QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| (State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
| |
| |
| (Address of Principal Executive Offices) |
(Zip Code) |
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
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| |
☒ |
Accelerated filer |
☐ | |||
| Non-accelerated filer |
☐ |
Emerging growth company |
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| Smaller reporting company |
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| Page No. |
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| Item 1. |
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| 1 |
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| 2 |
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| 3 |
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| 4 |
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| 5 |
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| 6 |
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| Item 2. |
33 |
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| Item 3. |
44 |
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| Item 4. |
44 |
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| Item 1. |
45 |
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| Item 1A. |
45 |
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| Item 2. |
45 |
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| Item 4. |
46 |
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| Item 6. |
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 |
$ | |
$ | |
||||
| Marketable securities |
|
|
||||||
| Accounts receivable, less allowance for doubtful accounts of $ |
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|
||||||
| Inventories, net |
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|
||||||
| Prepayments and other current assets |
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|
||||||
| Total current assets |
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|
||||||
| Property, plant and equipment, net |
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|
||||||
| Operating lease right-of-use assets, net |
|
— |
||||||
| Marketable securities |
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|
||||||
| Deferred tax assets |
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|
||||||
| Other assets |
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|
||||||
| Retirement plans assets |
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|
||||||
| Acquired intangible assets, net |
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|
||||||
| Goodwill |
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|
||||||
| Total assets |
$ | |
$ | |
||||
| LIABILITIES |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | |
$ | |
||||
| Accrued employees’ compensation and withholdings |
|
|
||||||
| Deferred revenue and customer advances |
|
|
||||||
| Other accrued liabilities |
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|
||||||
| Operating lease liabilities |
|
— |
||||||
| Contingent consideration |
|
|
||||||
| Income taxes payable |
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|
||||||
| Total current liabilities |
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|
||||||
| Retirement plans liabilities |
|
|
||||||
| Long-term deferred revenue and customer advances |
|
|
||||||
| Deferred tax liabilities |
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|
||||||
| Long-term other accrued liabilities |
|
|
||||||
| Long-term contingent consideration |
|
|
||||||
| Long-term operating lease liabilities |
|
— |
||||||
| Long-term income taxes payable |
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|
||||||
| Debt |
|
|
||||||
| Total liabilities |
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|
||||||
| Commitments and contingencies (See Note S) |
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| SHAREHOLDERS’ EQUITY |
||||||||
| Common stock, $ |
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|
||||||
| Additional paid-in capital |
|
|
||||||
| Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
| Accumulated deficit |
( |
) | ( |
) | ||||
| Total shareholders’ equity |
|
|
||||||
| Total liabilities and shareholders’ equity |
$ | |
$ | |
||||
| 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 |
$ | |
$ | |
$ | |
$ | |
||||||||
| Services |
|
|
|
|
||||||||||||
| Total revenues |
|
|
|
|
||||||||||||
| Cost of revenues: |
||||||||||||||||
| Cost of products |
|
|
|
|
||||||||||||
| Cost of services |
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|
|
|
||||||||||||
| Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) |
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|
|
|
||||||||||||
| Gross profit |
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|
|
||||||||||||
| Operating expenses: |
||||||||||||||||
| Selling and administrative |
|
|
|
|
||||||||||||
| Engineering and development |
|
|
|
|
||||||||||||
| Acquired intangible assets amortization |
|
|
|
|
||||||||||||
| Restructuring and other |
( |
) | |
( |
) | |
||||||||||
| Total operating expenses |
|
|
|
|
||||||||||||
| Income from operations |
|
|
|
|
||||||||||||
| Non-operating (income) expense: |
||||||||||||||||
| Interest income |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Interest expense |
|
|
|
|
||||||||||||
| Other (income) expense, net |
|
|
|
|
||||||||||||
| Income before income taxes |
|
|
|
|
||||||||||||
| Income tax provision |
|
|
|
|
||||||||||||
| Net income |
$ | |
$ | |
$ | |
$ | |
||||||||
| Net income per common share: |
||||||||||||||||
| Basic |
$ | |
$ | |
$ | |
$ | |
||||||||
| Diluted |
$ | |
$ | |
$ | |
$ | |
||||||||
| Weighted average common shares—basic |
|
|
|
|
||||||||||||
| Weighted average common shares—diluted |
|
|
|
|
||||||||||||
| 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 |
$ | |
$ | |
$ | |
$ | |
||||||||
| Other comprehensive income, net of tax: |
||||||||||||||||
| Foreign currency translation adjustment, net of tax of $ |
( |
) | |
( |
) | ( |
) | |||||||||
| Available-for-sale marketable securities: |
||||||||||||||||
| Unrealized gains (losses) on marketable securities arising during period, net of tax of $ |
|
( |
) | |
( |
) | ||||||||||
| Less: Reclassification adjustment for (gains) losses included in net income, net of tax of $( |
( |
) | ( |
) | ( |
) | |
|||||||||
| |
( |
) | |
( |
) | |||||||||||
| 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 $( |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Other comprehensive (loss) income |
( |
) | |
( |
) | ( |
) | |||||||||
| Comprehensive income |
