☒ | 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 |
Massachusetts | 04-2272148 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
600 Riverpark Drive, North Reading, Massachusetts | 01864 | |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, par value $0.125 per share | TER | Nasdaq Stock Market LLC |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Emerging growth company | ☐ | |||
Smaller reporting company | ☐ |
TERADYNE, INC.
INDEX
Page No. | ||||||||
Item 1. | ||||||||
Condensed Consolidated Balance Sheets as of | 1 | |||||||
2 | ||||||||
3 | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | 33 | |||||||
PART II. OTHER INFORMATION | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 4. | ||||||||
Item 6. |
Item 1: | Financial Statements |
July 3, 2022 | December 31, 2021 | |||||||
(in thousands, except per share amount) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 572,023 | $ | 1,122,199 | ||||
Marketable securities | 209,846 | 244,231 | ||||||
Accounts receivable, less allowance for credit losses of $1,849 and $2,012 at July 3, 2022 and December 31, 2021, respectively | 683,739 | 550,749 | ||||||
Inventories, net | 295,625 | 243,330 | ||||||
Prepayments | 498,093 | 406,266 | ||||||
Other current assets | 11,109 | 9,452 | ||||||
Total current assets | 2,270,435 | 2,576,227 | ||||||
Property, plant and equipment, net | 411,263 | 387,240 | ||||||
Operating lease right-of-use | 66,661 | 68,807 | ||||||
Marketable securities | 111,999 | 133,858 | ||||||
Deferred tax assets | 126,639 | 102,428 | ||||||
Retirement plans assets | 14,245 | 15,110 | ||||||
Other assets | 26,942 | 24,096 | ||||||
Acquired intangible assets, net | 62,509 | 75,635 | ||||||
Goodwill | 397,733 | 426,024 | ||||||
Total assets | $ | 3,488,426 | $ | 3,809,425 | ||||
LIABILITIES | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 175,606 | $ | 153,133 | ||||
Accrued employees’ compensation and withholdings | 190,506 | 253,667 | ||||||
Deferred revenue and customer advances | 163,127 | 146,185 | ||||||
Other accrued liabilities | 133,881 | 124,187 | ||||||
Operating lease liabilities | 17,770 | 19,977 | ||||||
Income taxes payable | 106,863 | 88,789 | ||||||
Current debt | 9,632 | 19,182 | ||||||
Total current liabilities | 797,385 | 805,120 | ||||||
Retirement plans liabilities | 141,884 | 151,141 | ||||||
Long-term deferred revenue and customer advances | 50,357 | 54,921 | ||||||
Long-term other accrued liabilities | 15,530 | 15,497 | ||||||
Deferred tax liabilities | 3,143 | 6,327 | ||||||
Long-term operating lease liabilities | 57,600 | 56,178 | ||||||
Long-term incomes taxes payable | 59,135 | 67,041 | ||||||
Debt | 64,796 | 89,244 | ||||||
Total liabilities | 1,189,830 | 1,245,469 | ||||||
Commitments and contingencies (Note Q) | 0 | 0 | ||||||
Mezzanine equity: | ||||||||
Convertible common shares | — | 1,512 | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common stock, $0.125 par value, 1,000,000 shares authorized; 157,880 and 162,251 shares issued and outstanding at July 3, 2022 and December 31, 2021, respectively | 19,735 | 20,281 | ||||||
Additional paid-in capital | 1,721,586 | 1,811,545 | ||||||
Accumulated other comprehensive loss | (52,959 | ) | (5,948 | ) | ||||
Retained earnings | 610,234 | 736,566 | ||||||
Total shareholders’ equity | 2,298,596 | 2,562,444 | ||||||
Total liabilities, convertible common shares and shareholders’ equity | $ | 3,488,426 | $ | 3,809,425 | ||||
April 2, 2023 | December 31, 2022 | |||||||
(in thousands, except per share amount) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 649,208 | $ | 854,773 | ||||
Marketable securities | 92,895 | 39,612 | ||||||
Accounts receivable, less allowance for credit losses of $1,973 and $1,955 at April 2, 2023 and December 31, 2022, respectively | 455,334 | 491,145 | ||||||
Inventories, net | 352,058 | 325,019 | ||||||
Prepayments | 549,114 | 532,962 | ||||||
Other current assets | 13,367 | 14,404 | ||||||
Total current assets | 2,111,976 | 2,257,915 | ||||||
Property, plant and equipment, net | 432,381 | 418,683 | ||||||
Operating lease right-of-use | 74,939 | 73,734 | ||||||
Marketable securities | 116,938 | 110,777 | ||||||
Deferred tax assets | 148,527 | 142,784 | ||||||
Retirement plans assets | 11,650 | 11,761 | ||||||
Other assets | 27,922 | 28,925 | ||||||
Acquired intangible assets, net | 49,246 | 53,478 | ||||||
Goodwill | 409,828 | 403,195 | ||||||
Total assets | $ | 3,383,407 | $ | 3,501,252 | ||||
LIABILITIES | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 142,382 | $ | 139,722 | ||||
Accrued employees’ compensation and withholdings | 119,433 | 212,266 | ||||||
Deferred revenue and customer advances | 119,355 | 148,285 | ||||||
Other accrued liabilities | 114,739 | 112,271 | ||||||
Operating lease liabilities | 19,985 | 18,594 | ||||||
Income taxes payable | 77,089 | 65,010 | ||||||
Current debt | 35,109 | 50,115 | ||||||
Total current liabilities | 628,092 | 746,263 | ||||||
Retirement plans liabilities | 121,303 | 116,005 | ||||||
Long-term deferred revenue and customer advances | 41,797 | 45,131 | ||||||
Long-term other accrued liabilities | 16,211 | 15,981 | ||||||
Deferred tax liabilities | 2,325 | 3,267 | ||||||
Long-term operating lease liabilities | 65,082 | 64,176 | ||||||
Long-term incomes taxes payable | 59,135 | 59,135 | ||||||
Total liabilities | 933,945 | 1,049,958 | ||||||
Commitments and contingencies (Note P) | ||||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common stock, $0.125 par value, 1,000,000 shares authorized; 155,445 and 155,759 shares issued and outstanding at April 2, 2023 and December 31, 2022, respectively | 19,431 | 19,470 | ||||||
Additional paid-in capital | 1,772,352 | 1,755,963 | ||||||
Accumulated other comprehensive loss | (36,466 | ) | (49,868 | ) | ||||
Retained earnings | 694,145 | 725,729 | ||||||
Total shareholders’ equity | 2,449,462 | 2,451,294 | ||||||
Total liabilities and shareholders’ equity | $ | 3,383,407 | $ | 3,501,252 | ||||
For the Three Months Ended | For the Six Months Ended | For the Three Months Ended | ||||||||||||||||||||||
July 3, | July 4, | July 3, | July 4, | April 2, | April 3, | |||||||||||||||||||
2022 | 2021 | 2022 | 2021 | 2023 | 2022 | |||||||||||||||||||
(in thousands, except per share amount) | (in thousands, except per share amount) | |||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Products | $ | 697,954 | $ | 951,945 | $ | 1,323,829 | $ | 1,612,453 | $ | 473,418 | $ | 625,875 | ||||||||||||
Services | 142,812 | 133,783 | 272,307 | 254,881 | 144,111 | 129,495 | ||||||||||||||||||
Total revenues | 840,766 | 1,085,728 | 1,596,136 | 1,867,334 | 617,529 | 755,370 | ||||||||||||||||||
Cost of revenues: | ||||||||||||||||||||||||
Cost of products | 274,674 | 388,845 | 517,690 | 656,629 | 198,665 | 243,016 | ||||||||||||||||||
