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 |
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
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(Address of Principal Executive Offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer |
☐ | Emerging growth company | ||||
Smaller reporting company |
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. |
30 |
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Item 3. |
4 2 |
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Item 4. |
4 2 |
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Item 1. |
4 3 |
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Item 1A. |
4 3 |
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Item 2. |
4 5 |
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Item 4. |
4 5 |
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Item 6. |
4 6 |
Item 1: |
Financial Statements |
June 28, 2020 |
December 31, 2019 |
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(in thousands, except per share amount) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Marketable securities |
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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 |
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Marketable securities |
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Deferred tax assets |
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Retirement plans assets |
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Other assets |
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Acquired intangible assets, net |
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Goodwill |
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Total assets |
$ | $ | ||||||
LIABILITIES |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
Accrued employees’ compensation and withholdings |
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Deferred revenue and customer advances |
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Other accrued liabilities |
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Operating lease liabilities |
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Contingent consideration |
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Income taxes payable |
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Total current liabilities |
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Retirement plans liabilities |
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Long-term deferred revenue and customer advances |
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Long-term contingent consideration |
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Long-term other accrued liabilities |
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Deferred tax liabilities |
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Long-term operating lease liabilities |
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Long-term income taxes payable |
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Debt |
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Total liabilities |
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Commitments and contingencies (See Note Q) |
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SHAREHOLDERS’ EQUITY |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Retained earnings (accumulated deficit) |
( |
) | ||||||
Total shareholders’ equity |
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Total liabilities and shareholders’ equity |
$ | $ | ||||||
For the Three Months Ended |
For the Six Months Ended |
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June 28, 2020 |
June 30, 2019 |
June 28, 2020 |
June 30, 2019 |
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(in thousands, except per share amount) |
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Revenues: |
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Products |
$ | $ | $ | $ | ||||||||||||
Services |
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Total revenues |
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Cost of revenues: |
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Cost of products |
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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: |
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Selling and administrative |
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Engineering and development |
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Acquired intangible assets amortization |
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Restructuring and other |
( |
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) | ||||||||||||
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Total operating expenses |
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Income from operations |
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Non-operating (income) expense: |
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Interest income |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Interest expense |
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Other (income) expense, net |
( |
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Income before income taxes |
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Income tax provision |
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Net income |
$ | $ | $ | $ | ||||||||||||
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Net income per common share: |
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Basic |
$ | $ | $ | $ | ||||||||||||
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Diluted |
$ | $ | $ | $ | ||||||||||||
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Weighted average common shares—basic |
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Weighted average common shares—diluted |
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Cash dividend declared per common share |
$ | $ | $ | $ | ||||||||||||