$ | |
$ | |
$ | |
$ | |
||||||||
| |
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 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
|||||||||||
| Net issuance of common stock under stock-based plans |
|
|
|
— |
— |
|
||||||||||||||||||
| Stock-based compensation expense |
— |
— |
|
— |
— |
|
||||||||||||||||||
| Repurchase of common stock |
( |
) | ( |
) | — |
— |
( |
) | ( |
) | ||||||||||||||
| Cash dividends ($ |
— |
— |
— |
— |
( |
) | ( |
) | ||||||||||||||||
| Net income |
— |
— |
— |
— |
|
|
||||||||||||||||||
| Other comprehensive loss |
— |
— |
— |
( |
) | — |
( |
) | ||||||||||||||||
| Balance, September 29 , 2019 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
|||||||||||
| For the Three Months Ended September 30, 2018 |
||||||||||||||||||||||||
| Balance, July 1, 2018 |
|
$ | |
$ | |
$ | ( |
) | $ | |
$ | |
||||||||||||
| Net issuance of common stock under stock-based plans |
|
|
|
— |
— |
|
||||||||||||||||||
| Stock-based compensation expense |
— |
— |
|
— |
— |
|
||||||||||||||||||
| Repurchase of common stock |
( |
) | ( |
) | — |
— |
( |
) | ( |
) | ||||||||||||||
| Cash dividends ($ |
— |
— |
— |
— |
( |
) | ( |
) | ||||||||||||||||
| Net income |
— |
— |
— |
— |
|
|
||||||||||||||||||
| Other comprehensive income |
— |
— |
— |
|
— |
7,028 |
||||||||||||||||||
| Balance, September 30, 2018 |
|
$ | |
$ | |
$ | |
$ | ( |
) | $ | |
||||||||||||
| For the Nine Months Ended September 29, 2019 |
||||||||||||||||||||||||
| Balance, December 31, 2018 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
|||||||||||
| Net issuance of common stock under stock-based plans |
|
|
|
— |
— |
|
||||||||||||||||||
| Stock-based compensation expense |
— |
— |
|
— |
— |
|
||||||||||||||||||
| Repurchase of common stock |
( |
) | ( |
) | — |
— |
( |
) | ( |
) | ||||||||||||||
| Cash dividends ($ |
— |
— |
— |
— |
( |
) | ( |
) | ||||||||||||||||
| Net income |
— |
— |
— |
— |
|
|
||||||||||||||||||
| Other comprehensive loss |
— |
— |
— |
( |
) | — |
( |
) | ||||||||||||||||
| Balance, September 29 , 2019 |
|
$ | |
$ | |
$ | ( |
) | $ | ( |
) | $ | |
|||||||||||
| For the Nine Months Ended September 30, 2018 |
||||||||||||||||||||||||
| Balance, December 31, 2017 |
|
$ | |
$ | |
$ | |
$ | |
$ | |
|||||||||||||
| Net issuance of common stock under stock-based plans |
|
|
|
— |
— |
|
||||||||||||||||||
| Stock-based compensation expense |
— |
— |
|
— |
— |
|
||||||||||||||||||
| Repurchase of common stock |
( |
) | ( |
) | — | — |
( |
) | ( |
) | ||||||||||||||
| Cash dividends ($ |
— |
— |
— |
— |
( |
) | ( |
) | ||||||||||||||||
| Net income |
— |
— |
— |
— |
|
|
||||||||||||||||||
| Other comprehensive loss |
— |
— |
— |
( |
) | — |
( |
) | ||||||||||||||||
| Reclassification of unrealized gains on equity securities |
— |
— |
— |
( |
) | |
— |
|||||||||||||||||
| Reclassification of tax effects resulting from the Tax Reform Act |
— |
— |
— |
|
( |
) | — |
|||||||||||||||||
| Cumulative effect of changes in accounting principle related to recognition |
— |
— |
— |
— |
|
|
||||||||||||||||||
| Balance, September 30, 2018 |
|
$ | |
$ | |
$ | |
$ | ( |
) | $ | |
||||||||||||
| For the Nine Months Ended |
||||||||
| September 29, 2019 |
September 30, 2018 |
|||||||
| (in thousands) |
||||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | |
$ | |
||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation |
|
|
||||||
| Amortization |
|
|
||||||
| Stock-based compensation |
|
|
||||||
| Deferred taxes |
( |
) | |
|||||
| Provision for excess and obsolete inventory |
|
|
||||||
| Contingent consideration fair value adjustment |
( |
) | ( |
) | ||||
| Gains on marketable securities |
( |
) | ( |
) | ||||
| Retirement plan s actuarial losses |
|
|
||||||
| Other |
|
|
||||||
| Changes in operating assets and liabilities, net of businesses acquired: |
||||||||
| Accounts receivable |
( |
) | ( |
) | ||||
| Inventories |
( |
) | ( |
) | ||||
| Prepayments and other assets |
( |
) | ( |
) | ||||
| Accounts payable and other liabilities |
|
|
||||||
| Deferred revenue and customer advances |
|
|
||||||
| Retirement plans contributions |
( |
) | ( |
) | ||||
| Income taxes |
( |
) | ( |
) | ||||
| Net cash provided by operating activities |
|
|
||||||
| Cash flows from investing activities: |
||||||||
| Purchases of property, plant and equipment |
( |
) | ( |
) | ||||
| Proceeds from government subsidy for property, plant and equipment |
— |
|
||||||
| Purchases of marketable securities |
( |
) | ( |
) | ||||
| Proceeds from sales of marketable securities |
|
|
||||||
| Proceeds from maturities of marketable securities |
|
|
||||||
| Proceeds from life insurance |
|
|
||||||
| Purchase of investment and acquisition of businesses, net of cash acquired |
( |
) | ( |
) | ||||
| Net cash (used for) provided by investing activities |
( |
) | |
|||||
| Cash flows from financing activities: |
||||||||
| Issuance of common stock under stock purchase and stock option plans |
|
|
||||||
| Repurchase of common stock |
( |
) | ( |
) | ||||
| Dividend payments |
( |
) | ( |
) | ||||
| Payments related to net settlement of employee stock compensation awards |
( |
) | ( |
) | ||||
| Payments of contingent consideration |
( |
) | ( |
) | ||||
| Net cash used for financing activities |
( |
) | ( |
) | ||||
| Effects of exchange rate changes on cash and cash equivalents |
( |
) | |
|||||
| (Decrease) increase in cash and cash equivalents |
( |
) | |
|||||
| Cash and cash equivalents at beginning of period |
|
|
||||||
| Cash and cash equivalents at end of period |
$ | |
$ | |
||||
| • | 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 |
$ | |
||
| Intangible assets |
|
|||
| Tangible assets acquired and liabilities assumed: |
||||
| Current assets |
|
|||
| Non-current assets |
|
|||
| Accounts payable and current liabilities |
( |
) | ||
| Long-term deferred tax liabilities |
( |
) | ||
| Other long-term liabilities |
( |
) | ||
| Total purchase price |
$ | |
||
| Fair Value |
Estimated Useful Life |
|||||||
| (in thousands) |
(in years) |
|||||||
| Developed technology |
$ | |
|
|||||
| Trademarks and tradenames |
|
|
||||||
| Customer relationships |
|
|
||||||
| Backlog |
|
|
||||||
| Total intangible assets |
$ | |
|
|||||
| For the Nine Months Ended |
||||
| September 30, 2018 |
||||
| (in thousands) |
||||
| Revenue |
$ | |
||
| Net income |
|
|||
| Net income per common share: |
||||
| Basic |
$ | |
||
| Diluted |
$ | |
||
| 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 |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | — |
$ | |
$ | ( |
) | $ | |
|||||||||||||||||||||
| Over time |
|
|
|
— |
|
|
— |
|
|