Cost of services | 59,703 | 49,894 | 117,124 | 102,098 | 62,444 | 57,421 | ||||||||||||||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) | 334,377 | 438,739 | 634,814 | 758,727 | 261,109 | 300,437 | ||||||||||||||||||
Gross profit | 506,389 | 646,989 | 961,322 | 1,108,607 | 356,420 | 454,933 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Selling and administrative | 139,533 | 140,187 | 279,718 | 269,984 | 150,955 | 140,185 | ||||||||||||||||||
Engineering and development | 111,951 | 110,021 | 220,067 | 210,423 | 105,762 | 108,116 | ||||||||||||||||||
Acquired intangible assets amortization | 4,871 | 5,402 | 9,934 | 10,938 | 4,802 | 5,063 | ||||||||||||||||||
Restructuring and other | 2,044 | 2,507 | 17,758 | (4,623 | ) | 2,037 | 15,714 | |||||||||||||||||
Total operating expenses | 258,399 | 258,117 | 527,477 | 486,722 | 263,556 | 269,078 | ||||||||||||||||||
Income from operations | 247,990 | 388,872 | 433,845 | 621,885 | 92,864 | 185,855 | ||||||||||||||||||
Non-operating (income) expense: | ||||||||||||||||||||||||
Interest income | (951 | ) | (633 | ) | (1,653 | ) | (1,441 | ) | (5,258 | ) | (703 | ) | ||||||||||||
Interest expense | 913 | 5,566 | 1,925 | 11,569 | 987 | 1,012 | ||||||||||||||||||
Other (income) expense, net | 9,436 | (87 | ) | 14,622 | 3,738 | 51 | 5,187 | |||||||||||||||||
Income before income taxes | 238,592 | 384,026 | 418,951 | 608,019 | 97,084 | 180,359 | ||||||||||||||||||
Income tax provision | 40,805 | 55,707 | 59,236 | 74,188 | 13,553 | 18,431 | ||||||||||||||||||
Net income | $ | 197,787 | $ | 328,319 | $ | 359,715 | $ | 533,831 | $ | 83,531 | $ | 161,928 | ||||||||||||
Net income per common share: | ||||||||||||||||||||||||
Basic | $ | 1.24 | $ | 1.98 | $ | 2.24 | $ | 3.21 | $ | 0.54 | $ | 1.00 | ||||||||||||
Diluted | $ | 1.16 | $ | 1.76 | $ | 2.07 | $ | 2.85 | $ | 0.50 | $ | 0.92 | ||||||||||||
Weighted average common shares—basic | 159,563 | 165,995 | 160,805 | 166,243 | 155,904 | 162,048 | ||||||||||||||||||
Weighted average common shares—diluted | 171,159 | 186,750 | 173,367 | 187,245 | 166,308 | 175,575 | ||||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, | July 4, | July 3, | July 4, | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Net income | $ | 197,787 | $ | 328,319 | $ | 359,715 | $ | 533,831 | ||||||||
Other comprehensive income, net of tax: | ||||||||||||||||
Foreign currency translation adjustment, net of tax of $0, $0, $0, $0, respectively | (29,230 | ) | 5,150 | (37,307 | ) | (15,974 | ) | |||||||||
Available-for-sale | ||||||||||||||||
Unrealized (losses) gains on marketable securities arising during period, net of tax of $(1,240), $436, $(2,573), and $(472), respectively | (4,522 | ) | 1,494 | (9,910 | ) | (1,776 | ) | |||||||||
Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $77, $2, $59, $(121), respectively | 274 | 3 | 209 | (441 | ) | |||||||||||
(4,248 | ) | 1,497 | (9,701 | ) | (2,217 | ) | ||||||||||
Defined benefit post-retirement plan: | ||||||||||||||||
Amortization of prior service credit, net of tax of $0, $0, $(1), $(1), respectively | (2 | ) | (2 | ) | (3 | ) | (3 | ) | ||||||||
Other comprehensive (loss) income | (33,480 | ) | 6,645 | (47,011 | ) | (18,194 | ) | |||||||||
Comprehensive income | $ | 164,307 | $ | 334,964 | $ | 312,704 | $ | 515,637 | ||||||||
For the Three Months Ended | ||||||||
April 2, | April 3, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Net income | $ | 83,531 | $ | 161,928 | ||||
Other comprehensive income (loss) , net of tax: | ||||||||
Foreign currency translation adjustment, net of tax of $0 and $0, respectively | 9,309 | (8,076 | ) | |||||
Available-for-sale | ||||||||
Unrealized gains (losses) on marketable securities arising during period, net of tax of $503 and $(1,333), respectively | 2,294 | (5,388 | ) | |||||
Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $2 and $(18), respectively | 5 | (65 | ) | |||||
2,299 | (5,453 | ) | ||||||
Cash flow hedges: | ||||||||
Unrealized gains arising during period, net of tax of $167, $0, respectively | 596 | — | ||||||
Less: Reclassification adjustment for losses included in net income, net of tax of $338 and $0, respectively | 1,200 | — | ||||||
1,796 | — | |||||||
Defined benefit post-retirement plan: | ||||||||
Amortization of prior service credit, net of tax of $0 and $0, respectively | (2 | ) | (2 | ) | ||||
Other comprehensive income (loss) | 13,402 | (13,531 | ) | |||||
Comprehensive income | $ | 96,933 | $ | 148,397 | ||||
Shareholders’ Equity | Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Common Shares Value | Common Stock Shares | Common Stock Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total Shareholders’ Equity | Convertible Common Shares Value | Common Stock Shares | Common Stock Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended July 3, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, April 3, 2022 | $ | — | 161,053 | $ | 20,132 | $ | 1,711,690 | $ | (19,479 | ) | $ | 762,189 | $ | 2,474,532 | ||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended April 2, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | $ | — | 155,759 | $ | 19,470 | $ | 1,755,963 | $ | (49,868 | ) | $ | 725,729 | $ | 2,451,294 | ||||||||||||||||||||||||||||||||||||||||||
Net issuance of common stock under stock-based plans | 579 | 73 | (3,943 | ) | (3,870 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 20,332 | 20,332 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (893 | ) | (112 | ) | (97,936 | ) | (98,048 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.11 per share) | (17,179 | ) | (17,179 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements of convertible notes | 324 | 41 | (41 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of convertible notes hedge call options | (324 | ) | (41 | ) | 41 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | 83,531 | 83,531 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | 13,402 | 13,402 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, April 2, 2023 | $ | — | 155,445 | $ | 19,431 | $ | 1,772,352 | $ | (36,466 | ) | $ | 694,145 | $ | 2,449,462 | ||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended April 3, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | 1,512 | 162,251 | $ | 20,281 | $ | 1,811,545 | $ | (5,948 | ) | $ | 736,566 | $ | 2,562,444 | ||||||||||||||||||||||||||||||||||||||||||
