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Teradyne Reports Second Quarter 2023 Results

Teradyne, Inc.
Teradyne, Inc.
  • Revenue and earnings above the mid-point of Q2 guidance

  • Revenue of $684 million in Q2’23, down 19% from Q2’22

  • Returned $152 million to shareholders in share repurchases and dividends in Q2’23

 

 

Q2'23

 

 

 

Q2'22

 

 

 

Q1'23

 

Revenue (mil)

$

684

 

 

$

841

 

 

$

618

 

GAAP EPS

$

0.73

 

 

$

1.16

 

 

$

0.50

 

Non-GAAP EPS

$

0.79

 

 

$

1.21

 

 

$

0.55

 

 

 

 

 

 

 

 

 

 

 

 

 

NORTH READING, Mass., July 26, 2023 (GLOBE NEWSWIRE) -- Teradyne, Inc. (NASDAQ: TER) reported revenue of $684 million for the second quarter of 2023 of which $475 million was in Semiconductor Test, $94 million in System Test, $44 million in Wireless Test and $72 million in Robotics. GAAP net income for the second quarter was $120.1 million or $0.73 per diluted share. On a non-GAAP basis, Teradyne’s net income in the second quarter was $129.0 million, or $0.79 per diluted share, which excluded restructuring and other charges, acquired intangible asset amortization, and included the related tax impact on non-GAAP adjustments.

ANNUNCIO PUBBLICITARIO

“We delivered revenue at the high end of our guidance range with higher semiconductor test shipments which more than offset weaker robotics demand in the quarter while profits exceeded plan on higher gross margins,” said Teradyne CEO Greg Smith. “As we enter Q3, test demand for DRR5 and HBM memory devices for data center applications remains strong and SOC test demand for automotive applications is incrementally stronger. In robotics, we expect order rates to decline as customers navigate slowing global industrial activity and macro-economic headwinds.”

Guidance for the third quarter of 2023 is revenue of $650 million to $710 million, with GAAP net income of $0.57 to $0.77 per diluted share and non-GAAP net income of $0.61 to $0.81 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization, restructuring and other charges and includes the related tax impact on non-GAAP adjustments.

Webcast
A conference call to discuss the second quarter results, along with management's business outlook, will follow at 8:30 a.m. ET, Thursday, July 27. Interested investors should access the webcast at http://investors.teradyne.com/events-presentations. Presentation materials will be available starting at 8:30 a.m. ET. A replay will also be available at the website.

Non-GAAP Results
In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses non-GAAP results of operations that exclude certain income items and charges. These results are provided as a complement to results provided in accordance with GAAP. Non-GAAP income from operations and non-GAAP net income exclude acquired intangible assets amortization, restructuring and other, pension actuarial gains and losses, stock compensation modification expense, discrete income tax adjustments, and includes the related tax impact on non-GAAP adjustments. GAAP requires that these items be included in determining income from operations and net income. Non-GAAP income from operations, non-GAAP net income, non-GAAP income from operations as a percentage of revenue, non-GAAP net income as a percentage of revenue, and non-GAAP net income per share are non-GAAP performance measures presented to provide meaningful supplemental information regarding Teradyne’s baseline performance before gains, losses or other charges that may not be indicative of Teradyne’s current core business or future outlook. These non-GAAP performance measures are used to make operational decisions, to determine employee compensation, to forecast future operational results, and for comparison with Teradyne’s business plan, historical operating results and the operating results of Teradyne’s competitors. Non-GAAP diluted shares include the impact of Teradyne’s call option on its shares. Management believes each of these non-GAAP performance measures provides useful supplemental information for investors, allowing greater transparency to the information used by management in its operational decision making and in the review of Teradyne’s financial and operational performance, as well as facilitating meaningful comparisons of Teradyne’s results in the current period compared with those in prior and future periods. A reconciliation of each available GAAP to non-GAAP financial measure discussed in this press release is contained in the attached exhibits and on the Teradyne website at www.teradyne.com by clicking on “Investor Relations” and then selecting “Financials” and the “GAAP to Non-GAAP Reconciliation” link. The non-GAAP performance measures discussed in this press release may not be comparable to similarly titled measures used by other companies. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.