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For the Three Months Ended |
For the Six Months Ended |
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June 28, |
June 30, |
June 28, |
June 30, |
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2020 |
2019 |
2020 |
2019 |
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(in thousands) |
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Net income |
$ | $ | $ | $ | ||||||||||||
Other comprehensive income, net of tax: |
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Foreign currency translation adjustment, net of tax of $ |
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Available-for-sale |
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Unrealized gains on debt securities arising during period, net of tax of $ |
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Less: Reclassification adjustment for gains included in net income, net of tax of $( |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
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Defined benefit retirement plans: |
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Amortization of prior service credit, net of tax of $ |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
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Other comprehensive income |
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Comprehensive income |
$ | $ | $ | $ | ||||||||||||
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Common Stock Shares |
Common Stock Par Value |
Additional Paid-in Capital |
Accumulated Other Comprehensive Loss |
(Accumulated Deficit) Retain ed Earnings |
Total Shareholders’ Equity |
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(in thousands) |
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For the Three Months Ended June 28, 2020 |
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Balance, March 29, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Net issuance of common stock under stock-based plans |
( |
) | ( |
) | ||||||||||||||||||||
Stock-based compensation expense |
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Repurchase of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Cash dividends ($ |
( |
) | ( |
) | ||||||||||||||||||||
Net income |
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Other comprehensive income |
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Balance, June 28, 2020 |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||||||
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For the Three Months Ended June 30, 2019 |
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Balance, March 31, 2019 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Net issuance of common stock under stock-based plans |
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Stock-based compensation expense |
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Repurchase of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Cash dividends ($ |
( |
) | ( |
) | ||||||||||||||||||||
Net income |
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Other comprehensive income |
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Balance, June 30, 2019 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
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For the Six Months Ended June 28, 2020 |
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Balance, December 31, 2019 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Net issuance of common stock under stock-based plans |
( |
) | ( |
) | ||||||||||||||||||||
Stock-based compensation expense |
||||||||||||||||||||||||
Repurchase of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Cash dividends ($ |
( |
) | ( |
) | ||||||||||||||||||||
Net income |
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Other comprehensive income |
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Balance, June 28, 2020 |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||||||
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For the Six Months Ended June 30, 2019 |
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Balance, December 31, 2018 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Net issuance of common stock under stock-based plans |
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Stock-based compensation expense |
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Repurchase of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Cash dividends ($ |
( |
) | ( |
) | ||||||||||||||||||||
Net income |
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Other comprehensive income |
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Balance, June 30, 2019 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
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For the Six Months Ended |
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June 28, 2020 |
June 30, 2019 |
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(in thousands) |
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Cash flows from operating activities: |
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Net income |
$ | $ | ||||||
Adjustments to reconcile net income from operations to net cash provided by operating activities: |
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Depreciation |
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Amortization |
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Stock-based compensation |
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Contingent consideration adjustment |
( |
) | ||||||
Provision for excess and obsolete inventory |
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Deferred taxes |
( |
) | ||||||
Gains on investments |
( |
) | ( |
) | ||||
Retirement plan actuarial (gains) 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 |
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Cash flows from investing activities: |
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Purchases of property, plant and equipment |