— |
|
|||||||||||||||||||||||||||||||||
| Europe, Middle East |
||||||||||||||||||||||||||||||||||||||||||||
| Point in time |
|
|
|
— |
|
|
|
— |
|
— |
|
|||||||||||||||||||||||||||||||||
| Over time |
|
|
|
— |
|
|
— |
|
|
— |
|
|||||||||||||||||||||||||||||||||
| Asia Pacific |
||||||||||||||||||||||||||||||||||||||||||||
| Point in time |
|
|
|
|
|
|
|
— |
|
— |
|
|||||||||||||||||||||||||||||||||
| Over time |
|
|
|
|
|
|
— |
— |
|
— |
|
|||||||||||||||||||||||||||||||||
| Lease Revenue |
|
— |
— |
— |
|
— |
— |
— |
|
— |
|
|||||||||||||||||||||||||||||||||
| Total |
$ | |
$ |
|
$ | |
$ | |
$ | |
$ |
|
$ |
|
$ | |
$ |
|
$ | ( |
) | $ | |
|||||||||||||||||||||
| 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 |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | ( |
) | $ | |
|||||||||||||||||||||
| Over time |
|
|
|
— |
|
|
— |
|
|
— |
|
|||||||||||||||||||||||||||||||||
| Europe, Middle East |
||||||||||||||||||||||||||||||||||||||||||||
| Point in time |
|
|
|
— |
|
|
|
— |
|
— |
|
|||||||||||||||||||||||||||||||||
| Over time |
|
|
|
— |
|
|
— |
|
|
— |
|
|||||||||||||||||||||||||||||||||
| Asia Pacific |
||||||||||||||||||||||||||||||||||||||||||||
| Point in time |
|
|
|
|
|
|
|
|
|
— |
|
|||||||||||||||||||||||||||||||||
| Over time |
|
|
|
|
|
|
— |
|
|
— |
|
|||||||||||||||||||||||||||||||||
| Lease Revenue |
|
— |
— |
— |
|
— |
— |
— |
|
— |
|
|||||||||||||||||||||||||||||||||
| Total |
$ | |
$ |
|
$ | |
$ | |
$ | |
$ |
|
$ |
|
$ | |
$ |
|
$ | ( |
) | $ | |
|||||||||||||||||||||
| 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 |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | — |
$ | |
$ | ( |
) | $ | |
|||||||||||||||||||||
| Over time |
|
|
|
— |
|
|
— |
|
|
— |
|
|||||||||||||||||||||||||||||||||
| Europe, Middle East |
||||||||||||||||||||||||||||||||||||||||||||
| Point in time |
|
|
|
— |
|
|
|
— |
|
— |
|
|||||||||||||||||||||||||||||||||
| Over time |
|
|
|
— |
|
|
— |
|
|
— |
|
|||||||||||||||||||||||||||||||||
| Asia Pacific |
||||||||||||||||||||||||||||||||||||||||||||
| Point in time |
|
|
|
|
|
|
|
— |
|
— |
|
|||||||||||||||||||||||||||||||||
| Over time |
|
|
|
|
|
|
— |
|
|
— |
|
|||||||||||||||||||||||||||||||||
| Lease Revenue |
|
— |
— |
— |
|
— |
— |
— |
|
— |
|
|||||||||||||||||||||||||||||||||
| Total |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | ( |
) | $ | |
|||||||||||||||||||||
| 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 |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | ( |
) | $ | |
|||||||||||||||||||||
| Over time |
|
|
|
— |
|
|
— |
|
|
— |
|
|||||||||||||||||||||||||||||||||
| Europe, Middle East |
||||||||||||||||||||||||||||||||||||||||||||
| Point in time |
|
|
|
— |
|
|
|
— |
|
— |
|
|||||||||||||||||||||||||||||||||
| Over time |
|
|
|
— |
|
|
— |
|
|
— |
|
|||||||||||||||||||||||||||||||||
| Asia Pacific |
||||||||||||||||||||||||||||||||||||||||||||
| Point in time |
|
|
|
|
|
|
|
|
|
— |
|
|||||||||||||||||||||||||||||||||
| Over time |
|
|
|
|
|
|
— |
|
|
— |
|
|||||||||||||||||||||||||||||||||
| Lease Revenue |
|
— |
— |
— |
|
— |
— |
— |
|
— |
|
|||||||||||||||||||||||||||||||||
| Total |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | ( |
) | $ | |
|||||||||||||||||||||
| September 29, 2019 |
December 31, 2018 |
|||||||
| (in thousands) |
||||||||
| Raw material |
$ | |
$ | |
||||
| Work-in-process |
|
|
||||||
| Finished goods |
|
|
||||||
| $ | |
$ | |
|||||
| 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 |
$ | |
$ | — |
$ | — |
$ | |
||||||||
| Cash equivalents |
|
|
— |
|
||||||||||||
| Available-for-sale securities: |
||||||||||||||||
| U.S. Treasury securities |
— |
|
— |
|
||||||||||||
| Commercial paper |
— |
|
— |
|
||||||||||||
| Corporate debt securities |
— |
|
— |
|
||||||||||||
| Certificates of deposit and time deposits |
— |
|
— |
|
||||||||||||
| U.S. government agency securities |
— |
|
— |
|
||||||||||||
| Debt mutual funds |
|
— |
— |
|
||||||||||||
| Non-U.S. government securities |
— |
|
— |
|
||||||||||||
| Equity securities: |
||||||||||||||||
| Mutual funds |
|
— |
— |
|
||||||||||||
| $ | |
$ | |
$ | — |
$ | |
|||||||||
| Derivative assets |
— |
|
— |
|
||||||||||||
| Total |
$ | |
$ | |
$ | — |
$ | |
||||||||
| Liabilities |
||||||||||||||||
| Contingent consideration |
$ | — |
$ | — |
$ | |
$ | |
||||||||
| Derivative liabilities |
— |
|
— |
|
||||||||||||
| Total |
$ | — |
$ | |
$ | |
$ | |
||||||||
| (Level 1) |
(Level 2) |
(Level 3) |
Total |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
$ | |
$ |
|
$ | — |
$ | |
||||||||
| Marketable securities |
— |
|
— |
|
||||||||||||
| Long-term marketable securities |
|
|
— |
|
||||||||||||
| Prepayments |
— |
|
— |
|
||||||||||||
| Total |
$ |
|
$ | |
$ |
— |
$ | |
||||||||
| Liabilities |
|
|||||||||||||||
| Other current liabilities |
$ | — |
$ | |
$ | — |
$ | |
||||||||
| Contingent consideration |
— |
— |
|
|
||||||||||||
| Long-term contingent consideration |
— |
— |
|
|
||||||||||||
| Total |
$ | — |
$ | |
$ | |
$ | |
||||||||
| 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 |
$ | |
$ | — |
$ | — |
$ | |
||||||||
| Cash equivalents |
|
|
— |
|
||||||||||||
| Available-for-sale securities: |
||||||||||||||||
| U.S. Treasury securities |
— |
|
— |
|
||||||||||||
| Commercial paper |
— |
|
— |
|
||||||||||||
| Corporate debt securities |
— |
|
— |
|
||||||||||||
| U.S. government agency securities |
— |
|
— |
|
||||||||||||
| Certificates of deposit and time deposits |
— |
|
— |
|
||||||||||||
| Debt mutual funds |
|
— |
— |
|
||||||||||||
| Non-U.S. government securities |
— |
|
— |
|
||||||||||||
| Equity securities: |
— |
|||||||||||||||
| Mutual funds |
|
— |
— |
|
||||||||||||
| $ | |
$ | |
$ | — |
$ | |
|||||||||
| Derivative assets |
— |
|
— |
|
||||||||||||
| Total |
$ | |
$ | |
$ | — |
$ | |
||||||||
| Liabilities |
||||||||||||||||
| Contingent consideration |
$ | — |
$ | — |
$ | |
$ | |
||||||||
| Derivative liabilities |
— |
|
— |
|
||||||||||||
| Total |
$ | — |
$ | |
$ | |
$ | |
||||||||
| |
|
) |
Total |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Assets |
||||||||||||||||
| Cash and cash equivalents |
$ |
|
$ |
|
$ | — |
$ | |
||||||||
| Marketable securities |
— |
|
— |
|
||||||||||||
| Long-term marketable securities |
|
|
— |
|
||||||||||||
| Prepayments |
— |
|
— |
|
||||||||||||
| Total |
$ | |
$ | |
$ | — |
$ | |
||||||||
| Liabilities |
||||||||||||||||
| Other accrued liabilities |
$ | — |
$ | |
$ | — |
$ | |
||||||||
| Contingent consideration |
— |
— |
|
|
||||||||||||
| Long-term contingent consideration |
— |
— |
|
|
||||||||||||
| Total |
$ | — |
$ | |
$ |
|
$ | |
||||||||