Net issuance of common stock under stock-based plans | 33 | 4 | (1,675 | ) | (1,671 | ) | 552 | 70 | (14,644 | ) | (14,574 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 11,658 | 11,658 | 14,204 | 14,204 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (3,206 | ) | (401 | ) | (333,933 | ) | (334,334 | ) | (1,750 | ) | (219 | ) | (211,247 | ) | (211,466 | ) | ||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.11 per share) | (17,561 | ) | (17,561 | ) | (17,908 | ) | (17,908 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Settlements of convertible notes | 495 | 62 | (149 | ) | (87 | ) | 509 | 64 | (157 | ) | (93 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of convertible notes hedge call options | (495 | ) | (62 | ) | 62 | — | (509 | ) | (64 | ) | 64 | — | ||||||||||||||||||||||||||||||||||||||||||||
Cumulative-effect of change in accounting principle related to convertible debt | 1,752 | 1,752 | (1,512 | ) | (99,322 | ) | 92,850 | (6,472 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | 197,787 | 197,787 | 161,928 | 161,928 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (33,480 | ) | (33,480 | ) | (13,531 | ) | (13,531 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, July 3, 2022 | $ | — | 157,880 | $ | 19,735 | $ | 1,721,586 | $ | (52,959 | ) | $ | 610,234 | $ | 2,298,596 | ||||||||||||||||||||||||||||||||||||||||||
Balance, April 3, 2022 | $ | — | 161,053 | $ | 20,132 | $ | 1,711,690 | $ | (19,479 | ) | $ | 762,189 | $ | 2,474,532 | ||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended July 4, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, April 4, 2021 | $ | 1,233 | 166,419 | $ | 20,802 | $ | 1,765,971 | $ | 8,677 | $ | 529,103 | $ | 2,324,553 | |||||||||||||||||||||||||||||||||||||||||||
Net issuance of common stock under stock-based plans | 215 | 27 | 14,283 | 14,310 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 12,515 | 12,515 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (1,190 | ) | (149 | ) | (155,846 | ) | (155,995 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.10 per share) | (16,624 | ) | (16,624 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements of convertible notes | 367 | 46 | 45,977 | 46,023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of convertible notes hedge call options | (367 | ) | (46 | ) | (46,291 | ) | (46,337 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Convertible common shares | 20,153 | (20,153 | ) | (20,153 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | 328,319 | 328,319 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | 6,645 | 6,645 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, July 4, 2021 | $ | 21,386 | 165,444 | $ | 20,680 | $ | 1,772,302 | $ | 15,322 | $ | 684,952 | $ | 2,493,256 | |||||||||||||||||||||||||||||||||||||||||||
For the Six Months Ended July 3, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | 1,512 | 162,251 | $ | 20,281 | $ | 1,811,545 | $ | (5,948 | ) | $ | 736,566 | $ | 2,562,444 | ||||||||||||||||||||||||||||||||||||||||||
Net issuance of common stock under stock-based plans | 585 | 73 | (16,318 | ) | (16,245 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 25,862 | 25,862 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (4,956 | ) | (619 | ) | (545,179 | ) | (545,798 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.22 per share) | (35,470 | ) | (35,470 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements of convertible notes | 1,004 | 125 | (306 | ) | (181 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of convertible notes hedge call options | (1,004 | ) | (125 | ) | 125 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative-effect of change in accounting principle related to convertible debt | (1,512 | ) | (99,322 | ) | 94,602 | (4,720 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income | 359,715 | 359,715 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (47,011 | ) | (47,011 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, July 3, 2022 | $ | — | 157,880 | $ | 19,735 | $ | 1,721,586 | $ | (52,959 | ) | $ | 610,234 | $ | 2,298,596 | ||||||||||||||||||||||||||||||||||||||||||
For the Six Months Ended July 4, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | 3,787 | 166,123 | $ | 20,765 | $ | 1,765,323 | $ | 33,516 | $ | 387,414 | $ | 2,207,018 | |||||||||||||||||||||||||||||||||||||||||||
Net issuance of common stock under stock-based plans | 885 | 111 | 211 | 322 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 25,874 | 25,874 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (1,564 | ) | (196 | ) | (202,988 | ) | (203,184 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.20 per share) | (33,305 | ) | (33,305 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements of convertible notes | 1,589 | 199 | 203,507 | 203,706 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of convertible notes hedge call options | (1,589 | ) | (199 | ) | (205,014 | ) | (205,213 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Convertible common shares | 17,599 | (17,599 | ) | (17,599 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | 533,831 | 533,831 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (18,194 | ) | (18,194 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, July 4, 2021 | $ | 21,386 | 165,444 | $ | 20,680 | $ | 1,772,302 | $ | 15,322 | $ | 684,952 | $ | 2,493,256 | |||||||||||||||||||||||||||||||||||||||||||
For the Six Months Ended | For the Three Months Ended | |||||||||||||||
July 3, | July 4, | April 2, | April 3, | |||||||||||||
2022 | 2021 | 2023 | 2022 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 359,715 | $ | 533,831 | $ | 83,531 | $ | 161,928 | ||||||||
Adjustments to reconcile net income from operations to net cash provided by operating activities: | ||||||||||||||||
Depreciation | 44,460 | 45,848 | 22,680 | 22,503 | ||||||||||||
Stock-based compensation | 25,122 | 23,231 | 18,885 | 12,894 | ||||||||||||
Provision for excess and obsolete inventory | 5,610 | 1,590 | ||||||||||||||
Amortization | 10,095 | 19,343 | 4,926 | 5,233 | ||||||||||||
Losses (gains) on investments | 8,973 | (4,650 | ) | |||||||||||||
Provision for excess and obsolete inventory | 6,695 | 3,625 | ||||||||||||||
Deferred taxes | (23,597 | ) | (800 | ) | (7,634 | ) | 11,288 | |||||||||
Contingent consideration fair value adjustments | — | (7,227 | ) | |||||||||||||
Loss on convertible debt conversions | — | 5,244 | ||||||||||||||
Retirement plans actuarial gains | — | (627 | ) | |||||||||||||
(Gains) losses on investments | (2,238 | ) | 2,001 | |||||||||||||
Other | 522 | 199 | 108 | 177 | ||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||
Accounts receivable | (146,384 | ) | (372,698 | ) | 37,204 | 208 | ||||||||||
Inventories | (46,682 | ) | 19,908 | (23,697 | ) | (9,480 | ) | |||||||||
Prepayments and other assets | (94,751 | ) | (117,416 | ) | (15,380 | ) | (74,305 | ) | ||||||||
Accounts payable and other liabilities | (43,611 | ) | 86,790 | |||||||||||||
Accounts payable and other accrued expenses | (83,208 | ) | (124,382 | ) | ||||||||||||
