Teradyne Reports 53% Sequential Growth in Second Quarter 2013 Sales, Raises Outlook for Third Quarte

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Teradyne Reports 53% Sequential Growth in Second Quarter 2013 Sales, Raises Outlook for Third Quarter of 2013

Q2'13 revenue of $429 million, up 53% from Q1'13 and down 22% from Q2'12

Q2'13 orders of $474 million, up 18% from Q1'13 and down 20% from Q2'12


Q2'13 diluted non-GAAP net income of $0.43 per share, up from $0.09 per share in Q1'13 and down from $0.77 per share in Q2'12.Q2'13 diluted GAAP net income of $0.28 per share

Q3'13 guidance: Revenue of $425 million to $465 million; Diluted non-GAAP net income of $0.39 to $0.49 per share; Diluted GAAP net income of $0.23 to $0.31 per share

NORTH READING, Mass.--(BUSINESS WIRE)-- Teradyne, Inc. (NYS: TER) reported revenue of $429 million for the second quarter of 2013 of which $293 million was in Semiconductor Test, $99 million in Wireless Test and $37 million in Systems Test. On a non-GAAP basis, Teradyne's net income in the second quarter was $89.1 million, or $0.43 per diluted share. This excludes acquired intangible asset amortization and non-cash convertible debt interest and includes income taxes on a cash basis. GAAP net income for the second quarter was $66.6 million, or $0.28 per diluted share.

Bookings in the second quarter of 2013 were $474 million of which $362 million were in Semiconductor Test, $87 million in Wireless Test and $25 million in Systems Test.

"We delivered our 16th consecutive quarter of profitable operationswithstrong growth in our semiconductor and wireless test businesses," said CEO, Mike Bradley. "Semiconductor Test orders grew 40% in the quarter driven by the mobile, power management, microcontroller, and memory test sectors. Wireless and Systems Test orders declined in the quarter as customers adjusted their capacity to market demand. We've raised our third quarter revenue outlook to reflect these order trends."

Guidance for the third quarter of 2013 is revenue of $425 million to $465 million with non-GAAP net income per diluted share of $0.39 to $0.49 and GAAP net income per diluted share of $0.23 to $0.31. Non-GAAP guidance excludes acquired intangible asset amortization and non-cash convertible debt interest and includes income taxes on a cash basis.

Webcast

A conference call to discuss the second quarter of 2013 results, along with management's business outlook is scheduled at 10 a.m. EDT, Thursday, July 25, 2013. The call will be broadcast simultaneously over the Internet. Interested investors should access the webcast at www.teradyne.com and click on "Investors" at least five minutes before the call begins.

A replay will be available approximately two hours after the completion of the call. The replay number in the U.S. & Canada is 855-859-2056. The replay number outside the U.S. & Canada is 404-537-3406. The pass code for both numbers is 13172250. A replay will also be available on the Teradyne website at www.teradyne.com. Click on "Investors" for a link to the replay. The replay will be available via phone and website through August 10, 2013.

Non-GAAP Results

In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses non-GAAP results of operations that exclude certain income items and charges. These results are provided as a complement to results provided in accordance with GAAP. Non-GAAP income from operations and non-GAAP net income exclude acquired intangible asset amortization, non-cash convertible debt interest, fair value inventory step-up related to LitePoint, pension and post retirement actuarial gains and losses, and restructuring and other, and include income taxes on a cash basis. GAAP requires that these items be included in determining income from operations and net income. Non-GAAP income from operations, non-GAAP net income, non-GAAP income from operations and non-GAAP net income as a percentage of revenue, and non-GAAP net income per share are non-GAAP measures presented to provide meaningful supplemental information regarding Teradyne's baseline performance before gains, losses or other charges that may not be indicative of Teradyne's current core business or future outlook. These non-GAAP measures are used to make operational decisions, to determine employee compensation, to forecast future operational results, and for comparison with Teradyne's business plan, historical operating results and the operating results of Teradyne's competitors. Non-GAAP gross margin excludes charges related to the fair value inventory step-up recorded as part of acquisition purchase accounting and pension and post retirement actuarial gains and losses. GAAP requires that this item be included in determining gross margin. Non-GAAP gross margin dollar amount and percentage are non-GAAP measures that management believes provide useful supplemental information for management and the investor. Management uses non-GAAP gross margin as a performance measure for Teradyne's current core business and future outlook and for comparison with Teradyne's business plan, historical gross margin results and the gross margin results of Teradyne's competitors. Non-GAAP diluted shares include the impact of Teradyne's call option on its shares. Management believes each of these non-GAAP measures provides useful supplemental information for investors, allowing greater transparency to the information used by management in its operational decision making and in the review of Teradyne's financial and operational performance, as well as facilitating meaningful comparisons of Teradyne's results in the current period compared with those in prior and future periods. A reconciliation of each available GAAP to non-GAAP financial measure discussed in this press release is contained in the attached exhibits and on the Teradyne website at www.teradyne.com by clicking on "Investors" and then selecting the "GAAP to Non-GAAP Reconciliation" link. The non-GAAP financial measures discussed in this press release may not be comparable to similarly titled measures used by other companies. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.