About Teradyne
Teradyne (NASDAQ:TER) test technology helps bring high-quality innovations such as smart devices, life-saving medical equipment and data storage systems to market, faster. Its advanced test solutions for semiconductors, electronic systems, wireless devices and more ensure that products perform as they were designed. Its robotics offerings include collaborative and mobile robots that help manufacturers of all sizes increase productivity, improve safety, and lower costs. In 2022, Teradyne had revenue of $3.2 billion and today employs over 6,500 people worldwide. For more information, visit teradyne.com. Teradyne® is a registered trademark of Teradyne, Inc., in the U.S. and other countries.

Safe Harbor Statement
This release contains forward-looking statements regarding Teradyne’s future business prospects, results of operations, market conditions, earnings per share, the impact of supply chain conditions on the business, customer sales expectations, the payment of a quarterly dividend, the repurchase of Teradyne common stock pursuant to a share repurchase program, the continued impact of the global COVID-19 pandemic, and the impact of U.S. and Chinese export and tariff laws, including regulations published by the U.S. Department of Commerce on October 7, 2022. Such statements are based on the current assumptions and expectations of Teradyne’s management and are neither promises nor guarantees of future performance, events, customer sales, supply chain conditions or improvements, earnings per share, use of cash, payment of dividends, repurchases of common stock, payment of the senior convertible notes, the impact of the COVID-19 pandemic, the impact of any tariffs or export controls imposed by the U.S. or China, compliance with trade protection measures or export restrictions, the impact of U.S. Department of Commerce or other government agency regulations relating to Huawei, HiSilicon and other customers or potential customers, the impact of U.S. Department of Commerce export control regulations for certain U.S. products and technology sold to military end users or for military end-use in China, or the impact of regulations published by the U.S. Department of Commerce relating to the export of semiconductors and semiconductor manufacturing equipment destined to certain end users and for certain end uses in China. There can be no assurance that management’s estimates of Teradyne’s future results or other forward-looking statements will be achieved. Specifically, Teradyne’s 2026 earnings model is aspirational and includes many assumptions. There can be no assurance that these assumptions will be accurate or that model results will be achieved. As set forth below, there are many factors that could cause our 2026 earnings model and actual results to differ materially from those presently expected. Additionally, the current dividend and share repurchase programs may be modified, suspended or discontinued at any time.

On October 7, 2022, the U.S. Department of Commerce published regulations restricting the export to China of advanced semiconductors, supercomputer technology, equipment for the manufacturing of advanced semiconductors and components and technology for the manufacturing in China of certain semiconductor manufacturing equipment. The restrictions on the sale of semiconductor testers in China to test certain advanced semiconductors impact Teradyne’s sales to certain companies in China. Several multinational companies manufacturing these advanced semiconductors in China have obtained one-year licenses allowing suppliers such as Teradyne to continue to provide testers to the facilities operated by these companies. We expect that other companies manufacturing advanced semiconductors in China will not receive licenses, thereby restricting Teradyne’s ability to provide testers to the facilities operated by these companies that do not receive a license. The Company has filed license applications to sell to and support certain customers in China for certain end uses. Several applications have been denied or granted with limitations so that our business will continue to be impacted by the regulation restrictions. In addition to the specific restrictions impacting Teradyne’s business, the regulations may have an adverse impact on certain actual or potential customers and on the global semiconductor industry. To the extent the regulations impact actual and potential customers or disrupt the global semiconductor industry, Teradyne’s business and revenues will be adversely impacted.

The Company also has determined that the restrictions on the export of certain US origin components and technology for use in the development and production in China of certain semiconductor manufacturing equipment impact its manufacturing and development operations in China. Teradyne received a temporary authorization from the Department of Commerce allowing the Company to continue its manufacturing and development operations. On May 25, 2023, the Department of Commerce issued an export license to replace this temporary authorization. The license is effective through May 31, 2027.

