EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

Teradyne Announces First Quarter, 2008 Results

NORTH READING, Mass. — (BUSINESS WIRE) —April 22, 2008—Teradyne, Inc. reported sales of $297 million in the first quarter of 2008. Net income for the first quarter was $21.8 million, or $0.12 per diluted share, on a non-GAAP basis, which excludes amortization of acquired intangible assets and special items, and $2.4 million or $0.01 per diluted share on a GAAP basis. Bookings for the first quarter were $321 million, and included a full quarter of Nextest bookings of $33 million.

“We’re off to a good start in 2008, with order growth in System on Chip (SOC) test and a strong showing by our new memory test business unit,” said Mike Bradley, Teradyne president and CEO. “Wireless solutions dominated our first quarter bookings, as FLEX® test systems once again cracked the 100-unit mark. In addition, our new product pipeline in both SOC and memory test showed good momentum on the design-in front.”

Guidance for the second quarter of 2008 is for sales of $310 million to $330 million, with earnings per diluted share between $0.14 and $0.19 on a non-GAAP basis, and $0.07 to $0.12 on a GAAP basis. Non-GAAP guidance excludes $8 million of estimated restructuring and other charges, net, as well as acquired intangible amortization of $5 million.

Webcast

A webcast to discuss first quarter 2008 results and management’s business outlook will be held at 10 a.m. Eastern Time, Wednesday, April 23, 2008. Interested investors should access the webcast at www.teradyne.com and click on “Investors” at least five minutes before the call begins. The webcast replay will be available on www.teradyne.com. In addition, a conference call replay will be available approximately two hours after the call. The replay number in the U.S. & Canada is 800-642-1687. The replay number outside the U.S. & Canada is 706-645-9291. The pass code for both numbers is 30479782. The replay will be available via phone and website through May 7, 2008.

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. Teradyne reports non-GAAP results in order to better assess and reflect operating performance. Management believes the non-GAAP measures help indicate Teradyne’s baseline performance before gains, losses or other charges that are considered by management to be outside Teradyne’s ongoing operating results. Teradyne believes these non-GAAP measures will aid investors’ overall understanding of

its results by providing a higher degree of transparency for certain expenses and providing a level of disclosure that will help investors understand how Teradyne plans and measures its own business. A reconciliation of each 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 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, Inc.

Teradyne (NYSE:TER) is a leading supplier of Automatic Test Equipment used to test complex electronics used in the consumer electronics, automotive, computing, telecommunications, and aerospace and defense industries. In 2007, Teradyne had sales of $1.1 billion and currently employs about 3,700 people worldwide. For more information, visit www.teradyne.com. Teradyne® is a registered trademark of Teradyne, Inc. in the U.S. and other countries. All product names are trademarks of Teradyne, Inc. (including its subsidiaries) or their respective owners.

Safe Harbor Statement

The forward-looking statements included in this release are made only as of the date of publication. Teradyne disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

This release contains forward-looking statements regarding future business prospects and market conditions. Such statements are based on the current assumptions and expectations of Teradyne’s management and are neither promises nor guarantees. You can generally 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 our future results 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; delays in new product introductions; lack of customer acceptance of new products; the ability to realize synergies and cost savings from the integration of Nextest Systems Corporation with Teradyne’s existing operations; and other events, factors and risks previously and from time to time disclosed in filings with the SEC, including, but not limited to, Teradyne’s annual report on Form 10-K for the fiscal year ended December 31, 2007.

TERADYNE, INC. REPORT FOR FIRST FISCAL QUARTER OF 2008

CONDENSED CONSOLIDATED OPERATING STATEMENTS

(In thousands, except per share amounts)

 

     Quarter Ended:  
     March 30,
2008		    December 31,
2007		     April 1,
2007		  

Net Revenues (1)

    $ 297,315    $ 260,416     $ 253,693  

Cost of Revenues (2) (3)

      158,812      141,846       140,296  
                       

Gross Profit

      138,503      118,570       113,397  

Operating Expenses:

        

Engineering and Development (2)

      55,149      50,420       49,262  

Selling and Administrative (2)

      65,221      60,839       62,947  

Acquired Intangible Asset Amortization

      3,863      797       911  

In-process Research and Development (4)

      1,100      —         16,700  

Restructuring and Other, net (5)