| 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 |
$ | |
$ | |
$ | |
$ | |
||||||||
| Fair value adjustment (a) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Foreign currency impact |
( |
) | |
( |
) | ( |
) | |||||||||
| Payments (b) |
— |
— |
( |
) | ( |
) | ||||||||||
| Acquisition of MiR |
— |
— |
— |
|
||||||||||||
| Balance at end of period |
$ | |
$ | |
$ | |
$ | |
||||||||
| (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 $, 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 $ |
| (b) | In the nine months ended September 29, 2019, Teradyne paid $ 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) |
$ | |
Monte Carl o s imulation |
Revenue volatility |
|
% | ||||||
| Discount r ate |
|
% | ||||||||||
| September 29, 2019 |
December 31, 2018 |
|||||||||||||||
| Carrying Value |
Fair Value |
Carrying Value |
Fair Value |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Assets |
||||||||||||||||
| Cash and cash equivalents |
$ | |
$ | |
$ | |
$ | |
||||||||
| Marketable securities |
|
|
|
|
||||||||||||
| Derivative assets |
|
|
|
|
||||||||||||
| Liabilities |
||||||||||||||||
| Contingent consideration |
|
|
|
|
||||||||||||
| Derivative liabilities |
|
|
|
|
||||||||||||
| Convertible debt (1) |
|
|
|
|
||||||||||||
| (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 |
$ | |
$ | |
$ | ( |
) | $ | |
$ | |
|||||||||
| Commercial paper |
|
|
( |
) | |
|
||||||||||||||
| Corporate debt securities |
|
|
( |
) | |
|
||||||||||||||
| Certificates of deposit and time deposits |
|
|
— |
|
— |
|||||||||||||||
| U.S. government agency securities |
|
|
( |
) | |
|
||||||||||||||
| Debt mutual funds |
|
|
— |
|
— |
|||||||||||||||
| Non-U.S. government securities |
|
— |
— |
|
— |
|||||||||||||||
| $ | |
$ | |
$ | ( |
) | $ | |
$ | |
||||||||||
| Cost |
Unrealized Gain |
Unrealized (Loss) |
Fair Market Value |
Fair Market Value of Investments with Unrealized Losses |
||||||||||||||||
| (in thousands) |
||||||||||||||||||||
| Marketable securities |
$ | |
$ | |
$ | ( |
) | $ | |
$ | |
|||||||||
| Long-term marketable securities |
|
|
( |
) | |
|
||||||||||||||
| $ | |
$ | |
$ | ( |
) | $ | |
$ | |
||||||||||
| 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 |
$ | |
$ | |
$ | ( |
) | $ | |
$ | |
|||||||||
| Commercial paper |
|
|
( |
) | |
|
||||||||||||||
| Corporate debt securities |
|
|
( |
) | |
|
||||||||||||||
| U.S. government agency securities |
|
|
( |
) | |
|
||||||||||||||
| Certificates of deposit and time deposits |
|
— |
— |
|
— |
|||||||||||||||
| Debt mutual funds |
|
|
— |
|
— |
|||||||||||||||
| Non-U.S. government securities |
|
— |
— |
|
— |
|||||||||||||||
| $ | |
$ | |
$ | ( |
) | $ | |
$ | |
||||||||||
| Cost |
Unrealized Gain |
Unrealized (Loss) |
Fair Market Value |
Fair Market Value of Investments with Unrealized Losses |
||||||||||||||||
| (in thousands) |
||||||||||||||||||||
| Marketable securities |
$ | |
$ | |
$ | ( |
) | $ | |
$ | |
|||||||||
| Long-term marketable securities |
|
|
( |
) | |
|
||||||||||||||
| $ | |
$ | |
$ | ( |
) | $ | |
$ | |
||||||||||
| September 29, 2019 |
||||||||
| Cost |
Fair Market Value |
|||||||
| (in thousands) |
||||||||
| Due within one year |
$ | |
$ | |
||||
| Due after 1 year through 5 years |
|
|
||||||
| Due after 5 years through 10 years |
|
|
||||||
| Due after 10 years |
|
|
||||||
| Total |
$ | |
$ | |
||||
| Balance Sheet Location |
September 29, 2019 |
December 31, 2018 |
||||||||||
| (in thousands) |
||||||||||||
| Derivatives not designated as hedging instruments: |
||||||||||||
| Foreign exchange contracts - derivative assets |
Prepayments |
$ | |
$ | |
|||||||
| Foreign exchange contracts - derivative liabilities |
Other current liabilities |
( |
) | ( |
) | |||||||
| Total derivatives |
$ | ( |
) | $ | ( |
) | ||||||
| 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 |
$ | |
$ | ( |
) | $ | |
$ | |
||||||||
| (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 $ |
| (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 $ |
| 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: |
$ | |
$ | |
||||
| Right-of-use assets obtained in exchange for new lease obligations |
|
|
||||||
| Operating Lease |
||||
| (in thousands) |
||||
| 2019 |
$ | |
||
| 2020 |
|
|||
| 2021 |
|
|||
| 2022 |
|
|||
| 2023 |
|
|||
| Thereafter |
|
|||
| Total lease payments |
|
|||
| Less imputed interest |
( |
) | ||
| Total lease liabilities |
$ | |
||
| Operating Lease |
||||
| (in thousands) |
||||
| 2019 |
$ | |
||
| 2020 |
|
|||
| 2021 |
|
|||
| 2022 |
|
|||
| 2023 |
|
|||
| Thereafter |
|
|||
| Total lease payments |
$ | |
||
| September 29, 2019 |
December 31, 2018 |
|||||||
| (in thousands) |
||||||||
| Debt Principal |
$ | |
$ | |
||||
| Unamortized discount |
|
|
||||||
| Net Carrying amount of convertible debt |
$ | |
$ | |
||||
| 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 |
$ | |
$ | |
$ | |
$ | |
||||||||
| Amortization of the discount component recognized as interest expense |
|
|
|
|
||||||||||||
| Total interest expense on the convertible debt |
$ | |
$ | |
$ | |
$ | |
||||||||
| September 29, 2019 |
December 31, 2018 |
|||||||
| (in thousands) |
||||||||
| Contract manufacturer and supplier prepayments |
$ | |
$ | |
||||
| Prepaid taxes |
|
|
||||||
| Prepaid maintenance and other services |
|
|
||||||
| Other prepayments |
|
|
||||||
| Total prepayments |
$ | |
$ | |
||||
| September 29, 2019 |
December 31, 2018 |
|||||||
| (in thousands) |
||||||||
| Maintenance and training |
$ | |
$ | |
||||
| Extended warranty |
|
|
||||||
| Customer advances, undelivered performance obligations and other |
|
|
||||||
| Total deferred revenue and customer advances |
$ | |
$ | |
||||
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 |
$ |
$ |
$ |
$ |
||||||||||||
Acquisition |
— |
— |
||||||||||||||
Accruals for warranties issued during the period |
||||||||||||||||
Accruals related to pre-existing warranties |
||||||||||||||||
Settlements made during the period |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Balance at end of period |
$ |
$ |
$ |
$ |
||||||||||||
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 |
$ | $ | $ | $ | ||||||||||||
Deferral of new extended warranty revenue |
||||||||||||||||
Recognition of extended warranty deferred revenue |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Balance at end of period |
$ | $ | $ | $ | ||||||||||||
For the Nine Months Ended |
||||||||
September 29, 2019 |
September 30, 2018 |
|||||||
Risk-free interest rate |
% | % | ||||||
Teradyne volatility-historical |
% | % | ||||||
NYSE Composite Index volatility-historical |
% | % | ||||||
Dividend yield |
% | % | ||||||