Important factors that could cause actual results, the 2026 earnings model, earnings per share, use of cash, dividend payments, repurchases of common stock, or payment of the senior convertible notes to differ materially from those presently expected include: conditions affecting the markets in which Teradyne operates; decreased or delayed product demand from one or more significant customers; development, delivery and acceptance of new products; the ability to grow the Robotics business; increased research and development spending; deterioration of Teradyne’s financial condition; the continued impact of the COVID-19 pandemic and related government responses on the market and demand for Teradyne’s products, on its contract manufacturers and supply chain, and on its workforce; the impact of a supply shortage on our supply chain and contract manufacturers; the consummation and success of any mergers or acquisitions; unexpected cash needs; insufficient cash flow to make required payments and pay the principal amount on the senior convertible notes; the business judgment of the board of directors that a declaration of a dividend or the repurchase of common stock is not in the Company’s best interests; additional U.S. or global tax regulations or guidance; the impact of any tariffs or export controls imposed by the U.S. or China; compliance with trade protection measures or export restrictions; the impact of U.S. Department of Commerce or other government agency regulations relating to Huawei, HiSilicon and other customers or potential customers; the impact of U.S. Department Commerce export control regulations for certain U.S. products and technology sold to military end users or for military end-use in China; the impact of regulations published by the U.S. Department of Commerce relating to semiconductors and semiconductor manufacturing equipment destined for certain end uses in China; and other events, factors and risks disclosed in filings with the SEC, including, but not limited to, the “Risk Factors” section of Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and Quarterly Report on Form 10-Q for the fiscal quarter ended April 2, 2023. The forward-looking statements provided by Teradyne in this press release represent management’s views as of the date of this release. Teradyne anticipates that subsequent events and developments may cause management’s views to change. However, while Teradyne may elect to update these forward-looking statements at some point in the future, Teradyne specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Teradyne’s views as of any date subsequent to the date of this release.

TERADYNE, INC. REPORT FOR SECOND FISCAL QUARTER OF 2023

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 


 

 

 

Quarter Ended

 

Six Months Ended

 

 

 

July 2,
2023

 

April 2,
2023

 

July 3,
2022

 

July 2,
2023

 

July 3,
2022

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

$

684,437

 

 

$

617,529

 

 

$

840,766

 

 

$

1,301,966

 

 

$

1,596,136

 

Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1)

 

 

281,945

 

 

 

261,109

 

 

 

334,377

 

 

 

543,054

 

 

 

634,814

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

402,492

 

 

 

356,420

 

 

 

506,389

 

 

 

758,912

 

 

 

961,322

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Selling and administrative (2)

 

 

145,695

 

 

 

150,955

 

 

 

139,533

 

 

 

296,650

 

 

 

279,718

 

Engineering and development

 

 

105,706

 

 

 

105,762

 

 

 

111,951

 

 

 

211,468

 

 

 

220,067

 

Acquired intangible assets amortization

 

 

4,825

 

 

 

4,802

 

 

 

4,871

 

 

 

9,627

 

 

 

9,934

 

Restructuring and other (3)

 

 

6,358

 

 

 

2,037

 

 

 

2,044

 

 

 

8,395

 

 

 

17,758

 

Operating expenses

 

 

262,584

 

 

 

263,556

 

 

 

258,399

 

 

 

526,140

 

 

 

527,477

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

139,908

 

 

 

92,864

 

 

 

247,990

 

 

 

232,772

 

 

 

433,845

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other (income) expense (4)

 

 

(4,494

)

 

 

(4,220

)

 

 

9,398

 

 

 

(8,714

)

 

 

14,894

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

144,402

 

 

 

97,084

 

 

 

238,592

 

 

 

241,486

 

 

 

418,951

 

Income tax provision

 

 

24,352

 

 

 

13,553

 

 

 

40,805

 

 

 

37,905

 

 

 

59,236

 

Net income

 

$

120,050

 

 

$

83,531

 

 

$

197,787

 

 

$

203,581

 

 

$

359,715

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.78

 

 

$

0.54

 

 

$

1.24

 

 

$

1.31

 

 

$

2.24

 

Diluted

 

$

0.73

 

 

$

0.50

 

 

$

1.16

 

 

$

1.23

 

 

$

2.07

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares - basic

 

 

154,760

 

 

 

155,904

 

 

 

159,563

 

 

 

155,332

 

 

 

160,805

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares - diluted (5)

 

 

164,751

 

 

 

166,308

 

 

 

171,159

 

 

 

165,530

 

 

 

173,367

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividend declared per common share

 

$

0.11

 

 

$

0.11

 

 

$

0.11

 

 

$

0.22

 

 

$

0.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Cost of revenues includes:

 

Quarter Ended

 

Six Months Ended

 

 

 

July 2,
2023

 

April 2,
2023

 

July 3,
2022

 

July 2,
2023

 

July 3,
2022

 

Provision for excess and obsolete inventory

 

$

5,731

 

 

$

5,610

 

 

$

5,105

 

 

$

11,341

 

 

$

6,695

 

 

Sale of previously written down inventory

 

 

(2,463

)

 

 

(385

)

 

 

(449

)

 

 

(2,848

)

 

 

(711

)

 

 

 

$

3,268

 

 

$

5,225

 

 

$

4,656

 

 

$

8,493

 

 

$

5,984

 

 

 

 

 

 

 

 

 

 

 

 

 

(2)

For the quarter ended April 2, 2023 and the six months ended July 2, 2023, selling and administrative expenses included an equity charge of $5.9 million for the modification of Teradyne's retired CEO's outstanding equity awards in connection with his February 1, 2023 retirement.

