||||||||
|
$ |
151.7
|
$ |
140.8
|
$ |
10.9
|
||||||
(1) | Included in Corporate and Other are: contingent consideration adjustments, employee severance, equity modification charge, interest income, interest expense, net foreign exchange gains and losses, intercompany eliminations, and acquisition related expenses and compensation. |
|
For the Nine Months
Ended
|
|
|
|||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
Dollar
Change
|
|
||||||
|
(in millions)
|
|||||||||||
Semiconductor Test
|
$ |
1,113.5
|
$ |
1,150.7
|
$ |
(37.2
|
) | |||||
Industrial Automation
|
209.8
|
176.8
|
33.0
|
|||||||||
System Test
|
204.9
|
162.3
|
42.6
|
|||||||||
Wireless Test
|
112.5
|
92.0
|
20.5
|
|||||||||
Corporate and Other
|
(0.4
|
) |
(0.6
|
) |
0.2
|
|||||||
|
$ |
1,640.3
|
$ |
1,581.2
|
$ |
59.1
|
||||||
|
For the Nine Months
Ended
|
|||||||
|
September 29,
2019
|
|
September 30,
2018
|
|
||||
China
|
23
|
% |
18
|
% | ||||
Taiwan
|
22
|
26
|
||||||
United States
|
14
|
13
|
||||||
Europe
|
10
|
10
|
||||||
Korea
|
10
|
8
|
||||||
Japan
|
7
|
6
|
||||||
Singapore
|
4
|
5
|
||||||
Thailand
|
4
|
3
|
||||||
Malaysia
|
3
|
6
|
||||||
Philippines
|
3
|
4
|
||||||
Rest of World
|
—
|
1
|
||||||
|
100
|
% |
100
|
% | ||||
(1) | Revenues attributable to a country are based on location of customer site. |
|
For the Nine Months
Ended
|
|
|
|||||||||
|
September 29,
2019
|
|
September 30,
2018
|
|
Dollar/Point
Change
|
|
||||||
|
(in millions)
|
|||||||||||
Gross profit
|
$ |
956.6
|
$ |
910.9
|
$ |
45.7
|
||||||
Percent of total revenues
|
58.3
|
% |
57.6
|
% |
0.7
|
|
For the Nine Months
Ended
|
|
|
|||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
Dollar
Change
|
|
||||||
|
(in millions)
|
|||||||||||
Selling and administrative
|
$ |
320.0
|
$ |
290.1
|
$ |
29.9
|
||||||
Percent of total revenues
|
19.5
|
% |
18.3
|
% |
|
|
For the Nine Months
Ended
|
|
|
|||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
Dollar
Change |
|
||||||
|
(in millions)
|
|||||||||||
Engineering and development
|
$ |
236.0
|
$ |
226.8
|
$ |
9.2
|
||||||
Percent of total revenues
|
14.4
|
% |
14.3
|
% |
|
|
For the Nine Months
Ended
|
|
|
|||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
Dollar
Change |
|
||||||
|
(in millions)
|
|||||||||||
Interest income
|
$ |
(18.6
|
) | $ |
(17.6
|
) | $ |
(1.0
|
) | |||
Interest expense
|
17.2
|
18.1
|
(0.9
|
) | ||||||||
Other (income) expense, net
|
6.6
|
4.4
|
2.2
|
|
For the Nine Months
Ended
|
|
|
|||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
Dollar
Change |
|
||||||
|
(in millions)
|
|||||||||||
Semiconductor Test
|
$ |
291.0
|
$ |
305.9
|
$ |
(14.8
|
) | |||||
System Test
|
63.3
|
35.3
|
28.0
|
|||||||||
Wireless Test
|
25.7
|
18.6
|
7.1
|
|||||||||
Industrial Automation
|
(10.7
|
) |
(1.2
|
) |
(9.5
|
) | ||||||
Corporate and Other (1)
|
7.5
|
(1.9
|
) |
9.4
|
||||||||
|
$ |
376.9
|
$ |
356.7
|
$ |
20.2
|
||||||
(1) | Included in Corporate and Other are: contingent consideration adjustments, employee severance, equity modification charge, interest income, interest expense, net foreign exchange gains and losses, intercompany eliminations, and acquisition related expenses and compensation. |
|
Payments Due by Period
|
|||||||||||||||||||||||
|
Total
|
|
Less than
1 year
|
|
1-3
years
|
|
3-5
years
|
|
More than
5 years
|
|
Other
|
|
||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||