For the Nine Months Ended |
||||||||
September 29, 2019 |
September 30, 2018 |
|||||||
Expected life (years) |
||||||||
Risk-free interest rate |
% | % | ||||||
Volatility-historical |
% | % | ||||||
Dividend yield |
% | % | ||||||
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 $ |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||
Other comprehensive loss before reclassifications, net of tax of $ |
( |
) | ( |
) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $ 125 ), $( |
( |
) | ( |
) | ( |
) | ||||||||||
Net current period other comprehensive income (loss), net of tax of $ |
( |
) | ( |
) | ( |
) | ||||||||||
Balance at September 29, 2019, net of tax of $ |
$ | ( |
) | $ | $ | $ | ( |
) | ||||||||
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 $ |
$ | $ | $ | $ | ||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax of $ |
( |
) | ( |
) | — |
( |
) | |||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $ |
— |
( |
) | 1,227 |
||||||||||||
Net current period other comprehensive income (loss), net of tax of $ |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Reclassification of income tax effects from the Tax Reform Act, net of tax of $ |
— |
|||||||||||||||
Reclassification of unrealized gains on equity securities, net of tax of $ |
— |
( |
) | — |
( |
) | ||||||||||
Balance a t September 30, 2018, net of tax of $ |
$ | $ | ( |
) | $ | $ | ||||||||||
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 $ |
$ | $ | $ | $ | ( |
) | Interest income (expense) |
||||||||||||
Defined benefit pension and postretirement plans: |
|||||||||||||||||||
Amortization of prior service benefit, net of tax of $ |
(a) |
||||||||||||||||||
Total reclassifications, net of tax of $ |
$ | $ | $ | $ | (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 |
$ | $ | $ | $ | $ | |||||||||||||||
Accumulated impairment losses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
— |
||||||||||||||||||||
Lemsys acquisition |
— |
— |
— |
|||||||||||||||||
Foreign currency translation adjustment |
( |
) | — |
— |
( |
) | ||||||||||||||
Balance at September 29, 2019 |
||||||||||||||||||||
Goodwill |
||||||||||||||||||||
Accumulated impairment losses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||
September 29, 2019 |
||||||||||||||||
Gross Carrying Amount (1) (2) |
Accumulated Amortization (2) |
Foreign Currency Translation Adjustment |
Net Carrying Amount |
|||||||||||||
(in thousands) |
||||||||||||||||
Developed technology |
$ | $ | ( |
) | $ | ( |
) | $ |
||||||||
Customer relationships |
( |
) | ( |
) | ||||||||||||
Tradenames and trademarks |
( |
) | ( |
) | ||||||||||||
Total intangible assets |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
December 31, 2018 |
||||||||||||||||
Gross Carrying Amount |
Accumulated Amortization |
Foreign Currency Translation Adjustment |
Net Carrying Amount |
|||||||||||||
(in thousands) |
||||||||||||||||
Developed technology |
$ |
$ |
( |
) | $ | ( |
) | $ | ||||||||
Customer relationships |
( |
) | ( |
) | ||||||||||||
Tradenames and trademarks |
( |
) | ( |
) | ||||||||||||
Non-compete agreement |
( |
) | — |
— |
||||||||||||
Backlog |
( |
) | — |
— |
||||||||||||
Total intangible assets |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
| (1) | $ have been added in January 2019 . |
| (2) | $ removed from the gross carrying amount and accumulated amortization. |
Amortization Expense |
||||
Year |
(in thousands) |
|||
2019 (remainder) |
||||
2020 |
||||
2021 |
||||
2022 |
||||
2023 |
||||
Thereafter |
||||
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 |
$ | $ | $ | $ | ||||||||||||
Weighted average common shares-basic |
||||||||||||||||
Effect of dilutive potential common shares: |
||||||||||||||||
Incremental shares from assumed conversion of convertible notes (1) |
||||||||||||||||
Convertible note hedge warrant shares (2) |
||||||||||||||||
Restricted stock units |
||||||||||||||||
Stock options |
||||||||||||||||
Employee stock purchase plan |
||||||||||||||||
Dilutive potential common shares |
||||||||||||||||
Weighted average common shares-diluted |
||||||||||||||||
Net income per common share-basic |
$ | $ | $ | $ | ||||||||||||
Net income per common share-diluted |
$ | $ | $ | $ | ||||||||||||
| (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 $ |
| (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 $ |
| |
For the Three Months Ended |
|||||||||||||||
| |
September |
September 30, 2018 |
||||||||||||||
| |
United States |
Foreign |
United States |
Foreign |
||||||||||||
| |
(in thousands) |
|||||||||||||||
| Service cost |
$ | |
$ | |
$ | |
$ | |
||||||||
| Interest cost |
|
|
|
|
||||||||||||
| Expected return on plan assets |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Amortization of prior service cost |
— |
— |
|
— |
||||||||||||
| Settlement loss |
— |
— |
|
— |
||||||||||||
| Total net periodic pension cost |
$ | |
$ | |
$ | |
$ | |
||||||||
| For the Nine Months Ended |
||||||||||||||||
| September 29, 2019 |
September 30, 2018 |
|||||||||||||||
| United States |
Foreign |
United States |
Foreign |
|||||||||||||
| (in thousands) |
||||||||||||||||
| Service cost |
$ | |
$ | |
$ | |
$ | |
||||||||
| Interest cost |
|
|
|
|
||||||||||||
| Expected return on plan assets |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Amortization of prior service cost |
— |
— |
|
— |
||||||||||||
| Net actuarial loss (gain) |
|
— |
( |
) | — |
|||||||||||
| Settlement loss |
— |
— |
|
— |
||||||||||||
| Total net periodic pension cost |
$ | |
$ | |
$ | |
$ | |
||||||||
| 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 |
$ | |
$ | |
$ | |
$ | |
||||||||
| Interest cost |
|
|
|
|
||||||||||||
| Amortization of prior service credit |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Net actuarial loss |
— |
— |
|
|
||||||||||||
| Special termination benefits |
— |
|
— |
|
||||||||||||
| Total net periodic postretirement benefit cost |
$ | |
$ | |
$ | |
$ | |
||||||||
| 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 |
|
% | |
% | |
% | |
% | ||||||||
| Discrete expense related to U.S. transition tax |
— |
— |
|
|
||||||||||||
| Foreign taxes |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| International provisions of the U.S. Tax Cuts and Jobs |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Tax credits |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Discrete benefit related to equity compensation |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Discrete benefit related to release of reserves for uncertain tax positions |
— |
( |
) |
( |
) |
— |
||||||||||
| Other, net |
( |
) | |
|
|
|||||||||||
| Effective tax rate |