( |
) | ( |
) | ||||
Purchases of marketable securities |
( |
) | ( |
) | ||||
Proceeds from maturities of marketable securities |
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Proceeds from sales of marketable securities |
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Proceeds from life insurance |
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Acquisition of businesses, net of cash acquired |
( |
) | ||||||
Net cash used for investing activities |
( |
) | ( |
) | ||||
Cash flows from financing activities: |
||||||||
Issuance of common stock under stock purchase and stock option plans |
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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 in cash and cash equivalents |
( |
) | ( |
) | ||||
Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
$ | $ | ||||||
Supplemental cash flow disclosure |
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Non-cash investing activities: |
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Capital expenditures incurred but not yet paid |
$ | $ |
• |
semiconductor test (“Semiconductor Test”) systems; |
• |
defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, storage and system level test (“Storage Test”) systems, and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”); |
• |
industrial automation (“Industrial Automation”) products; and |
• |
wireless test (“Wireless Test”) systems. |
Purchase Price Allocation |
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(in thousands) |
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Goodwill |
$ | |||
Intangible assets |
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Tangible assets acquired and liabilities assumed: |
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Other current assets |
||||
Non-current assets |
||||
Accounts payable and current liabilities |
( |
) | ||
Long-term other liabilities |
( |
) | ||
Total purchase price |
$ | |||
Fair Value |
Estimated Useful Life |
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(in thousands) |
(in years) |
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Developed technology |
$ | |||||||
Trademarks and tradenames |
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Customer relationships |
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Backlog |
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Total intangible assets |
$ | |||||||
For the Three Months Ended |
For the Six Months Ended |
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June 30, 2019 |
June 30, 2019 |
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(in thousands) |
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Revenue |
$ | $ | ||||||
Net income |
||||||||
Net income per common share: |
||||||||
Basic |
$ | $ | ||||||
Diluted |
$ | $ |
Semiconductor Test |
Industrial Automation |
|||||||||||||||||||||||||||||||||||
System on a Chip |
Memory |
System Test |
Universal Robots |
Mobile Industrial Robots |
AutoGuide |
Wireless Test |
Corporate and Other |
Total |
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(in thousands) |
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For the Three Months Ended June 28, 2020 (1) |
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Timing of Revenue Recognition |
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Point in Time |
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
Over Time |
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Total |
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
Geographical Market |
||||||||||||||||||||||||||||||||||||
Asia Pacific |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Americas |
( |
) | ||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa |
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Total |
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
For the Three Months Ended June 30, 2019 (1) |
||||||||||||||||||||||||||||||||||||
Timing of Revenue Recognition |
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Point in Time |
$ | $ | $ | $ | $ | $ | — | $ | $ | ( |
) | $ | ||||||||||||||||||||||||
Over Time |
— | — | — | |||||||||||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | — | $ | $ | ( |
) | $ | ||||||||||||||||||||||||
Geographical Market |
||||||||||||||||||||||||||||||||||||
Asia Pacific |
$ | $ | $ | $ | $ | $ | — | $ | $ | — | $ | |||||||||||||||||||||||||
Americas |
— | ( |
) | |||||||||||||||||||||||||||||||||
Europe, Middle East and Africa |
— | — | ||||||||||||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | — | $ | $ | ( |
) | $ | ||||||||||||||||||||||||
For the Six Months Ended June 28, 2020 (2) |
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Timing of Revenue Recognition |
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Point in Time |
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
Over Time |
||||||||||||||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
Geographical Market |
||||||||||||||||||||||||||||||||||||
Asia Pacific |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Americas |
( |
) | ||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa |
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Total |
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
For the Six Months Ended June 30, 2019 (2) |
||||||||||||||||||||||||||||||||||||
Timing of Revenue Recognition |
||||||||||||||||||||||||||||||||||||
Point in Time |
$ | $ | $ | $ | $ | $ | — | $ | $ | ( |
) | $ | ||||||||||||||||||||||||
Over Time |
— | — | — | |||||||||||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | — | $ | $ | ( |
) | $ | ||||||||||||||||||||||||
Geographical Market |
||||||||||||||||||||||||||||||||||||
Asia Pacific |
$ | $ | $ | $ | $ | $ | — | $ | $ | — | $ | |||||||||||||||||||||||||
Americas |
— | ( |
) | |||||||||||||||||||||||||||||||||
Europe, Middle East and Africa |
— | — | ||||||||||||||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | — | $ | $ | ( |
) | $ | ||||||||||||||||||||||||