Deferred revenue and customer advances | 14,163 | 15,189 | (32,705 | ) | 6,747 | |||||||||||
Retirement plans contributions | (2,618 | ) | (2,739 | ) | ||||||||||||
Retirement plan contributions | (1,234 | ) | (1,329 | ) | ||||||||||||
Income taxes | 10,815 | (2,628 | ) | 12,488 | (7,611 | ) | ||||||||||
Net cash provided by operating activities | 122,917 | 244,423 | 19,336 | 7,462 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchases of property, plant and equipment | (89,743 | ) | (73,957 | ) | (41,444 | ) | (43,999 | ) | ||||||||
Purchases of marketable securities | (247,881 | ) | (398,086 | ) | (69,276 | ) | (165,977 | ) | ||||||||
Proceeds from sales of marketable securities | 7,929 | 30,581 | ||||||||||||||
Proceeds from maturities of marketable securities | 139,652 | 460,213 | 7,468 | 96,682 | ||||||||||||
Proceeds from sales of marketable securities | 143,642 | 116,112 | ||||||||||||||
Purchase of investment | — | (12,000 | ) | |||||||||||||
Proceeds from life insurance | 460 | — | ||||||||||||||
Net cash (used for) provided by investing activities | (54,330 | ) | 92,282 | |||||||||||||
Net cash used for investing activities | (94,863 | ) | (82,713 | ) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Issuance of common stock under stock purchase and stock option plans | 16,536 | 32,581 | 15,997 | 16,475 | ||||||||||||
Repurchase of common stock | (532,799 | ) | (196,584 | ) | (93,308 | ) | (201,465 | ) | ||||||||
Payments related to net settlement of employee stock compensation awards | (19,870 | ) | (31,048 | ) | ||||||||||||
Dividend payments | (17,165 | ) | (17,895 | ) | ||||||||||||
Payments of convertible debt principal | (42,292 | ) | (66,828 | ) | (15,155 | ) | (20,694 | ) | ||||||||
Dividend payments | (35,442 | ) | (33,271 | ) | ||||||||||||
Payments related to net settlement of employee stock compensation awards | (32,780 | ) | (31,794 | ) | ||||||||||||
Net cash used for financing activities | (626,777 | ) | (295,896 | ) | (129,501 | ) | (254,627 | ) | ||||||||
Effects of exchange rate changes on cash and cash equivalents | 8,014 | (489 | ) | (537 | ) | 2,282 | ||||||||||
(Decrease) increase in cash and cash equivalents | (550,176 | ) | 40,320 | |||||||||||||
Decrease in cash and cash equivalents | (205,565 | ) | (327,596 | ) | ||||||||||||
Cash and cash equivalents at beginning of period | 1,122,199 | 914,121 | 854,773 | 1,122,199 | ||||||||||||
Cash and cash equivalents at end of period | $ | 572,023 | $ | 954,441 | $ | 649,208 | $ | 794,603 | ||||||||
Non-cash investing activities: | ||||||||||||||||
Capital expenditures incurred but not yet paid: | $ | 1,855 | $ | 4,503 | $ | 3,823 | $ | 2,500 |
Semiconductor Test | Industrial Automation | |||||||||||||||||||||||||||||||||||
System on-a-Chip | Memory | System Test | Universal Robots | Mobile Industrial Robots | AutoGuide | Wireless Test | Corporate and Eliminations | Total | ||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||
For the Three Months Ended July 3, 2022 (1) | ||||||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||||||
Point in Time | $ | 395,211 | $ | 74,790 | $ | 118,692 | $ | 80,409 | $ | 16,730 | $ | 1,071 | $ | 60,765 | $ | (193 | ) | $ | 747,475 | |||||||||||||||||
Over Time | 64,253 | 7,094 | 16,010 | 2,104 | 668 | 73 | 3,089 | — | 93,291 | |||||||||||||||||||||||||||
Total | $ | 459,464 | $ | 81,884 | $ | 134,702 | $ | 82,513 | $ | 17,398 | $ | 1,144 | $ | 63,854 | $ | (193 | ) | $ | 840,766 | |||||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||||||
Asia Pacific | $ | 413,537 | $ | 78,996 | $ | 95,584 | $ | 17,357 | $ | 5,317 | $ | — | $ | 44,106 | $ | — | $ | 654,897 | ||||||||||||||||||
Americas | 28,714 | 2,552 | 33,409 | 27,732 | 6,085 | 1,144 | 17,460 | (193 | ) | 116,903 | ||||||||||||||||||||||||||
Europe, Middle East and Africa | 17,213 | 336 | 5,709 | 37,424 | 5,996 | — | 2,288 | — | 68,966 | |||||||||||||||||||||||||||
Total | $ | 459,464 | $ | 81,884 | $ | 134,702 | $ | 82,513 | $ | 17,398 | $ | 1,144 | $ | 63,854 | $ | (193 | ) | $ | 840,766 | |||||||||||||||||
For the Three Months Ended July 4, 2021 (1) | ||||||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||||||
Point in Time | $ | 675,958 | $ | 84,232 | $ | 88,197 | $ | 74,412 | $ | 15,091 | $ | — | $ | 51,619 | $ | (146 | ) | $ | 989,363 | |||||||||||||||||
Over Time | 65,712 | 8,074 | 16,622 | 1,665 | 809 | 209 | 3,274 | — | 96,365 | |||||||||||||||||||||||||||
Total | $ | 741,670 | $ | 92,306 | $ | 104,819 | $ | 76,077 | $ | 15,900 | $ | 209 | $ | 54,893 | $ | (146 | ) | $ | 1,085,728 | |||||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||||||
Asia Pacific | $ | 710,995 | $ | 87,151 | $ | 61,230 | $ | 18,044 | $ | 2,439 | $ | — | $ | 45,802 | $ | — | $ | 925,661 | ||||||||||||||||||
Americas | 21,664 | 3,672 | 36,256 | 24,808 | 6,897 | 209 | 7,107 | (146 | ) | 100,467 | ||||||||||||||||||||||||||
Europe, Middle East and Africa | 9,011 | 1,483 | 7,333 | 33,225 | 6,564 | — | 1,984 | — | 59,600 | |||||||||||||||||||||||||||
Total | $ | 741,670 | $ | 92,306 | $ | 104,819 | $ | 76,077 | $ | 15,900 | $ | 209 | $ | 54,893 | $ | (146 | ) | $ | 1,085,728 | |||||||||||||||||
For the Six Months Ended July 3, 2022 (2) | ||||||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||||||
Point in Time | $ | 718,666 | $ | 163,513 | $ | 223,981 | $ | 163,591 | $ | 33,264 | $ | 1,281 | $ | 109,194 | $ | (539 | ) | $ | 1,412,951 | |||||||||||||||||
Over Time | 127,382 | 14,127 | 29,390 | 4,206 | 1,342 | 560 | 6,178 | — | 183,185 | |||||||||||||||||||||||||||
Total | $ | 846,048 | $ | 177,640 | $ | 253,371 | $ | 167,797 | $ | 34,606 | $ | 1,841 | $ | 115,372 | $ | (539 | ) | $ | 1,596,136 | |||||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||||||
Asia Pacific | $ | 754,277 | $ | 172,147 | $ | 169,369 | $ | 35,978 | $ | 7,909 | $ | — | $ | 79,052 | $ | — | $ | 1,218,732 | ||||||||||||||||||
Americas | 58,428 | 4,598 | 70,017 | 55,880 | 13,952 | 1,841 | 27,147 | (539 | ) | 231,324 | ||||||||||||||||||||||||||
Europe, Middle East and Africa | 33,343 | 895 | 13,985 | 75,939 | 12,745 | — | 9,173 | — | 146,080 | |||||||||||||||||||||||||||
Total | $ | 846,048 | $ | 177,640 | $ | 253,371 | $ | 167,797 | $ | 34,606 | $ | 1,841 | $ | 115,372 | $ | (539 | ) | $ | 1,596,136 | |||||||||||||||||
For the Six Months Ended July 4, 2021 (2) | ||||||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||||||
Point in Time | $ | 1,040,148 | $ | 186,124 | $ | 207,511 | $ | 138,419 | $ | 29,155 | $ | (120 | ) | $ | 89,499 | $ | (289 | ) | $ | 1,690,447 | ||||||||||||||||
Over Time | 121,752 | 14,015 | 30,145 | 3,259 | 876 | 548 | 6,292 | — | 176,887 | |||||||||||||||||||||||||||
Total | $ | 1,161,900 | $ | 200,139 | $ | 237,656 | $ | 141,678 | $ | 30,031 | $ | 428 | $ | 95,791 | $ | (289 | ) | $ | 1,867,334 | |||||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||||||