 

 

 

 

 

 

 

 

 

 

 

 

(3)

Restructuring and other consists of:

 

Quarter Ended

 

Six Months Ended

 

 

 

July 2,
2023

 

April 2,
2023

 

July 3,
2022

 

July 2,
2023

 

July 3,
2022

 

Employee severance

 

$

5,140

 

 

$

2,037

 

 

$

383

 

 

$

7,177

 

 

$

934

 

 

Litigation settlement

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

14,700

 

 

Acquisition related expenses and compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(201

)

 

Other

 

 

1,218

 

 

 

-

 

 

 

1,661

 

 

 

1,218

 

 

 

2,325

 

 

 

 

$

6,358

 

 

$

2,037

 

 

$

2,044

 

 

$

8,395

 

 

$

17,758

 

 

 

 

 

 

 

 

 

 

 

 

 

(4)

Interest and other includes:

 

Quarter Ended

 

Six Months Ended

 

 

 

July 2,
2023

 

April 2,
2023

 

July 3,
2022

 

July 2,
2023

 

July 3,
2022

 

Pension actuarial losses

 

$

53

 

 

$

-

 

 

$

-

 

 

$

53

 

 

$

-

 

 

 

 

$

53

 

 

$

-

 

 

$

-

 

 

$

53

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

(5)

Under GAAP, when calculating diluted earnings per share, convertible debt must be assumed to have converted if the effect on EPS would be dilutive. Diluted shares assume the conversion of the convertible debt as the effect would be dilutive. Accordingly, for the quarters ended July 2, 2023, April 2, 2023 and July 3, 2022, 0.7 million, 0.9 million and 1.9 million shares, respectively, have been included in diluted shares. For the six months ended July 2, 2023 and July 3, 2022, 0.8 million and 2.2 million shares, respectively, have been included in diluted shares. For the quarters ended July 2, 2023, April 2, 2023 and July 3, 2022, diluted shares also included 8.9 million, 9.0 million and 9.0 million shares, respectively, from the convertible note hedge transaction. For the six months ended July 2, 2023 and July 3, 2022, diluted shares included 8.9 million and 9.5 million shares, respectively, from the convertible note hedge transaction.

 

 


CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

 

 

 

 

 

 

 

 

 

 

 

July 2,
2023

 

December 31,
2022

Assets

 

 

 

 

Cash and cash equivalents

 

$

613,208

 

 

$

854,773

 

Marketable securities

 

 

95,199

 

 

 

39,612

 

Accounts receivable, net

 

 

493,234

 

 

 

491,145

 

Inventories, net

 

 

347,295

 

 

 

325,019

 

Prepayments

 

 

560,682

 

 

 

532,962

 

Other current assets

 

 

14,222

 

 

 

14,404

 

Total current assets

 

 

2,123,840

 

 

 

2,257,915

 

 

 

 

 

 

Property, plant and equipment, net

 

 

437,077

 

 

 

418,683

 

Operating lease right-of-use assets, net

 

 

75,889

 

 

 

73,734

 

Marketable securities

 

 

104,685

 

 

 

110,777

 

Deferred tax assets

 

 

152,471

 

 

 

142,784

 

Retirement plans assets

 

 

11,514

 

 

 

11,761

 

Other assets

 

 

32,699

 

 

 

28,925

 

Acquired intangible assets, net

 

 

44,611

 

 

 

53,478

 

Goodwill

 

 

412,110

 

 

 

403,195

 

Total assets

 

$

3,394,896

 

 

$

3,501,252

 

 

 

 

 

 

Liabilities

 

 

 

 

Accounts payable

 

$

153,157

 

 

$

139,722

 

Accrued employees' compensation and withholdings

 

 

163,653

 

 

 

212,266

 

Deferred revenue and customer advances

 

 

120,085

 

 

 

148,285

 

Other accrued liabilities

 

 

114,435

 

 

 

112,271

 

Operating lease liabilities

 

 

20,212

 

 

 

18,594

 

Income taxes payable

 

 