|
% |
|
% |
|
% |
|
% | ||||||||
Semiconductor Test |
Industrial Automation |
System Test |
Wireless Test |
Corporate and Other |
Consolidated |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Three Months Ended September 29, 2019 |
||||||||||||||||||||||||
Revenues |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||
Income (loss) before income taxes (1)(2) |
( |
) | ||||||||||||||||||||||
Total assets (3) |
||||||||||||||||||||||||
Three Months Ended September 30, 2018 |
||||||||||||||||||||||||
Revenues |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||
Income (loss) before income taxes (1)(2) |
( |
) | ||||||||||||||||||||||
Total assets (3) |
||||||||||||||||||||||||
Nine Months Ended September 29, 2019 |
||||||||||||||||||||||||
Revenues |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||
Income (loss) before income taxes (1)(2) |
( |
) | ||||||||||||||||||||||
Total assets (3) |
||||||||||||||||||||||||
Nine Months Ended September 30, 2018 |
||||||||||||||||||||||||
Revenues |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||
Income (loss) before income taxes (1)(2) |
( |
) | ( |
) | ||||||||||||||||||||
Total assets (3) |
||||||||||||||||||||||||
| (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 |
$ |
$ |
$ |
$ |
||||||||||||
Restructuring and other—employee severance |
— |
|||||||||||||||
Industrial Automation: |
||||||||||||||||
Restructuring and other—acquisition related expenses |
$ |
— |
$ |
$ |
$ |
|||||||||||
Restructuring and other—employee severance |
— |
— |
— |
|||||||||||||
Cost of revenues—inventory charge |
— |
— |
||||||||||||||
System Test: |
||||||||||||||||
Cost of revenues—inventory charge |
$ |
— |
$ |
— |
$ |
$ |
||||||||||
Wireless Test: |
||||||||||||||||
Cost of revenues—inventory charge |
$ |
$ |
$ |
$ |
||||||||||||
Corporate and Other: |
||||||||||||||||
Restructuring and other—MiR contingent consideration adjustment |
$ |
( |
) |
$ |
— |
$ |
( |
) |
$ |
— |
||||||
Selling and administrative – equity modification charge |
— |
— |
||||||||||||||
Restructuring and other—acquisition related expenses and compensation |
— |
|||||||||||||||
Restructuring and other—Universal Robots contingent consideration adjustment |
— |
( |
) |
— |
( |
) | ||||||||||
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 |
|||||||
| For the Three Months Ended |
||||||||
| September 29, |
September 30, |
|||||||
| 2019 |
2018 |
|||||||
| China |
31 |
% | 21 |
% | ||||
| Taiwan |
21 |
25 |
||||||
| United States |
14 |
12 |
||||||
| Korea |
10 |
6 |
||||||
| Europe |
9 |
9 |
||||||
| Japan |
4 |
7 |
||||||
| Thailand |
4 |
2 |
||||||
| Singapore |
3 |
7 |
||||||
| Malaysia |
2 |
7 |
||||||
| Philippines |
2 |
3 |
||||||
| Rest of World |
— |
1 |
||||||
| 100 |
% | 100 |
% | |||||
| (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) |
Exhibit 31.1
CERTIFICATIONS
I, Mark E. Jagiela, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Teradyne, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 8, 2019
| By: | /S/ MARK E. JAGIELA | |
| Mark E. Jagiela | ||
| Chief Executive Officer November 8, 2019 |
Exhibit 31.2
CERTIFICATIONS
I, Sanjay Mehta, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Teradyne, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 8, 2019
| By: | /S/ SANJAY MEHTA | |
| Sanjay Mehta | ||
| Chief Financial Officer November 8, 2019 |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Teradyne, Inc. (the “Company”) on Form 10-Q for the period ended September 29, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark E. Jagiela, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C (S) 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
| /S/ MARK E. JAGIELA |
| Mark E. Jagiela |
| Chief Executive Officer November 8, 2019 |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Teradyne, Inc. (the “Company”) on Form 10-Q for the period ended September 29, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sanjay Mehta, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C (S) 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
| /S/ SANJAY MEHTA |
| Sanjay Mehta |
| Chief Financial Officer |
| November 8, 2019 |
Financial Instruments |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Instruments | G. FINANCIAL INSTRUMENTS Cash Equivalents Teradyne considers all highly liquid investments with maturities of three months or less at the date of acquisition to be cash equivalents. Marketable Securities Teradyne’s available-for-sale debt securities are classified as Level 2 and equity securities are classified as Level 1. Contingent consideration is classified as Level 3. The vast majority of Level 2 securities are fixed income securities priced by third party pricing vendors. These pricing vendors utilize the most recent observable market information in pricing these securities or, if specific prices are not available, use other observable inputs like market transactions involving identical or comparable securities.During the three and nine months ended September 29, 2019 and September 30, 2018, there were no transfers in or out of Level 1, Level 2, or Level 3 financial instruments. Realized gains recorded in the three and nine months ended September 29, 2019 were $0.5 million and $0.7 million, respectively. Realized losses recorded in the nine months ended September 29, 2019 were $0.2 million. Realized gains recorded in the three and nine months ended September 30, 2018 were $0.2 million and $0.6 million, respectively. Realized losses recorded in the nine months ended September 30, 2018 were $1.6 million. Realized gains are included in interest income and realized losses are included in interest expense. Unrealized gains on equity securities recorded in the three and nine months ended September 29, 2019 were $0.1 million and $3.8 million, respectively. Unrealized losses on equity securities recorded in the three and nine months ended September 29, 2019 were $0.2 million. Unrealized gains on equity securities recorded in the three and nine months ended September 30, 2018 were $1.0 million and $1.4 million, respectively. Unrealized gains on equity securities are included in interest income and unrealized losses are included in interest expense. Unrealized gains and losses on available-for-sale debt securities are included in accumulated other comprehensive income (loss) on the balance sheet.The cost of securities sold is based on the specific identification method. The following table sets forth by fair value hierarchy Teradyne’s financial assets and liabilities that were measured at fair value on a recurring basis as of September 29, 2019 and December 31, 2018.