(1) | Includes $ million and $ Revenue from Contracts with Customers.” |
(2) | Includes $ Revenue from Contracts with Customers.” |
June 28, 2020 |
December 31, 2019 |
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(in thousands) |
||||||||
Raw material |
$ | $ | ||||||
Work-in-process |
||||||||
Finished goods |
||||||||
$ | $ | |||||||
June 28, 2020 |
||||||||||||||||
Quoted Prices in Active Markets for Identical Instruments (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total |
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(in thousands) |
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Assets |
||||||||||||||||
Cash |
$ | $ | — | $ | — | $ | ||||||||||
Cash equivalents |
— | |||||||||||||||
Available-for-sale |
— | |||||||||||||||
U.S. Treasury securities |
— | — | ||||||||||||||
Commercial paper |
— | — | ||||||||||||||
Corporate debt securities |
— | — | ||||||||||||||
Certificates of deposit and time deposits |
— | — | ||||||||||||||
Debt mutual funds |
— | — | ||||||||||||||
U.S. government agency securities |
— | — | ||||||||||||||
Non-U.S. government securities |
— | — | ||||||||||||||
Equity securities: |
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Mutual funds |
— | — | ||||||||||||||
|
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|
|||||||||
$ | $ | $ | — | $ | ||||||||||||
Derivative assets |
— | — | ||||||||||||||
|
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|
|||||||||
Total |
$ | $ | $ | — | $ | |||||||||||
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|||||||||
Liabilities |
||||||||||||||||
Contingent consideration |
$ | — | $ | — | $ | $ | ||||||||||
Derivative liabilities |
— | — | ||||||||||||||
|
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|
|||||||||
Total |
$ | — | $ | $ | $ | |||||||||||
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|||||||||
Reported as follows: |
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(Level 1) |
(Level 2) |
(Level 3) |
Total |
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(in thousands) |
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Assets |
||||||||||||||||
Cash and cash equivalents |
$ | $ | $ | — | $ | |||||||||||
Marketable securities |
— | — | ||||||||||||||
Long-term marketable securities |
— | |||||||||||||||
Prepayments and other current assets |
— | — | ||||||||||||||
|
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|
|
|
|
|
|
|||||||||
Total |
$ | $ | $ | — | $ | |||||||||||
|
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|
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|
|||||||||
Liabilities |
. | |||||||||||||||
Other current liabilities |
$ | — | $ | $ | — | $ | ||||||||||
Contingent consideration |
— | — | ||||||||||||||
Long-term contingent consideration |
— | — | ||||||||||||||
Total |
$ | — | $ | $ | $ | |||||||||||
|
|
|
|
|
|
|
|
December 31, 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 |
— | |||||||||||||||
Corporate debt securities |
— | — | ||||||||||||||
Commercial paper |
— | — | ||||||||||||||
U.S. Treasury securities |
— | — | ||||||||||||||
U.S. government agency securities |
— | — | ||||||||||||||
Debt mutual funds |
— | — | ||||||||||||||
Certificates of deposit and time deposits |
— | — | ||||||||||||||
Non-U.S. government securities |
— | — | ||||||||||||||
Equity securities: |
||||||||||||||||
Equity mutual funds |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | $ | $ | — | $ | ||||||||||||
Derivative assets |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | $ | $ | — | $ | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities |
||||||||||||||||
Contingent consideration |
$ | — | $ | — | $ | $ | ||||||||||
Derivative liabilities |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | — | $ | $ | $ | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Reported as follows: |
||||||||||||||||
(Level 1) |
(Level 2) |
(Level 3) |
Total |
|||||||||||||
(in thousands) |
||||||||||||||||
Assets |
||||||||||||||||
Cash and cash equivalents |
$ | $ | $ | — | $ | |||||||||||
Marketable securities |
— | — | ||||||||||||||
Long-term marketable securities |
— | |||||||||||||||
Prepayments and other current assets |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | $ | $ | — | $ | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities |
||||||||||||||||
Other accrued liabilities |
$ | — | $ | $ | — | $ | ||||||||||
Contingent consideration |
— | — | ||||||||||||||
Long-term contingent consideration |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | — | $ | $ | $ | |||||||||||
|
|
|
|
|
|
|
|
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||
June 28, |
June 30, |
June 28, |
June 30, |
|||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
(in thousands) |
||||||||||||||||
Balance at beginning of period |
$ | $ | $ | $ | ||||||||||||
Foreign currency impact |
( |
) | ( |
) | ||||||||||||
Payments (a)(b) |
( |
) | ( |
) | ||||||||||||
Fair value adjustment (c)(d) |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at end of period |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
(a) | In the six months ended June 28, 2020, Teradyne paid $ earn-out in connection with the acquisition of MiR. |
(b) | In the six months ended June 30, 2019, Teradyne paid $ |
(c) | In the three and six months ended June 28, 2020, the fair value of contingent consideration for the earn-outs in connection with the acquisition of MiR decreased by $ , due to higher f . or e casted results |
(d) | In the three and six months ended June 30, 2019, the fair value of contingent consideration for the earn-out in connection with the acquisition of MiR decreased by $ |
Liability |
June 28, 2020 Fair |
Valuation Technique |
Unobservable Inputs |
Weighted Average |
||||||||
(in thousands) |
||||||||||||
Contingent consideration (AutoGuide) |
$ | Monte Carlo Simulation | Revenue volatility | % | ||||||||
Discount Rate | % | |||||||||||
Contingent consideration (MiR) |
$ | Monte Carlo Simulation | Revenue volatility | % | ||||||||
Discount Rate | % |
June 28, 2020 |