65,437

 

 

 

65,010

 

Current debt

 

 

32,806

 

 

 

50,115

 

 

 

 

 

 

Total current liabilities

 

 

669,785

 

 

 

746,263

 

 

 

 

 

 

Retirement plans liabilities

 

 

124,040

 

 

 

116,005

 

Long-term deferred revenue and customer advances

 

 

38,999

 

 

 

45,131

 

Long-term other accrued liabilities

 

 

16,475

 

 

 

15,981

 

Deferred tax liabilities

 

 

1,304

 

 

 

3,267

 

Long-term operating lease liabilities

 

 

65,079

 

 

 

64,176

 

Long-term income taxes payable

 

 

44,331

 

 

 

59,135

 

Total liabilities

 

 

960,013

 

 

 

1,049,958

 

 

 

 

 

 

Shareholders' equity

 

 

2,434,883

 

 

 

2,451,294

 

Total liabilities and shareholders’ equity

 

$

3,394,896

 

 

$

3,501,252

 

 

 

 

 

 

 

 

 

 


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Six Months Ended

 

July 2,
2023

 

July 3,
2022

 

July 2,
2023

 

July 3,
2022

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

$

120,050

 

 

$

197,787

 

 

$

203,581

 

 

$

359,715

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation

 

22,551

 

 

 

21,957

 

 

 

45,231

 

 

 

44,460

 

Stock-based compensation

 

13,564

 

 

 

12,228

 

 

 

32,449

 

 

 

25,122

 

Provision for excess and obsolete inventory

 

5,731

 

 

 

5,105

 

 

 

11,341

 

 

 

6,695

 

Amortization

 

4,654

 

 

 

4,862

 

 

 

9,580

 

 

 

10,095

 

Deferred taxes

 

(5,937

)

 

 

(34,885

)

 

 

(13,571

)

 

 

(23,597

)

(Gains) losses on investments

 

(2,507

)

 

 

6,972

 

 

 

(4,745

)

 

 

8,973

 

Other

 

(201

)

 

 

345

 

 

 

(92

)

 

 

522

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

Accounts receivable

 

(39,897

)

 

 

(146,592

)

 

 

(2,693

)

 

 

(146,384

)

Inventories

 

9,852

 

 

 

(37,202

)

 

 

(13,845

)

 

 

(46,682

)

Prepayments and other assets

 

(14,204

)

 

 

(25,597

)

 

 

(29,584

)

 

 

(99,902

)

Accounts payable and other liabilities

 

58,694

 

 

 

85,922

 

 

 

(24,514

)

 

 

(38,460

)

Deferred revenue and customer advances

 

(2,233

)

 

 

7,416

 

 

 

(34,938

)

 

 

14,163

 

Retirement plans contributions

 

(1,248

)

 

 

(1,289

)

 

 

(2,482

)

 

 

(2,618

)

Income taxes

 

(26,102

)

 

 

18,426

 

 

 

(13,614

)

 

 

10,815

 

Net cash provided by operating activities

 

142,767

 

 

 

115,455

 

 

 

162,104

 

 

 

122,917

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

(39,258

)

 

 

(45,744

)

 

 

(80,702

)

 

 

(89,743

)

Purchases of marketable securities

 

(29,742

)

 

 

(81,904

)

 

 

(99,018

)

 

 

(247,881

)

Proceeds from sales of marketable securities

 

27,648

 

 

 

113,061

 

 

 

35,577

 

 

 

143,642

 

Proceeds from maturities of marketable securities

 

14,529

 

 

 

42,970

 

 

 

21,997

 

 

 

139,652

 

Proceeds from life insurance

 

-

 

 

 

-

 

 

 

460

 

 

 

-

 

Net cash (used for) provided by investing activities

 

(26,823

)

 

 

28,383

 

 

 

(121,686

)

 

 

(54,330

)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Repurchase of common stock

 

(134,537

)

 

 

(331,334

)

 

 

(227,845

)

 

 

(532,799

)

Dividend payments

 

(17,019

)

 

 

(17,547

)

 

 

(34,184

)

 

 

(35,442

)

Payments of convertible debt principal

 

(2,303

)

 

 

(21,598

)

 

 

(17,458

)

 

 

(42,292

)

Payments related to net settlement of employee stock compensation awards

 

(438

)

 

 

(1,732

)

 

 

(20,308

)

 

 

(32,780

)

Issuance of common stock under stock purchase and stock option plans

 