      11,785      (355 )     2,247  
                       

Operating Expenses

      137,118      111,701       132,067  

Income/(Loss) From Operations

      1,385      6,869       (18,670 )

Interest & Other, net (6)

      5,082      8,088       12,341  
                       

Income/(Loss) from Continuing Operations Before Income Taxes

      6,467      14,957       (6,329 )

Income Tax Provision/(Benefit)

      4,100      (2,196 )     1,385  
                       

Income/(Loss) from Continuing Operations

      2,367      17,153       (7,714 )

(Loss)/Income from Discontinued Operations

      —        (449 )     93  

Income Tax Provision

      —        —         15  
                       

(Loss)/Income from Discontinued Operations

      —        (449 )     78  
                       

Net Income/(Loss)

    $ 2,367    $ 16,704     $ (7,636 )
                       

Income/(Loss) per Common Share from Continuing Operations:

        

Basic

    $ 0.01    $ 0.10     $ (0.04 )
                       

Diluted

    $ 0.01    $ 0.10     $ (0.04 )
                       

Net Income/(Loss) per Common Share:

        

Basic

    $ 0.01    $ 0.10     $ (0.04 )
                       

Diluted

    $ 0.01    $ 0.10     $ (0.04 )
                       

Weighted Average Common Shares - Basic

      173,762      173,498       189,625  
                       

Weighted Average Common Shares - Diluted

      175,722      173,829       189,625  
                       

Net Orders

    $ 321,055    $ 281,995     $ 245,975  
                       

 

(1) For the quarter ended March 30, 2008, net revenues excluded $4 million of Nextest revenue, that would otherwise be recognized except for purchase accounting effects on acquired deferred revenue.
(2) Includes the following amounts related to stock-based compensation:

 

     March 30,
2008		    December 31,
2007		    April 1,  
2007  

Cost of Revenues

    $ 863    $ 728    $ 1,384

Engineering and Development

      1,632      1,187      2,259

Selling and Administrative

      2,660      1,914      3,643
                    
   $ 5,155    $ 3,829    $ 7,286
                    

 

(3) For the quarter ended March 30, 2008 and December 31, 2007, cost of revenues included credits of $0.9 million and $0.6 million, respectively, related to previously written off inventory in the Semiconductor Test Division. For the quarter ended March 30, 2008, cost of revenues also included a charge of $4.3 million to adjust Nextest acquired inventory to fair value.
(4) For the quarter ended March 30, 2008 and April 1, 2007, in-process research and development included a charge related to the Nextest acquisition and a charge related to the acquisition of enabling test technology from MOSAID Technologies, respectively.

(5) Restructuring and other, net consists of:

 

     Quarter Ended:
     March 30,
2008		    December 31,
2007		     April 1,
2007

Severance

    $ 7,113    $ 522     $ 2,201

Facility Related

      4,672      1,667       46

Insurance gain from Taiwan fire

      —        (2,544 )     —  
                     
   $ 11,785    $ (355 )   $ 2,247
                     

 

(6) For the quarter ended April 1, 2007, interest and other, net included income of $1.8 million for the recognition of fair value of an asset related to an equity investment.

CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

 

     March 30,
2008		    December 31,
2007

Assets

      

Cash and Cash Equivalents

    $ 323,080    $ 562,371

Marketable Securities

      31,510      75,593

Accounts Receivable

      201,906      189,487

Inventories

      103,692      80,313

Other Current Assets

      73,906      37,169
             
     734,094      944,933

Net Property, Plant and Equipment

      371,518      352,707

Long-term Marketable Securities

      86,068      104,978

Goodwill

      242,698      69,147

Intangible and Other Assets

      128,219      37,127

Retirement Plans Assets

      47,931      46,396
             
   $ 1,610,528    $ 1,555,288
             

Liabilities

      