Asia Pacific | $ | 1,098,231 | $ | 191,200 | $ | 160,750 | $ | 35,877 | $ | 5,886 | $ | — | $ | 79,334 | $ | — | $ | 1,571,278 | ||||||||||||||||||
Americas | 42,443 | 7,092 | 63,915 | 42,961 | 12,050 | 428 | 12,876 | (289 | ) | 181,476 | ||||||||||||||||||||||||||
Europe, Middle East and Africa | 21,226 | 1,847 | 12,991 | 62,840 | 12,095 | — | 3,581 | — | 114,580 | |||||||||||||||||||||||||||
Total | $ | 1,161,900 | $ | 200,139 | $ | 237,656 | $ | 141,678 | $ | 30,031 | $ | 428 | $ | 95,791 | $ | (289 | ) | $ | 1,867,334 | |||||||||||||||||
Semiconductor Test | Robotics | |||||||||||||||||||||||||||||||
System on- a-Chip | Memory | System Test | Universal Robots | Mobile Industrial Robots | Wireless Test | Corporate and Eliminations | Total | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
For the Three Months Ended April 2, 2023 (1) | ||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||
Point in Time | $ | 273,275 | $ | 61,258 | $ | 56,857 | $ | 70,029 | $ | 15,959 | $ | 35,363 | $ | — | $ | 512,741 | ||||||||||||||||
Over Time | 73,559 | 6,917 | 17,774 | 2,008 | 1,218 | 3,312 | — | 104,788 | ||||||||||||||||||||||||
Total | $ | 346,834 | $ | 68,175 | $ | 74,631 | $ | 72,037 | $ | 17,177 | $ | 38,675 | $ | — | $ | 617,529 | ||||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||
Asia Pacific | $ | 283,259 | $ | 63,695 | $ | 39,590 | $ | 13,217 | $ | 1,502 | $ | 23,231 | $ | — | $ | 424,494 | ||||||||||||||||
Americas | 41,568 | 2,944 | 28,980 | 20,447 | 11,806 | 12,846 | — | 118,591 | ||||||||||||||||||||||||
Europe, Middle East and Africa | 22,007 | 1,536 | 6,061 | 38,373 | 3,869 | 2,598 | — | 74,444 | ||||||||||||||||||||||||
Total | $ | 346,834 | $ | 68,175 | $ | 74,631 | $ | 72,037 | $ | 17,177 | $ | 38,675 | $ | — | $ | 617,529 | ||||||||||||||||
For the Three Months Ended April 3, 2022 (1) | ||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||
Point in Time | $ | 323,456 | $ | 88,723 | $ | 105,288 | $ | 83,182 | $ | 16,744 | $ | 48,429 | $ | (346 | ) | $ | 665,476 | |||||||||||||||
Over Time | 63,129 | 7,033 | 13,380 | 2,102 | 1,161 | 3,089 | — | 89,894 | ||||||||||||||||||||||||
Total | $ | 386,585 | $ | 95,756 | $ | 118,668 | $ | 85,284 | $ | 17,905 | $ | 51,518 | $ | (346 | ) | $ | 755,370 | |||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||
Asia Pacific | $ | 340,741 | $ | 93,151 | $ | 73,784 | $ | 18,621 | $ | 2,592 | $ | 34,946 | $ | — | $ | 563,835 | ||||||||||||||||
Americas | 29,714 | 2,046 | 36,608 | 28,148 | 8,564 | 9,687 | (346 | ) | 114,421 | |||||||||||||||||||||||
Europe, Middle East and Africa | 16,130 | 559 | 8,276 | 38,515 | 6,749 | 6,885 | — | 77,114 | ||||||||||||||||||||||||
Total | $ | 386,585 | $ | 95,756 | $ | 118,668 | $ | 85,284 | $ | 17,905 | $ | 51,518 | $ | (346 | ) | $ | 755,370 | |||||||||||||||
(1) | Includes “Revenue from Contracts with Customers.” |
April 2, 2023 | December 31, 2022 | |||||||
(in thousands) | ||||||||
Maintenance, service and training | $ | 70,609 | $ | 78,089 | ||||
Extended warranty | 49,343 | 56,180 | ||||||
Customer advances, undelivered elements and other | 41,200 | 59,147 | ||||||
Total deferred revenue and customer advances | $ | 161,152 | $ | 193,416 | ||||
July 3, | December 31, | |||||||
2022 | 2021 | |||||||
(in thousands) | ||||||||
Maintenance, service and training | $ | 83,464 | $ | 81,826 | ||||
Extended warranty | 65,791 | 64,168 | ||||||
Customer advances, undelivered elements and other | 64,229 | 55,112 | ||||||
Total deferred revenue and customer advances | $ | 213,484 | $ | 201,106 | ||||
July 3, | December 31, | |||||||||||||||
2022 | 2021 | April 2, 2023 | December 31, 2022 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Raw material | $ | 193,907 | $ | 155,641 | $ | 264,035 | $ | 256,065 | ||||||||
Work-in-process | 36,184 | 37,740 | 43,987 | 37,982 | ||||||||||||
Finished goods | 65,534 | 49,949 | 44,036 | 30,972 | ||||||||||||
$ | 295,625 | $ | 243,330 | $ | 352,058 | $ | 325,019 | |||||||||
July 3, 2022 | ||||||||||||||||
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 | $ | 447,312 | $ | — | $ | — | $ | 447,312 | ||||||||
Cash equivalents | 95,068 | 29,643 | — | 124,711 | ||||||||||||
Available-for-sale | ||||||||||||||||
Commercial paper | — | 150,443 | — | 150,443 | ||||||||||||
U.S. Treasury securities | — | 73,100 | — | 73,100 | ||||||||||||
Corporate debt securities | — | 49,344 | — | 49,344 | ||||||||||||
Debt mutual funds | 6,514 | — | — | 6,514 | ||||||||||||
U.S. government agency securities | — | 4,693 | — | 4,693 | ||||||||||||
Certificates of deposit and time deposits | — | 1,261 | — | 1,261 | ||||||||||||
Non-U.S. government securities | — | 546 | — | 546 | ||||||||||||
Equity securities: | ||||||||||||||||
Mutual funds | 35,944 | — | — | 35,944 | ||||||||||||
$ | 584,838 | $ | 309,030 | $ | — | $ | 893,868 | |||||||||
Derivative assets | — | 103 | — | 103 | ||||||||||||
Total | $ | 584,838 | $ | 309,133 | $ | — | $ | 893,971 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | $ | — | $ | 233 | $ | — | $ | 233 | ||||||||
Total | $ | — | $ | 233 | $ | — | $ | 233 | ||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 542,380 | $ | 29,643 | $ | — | $ | 572,023 | ||||||||
Marketable securities | — | 209,846 | — | 209,846 | ||||||||||||
Long-term marketable securities | 42,458 | 69,541 | — | 111,999 | ||||||||||||
Prepayments and other current assets | — | 103 | — | 103 | ||||||||||||
Total | $ | 584,838 | $ | 309,133 | $ | — | $ | 893,971 | ||||||||
Liabilities | . | |||||||||||||||
Other current liabilities | $ | — | $ | 233 | $ | — | $ | 233 | ||||||||
Total | $ | — | $ | 233 | $ | — | $ | 233 | ||||||||
December 31, 2021 | ||||||||||||||||
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 | $ | 628,740 | $ | — | $ | — | $ | 628,740 | ||||||||
Cash equivalents | 412,212 | 81,247 | — | 493,459 | ||||||||||||
Available-for-sale | — | |||||||||||||||
Commercial paper | — | 189,620 | — | 189,620 | ||||||||||||
U.S. Treasury securities | — | 77,789 | — | 77,789 | ||||||||||||
Corporate debt securities | — | 56,901 | — | 56,901 | ||||||||||||
Debt mutual funds | 7,971 | — | — | 7,971 | ||||||||||||
U.S. government agency securities | — | 4,610 | — | 4,610 | ||||||||||||
Certificates of deposit and time deposits | — | 1,356 | — | 1,356 | ||||||||||||
Non-U.S. government securities | — | 589 | — | 589 | ||||||||||||
Equity securities: | ||||||||||||||||
Mutual Funds | 39,253 | — | — | 39,253 | ||||||||||||
$ | 1,088,176 | $ | 412,112 | $ | — | $ | 1,500,288 | |||||||||
Derivative assets | — | 92 | — | 92 | ||||||||||||
Total | $ | 1,088,176 | $ | 412,204 | $ | — | $ | 1,500,380 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | — | 118 | — | 118 | ||||||||||||
Total | $ | — | $ | 118 | $ | — | $ | 118 | ||||||||