602

 

 

 

61

 

 

 

16,599

 

 

 

16,536

 

Net cash used for financing activities

 

(153,695

)

 

 

(372,150

)

 

 

(283,196

)

 

 

(626,777

)

 

 

 

 

 

 

 

 

Effects of exchange rate changes on cash and cash equivalents

 

1,751

 

 

 

5,732

 

 

 

1,213

 

 

 

8,014

 

Decrease in cash and cash equivalents

 

(36,000

)

 

 

(222,580

)

 

 

(241,565

)

 

 

(550,176

)

Cash and cash equivalents at beginning of period

 

649,208

 

 

 

794,603

 

 

 

854,773

 

 

 

1,122,199

 

Cash and cash equivalents at end of period

$

613,208

 

 

$

572,023

 

 

$

613,208

 

 

$

572,023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


GAAP to Non-GAAP Earnings Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

July 2, 2023

 

% of Net Revenues

 

 

 

 

 

April 2, 2023

 

% of Net Revenues

 

 

 

 

 

July 3, 2022

 

% of Net Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

$

684.4

 

 

 

 

 

 

 

 

$

617.5

 

 

 

 

 

 

 

 

$

840.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit GAAP and non-GAAP

$

402.5

 

 

 

58.8

%

 

 

 

 

 

$

356.4

 

 

57.7

%

 

 

 

 

 

$

506.4

 

 

60.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations - GAAP

$

139.9

 

 

 

20.4

%

 

 

 

 

 

$

92.9

 

 

15.0

%

 

 

 

 

 

$

248.0

 

 

29.5

%

 

 

 

 

Restructuring and other (1)

 

6.4

 

 

 

0.9

%

 

 

 

 

 

 

2.0

 

 

0.3

%

 

 

 

 

 

 

2.0

 

 

0.2

%

 

 

 

 

Acquired intangible assets amortization

 

4.8

 

 

 

0.7

%

 

 

 

 

 

 

4.8

 

 

0.8

%

 

 

 

 

 

 

4.9

 

 

0.6

%

 

 

 

 

Equity modification charge (2)

 

-

 

 

 

-

 

 

 

 

 

 

 

5.9

 

 

1.0

%

 

 

 

 

 

 

-

 

 

-

 

 

 

 

 

Income from operations - non-GAAP

$

151.1

 

 

 

22.1

%

 

 

 

 

 

$

105.6

 

 

17.1

%

 

 

 

 

 

$

254.9

 

 

30.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income per Common Share

 

 

 

 

 

Net Income per Common Share

 

 

 

 

 

Net Income per Common Share

 

 

July 2, 2023

 

% of Net Revenues

 

Basic

 

Diluted

 

April 2, 2023

 

% of Net Revenues

 

Basic

 

Diluted

 

July 3, 2022

 

% of Net Revenues

 

Basic

 

Diluted

Net income - GAAP

$

120.1

 

 

 

17.5

%

 

$

0.78

 

 

$

0.73

 

 

$

83.5

 

 

13.5

%

 

$

0.54

 

 

$

0.50

 

 

$

197.8

 

 

23.5

%

 

$

1.24

 

 

$

1.16

 

Restructuring and other (1)

 

6.4

 

 

 

0.9

%

 

 

0.04

 

 

 

0.04

 

 

 

2.0

 

 

0.3

%

 

 

0.01

 

 

 

0.01

 

 

 

2.0

 

 

0.2

%

 

 

0.01

 

 

 

0.01

 

Acquired intangible assets amortization

 

4.8

 

 

 

0.7

%

 

 

0.03

 

 

 

0.03

 

 

 

4.8

 

 

0.8

%

 

 

0.03

 

 

 

0.03

 

 

 

4.9

 

 

0.6

%

 

 

0.03

 

 

 

0.03

 

Pension mark-to-market adjustment (3)

 

0.1

 

 

 

0.0

%

 

 

0.00

 

 

 

0.00

 

 

 

-

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

-

 

 

 

-

 

 

 

-

 

Equity modification charge (2)

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5.9

 

 

1.0

%

 

 

0.04

 

 

 

0.04

 

 

 

-

 

 

-

 

 

 

-

 

 

 

-

 

Exclude discrete tax adjustments

 

0.5

 

 

 

0.1

%

 

 

0.00

 

 

 

0.00

 

 

 

(2.5

)

 

-0.4

%

 

 

(0.02

)

 

 

(0.02

)

 

 