December 31, 2019 |
|||||||||||||||
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. |
June 28, 2020 |
||||||||||||||||||||
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 |
— | — | ||||||||||||||||||
Debt mutual funds |
— | — | ||||||||||||||||||
U.S. government agency securities |
||||||||||||||||||||
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, 2019 |
||||||||||||||||||||
Available-for-Sale |
||||||||||||||||||||
Cost |
Unrealized Gain |
Unrealized (Loss) |
Fair Market Value |
Fair Market Value of Investments with Unrealized Losses |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Corporate debt securities |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||
Commercial paper |
( |
) | ||||||||||||||||||
U.S. Treasury securities |
( |
) | ||||||||||||||||||
U.S. government agency securities |
( |
) | ||||||||||||||||||
Debt mutual funds |
— | — | ||||||||||||||||||
Certificates of deposit and time deposits |
— | — | — | |||||||||||||||||
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 |
( |
) | ||||||||||||||||||
$ | $ | $ | ( |
) | $ | $ | ||||||||||||||
June 28, 2020 |
||||||||
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 |
June 28, 2020 |
December 31, 2019 |
||||||||||
(in thousands) |
||||||||||||
Derivatives not designated as hedging instruments: |
||||||||||||
Foreign exchange contracts |
Prepayments | $ | $ | |||||||||
Foreign exchange contracts |
Other current liabilities | ( |
) | ( |
) | |||||||
Total derivatives |
$ | ( |
) | $ | ||||||||
Location of (Gains) Losses |
For the Three Months Ended |
For the Six Months Ended |
||||||||||||||||
Recognized in |
June 28, |
June 30, |
June 28, |
June 30, |
||||||||||||||
Statement of Operations |
2020 |
2019 |
2020 |
2019 |
||||||||||||||
(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 the monetary assets and liabilities denominated in foreign currencies. |
(2) | For the three months ended June 28, 2020, net losses from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $ |
(3) | For the three months ended June 30, 2019, net losses from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $ |
June 28, 2020 |
December 31, 2019 |
|||||||
(in thousands) |
||||||||
Debt Principal |
$ | $ | ||||||
Unamortized discount |
||||||||
Net Carrying amount of convertible debt |
$ | $ | ||||||
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||
June 28, 2020 |
June 30, 2019 |
June 28, 2020 |
June 30, 2019 |
|||||||||||||
(in thousands) |
||||||||||||||||
Contractual interest expense on the coupon |
$ | $ | $ | $ | ||||||||||||
Amortization of the discount component and debt issue fees recognized as interest expense |
||||||||||||||||
Total interest expense on the convertible debt |
$ | $ | $ | $ | ||||||||||||
June 28, 2020 |
December 31, 2019 |
|||||||
(in thousands) |
||||||||
Contract manufacturer and supplier prepayments |
$ | $ | ||||||
Prepaid maintenance and other services |
||||||||
Prepaid taxes |
||||||||
Other prepayments |
||||||||
Total prepayments |
$ | $ | ||||||
June 28, 2020 |
December 31, 2019 |
|||||||
(in thousands) |
||||||||
Maintenance, service and training |
$ | $ | ||||||
Extended warranty |
||||||||
Customer advances, undelivered elements and other |
||||||||
Total deferred revenue and customer advances |
$ | $ | ||||||
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||
June 28, 2020 |
June 30, 2019 |
June 28, 2020 |
June 30, 2019 |
|||||||||||||
(in thousands) |
||||||||||||||||
Balance at beginning of period |
$ | $ | $ | $ | ||||||||||||
Accruals for warranties issued during the period |
||||||||||||||||
Accruals related to pre-existing warranties |
||||||||||||||||
Settlements made during the period |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Acquisition |
— | — | ||||||||||||||
Balance at end of period |
$ | $ | $ | $ | ||||||||||||
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||
June 28, 2020 |
June 30, 2019 |
June 28, 2020 |
June 30, 2019 |
|||||||||||||
(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 Six Months Ended |
||||||||
June 28, 2020 |
June 30, 2019 |
|||||||
Risk-free interest rate |
% | % | ||||||
Teradyne volatility-historical |
% | % | ||||||
NYSE Composite Index volatility-historical |
% | % | ||||||
Dividend yield |
% | % |
For the Six Months Ended |
||||||||
June 28, 2020 |
June 30, 2019 |
|||||||
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) |
||||||||||||||||
Six Months Ended June 28, 2020 |
||||||||||||||||
Balance at December 31, 2019, net of tax of $ |
$ | ( |
) | $ | $ | $ | ( |
) | ||||||||
Other comprehensive income before reclassifications, net of tax of $ |
||||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $ |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net current period other comprehensive income (loss), net of tax of $ |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at June 28, 2020, net of tax of $ |
$ | ( |
) | $ | $ | $ | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Six Months Ended June 30, 2019 |
||||||||||||||||
Balance at December 31, 2018, net of tax of $ |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||
Other comprehensive income before reclassifications, net of tax of $ |
||||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $ |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net current period other comprehensive income (loss), net of tax of $ |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance as June 30, 2019, net of tax of $ |
$ | ( |
) | $ | $ | $ | ( |
) | ||||||||
|
|
|
|
|
|
|
|
Details about Accumulated Other Comprehensive Income Components |
For the Three Months Ended |
For the Six Months Ended |
Affected Line Item in the Statements of Operations |
|||||||||||||||||
June 28, 2020 |
June 30, 2019 |
June 28, 2020 |
June 30, 2019 |
|||||||||||||||||
(in thousands) |
||||||||||||||||||||
Available-for-sale |
||||||||||||||||||||
Unrealized gains, net of tax of $ |
$ | $ | $ | $ | Interest income | |||||||||||||||
Defined benefit retirement plans: |
||||||||||||||||||||