April 2, 2023 | ||||||||||||||||
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 | $ | 244,542 | $ | — | $ | — | $ | 244,542 | ||||||||
Cash equivalents | 252,374 | 152,292 | — | 404,666 | ||||||||||||
Available-for-sale | ||||||||||||||||
U.S. Treasury securities | — | 52,168 | — | 52,168 | ||||||||||||
Corporate debt securities | — | 51,369 | — | 51,369 | ||||||||||||
Commercial paper | — | 47,548 | — | 47,548 | ||||||||||||
U.S. government agency securities | — | 7,394 | — | 7,394 | ||||||||||||
Debt mutual funds | 6,800 | — | — | 6,800 | ||||||||||||
Certificates of deposit and time deposits | — | 1,754 | — | 1,754 | ||||||||||||
Non-U.S. government securities | — | 554 | — | 554 | ||||||||||||
Equity securities: | ||||||||||||||||
Mutual funds | 42,246 | — | — | 42,246 | ||||||||||||
Total | $ | 545,962 | $ | 313,079 | $ | — | $ | 859,041 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | $ | — | $ | 1,980 | $ | — | $ | 1,980 | ||||||||
Total | $ | — | $ | 1,980 | $ | — | $ | 1,980 | ||||||||
(Level 1) | (Level 2) | (Level 3) | Total | (Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,040,952 | $ | 81,247 | $ | — | $ | 1,122,199 | $ | 496,916 | $ | 152,292 | $ | — | $ | 649,208 | ||||||||||||||||
Marketable securities | — | 244,231 | — | 244,231 | — | 92,895 | — | 92,895 | ||||||||||||||||||||||||
Long-term marketable securities | 47,224 | 86,634 | — | 133,858 | 49,046 | 67,892 | — | 116,938 | ||||||||||||||||||||||||
Prepayments and other current assets | — | 92 | — | 92 | ||||||||||||||||||||||||||||
Total | $ | 1,088,176 | $ | 412,204 | $ | — | $ | 1,500,380 | $ | 545,962 | $ | 313,079 | $ | — | $ | 859,041 | ||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
Other current liabilities | $ | — | $ | 118 | $ | — | $ | 118 | $ | — | $ | 1,980 | $ | — | $ | 1,980 | ||||||||||||||||
Total | $ | — | $ | 118 | $ | — | $ | 118 | $ | — | $ | 1,980 | $ | — | $ | 1,980 | ||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, | July 4, | July 3, | July 4, | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at beginning of period | $ | — | $ | — | $ | — | $ | 7,227 | ||||||||
Fair value adjustment (a) | — | — | — | (7,227 | ) | |||||||||||
Balance at end of period | $ | — | $ | — | $ | — | $ | — | ||||||||
December 31, 2022 | ||||||||||||||||
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 | $ | 632,417 | $ | — | $ | — | $ | 632,417 | ||||||||
Cash equivalents | 161,767 | 60,589 | — | 222,356 | ||||||||||||
Available for sale securities: | ||||||||||||||||
Corporate debt securities | — | 50,856 | — | 50,856 | ||||||||||||
U.S. Treasury securities | — | 39,649 | — | 39,649 | ||||||||||||
Commercial paper | — | 7,159 | — | 7,159 | ||||||||||||
Debt mutual funds | 6,580 | — | — | 6,580 | ||||||||||||
U.S. government agency securities | — | 6,352 | — | 6,352 | ||||||||||||
Certificates of deposit and time deposits | — | 1,740 | — | 1,740 | ||||||||||||
Non-U.S. government securities | — | 535 | — | 535 | ||||||||||||
Equity securities: | ||||||||||||||||
Mutual funds | 37,518 | — | — | 37,518 | ||||||||||||
Total | $ | 838,282 | $ | 166,880 | $ | — | $ | 1,005,162 | ||||||||
Derivative assets | — | 86 | — | 86 | ||||||||||||
Total | $ | 838,282 | $ | 166,966 | $ | — | $ | 1,005,248 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | $ | — | $ | 4,215 | $ | — | $ | 4,215 | ||||||||
Total | $ | — | $ | 4,215 | $ | — | $ | 4,215 | ||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 794,184 | $ | 60,589 | $ | — | $ | 854,773 | ||||||||
Marketable securities | — | 39,612 | — | 39,612 | ||||||||||||
Long-term marketable securities | 44,098 | 66,679 | — | 110,777 | ||||||||||||
Prepayments | — | 86 | — | 86 | ||||||||||||
Total | $ | 838,282 | $ | 166,966 | $ | — | $ | 1,005,248 | ||||||||
Liabilities | ||||||||||||||||
Other current liabilities | $ | — | $ | 4,215 | $ | — | $ | 4,215 | ||||||||
Total | $ | — | $ | 4,215 | $ | — | $ | 4,215 | ||||||||
April 2, 2023 | December 31, 2022 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 649,208 | $ | 649,208 | $ | 854,773 | $ | 854,773 | ||||||||
Marketable securities | 209,833 | 209,833 | 150,389 | 150,389 | ||||||||||||
Derivative assets | — | — | 86 | 86 | ||||||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | 1,980 | 1,980 | 4,215 | 4,215 | ||||||||||||
Convertible debt | 35,109 | 119,586 | 50,115 | 139,007 |
July 3, 2022 | December 31, 2021 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 572,023 | $ | 572,023 | $ | 1,122,199 | $ | 1,122,199 | ||||||||
Marketable securities | 321,845 | 321,845 | 378,089 | 378,089 | ||||||||||||
Derivative assets | 103 | 103 | 92 | 92 | ||||||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | 233 | 233 | 118 | 118 | ||||||||||||
Convertible debt | 74,428 | 233,339 | 108,426 | 604,648 |
July 3, 2022 | ||||||||||||||||||||
Available-for-Sale | ||||||||||||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Commercial paper | $ | 150,695 | $ | 8 | $ | (260 | ) | $ | 150,443 | $ | 137,162 | |||||||||
U.S. Treasury securities | 75,962 | 42 | (2,904 | ) | 73,100 | 71,861 | ||||||||||||||
Corporate debt securities | 53,274 | 147 | (4,077 | ) | 49,344 | 46,289 | ||||||||||||||
Debt mutual funds | 6,783 | — | (269 | ) | 6,514 | 3,245 | ||||||||||||||
U.S. government agency securities | 4,786 | — | (93 | ) | 4,693 | 4,693 | ||||||||||||||
Certificates of deposit and time deposits | 1,261 | — | — | 1,261 | — | |||||||||||||||
Non-U.S. government securities | 546 | — | — | 546 | — | |||||||||||||||
$ | 293,307 | $ | 197 | $ | (7,603 | ) | $ | 285,901 | $ | 263,250 | ||||||||||
April 2, 2023 | ||||||||||||||||||||
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 | $ | 55,615 | $ | 38 | $ | (3,485 | ) | $ | 52,168 | $ | 49,669 | |||||||||
Corporate debt securities | 56,040 | 41 | (4,712 | ) | 51,369 | 49,131 | ||||||||||||||
Commercial paper | 47,225 | 337 | (14 | ) | 47,548 | 16,845 | ||||||||||||||
U.S. government agency securities | 7,427 | 9 | (42 | ) | 7,394 | 4,419 | ||||||||||||||
Debt mutual funds | 7,130 | — | (330 | ) | 6,800 | 3,312 | ||||||||||||||
Certificates of deposit and time deposits | 1,754 | — | — | 1,754 | — | |||||||||||||||
Non-U.S. government securities | 554 | — | — | 554 | — | |||||||||||||||
$ | 175,745 | $ | 425 | $ | (8,583 | ) | $ | 167,587 | $ | 123,376 | ||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Marketable securities | $ | 210,598 | $ | 8 | $ | (760 | ) | $ | 209,846 | $ | 195,003 | |||||||||
Long-term marketable securities | 82,709 | 189 | (6,843 | ) | 76,055 | 68,247 | ||||||||||||||
$ | 293,307 | $ | 197 | $ | (7,603 | ) | $ | 285,901 | $ | 263,250 | ||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Marketable securities | $ | 92,915 | $ | 337 | $ | (357 | ) | $ | 92,895 | $ | 60,438 | |||||||||