Reported as follows:
Reported as follows:
Changes in the fair value of Level 3 contingent consideration for the three and nine months ended September 29, 2019 and September 30, 2018 were as follows:
The following table provides quantitative information associated with the fair value measurement of Teradyne’s Level 3 financial instruments:
As of September 29, 2019, the significant unobservable inputs used in the Monte Carlo simulation to fair value the MiR contingent consideration include forecasted revenues, revenue volatility, earnings before interest and taxes, and discount rate. Increases or decreases in the inputs would result in a higher or lower fair value measurement. As of September 29, 2019, the maximum amount of contingent consideration that could be paid in connection with the acquisition of MiR is $81.0 million. The remaining earn-out periods end on December 31, 2019 and December 31, 2020.The carrying amounts and fair values of Teradyne’s financial instruments at September 29, 2019 and December 31, 2018 were as follows:
The fair values of accounts receivable, net and accounts payable approximate the carrying value due to the short-term nature of these instruments. The following table summarizes the composition of
available-for-sale marketable securities at September 29, 2019:
Reported as follows:
The following table summarizes the composition of
available-for-sale marketable securities at December 31, 2018:
Reported as follows:
As of September 29, 2019, the fair market value of investments in available-for-sale securities with unrealized losses totaled $60.7 million. Of this value, $4.9 million had unrealized losses of $0.1 million for greater than one year and $55.8 million had unrealized losses of $0.1 million for less than one year.As of December 31, 2018, the fair market value of investments with unrealized losses totaled $192.0 million. Of this value, $28.5 million had unrealized losses of $1.6 million greater than one year and $163.5 million had unrealized losses of $1.4 million for less than one year. Teradyne reviews its investments to identify and evaluate investments that have an indication of possible impairment. Based on this review, Teradyne determined that the unrealized losses related to these investments at September 29, 2019 and December 31, 2018 were temporary. The contractual maturities of investments in
available-for-sale securities held at September 29, 2019 were as follows:
Contractual maturities of investments in available-for-sale securities held at September 29, 2019 exclude $4.0 million of debt mutual funds as they do not have a contractual maturity date.Derivatives Teradyne conducts business in a number of foreign countries, with certain transactions denominated in local currencies. The purpose of Teradyne’s foreign currency management is to minimize the effect of exchange rate fluctuations on certain foreign currency denominated monetary assets and liabilities. Teradyne does not use derivative financial instruments for trading or speculative purposes. To minimize the effect of exchange rate fluctuations associated with the remeasurement of monetary assets and liabilities denominated in foreign currencies, Teradyne enters into foreign currency forward contracts. The change in fair value of these derivatives is recorded directly in earnings, and is used to offset the change in value of monetary assets and liabilities denominated in foreign currencies. The notional amount of foreign currency forward contracts at September 29, 2019 and December 31, 2018 was $114.9 million and $163.1 million, respectively. Gains and losses on foreign currency forward contracts and foreign currency remeasurement gains and losses on monetary assets and liabilities are included in other (income) expense, net. The following table summarizes the fair value of derivative instruments as of September 29, 2019 and December 31, 2018:
The following table summarizes the effect of derivative instruments recognized in the statement of operations for the three and nine months ended September 29, 2019 and September 30, 2018.
See Note I: “Debt” regarding derivatives related to the convertible senior notes. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recently Issued Accounting Pronouncements |
9 Months Ended |
|---|---|
Sep. 29, 2019 | |
| Recently Issued Accounting Pronouncements | C. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS On January 26, 2017, the FASB issued ASU
2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment.” one-step impairment test will be applied to goodwill at all reporting units, even those with zero or negative carrying amounts. Entities will be required to disclose the amount of goodwill at reporting units with zero or negative carrying amounts. The revised guidance will be applied prospectively, and is effective in 2020. Early adoption is permitted for any impairment tests performed after January 1, 2017. Teradyne is currently evaluating the impact of this ASU on its financial position, results of operations and statements of cash flows. |
Shareholders' Equity |
9 Months Ended |
|---|---|
Sep. 29, 2019 | |
| Equity [Abstract] | |
| Shareholders' Equity | V. SHAREHOLDERS’ EQUITY Stock Repurchase Program In January 2018, Teradyne’s Board of Directors cancelled the December 2016 stock repurchase program and authorized a new stock repurchase program for up to $1.5 billion of common stock. Teradyne intends to repurchase $500 million in 2019. During the nine months ended September 29, 2019, Teradyne repurchased 8.8 million shares of common stock for $368.8 million at an average price of $41.93 per share. The cumulative repurchases under the $1.5 billion stock repurchase program as of September 29, 2019 totaled 30.4 million shares of common stock for $1.2 billion at an average price per share of $39.18. During the nine months ended September 30, 2018, Teradyne repurchased 13.8 million shares of common stock for $562.3 million at an average price of $40.62 per share. The total price includes commissions and is recorded as a reduction to retained earnings. Dividend Holders of Teradyne’s common stock are entitled to receive dividends when they are declared by Teradyne’s Board of Directors. In January 2019 , May 2019 and August 2019, Teradyne’s Board of Directors declared a quarterly cash dividend of $0.09 per share. Dividend payments for the three and nine months ended September 29, 2019 were $15.3 million and $46.3 million, respectively. In January 2018 , May 2018 and August 2018, Teradyne’s Board of Directors declared a quarterly cash dividend of $0.09 per share. Dividend payments for the three and nine months ended September 30, 2018 were $16.6 million and $51.3 million, respectively.While Teradyne declared a quarterly cash dividend and authorized a share repurchase program, it may reduce or eliminate the cash dividend or share repurchase program in the future. Future cash dividends and stock repurchases are subject to the discretion of Teradyne’s Board of Directors, which will consider, among other things, Teradyne’s earnings, capital requirements and financial condition. |
Revenue (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disaggregated Revenue by Primary Geographical Market, Major Product Line and Timing of Revenue Recognition | The following table provides information about disaggregated revenue by primary geographical market, major product line and timing of revenue recognition.