1.6

 

 

0.2

%

 

 

0.01

 

 

 

0.01

 

Non-GAAP tax adjustments

 

(2.9

)

 

 

-0.4

%

 

 

(0.02

)

 

 

(0.02

)

 

 

(2.4

)

 

-0.4

%

 

 

(0.02

)

 

 

(0.01

)

 

 

(2.3

)

 

-0.3

%

 

 

(0.01

)

 

 

(0.01

)

Convertible share adjustment (4)

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

-

 

 

 

-

 

 

 

0.01

 

Net income - non-GAAP

$

129.0

 

 

 

18.8

%

 

$

0.83

 

 

$

0.79

 

 

$

91.3

 

 

14.8

%

 

$

0.59

 

 

$

0.55

 

 

$

204.0

 

 

24.3

%

 

$

1.28

 

 

$

1.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP and non-GAAP weighted average common shares - basic

 

154.8

 

 

 

 

 

 

 

 

 

155.9

 

 

 

 

 

 

 

 

 

159.6

 

 

 

 

 

 

 

GAAP weighted average common shares - diluted

 

164.8

 

 

 

 

 

 

 

 

 

166.3

 

 

 

 

 

 

 

 

 

171.2

 

 

 

 

 

 

 

Exclude dilutive shares related to convertible note transaction

 

(0.7

)

 

 

 

 

 

 

 

 

(0.9

)

 

 

 

 

 

 

 

 

(1.9

)

 

 

 

 

 

 

Non-GAAP weighted average common shares - diluted

 

164.1

 

 

 

 

 

 

 

 

 

165.4

 

 

 

 

 

 

 

 

 

169.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Restructuring and other consists of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

 

 

 

 

 

 

July 2, 2023

 

 

 

 

 

 

 

April 2, 2023

 

 

 

 

 

 

 

July 3, 2022

 

 

 

 

 

 

 

Employee severance

$

5.1

 

 

 

 

 

 

 

 

$

2.0

 

 

 

 

 

 

 

 

$

0.4

 

 

 

 

 

 

 

 

Other

 

1.2

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

1.7

 

 

 

 

 

 

 

 

 

$

6.4

 

 

 

 

 

 

 

 

$

2.0

 

 

 

 

 

 

 

 

$

2.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2)

For the quarter ended April 2, 2023, selling and administrative expenses include an equity charge of $5.9 million for the modification of Teradyne’s retired CEO’s outstanding equity awards in connection with his February 1, 2023 retirement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3)

For the quarter ended July 2, 2023 adjustment to exclude actuarial loss recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4)

For the quarters ended April 2, 2023, and July 3, 2022, the non-GAAP diluted EPS calculation adds back $0.1 million, and $0.2 million, respectively, of convertible debt interest expense to non-GAAP net income. For the quarters ended July 2, 2023, April 2, 2023, and July 3, 2022, non-GAAP weighted average diluted common shares include 8.9 million, 9.0 million and 9.0 million shares, respectively, from the convertible note hedge transaction.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

 

 

 

 

 

 

 

July 2, 2023

 

% of Net Revenues

 

 

 

 

 

July 3, 2022

 

% of Net Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Revenues

$

1,302.0

 

 

 

 

 

 

 

 

$

1,596.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit GAAP and non-GAAP

$

758.9

 

 

 

58.3

%

 

 

 

 

 

$

961.3

 

 

60.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations - GAAP

$

232.8

 

 

 

17.9

%

 

 

 

 

 

$

433.8

 

 

27.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Acquired intangible assets amortization

 

9.6

 

 

 

0.7

%

 

 

 

 

 

 

9.9

 

 

0.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring and other (1)

 

8.4

 

 

 

0.6

%

 

 

 

 

 

 

17.8

 

 

1.1

%

 

 

 

 

 

 

 

 

 

 

 

 

Equity modification charge (2)

 

5.9

 

 

 

0.5

%

 

 

 

 

 

 

-

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations - non-GAAP

$

256.7

 

 

 

19.7

%

 

 

 

 

 

$

461.5

 

 

28.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income per Common Share

 

 

 

 

 

Net Income per Common Share

 

 

 

 

 

 

 

 

 

 

July 2, 2023

 

% of Net Revenues

 

Basic

 

Diluted

 

July 3, 2022

 

% of Net Revenues

 

Basic

 

Diluted

 

 

 

 

 

 

 

 

Net income - GAAP

$

203.6

 

 