Accounts Payable

    $ 87,716    $ 57,426

Accrued Employees’ Compensation and Withholdings

      61,603      71,691

Deferred Revenue and Customer Advances

      47,891      41,928

Other Accrued Liabilities

      51,853      47,002

Income Taxes Payable

      —        5,187
             
     249,063      223,234

Retirement Plans Liabilities

      82,058      80,388

Other Long-term Liabilities

      43,726      22,492
             
     374,847      326,114

Shareholders’ Equity

      1,235,681      1,229,174
             
   $ 1,610,528    $ 1,555,288
             

GAAP to Non-GAAP Earnings Reconciliation

References by the Company to non-GAAP income and non-GAAP income per share refer to income from continuing operations or income per common share from continuing operations excluding in-process research and development, restructuring and other, net, certain inventory provisions and fair value adjustment relating to Nextest, interest and other, net, and acquired intangible asset amortization, as well as adjustments to profit sharing due to these exclusions. GAAP requires that these items be included in determining income from continuing operations. Non-GAAP income from continuing operations (which is the basis for non-GAAP income per share) gives an indication of Teradyne’s baseline performance before gains, losses or other charges that are considered by management to be outside the Company’s ongoing operating results. The Company believes these non-GAAP measures will aid investors’ overall understanding of the Company’s results by providing a higher degree of transparency for certain expenses and credits, through providing a level of disclosure that will help investors understand how the Company plans and measures its own business. However, the presentation of non-GAAP measures is not meant to be considered in isolation or as a substitute for, or superior to, financial information provided in accordance with GAAP.

 

     Quarter Ended:  
     March 30,
2008		           December 31,
2007		           April 1,
2007		        
(in millions, except per share data)                                     

Gross Margin - GAAP

    $ 138.5     46.6 %   $ 118.6     45.5 %   $ 113.4     44.7 %

Inventory provision reversal (1)

      (0.9 )       (0.6 )       —      

Nextest inventory fair value adjustment reversal (2)

      4.3         —           —      
                              

Gross Margin - non-GAAP

    $ 141.9     47.7 %   $ 118.0     45.3 %   $ 113.4     44.7 %

Income/(Loss) from Continuing Operations -GAAP

    $ 2.4     0.8 %   $ 17.2     6.6 %   $ (7.7 )   -3.0 %

Inventory provision reversal (1)

      (0.9 )       (0.6 )       —      

Nextest inventory fair value adjustment reversal (2)

      4.3         —           —      

Acquired intangible asset amortization

      3.9         0.8         0.9    

In-process research and development (3)

     1.1         —           16.7    

Restructuring and other, net (4)

      11.8         (0.4 )       2.2    

Interest and Other, net (5)

      —           —           (1.8 )  

Profit sharing adjustment (6)

      (0.8 )       —           (1.1 )  
                              

Income from Continuing Operations - non-GAAP

    $ 21.8     7.3 %   $ 17.0     6.5 %   $ 9.2     3.6 %
                              

GAAP Income/(Loss) per Common Share from Continuing Operations- Basic

    $ 0.01       $ 0.10       $ (0.04 )  
                              

Non-GAAP Income per Common Share from Continuing Operations - Basic

    $ 0.13       $ 0.10       $ 0.05    
                              

GAAP Weighted Average Common Shares - Basic

      173.8         173.5         189.6    

GAAP Income/(Loss) per Common Share from Continuing Operations - Diluted

    $ 0.01       $ 0.10       $ (0.04 )  
                              

Non-GAAP Income per Common Share from Continuing Operations - Diluted

    $ 0.12       $ 0.10       $ 0.05    
                              

GAAP Weighted Average Common Shares - Diluted

      175.7         173.8         191.0    

 

(1)

Reversal of previously written off inventory for non-FLEX products in the Semiconductor Test Division.

(2)

Reversal of a charge adjusting Nextest acquired inventory to fair value.

(3)

In-process research and development charges related to the Nextest acquisition for the quarter ended March 30, 2008 and for the acquisition of enabling test technology from MOSAID technologies for the quarter ended April 2, 2007.

(4)

Restructuring and other, net consists of (in millions):

 

     Quarter Ended:
     March 30,
2008		    December 31,
2007		     April 1,
2007

Employee severance

    $ 7.1    $ 0.5     $ 2.2

Facility related

      4.7      1.6       —  

Insurance gain from Taiwan fire

      —        (2.5 )     —  
                     
   $ 11.8    $ (0.4 )   $ 2.2
                     

 

(5)

Recognition of fair value of an asset related to an equity investment.

(6)

Profit sharing adjustment for non-GAAP items.

 

For press releases and other information of interest to investors, please visit Teradyne’s homepage on the world wide web at http://www.teradyne.com.

 

Contact: Teradyne, Inc.

Tom Newman, 978-370-2425

Vice President of Corporate Relations