Long-term marketable securities | 82,830 | 88 | (8,226 | ) | 74,692 | 62,938 | ||||||||||||||
$ | 175,745 | $ | 425 | $ | (8,583 | ) | $ | 167,587 | $ | 123,376 | ||||||||||
December 31, 2022 | ||||||||||||||||||||
Available-for-Sale | ||||||||||||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Corporate debt securities | $ | 57,006 | $ | 3 | $ | (6,153 | ) | $ | 50,856 | $ | 50,667 | |||||||||
U.S. Treasury securities | 44,030 | — | (4,381 | ) | 39,649 | 39,649 | ||||||||||||||
Commercial paper | 7,089 | 70 | — | 7,159 | — | |||||||||||||||
Debt mutual funds | 6,997 | — | (417 | ) | 6,580 | 3,095 | ||||||||||||||
U.S. government agency securities | 6,442 | — | (90 | ) | 6,352 | 6,352 | ||||||||||||||
Certificates of deposit and time deposits | 1,740 | — | — | 1,740 | — | |||||||||||||||
Non-U.S. government securities | 535 | — | — | 535 | — | |||||||||||||||
$ | 123,839 | $ | 73 | $ | (11,041 | ) | $ | 112,871 | $ | 99,763 | ||||||||||
December 31, 2021 | ||||||||||||||||||||
Available-for-Sale | ||||||||||||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Commercial paper | $ | 189,614 | $ | 15 | $ | (9 | ) | $ | 189,620 | $ | 22,784 | |||||||||
U.S. Treasury securities | 77,707 | 551 | (470 | ) | 77,789 | 46,435 | ||||||||||||||
Corporate debt securities | 52,266 | 4,863 | (227 | ) | 56,901 | 19,422 | ||||||||||||||
Debt mutual funds | 7,928 | 43 | — | 7,971 | — | |||||||||||||||
U.S. government agency securities | 4,617 | 5 | (12 | ) | 4,610 | 3,296 | ||||||||||||||
Certificates of deposit and time deposits | 1,356 | — | — | 1,356 | — | |||||||||||||||
Non-U.S. government securities | 589 | — | — | 589 | — | |||||||||||||||
$ | 334,077 | $ | 5,477 | $ | (718 | ) | $ | 338,836 | $ | 91,937 | ||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Marketable securities | $ | 244,213 | $ | 64 | $ | (46 | ) | $ | 244,231 | $ | 54,798 | |||||||||
Long-term marketable securities | 89,864 | 5,413 | (672 | ) | 94,605 | 37,139 | ||||||||||||||
$ | 334,077 | $ | 5,477 | $ | (718 | ) | $ | 338,836 | $ | 91,937 | ||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Marketable securities | $ | 39,950 | $ | 70 | $ | (408 | ) | $ | 39,612 | $ | 30,713 | |||||||||
Long-term marketable securities | 83,889 | 3 | (10,633 | ) | 73,259 | 69,050 | ||||||||||||||
$ | 123,839 | $ | 73 | $ | (11,041 | ) | $ | 112,871 | $ | 99,763 | ||||||||||
July 3, 2022 | ||||||||
Cost | Fair Market Value | |||||||
(in thousands) | ||||||||
Due within one year | $ | 210,598 | $ | 209,846 | ||||
Due after 1 year through 5 years | 32,283 | 31,069 | ||||||
Due after 5 years through 10 years | 5,055 | 4,736 | ||||||
Due after 10 years | 38,588 | 33,736 | ||||||
Total | $ | 286,524 | $ | 279,387 | ||||
April 2, 2023 | ||||||||
Cost | Fair Market Value | |||||||
(in thousands) | ||||||||
Due within one year | $ | 92,915 | $ | 92,895 | ||||
Due after 1 year through 5 years | 31,721 | 30,672 | ||||||
Due after 5 years through 10 years | 5,022 | 4,612 | ||||||
Due after 10 years | 38,957 | 32,608 | ||||||
Total | $ | 168,615 | $ | 160,787 | ||||
July 3, 2022 | December 31, 2021 | |||||||||||||||||||||||
Buy Position | Sell Position | Net Total | Buy Position | Sell Position | Net Total | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Japanese Yen | $ | (32.5 | ) | $ | — | $ | (32.5 | ) | $ | (31.4 | ) | $ | — | $ | (31.4 | ) | ||||||||
Taiwan Dollar | (27.2 | ) | — | (27.2 | ) | (35.1 | ) | — | (35.1 | ) | ||||||||||||||
Korean Won | (3.1 | ) | — | (3.1 | ) | (4.2 | ) | — | (4.2 | ) | ||||||||||||||
British Pound Sterling | (1.0 | ) | — | (1.0 | ) | (1.8 | ) | — | (1.8 | ) | ||||||||||||||
Singapore Dollar | — | 40.0 | 40.0 | — | 61.9 | 61.9 | ||||||||||||||||||
Euro | — | 39.8 | 39.8 | — | 44.9 | 44.9 | ||||||||||||||||||
Philippine Peso | — | 3.2 | 3.2 | — | 3.9 | 3.9 | ||||||||||||||||||
Chinese Yuan | — | 2.8 | 2.8 | — | 2.8 | 2.8 | ||||||||||||||||||
Total | $ | (63.8 | ) | $ | 85.8 | $ | 22.0 | $ | (72.5 | ) | $ | 113.5 | $ | 41.0 | ||||||||||
April 2, 2023 | December 31, 2022 | |||||||||||||||||||||||
Buy Position | Sell Position | Net Total | Buy Position | Sell Position | Net Total | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Japanese Yen | $ | (57.7 | ) | $ | — | $ | (57.7 | ) | $ | (37.1 | ) | $ | — | $ | (37.1 | ) | ||||||||
Taiwan Dollar | (38.3 | ) | — | (38.3 | ) | (29.2 | ) | — | (29.2 | ) | ||||||||||||||
Korean Won | (3.1 | ) | — | (3.1 | ) | (6.4 | ) | — | (6.4 | ) | ||||||||||||||
British Pound Sterling | (1.2 | ) | — | (1.2 | ) | (1.2 | ) | — | (1.2 | ) | ||||||||||||||
Singapore Dollar | — | 35.7 | 35.7 | — | 33.5 | 33.5 | ||||||||||||||||||
Euro | — | 24.3 | 24.3 | — | 38.4 | 38.4 | ||||||||||||||||||
Philippine Peso | — | 2.5 | 2.5 | — | 2.7 | 2.7 | ||||||||||||||||||
Chinese Yuan | — | 1.9 | 1.9 | — | 2.2 | 2.2 | ||||||||||||||||||
Total | $ | (100.3 | ) | $ | 64.4 | $ | (35.9 | ) | $ | (73.9 | ) | $ | 76.8 | $ | 2.9 | |||||||||
April 2, 2023 | December 31, 2022 | |||||||||||||||||||||||
Buy Position | Sell Position | Net Total | Buy Position | Sell Position | Net Total | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Japanese Yen | $ | (13.6 | ) | $ | 30.2 | $ | 16.6 | $ | (23.4 | ) | $ | 61.2 | $ | 37.8 | ||||||||||
Taiwan Dollar | — | — | — | (5.5 | ) | 10.9 | 5.4 | |||||||||||||||||
Total | $ | (13.6 | ) | $ | 30.2 | $ | 16.6 | $ | (28.9 | ) | $ | 72.1 | $ | 43.2 | ||||||||||
Balance Sheet Location | April 2, 2023 | December 31, 2022 | ||||||||||
(in thousands) | ||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||
Foreign exchange forward contracts | Prepayments | $ | — | $ | 86 | |||||||
Foreign exchange forward contracts | Other current liabilities | (1,057 | ) | (990 | ) | |||||||
Derivatives designated as hedging instruments: | ||||||||||||
Foreign exchange option contracts | Other current liabilities | (923 | ) | (3,225 | ) | |||||||
Total derivatives | $ | (1,980 | ) | $ | (4,129 | ) | ||||||
Balance Sheet Location | July 3, 2022 | December 31, 2021 | ||||||||
(in thousands) | ||||||||||
Derivatives not designated as hedging instruments: | ||||||||||
Foreign exchange contracts | Prepayments | $ | 103 | $ | 92 | |||||
Foreign exchange contracts | Other current liabilities | (233 | ) | (118 | ) | |||||
Total derivatives | $ | (130 | ) | $ | (26 | ) | ||||
Location of (Gains) Losses | For the Three Months Ended | For the Six Months Ended | ||||||||||||||||
Recognized in | July 3, | July 4, | July 3, | July 4, | ||||||||||||||
Statement of Operations | 2022 | 2021 | 2022 | 2021 | ||||||||||||||
(in thousands) | ||||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||
Foreign exchange contracts | Other (income) expense, net | $ | (1,703 | ) | $ | 1,531 | $ | (3,455 | ) | $ | 3,650 |
For the Three Months Ended | ||||||||||||