 

15.6

%

 

$

1.31

 

 

$

1.23

 

 

$

359.7

 

 

22.5

%

 

$

2.24

 

 

$

2.07

 

 

 

 

 

 

 

 

 

Acquired intangible assets amortization

 

9.6

 

 

 

0.7

%

 

 

0.06

 

 

 

0.06

 

 

 

9.9

 

 

0.6

%

 

 

0.06

 

 

 

0.06

 

 

 

 

 

 

 

 

 

Restructuring and other (1)

 

8.4

 

 

 

0.6

%

 

 

0.05

 

 

 

0.05

 

 

 

17.8

 

 

1.1

%

 

 

0.11

 

 

 

0.10

 

 

 

 

 

 

 

 

 

Equity modification charge (2)

 

5.9

 

 

 

0.5

%

 

 

0.04

 

 

 

0.04

 

 

 

-

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

Pension mark-to-market adjustment (3)

 

0.1

 

 

 

0.0

%

 

 

0.00

 

 

 

0.00

 

 

 

-

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

Exclude discrete tax adjustments

 

(1.9

)

 

 

-0.1

%

 

 

(0.01

)

 

 

(0.01

)

 

 

(8.8

)

 

-0.6

%

 

 

(0.05

)

 

 

(0.05

)

 

 

 

 

 

 

 

 

Non-GAAP tax adjustments

 

(5.3

)

 

 

-0.4

%

 

 

(0.03

)

 

 

(0.03

)

 

 

(5.6

)

 

-0.4

%

 

 

(0.03

)

 

 

(0.03

)

 

 

 

 

 

 

 

 

Convertible share adjustment (4)

 

-

 

 

 

-

 

 

 

-

 

 

 

0.01

 

 

 

-

 

 

-

 

 

 

-

 

 

 

0.03

 

 

 

 

 

 

 

 

 

Net income - non-GAAP

$

220.4

 

 

 

16.9

%

 

$

1.42

 

 

$

1.34

 

 

$

373.0

 

 

23.4

%

 

$

2.32

 

 

$

2.18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP and non-GAAP weighted average common shares - basic

 

155.3

 

 

 

 

 

 

 

 

 

160.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP weighted average common shares - diluted

 

165.5

 

 

 

 

 

 

 

 

 

173.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exclude dilutive shares from convertible note

 

(0.8

)

 

 

 

 

 

 

 

 

(2.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP weighted average common shares - diluted

 

164.7

 

 

 

 

 

 

 

 

 

171.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Restructuring and other consists of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

July 2, 2023

 

 

 

 

 

 

 

July 3, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee severance

$

7.2

 

 

 

 

 

 

 

 

$

0.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Litigation settlement

 

-

 

 

 

 

 

 

 

 

 

14.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition related expenses and compensation

 

-

 

 

 

 

 

 

 

 

 

(0.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

1.2

 

 

 

 

 

 

 

 

 

2.3

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

$

8.4

 

 

 

 

 

 

 

 

$

17.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2)

For the six months ended July 2, 2023, selling and administrative expenses include an equity charge of $5.9 million for the modification of Teradyne’s retired CEO’s outstanding equity awards in connection with his February 1, 2023 retirement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3)

For the six months ended July 2, 2023 adjustment to exclude actuarial loss recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4)

For the six months ended July 2, 2023 and July 3, 2022, the non-GAAP diluted EPS calculation adds back $0.2 million and $0.5 million, respectively, of convertible debt interest expense to non-GAAP net income. For the six months ended July 2, 2023 and July 3, 2022, non-GAAP weighted average diluted common shares include 8.9 million and 9.5 million shares, respectively, related to the convertible debt hedge transaction.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP to Non-GAAP Reconciliation of Third Quarter 2023 guidance:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP and non-GAAP third quarter revenue guidance:

 

 

$650 million to $710 million

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income per diluted share

 

 

$

0.57

 

 

$

0.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exclude acquired intangible assets amortization

 

 

 

0.03

 

 

 

0.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exclude acquired restructuring and other charges

 

 

 

0.02

 

 

 

0.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP tax adjustments

 

 

 

(0.01

)

 

 

(0.01

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income per diluted share

 

 

$

0.61

 

 

$

0.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


For press releases and other information of interest to investors, please visit Teradyne's homepage at http://www.teradyne.com.

Contact: Teradyne, Inc.

Andy Blanchard 978-370-2425
Vice President of Corporate Relations