Amortization of prior service credit , net of tax of $ |
(a) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total reclassifications, net of tax of $ |
$ | $ | $ | $ | Net income | |||||||||||||||
|
|
|
|
|
|
|
|
(a) | The amortization of prior service benefit is included in the computation of net periodic pension cost and postretirement benefit. See Note P: “Retirement Plans.” |
Industrial Automation |
System Test |
Wireless Test |
Semiconductor Test |
Total |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Balance at December 31, 2019 |
||||||||||||||||||||
Goodwill |
$ | $ | $ | $ | $ | |||||||||||||||
Accumulated impairment losses |
— | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
AutoGuide acquisition |
( |
) | — | — | — | ( |
) | |||||||||||||
Foreign currency translation adjustment |
— | — | ||||||||||||||||||
Balance at June 28, 2020 |
||||||||||||||||||||
Goodwill |
||||||||||||||||||||
Accumulated impairment losses |
— | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
Gross Carrying Amount |
Accumulated Amortization |
Foreign Currency Translation Adjustment |
Net Carrying Amount |
|||||||||||||
(in thousands) |
||||||||||||||||
Balance at June 28, 2020 |
||||||||||||||||
Developed technology |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
Customer relationships |
( |
) | ( |
) | ||||||||||||
Tradenames and trademarks |
( |
) | ( |
) | ||||||||||||
Total intangible assets |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
Balance at December 31, 2019 |
||||||||||||||||
Developed technology |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
Customer relationships |
( |
) | ( |
) | ||||||||||||
Tradenames and trademarks |
( |
) | ( |
) | ||||||||||||
Backlog |
( |
) | — | — | ||||||||||||
Total intangible assets |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
Year |
Amortization Expense |
|||
(in thousands) |
||||
2020 (remainder) |
||||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
Thereafter |
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||
June 28, |
June 30, |
June 28, |
June 30, |
|||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
(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 was calculated using the difference between the average Teradyne stock price for the period and the conversion price of $ |
(2) | Convertible notes 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 |
||||||||||||||||
June 28, 2020 |
June 30, 2019 |
|||||||||||||||
United States |
Foreign |
United States |
Foreign |
|||||||||||||
(in thousands) |
||||||||||||||||
Service cost |
$ | $ | $ | $ | ||||||||||||
Interest cost |
||||||||||||||||
Expected return on plan assets |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net actuarial loss |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total net periodic pension cost |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
For the Six Months Ended |
||||||||||||||||
June 28, 2020 |
June 30, 2019 |
|||||||||||||||
United States |
Foreign |
United States |
Foreign |
|||||||||||||
(in thousands) |
||||||||||||||||
Service cost |
$ | $ | $ | $ | ||||||||||||
Interest cost |
||||||||||||||||
Expected return on plan assets |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net actuarial loss |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total net periodic pension cost |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||
June 28, 2020 |
June 30, 2019 |
June 28, 2020 |
June 30, 2019 |
|||||||||||||
(in thousands) |
||||||||||||||||
Service cost |
$ | $ | $ | $ | ||||||||||||
Interest cost |
||||||||||||||||
Amortization of prior service credit |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net actuarial (gain) loss |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total net periodic postretirement benefit (credit) cost |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
|
|
|
|
|
|
|
|
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||
June 28, 2020 |
June 30, 2019 |
June 28, 2020 |
June 30, 2019 |
|||||||||||||
US statutory federal tax rate |
% | % | % | % | ||||||||||||
Discrete benefit related to release of reserves for uncertain tax positions |
( |
) | ( |
) | ||||||||||||
Foreign taxes |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
International provisions of the U.S. Tax Cuts and Jobs Act of 2017 |
( |
) | ( |
) | ||||||||||||
Tax credits |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Discrete benefit related to equity compensation |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Discrete expense related to U.S. transition tax |
||||||||||||||||
Other, net |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Effective tax rate |
% | % | % | % | ||||||||||||
|
|
|
|
|
|
|
|
Semiconductor Test |
System Test |
Industrial Automation |
Wireless Test |
Corporate and Other |
Consolidated |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Three Months Ended June 28, 2020 |
||||||||||||||||||||||||
Revenues |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||
Income (loss) before income taxes (1)(2) |
( |
) | ( |
) | ||||||||||||||||||||
Total assets (3) |
||||||||||||||||||||||||
Three Months Ended June 30, 2019 |
||||||||||||||||||||||||
Revenues |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||
Income before income taxes (1)(2) |
( |
) | ||||||||||||||||||||||
Total assets (3) |
||||||||||||||||||||||||
Six Months Ended June 28, 2020 |
||||||||||||||||||||||||
Revenues |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||
Income (loss) before income taxes (1)(2) |
( |
) | ( |
) | ||||||||||||||||||||
Total assets (3) |
||||||||||||||||||||||||
Six Months Ended June 30, 2019 |
||||||||||||||||||||||||
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, interest expense, net foreign exchange gains (losses), pension and postretirement plans actuarial (gains) losses, intercompany eliminations and acquisition related charges. |
(2) | Included in income (loss) before taxes are charges and credits related to restructuring and other, and inventory charges. |