About Teradyne

Teradyne (NYS: TER) is a leading supplier of Automatic Test Equipment used to test semiconductors, wireless products, data storage and complex electronic systems which serve consumer, communications, industrial and government customers. In 2012, Teradyne had sales of $1.66 billion and currently employs approximately 3,700 people worldwide. For more information, visit www.teradyne.com. Teradyne(R) is a registered trademark of Teradyne, Inc. in the U.S. and other countries.

Safe Harbor Statement

This release contains forward-looking statements regarding future business prospects, Teradyne's results of operations and market conditions. Such statements are based on the current assumptions and expectations of Teradyne's management and are neither promises nor guarantees of future performance. You can identify these forward-looking statements based on the context of the statements and by the fact that they use words such as "will," "anticipate," "expect," "project," "intend," "plan," "believe," "target" and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. There can be no assurance that management's estimates of Teradyne's future results or other forward looking statements will be achieved. Important factors that could cause actual results to differ materially from those presently expected include: conditions affecting the markets in which Teradyne operates; decreased or delayed product demand; increased research and development spending 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, 2012 and Quarterly Report on Form 10-Q for the period ended March 31, 2013. 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 SECOND FISCAL QUARTER OF 2013
               
CONDENSED CONSOLIDATED OPERATING STATEMENTS
(In thousands, except per share amounts)
        
Quarter EndedSix Months Ended
June 30, 2013March 31, 2013July 1, 2012June 30, 2013July 1, 2012
 
Net revenues$428,889$280,367$548,284$709,256$944,952
 
Cost of revenues (1) (2) 187,656  126,950  238,778  314,606  444,520 
 
Gross profit241,233153,417309,506394,650500,432
 
Operating expenses:
Engineering and development (1)67,77362,75167,834130,524129,113
Selling and administrative (1)69,23067,89072,064137,120138,697
Acquired intangible asset amortization18,06318,03618,42936,09936,858
Restructuring and other (3) 259  332  (6,262) 591  (8,087)
Operating expenses155,325149,009152,065304,334296,581
 
Income from operations85,9084,408157,44190,316203,851
 
Interest and other (4) (5,551) (5,834) (5,449) (11,385) (10,615)
 
Income (loss) before income taxes80,357(1,426)151,99278,931193,236
Income tax provision (benefit) 13,801  (8,015) 40,605  5,786  48,285 
Net income$66,556 $6,589 $111,387 $73,145 $144,951 
 

Net income per common share:

Basic$0.35 $0.03 $0.60 $0.38 $0.78 
Diluted$0.28 $0.03 $0.49 $0.31 $0.63 
 
Weighted average common shares - basic 190,569  189,686  186,573  190,128  186,205 
 
 
Weighted average common shares - diluted (5) 234,909  234,757  229,646  234,833  230,399 
 
Net orders$473,815 $400,082 $591,703 $873,897 $1,049,785 
 
 
 
(1)

In the first quarter of 2012, we changed our accounting method from delayed recognition of actuarial gains and losses for our defined benefit pension plans and other post retirement benefit plans to immediate recognition. We elected to immediately recognize net actuarial gains and losses and the change in the fair value of plan assets in our operating results in the year in which they occur. Below are the pension (gains) and losses included in our operating results:

 
Quarter EndedSix Months Ended
June 30, 2013March 31, 2013July 1, 2012June 30, 2013July 1, 2012
Cost of revenues$(335)$-$778$(335)$778
Engineering and development(659)-1,463(659)1,463
Selling and administrative (365) -  813  (365) 813 
$(1,359)$- $3,054 $(1,359)$3,054 
 
 
(2)Cost of revenues includes:Quarter EndedSix Months Ended
June 30, 2013March 31, 2013July 1, 2012June 30, 2013July 1, 2012
Provision for excess and obsolete inventory$1,975$3,800$9,353$5,775$10,927
Sale of previously written down inventory(3,058)(1,783)-(4,841)(1,272)
Inventory step-up -  -  1,218  -  6,089 
$(1,083)$2,017 $10,571 $934 $15,744 
 
 
(3)Restructuring and other consists of:Quarter EndedSix Months Ended
June 30, 2013March 31, 2013July 1, 2012June 30, 2013July 1, 2012
Contingent consideration fair value adjustment$-$-$(6,548)$-$(8,373)
Employee severance 259  332  286  591  286 
$259 $332 $(6,262)$591 $(8,087)
 
 
(4)Interest and other includes:Quarter EndedSix Months Ended
June 30, 2013March 31, 2013July 1, 2012June 30, 2013July 1, 2012
Non-cash convertible debt interest$3,884$3,754$3,3897,638 Read Full Story

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