Convertible debt
|
$ |
460,000
|
$ |
—
|
$ |
—
|
$ |
460,000
|
$ |
—
|
$ |
—
|
||||||||||||
Purchase obligations
|
360,342
|
354,195
|
6,147
|
—
|
—
|
—
|
||||||||||||||||||
Retirement plans contributions
|
126,147
|
9,494
|
20,594
|
26,485
|
69,574
|
—
|
||||||||||||||||||
Transition tax payable (1)
|
91,139
|
7,358
|
15,958
|
22,940
|
44,883
|
—
|
||||||||||||||||||
Operating lease obligations
|
73,253
|
21,342
|
29,923
|
12,508
|
9,480
|
—
|
||||||||||||||||||
Interest on long-term debt
|
25,875
|
5,750
|
11,500
|
8,625
|
—
|
—
|
||||||||||||||||||
Fair value of contingent consideration
|
18,080
|
6,297
|
11,783
|
—
|
—
|
—
|
||||||||||||||||||
Other long-term liabilities reflected on the balance sheet under GAAP (2)
|
67,785
|
—
|
36,044
|
6,097
|
451
|
25,193
|
||||||||||||||||||
Total
|
$ |
1,222,621
|
$ |
404,436
|
$ |
131,949
|
$ |
536,655
|
$ |
124,388
|
$ |
25,193
|
||||||||||||
(1) | Represents the transition tax liability associated with our accumulated foreign earnings as a result of the enactment of the Tax Reform Act on December 22, 2017. |
(2) | Included in other long-term liabilities are liabilities for customer advances, extended warranty, uncertain tax positions, deferred tax liabilities and other obligations. For certain long-term obligations, we are unable to provide a reasonably reliable estimate of the timing of future payments relating to these obligations and therefore we included these amounts in the column marked “Other.” |
Item 3:
|
Quantitative and Qualitative Disclosures about Market Risks
|
Hypothetical Change in Teradyne Stock Price
|
Fair Value
|
|
Estimated change
in fair value |
|
Hypothetical percentage
increase (decrease) in fair value |
|
||||||
10% Increase
|
$ |
936,589
|
$ |
69,201
|
8.0
|
% | ||||||
No Change
|
867,388
|
—
|
—
|
|||||||||
10% Decrease
|
793,228
|
(74,160
|
) |
(8.5
|
) |
Item 4:
|
Controls and Procedures
|
Item 1:
|
Legal Proceedings
|
Item 1A:
|
Risk Factors
|
Item 2:
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
(a) Total
Number of
Shares
(or Units)
Purchased
|
|
(b) Average
Price Paid per
Share (or Unit)
|
|
(c) Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs
|
|
(d) Maximum Number
(or Approximate Dollar
Value) of Shares (or
Units) that may Yet Be
Purchased Under the
Plans or Programs
|
|
||||||||
July 1, 2019 – July 28, 2019
|
806
|
$ |
47.02
|
806
|
$ |
391,430
|
||||||||||
July 29, 2019 – August 25, 2019
|
386
|
$ |
53.36
|
385
|
$ |
370,875
|
||||||||||
August 26, 2019 – September 29, 2019
|
1,133
|
$ |
55.75
|
1,132
|
$ |
307,737
|
||||||||||
|
2,325
|
(1) | $ |
52.33
|
(1) |
2,323
|
|
|||||||||
(1) | Includes approximately two thousand shares at an average price of $50.83 withheld from employees for the payment of taxes. |
Item 4:
|
Mine Safety Disclosures
|
Item 6:
|
Exhibits
|
Exhibit
Number
|
|
Description
|
||
31.1
|
||||
31.2
|
||||
32.1
|
||||
32.2
|
||||
101.INS
|
XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|||
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|||
104
|
Cover Page Interactive Data File (formatted as Inline XBRL, and contained in Exhibit 101)
|
TERADYNE, INC.
|
Registrant
|
/
s
/
Sanjay Mehta
|
Sanjay Mehta
Vice President,
Chief Financial Officer and Treasurer
(Duly Authorized Officer
and Principal Financial Officer)
|
1 Year Teradyne Chart |
1 Month Teradyne Chart |
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