(3) | Total assets are attributable to each segment. Corporate assets consist of cash and cash equivalents, marketable securities and certain other assets. |
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||
June 28, 2020 |
June 30, 2019 |
June 28, 2020 |
June 30, 2019 |
|||||||||||||
(in thousands) |
(in thousands) |
|||||||||||||||
Semiconductor Test: |
||||||||||||||||
Contract termination settlement charge |
$ |
$ |
$ |
$ |
||||||||||||
Cost of revenues—inventory charge |
||||||||||||||||
Restructuring and other—employee severance |
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Wireless Test: |
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Cost of revenues—inventory charge |
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Industrial Automation: |
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Restructuring and other—acquisition related expenses and compensation |
||||||||||||||||
System Test: |
||||||||||||||||
Cost of revenues—inventory charge |
||||||||||||||||
Corporate and Other: |
||||||||||||||||
Restructuring and other—AutoGuide contingent consideration adjustment |
||||||||||||||||
Restructuring and other—acquisition related expenses and compensation |
||||||||||||||||
Restructuring and other – other |
||||||||||||||||
Restructuring and other—MiR contingent consideration adjustment |
( |
) | ( |
) | ( |
) | ( |
) |
Item 2: |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | semiconductor test (“Semiconductor Test”) systems; |
• | defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, storage and system level test (“Storage Test”) systems, and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”); |
• | industrial automation (“Industrial Automation”) products; and |
• | wireless test (“Wireless Test”) systems. |
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||
June 28, 2020 |
June 30, 2019 |
June 28, 2020 |
June 30, 2019 |
|||||||||||||
Percentage of revenues: |
||||||||||||||||
Revenues: |
||||||||||||||||
Products |
88 | % | 81 | % | 87 | % | 80 | % | ||||||||
Services |
12 | 19 | 13 | 20 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
100 | 100 | 100 | 100 | ||||||||||||
Cost of revenues: |
||||||||||||||||
Cost of products |
38 | 34 | 38 | 34 | ||||||||||||
Cost of services |
5 | 8 | 5 | 8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) |
44 | 43 | 43 | 42 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
56 | 57 | 57 | 58 | ||||||||||||
Operating expenses: |
||||||||||||||||
Selling and administrative |
14 | 19 | 15 | 20 | ||||||||||||
Engineering and development |
11 | 14 | 12 | 15 | ||||||||||||
Acquired intangible assets amortization |
1 | 2 | 1 | 2 | ||||||||||||
Restructuring and other |
3 | (2 | ) | 1 | (1 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
29 | 34 | 29 | 36 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income from operations |
27 | 24 | 28 | 21 | ||||||||||||
Non-operating (income) expense: |
||||||||||||||||
Interest income |
— | (1 | ) | — | (1 | ) | ||||||||||
Interest expense |
1 | 1 | 1 | 1 | ||||||||||||
Other (income) expense, net |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes |
26 | 23 | 27 | 21 | ||||||||||||
Income tax provision |
3 | 6 | 3 | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income |
23 | % | 17 | % | 24 | % | 20 | % | ||||||||
|
|
|
|
|
|
|
|
For the Three Months Ended |
||||||||||||
June 28, 2020 |
June 30, 2019 |
Dollar Change |
||||||||||
(in millions) |
||||||||||||
Semiconductor Test |
$ | 659.1 | $ | 374.9 | $ | 284.2 | ||||||
System Test |
71.8 | 73.4 | (1.6 | ) | ||||||||
Industrial Automation |
58.8 | 74.7 | (15.9 | ) | ||||||||
Wireless Test |
49.2 | 41.2 | 8.0 | |||||||||
Corporate and Other |
(0.3 | ) | — | (0.3 | ) | |||||||
|
|
|
|
|
|
|||||||
$ | 838.7 | $ | 564.2 | $ | 274.5 | |||||||
|
|
|
|
|
|
For the Three Months Ended |
||||||||
June 28, 2020 |
June 30, 2019 |
|||||||
Taiwan |
51 | % | 27 | % | ||||
China |
14 | 20 | ||||||
United States |
7 | 14 | ||||||
Japan |
7 | 6 | ||||||
Europe |
6 | 9 | ||||||
Korea |
6 | 9 | ||||||
Thailand |
3 | 4 | ||||||
Singapore |
2 | 3 | ||||||
Philippines |
2 | 2 | ||||||
Malaysia |
1 | 3 | ||||||
Rest of World |
1 | 3 | ||||||
|
|
|
|
|||||
100 | % | 100 | % | |||||
|
|
|
|
(1) | Revenues attributable to a country are based on location of customer site. |
For the Three Months Ended |
||||||||||||
June 28, |
June 30, |
Dollar/Point |
||||||||||
2020 |
2019 |
Change |
||||||||||
(in millions) |
||||||||||||
Gross profit |
$ | 471.5 | $ | 323.9 | $ | 147.6 | ||||||
Percent of total revenues |
56.2 | % | 57.4 | % | (1.2 | ) |
For the Three Months Ended |
||||||||||||
June 28, |
June 30, |
Dollar |
||||||||||
2020 |
2019 |
Change |
||||||||||
(in millions) |
||||||||||||
Selling and administrative |
$ | 113.3 | $ | 108.8 | $ | 4.5 | ||||||
Percent of total revenues |
13.5 | % | 19.3 | % |
For the Three Months Ended |
||||||||||||
June 28, |
June 30, |
Dollar |
||||||||||
2020 |
2019 |
Change |
||||||||||
(in millions) |
||||||||||||
Engineering and development |
$ | 94.1 | $ | 81.4 | $ | 12.7 | ||||||
Percent of total revenues |
11.2 | % | 14.4 | % |
For the Three Months Ended |
||||||||||||
June 28, |
June 30, |
Dollar |
||||||||||
2020 |
2019 |
Change |
||||||||||
(in millions) |
||||||||||||
Interest income |
$ | (1.4 | ) | $ | (4.4 | ) | $ | 3.0 | ||||
Interest expense |
6.0 | 5.8 | 0.2 | |||||||||
Other (income) expense, net |
(4.0 | ) | 1.4 | (5.4 | ) |
For the Three Months Ended |
||||||||||||
June 28, |
June 30, |
Dollar |
||||||||||
2020 |
2019 |
Change |
||||||||||
(in millions) |
||||||||||||
Semiconductor Test |
$ | 228.8 | $ | 91.4 | $ | 137.4 | ||||||
System Test |
19.2 | 23.5 | (4.3 | ) | ||||||||
Wireless Test |
14.5 | 10.9 | 3.6 | |||||||||
Industrial Automation |
(11.4 | ) | (3.7 | ) | (7.7 | ) | ||||||
Corporate and Other (1) |
(33.8 | ) | 9.1 | (42.9 | ) | |||||||
|
|
|
|
|
|
|||||||
$ | 217.3 | $ | 131.2 | $ | 86.1 | |||||||
|
|
|
|
|
|