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Debt (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of Convertible Senior Notes | The below tables represent the key components of Teradyne’s convertible senior notes:
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Schedule of Operating Lease, Maturity (Detail) - USD ($) $ in Thousands |
Sep. 29, 2019 |
Jan. 01, 2019 |
Feb. 28, 2016 |
|---|---|---|---|
| 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 | $ 54,300 | $ 54,300 |
| 2019 | 19,570 | ||
| 2020 | 18,293 | ||
| 2021 | 13,578 | ||
| 2022 | 9,693 | ||
| 2023 | 5,449 | ||
| Thereafter | 9,472 | ||
| Total lease payments | $ 76,055 |
Schedule of Estimated Fair Value of Stock Options Grant Using Black Scholes Option Pricing Model (Detail) - Stock Options |
9 Months Ended | |
|---|---|---|
Sep. 29, 2019 |
Sep. 30, 2018 |
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| Share-based Compensation Arrangement by Share-based Payment Award | ||
| Expected life (years) | 5 years | 5 years |
| Risk-free interest rate | 2.50% | 2.40% |
| Volatility-historical | 30.10% | 26.40% |
| Dividend yield | 1.00% | 0.80% |
Reclassifications Out of Accumulated Other Comprehensive Income to Statements of Operations (Parenthetical) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 29, 2019 |
Sep. 30, 2018 |
Sep. 29, 2019 |
Sep. 30, 2018 |
|
| Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
| Reclassifications, tax | $ 110 | $ 35 | $ 157 | $ 59 |
| Unrealized (Losses) Gains on Marketable Securities | ||||
| Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
| Reclassifications, tax | 99 | 17 | 125 | 6 |
| Amortization of Prior Service Credit | ||||
| Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
| Reclassifications, tax | $ 11 | $ 18 | $ 32 | $ 53 |
Schedule of Prepayments and Other Assets (Detail) - USD ($) $ in Thousands |
Sep. 29, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Prepaid And Other Current Assets [Line Items] | ||
| 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 |
Subsequent Events - Additional Information (Detail) $ in Millions |
Oct. 18, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|---|---|---|
| Subsequent Event [Line Items] | ||
| Business acquisiton consideration through earnouts | $ 30.8 | |
| Industrial Automation | Subsequent Event | Autoguide LLC [Member] | ||
| Subsequent Event [Line Items] | ||
| Business acquisition percentage of equity | 100.00% | |
| Business acquisition,cash consideration | $ 58.0 | |
| Business acquisiton consideration through earnouts | $ 107.0 | |
| Quantity of material to be transported | 4,500 |
Deferred Revenue and Customer Advances (Tables) |
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Sep. 29, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred Revenue and Customer Advances | Deferred revenue and customer advances consist of the following and are included in short and long-term deferred revenue and customer advances on the balance sheet:
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Segment Information - Additional Information (Detail) |
9 Months Ended |
|---|---|
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Sep. 29, 2019
Segment
| |
| Segment Reporting Information [Line Items] | |
| Number of Operating Segments | 4 |
Goodwill and Acquired Intangible Assets (Tables) |
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| Changes in Carrying Amount of Goodwill by Segment | The changes in the carrying amount of goodwill by reportable segments for the nine months ended September 29, 2019 were as follows:
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| Schedule of Estimated Intangible Assets Amortization Expense | Estimated intangible asset amortization expense for each of the five succeeding fiscal years is as follows:
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| Wireless Test | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Amortizable Intangible Assets | Amortizable intangible assets consist of the following and are included in intangible assets, net on the balance sheet:
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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Sep. 29, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Accounts receivable, less allowance for doubtful accounts | $ 1,770 | $ 1,673 |
| Common stock, par value | $ 0.125 | $ 0.125 |
| Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
| Common stock, shares issued | 168,490,000 | 175,522,000 |
| Common stock, shares outstanding | 168,490,000 | 175,522,000 |
Segment Information (Tables) |
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| Segment Information | Segment information for the three and nine months ended September 29, 2019 and September 30, 2018 is as follows:
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| Schedule of Segment Reporting Information by Segment Charges | Included in each segment are charges and credits in the following line items in the statements of operations:
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Restructuring and Other - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 29, 2019 |
Sep. 30, 2018 |
Sep. 29, 2019 |
Sep. 30, 2018 |
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| Restructuring Cost and Reserve | ||||
| Contingent consideration adjustment | $ 7,800 | $ 800 | $ (16,460) | $ (9,236) |
| Acquisition related costs | 500 | 800 | 2,300 | 4,100 |
| Wireless Test | ||||
| Restructuring Cost and Reserve | ||||
| Impairment charges fixed assets | 300 | 300 | ||
| Semiconductor Test | ||||
| Restructuring Cost and Reserve | ||||
| Severance benefit and charges | $ 500 | $ 1,700 | $ 7,900 | |
| Semiconductor Test, Industrial Automation and Corporate | ||||
| Restructuring Cost and Reserve | ||||
| Severance benefit and charges | $ 2,100 | |||
Schedule of Estimated Intangible Asset Amortization Expense (Detail) $ in Thousands |
Sep. 29, 2019
USD ($)
|
|---|---|
| Finite-Lived Intangible Assets | |
| 2019 (remainder) | $ 8,694 |
| 2020 | 24,232 |
| 2021 | 14,340 |
| 2022 | 13,447 |
| 2023 | 12,976 |
| Thereafter | $ 22,884 |
Commitments and Contingencies |
9 Months Ended |
|---|---|
Sep. 29, 2019 | |
| Commitments and Contingencies | S. COMMITMENTS AND CONTINGENCIES Purchase Commitments As of September 29, 2019, Teradyne had entered into purchase commitments for certain components and materials. The purchase commitments covered by the agreements aggregate to approximately $360.3 million, of which $354.2 million is for less than one year. Legal Claims Teradyne is subject to various legal proceedings and claims which have arisen in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on Teradyne’s results of operations, financial condition or cash flows. |
Goodwill and Acquired Intangible Assets |
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| Goodwill and Intangible Assets | O. GOODWILL AND ACQUIRED INTANGIBLE ASSETS Goodwill Teradyne performs its annual goodwill impairment test as required under the provisions of ASC 350-10, “Intangibles—Goodwill and Other” The changes in the carrying amount of goodwill by reportable segments for the nine months ended September 29, 2019 were as follows:
Intangible Assets Teradyne reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Amortizable intangible assets consist of the following and are included in intangible assets, net on the balance sheet:
Aggregate intangible asset amortization expense was $9.6 million and $30.4 million, respectively, for the three and nine months ended September 29, 2019 and $11.1 million and $28.6 million, respectively, for the three and nine months ended September 30, 2018. Estimated intangible asset amortization expense for each of the five succeeding fiscal years is as follows:
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Deferred Revenue and Customer Advances |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred Revenue and Customer Advances | K. DEFERRED REVENUE AND CUSTOMER ADVANCES Deferred revenue and customer advances consist of the following and are included in short and long-term deferred revenue and customer advances on the balance sheet:
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Income Taxes (Tables) |
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| Reconciliation of Effective Tax Rate | A reconciliation of the United States federal statutory corporate tax rate to Teradyne’s effective tax rate was as follows:
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 29, 2019 |
Sep. 30, 2018 |
Sep. 29, 2019 |
Sep. 30, 2018 |
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| Foreign currency translation adjustments, tax | $ 0 | |||
| Unrealized gains (losses) on marketable securities arising during period, net of tax | 507 | $ (62) | $ 1,762 | $ (806) |
| Reclassification adjustment for (gains) losses included in net income, net of tax | (99) | (17) | (125) | (6) |
| Amortization of prior service benefit included in net periodic pension and post-retirement benefit, net of tax | $ (11) | $ (18) | $ (32) | $ (53) |