(1) | Included in Corporate and Other are the following: contingent consideration adjustments, employee severance, interest (income) and expense, net foreign exchange (gains) and losses, pension and postretirement plans actuarial (gains) losses, intercompany eliminations, and certain acquisition related charges and compensation. |
For the Six Months Ended |
||||||||||||
June 28, |
June 30, |
Dollar |
||||||||||
2020 |
2019 |
Change |
||||||||||
(in millions) |
||||||||||||
Semiconductor Test |
$ | 1,143.6 | $ | 715.8 | $ | 427.8 | ||||||
System Test |
187.9 | 131.6 | 56.3 | |||||||||
Industrial Automation |
119.1 | 140.9 | (21.8 | ) | ||||||||
Wireless Test |
92.7 | 70.3 | 22.4 | |||||||||
Corporate and Other |
(0.3 | ) | (0.2 | ) | (0.1 | ) | ||||||
|
|
|
|
|
|
|||||||
$ | 1,543.0 | $ | 1,058.3 | $ | 484.6 | |||||||
|
|
|
|
|
|
For the Six Months Ended |
||||||||
June 28, |
June 30, |
|||||||
2020 |
2019 |
|||||||
Taiwan |
41 | % | 23 | % | ||||
China |
15 | 19 | ||||||
Korea |
10 | 10 | ||||||
United States |
9 | 14 | ||||||
Europe |
7 | 10 | ||||||
Japan |
7 | 9 | ||||||
Thailand |
4 | 4 | ||||||
Malaysia |
2 | 3 | ||||||
Singapore |
2 | 4 | ||||||
Philippines |
2 | 3 | ||||||
Rest of World |
1 | 1 | ||||||
|
|
|
|
|||||
100 | % | 100 | % | |||||
|
|
|
|
(1) | Revenues attributable to a country are based on location of customer site. |
For the Six Months Ended |
||||||||||||
June 28, |
June 30, |
Dollar/Point |
||||||||||
2020 |
2019 |
Change |
||||||||||
(in millions) |
||||||||||||
Gross profit |
$ | 877.0 | $ | 611.6 | $ | 265.4 | ||||||
Percent of total revenues |
56.8 | % | 57.8 | % | (1.0 | ) |
For the Six Months Ended |
||||||||||||
June 28, |
June 30, |
Dollar |
||||||||||
2020 |
2019 |
Change |
||||||||||
(in millions) |
||||||||||||
Selling and administrative |
$ | 224.6 | $ | 210.8 | $ | 13.8 | ||||||
Percent of total revenues |
14.6 | % | 19.9 | % |
For the Six Months Ended |
||||||||||||
June 28, |
June 30, |
Dollar |
||||||||||
2020 |
2019 |
Change |
||||||||||
(in millions) |
||||||||||||
Engineering and development |
$ | 179.3 | $ | 158.2 | $ | 21.1 | ||||||
Percent of total revenues |
11.6 | % | 15.0 | % |
For the Six Months Ended |
||||||||||||
June 28, |
June 30, |
Dollar |
||||||||||
2020 |
2019 |
Change |
||||||||||
(in millions) |
||||||||||||
Interest income |
$ | (4.1 | ) | $ | (9.4 | ) | $ | 5.3 | ||||
Interest expense |
11.6 | 11.3 | 0.3 | |||||||||
Other (income) expense, net |
2.8 | — | 2.8 |
For the Six Months Ended |
||||||||||||
June 28, |
June 30, |
Dollar |
||||||||||
2020 |
2019 |
Change |
||||||||||
(in millions) |
||||||||||||
Semiconductor Test |
$ | 382.6 | $ | 174.4 | $ | 208.2 | ||||||
System Test |
67.6 | 38.9 | 28.7 | |||||||||
Wireless Test |
24.7 | 14.6 | 10.1 | |||||||||
Industrial Automation |
(26.7 | ) | (9.0 | ) | (17.7 | ) | ||||||
Corporate and Other (1) |
(33.8 | ) | 6.3 | (40.1 | ) | |||||||
|
|
|
|
|
|
|||||||
$ | 414.4 | $ | 225.2 | $ | 189.2 | |||||||
|
|
|
|
|
|
(1) | Included in Corporate and Other are, contingent consideration adjustments, employee severance, interest income, interest expense, net foreign exchange (gains) and losses, pension and postretirement plan actuarial (gains) losses, intercompany eliminations, and acquisition related expenses. |
Payments Due by Period |
||||||||||||||||||||||||
Total |
Less than 1 year |
1-3 years |
3-5 years |
More than 5 years |
Other |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Purchase obligations |
$ | 544,225 | $ | 534,282 | $ | 9,943 | $ | — | $ | — | $ | — | ||||||||||||
Convertible debt |
459,987 | — | — | 459,987 | — | — | ||||||||||||||||||
Retirement plans contributions |
130,826 | 5,216 | 10,386 | 10,318 | 104,906 | — | ||||||||||||||||||
Transition tax payable (1) |
88,157 | 13,227 | 15,795 | 34,539 | 24,596 | — | ||||||||||||||||||
Operating lease obligations |
77,692 | 23,956 | 31,508 | 13,367 | 8,861 | — | ||||||||||||||||||
Interest on long-term debt |
20,125 | 5,750 | 11,500 | 2,875 | — | — | ||||||||||||||||||
Fair value of contingent consideration |
49,737 | 16,789 | 32,948 | — | — | — | ||||||||||||||||||
Other long-term liabilities reflected on the balance sheet under GAAP (2) |
90,336 | — | 47,470 | 7,700 | 464 | 34,702 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | 1,461,085 | $ | 599,220 | $ | 159,550 | $ | 528,786 | $ | 138,827 | $ | 34,702 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Represents the transition tax liability associated with our accumulated foreign earnings as a result of 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 |
$ | 1,314,002 | $ | 115,333 | 9.6 | % | ||||||
No Change |
1,198,669 | — | — | |||||||||
10% Decrease |
1,085,067 | (113,602 | ) | (9.5 | ) |
Item 4: |
Controls and Procedures |
Item 1: |
Legal Proceedings |
Item 1A: |
Risk Factors |
• | make it difficult to make payments on this indebtedness and our other obligations; |
• | make it difficult to obtain any necessary future financing for working capital, capital expenditures, debt service requirements or other purposes; |
• | require the dedication of a substantial portion of any cash flow from operations to service for indebtedness, thereby reducing the amount of cash flow available for other purposes, including capital expenditures; and |
• | limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we compete. |
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 |
||||||||||||
March 30, 2020 – April 26, 2020 |
174 | $ | 54.57 | 173 | $ | 911,535 | ||||||||||
April 27, 2020 – May 24, 2020 |
5 | $ | 57.88 | — | $ | 911,535 | ||||||||||
May 25, 2020 – June 28, 2020 |
1 | $ | 69.05 | — | $ | 911,535 | ||||||||||
|
|
|
|
|
|
|||||||||||
180 | (1) | $ | 54.78 | (1) | 173 | |||||||||||
|
|
|
|
|
|
(1) | Includes approximately eight thousand shares at an average price of $59.13 withheld from employees for the payment of taxes. |
Item 4: |
Mine Safety Disclosures |
Item 6: |
Exhibits |
TERADYNE, INC. Registrant /s/ SANJAY MEHTA |
Sanjay Mehta Vice President, Chief Financial Officer and Treasurer (Duly Authorized Officer and Principal Financial Officer) August 3, 2020 |