Location of Losses (Gains) Recognized in Statement of Operations | April 2, 2023 | April 3, 2022 | ||||||||||
(in thousands) | ||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||
Foreign exchange forward contracts | Other (income) expense, net | $ | 1,259 | $ | (1,752 | ) | ||||||
Derivatives designated as hedging instruments: | ||||||||||||
Foreign exchange option contracts | Revenue | 1,538 | — | |||||||||
Total Derivatives | $ | 2,797 | $ | (1,752 | ) | |||||||
July 3, 2022 | December 31, 2021 | April 2, 2023 | December 31, 2022 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Debt principal | $ | 74,688 | $ | 116,980 | $ | 35,109 | $ | 50,228 | ||||||||
Unamortized debt issuance fees | 260 | 8,554 | — | 113 | ||||||||||||
Net Carrying amount of convertible debt | $ | 74,428 | $ | 108,426 | ||||||||||||
Net carrying amount of convertible debt | $ | 35,109 | $ | 50,115 | ||||||||||||
July 3, 2022 | December 31, 2021 | |||||||
(in thousands) | ||||||||
Current debt | $ | 9,632 | $ | 19,182 | ||||
Long-term debt | 64,796 | 89,244 | ||||||
Net carrying amount of convertible debt | $ | 74,428 | $ | 108,426 | ||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Contractual interest expense on the coupon | $ | 121 | $ | 1,072 | $ | 432 | $ | 2,311 | ||||||||
Amortization of debt issuance fees recognized as interest expense (2) | 64 | 3,511 | 130 | 7,347 | ||||||||||||
Total interest expense on the convertible debt | $ | 185 | $ | 4,583 | $ | 562 | $ | 9,658 | ||||||||
For the Three Months Ended | ||||||||
April 2, 2023 | April 3, 2022 | |||||||
(in thousands) | ||||||||
Contractual interest expense on the coupon | $ | 138 | $ | 311 | ||||
Amortization of the issue fees recognized as interest expense | 113 | 66 | ||||||
Total interest expense on the convertible debt | $ | 251 | $ | 377 | ||||
April 2, 2023 | December 31, 2022 | |||||||
(in thousands) | ||||||||
Contract manufacturer and supplier prepayments | $ | 494,849 | $ | 491,105 | ||||
Prepaid taxes | 22,677 | 18,625 | ||||||
Prepaid maintenance and other services | 16,591 | 14,545 | ||||||
Other prepayments | 14,997 | 8,687 | ||||||
Total prepayments | $ | 549,114 | $ | 532,962 | ||||
July 3, | December 31, | |||||||
2022 | 2021 | |||||||
(in thousands) | ||||||||
Contract manufacturer and supplier prepayments | $ | 460,727 | $ | 364,478 | ||||
Prepaid maintenance and other services | 17,421 | 13,660 | ||||||
Prepaid taxes | 8,675 | 15,090 | ||||||
Other prepayments | 11,270 | 13,038 | ||||||
Total prepayments | $ | 498,093 | $ | 406,266 | ||||
For the Three Months Ended | ||||||||
April 2, 2023 | April 3, 2022 | |||||||
(in thousands) | ||||||||
Balance at beginning of period | $ | 14,181 | $ | 24,577 | ||||
Accruals for warranties issued during the period | 4,117 | 4,100 | ||||||
Accruals related to pre-existing warranties | (405 | ) | (2,758 | ) | ||||
Settlements made during the period | (4,992 | ) | (5,814 | ) | ||||
Balance at end of period | $ | 12,901 | $ | 20,105 | ||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, | July 4, | July 3, | July 4, | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at beginning of period | $ | 20,105 | $ | 23,893 | $ | 24,577 | $ | 16,633 | ||||||||
Accruals for warranties issued during the period | 6,429 | 10,197 | 10,530 | 22,078 | ||||||||||||
Accruals related to pre-existing warranties | (1,611 | ) | (3,450 | ) | (4,370 | ) | (3,003 | ) | ||||||||
Settlements made during the period | (8,887 | ) | (4,964 | ) | (14,701 | ) | (10,032 | ) | ||||||||
Balance at end of period | $ | 16,036 | $ | 25,676 | $ | 16,036 | $ | 25,676 | ||||||||
For the Three Months Ended | ||||||||
April 2, 2023 | April 3, 2022 | |||||||
(in thousands) | ||||||||
Balance at beginning of period | $ | 56,180 | $ | 64,168 | ||||
Deferral of new extended warranty revenue | 4,413 | 11,774 | ||||||
Recognition of extended warranty deferred revenue | (11,250 | ) | (10,216 | ) | ||||
Balance at end of period | $ | 49,343 | $ | 65,726 | ||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, | July 4, | July 3, | July 4, | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at beginning of period | $ | 65,726 | $ | 53,908 | $ | 64,168 | $ | 51,929 | ||||||||
Deferral of new extended warranty revenue | 9,788 | 16,290 | 21,563 | 23,805 | ||||||||||||
Recognition of extended warranty deferred revenue | (9,723 | ) | (6,673 | ) | (19,940 | ) | (12,209 | ) | ||||||||
Balance at end of period | $ | 65,791 | $ | 63,525 | $ | 65,791 | $ | 63,525 | ||||||||
For the Six Months Ended | ||||||||
July 3, 2022 | July 4, 2021 | |||||||
Risk-free interest rate | 1.4 | % | 0.2 | % | ||||
Teradyne volatility-historical | 47.1 | % | 43.9 | % | ||||
NYSE Composite Index volatility-historical | 22.7 | % | 22.9 | % | ||||
Dividend yield | 0.4 | % | 0.4 | % |
For the Three Months Ended | ||||||||
April 2, 2023 | April 3, 2022 | |||||||
Risk-free interest rate | 3.9 | % | 1.4 | % | ||||
Teradyne volatility-historical | 50.2 | % | 47.1 | % | ||||
NYSE Composite Index volatility-historical | 24.8 | % | 22.7 | % | ||||
Dividend yield | 0.4 | % | 0.4 | % |
For the Six Months Ended | ||||||||
July 3, 2022 | July 4, 2021 | |||||||
Expected life (years) | 4.0 | 5.0 | ||||||
Risk-free interest rate | 1.6 | % | 0.4 | % | ||||
Volatility-historical | 43.7 | % | 37.8 | % | ||||
Dividend yield | 0.4 | % | 0.4 | % |
For the Three Months Ended | ||||||||
April 2, 2023 | April 3, 2022 | |||||||
Expected life (years) | 4.0 | 4.0 | ||||||
Risk-free interest rate | 3.7 | % | 1.6 | % | ||||
Volatility-historical | 46.7 | % | 43.7 | % | ||||
Dividend yield | 0.4 | % | 0.4 | % |
Foreign Currency Translation Adjustment | Unrealized Gains (Losses) on Marketable Securities | Retirement Plans Prior Service Credit | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Six Months Ended July 3, 2022 | ||||||||||||||||
Balance at December 31, 2021, net of tax of $0, $1,055, $(1,128), $0, respectively | $ | (10,818 | ) | $ | 3,704 | $ | 1,166 | $ | (5,948 | ) | ||||||
Other comprehensive loss before reclassifications, net of tax of $0, $(2,573), $0, respectively | (37,307 | ) | (9,910 | ) | — | $ | (47,217 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $59, $(1), respectively | — | 209 | (3 | ) | 206 | |||||||||||
Net current period other comprehensive loss, net of tax of $0, $(2,514), $(1), respectively | (37,307 | ) | (9,701 | ) | (3 | ) | (47,011 | ) | ||||||||
Balance at July 3, 2022, net of tax of $0, $(1,459), $(1,129), respectively | $ | (48,125 | ) | $ | (5,997 | ) | $ | 1,163 | $ | (52,959 | ) | |||||
Six Months Ended July 4, 2021 | ||||||||||||||||
Balance at December 31, 2020, net of tax of $0, $1,910, $(1,126), respectively | $ | 25,389 | $ | 6,954 | $ | 1,173 | $ | 33,516 | ||||||||
Other comprehensive loss before reclassifications, net of tax of $0, $(472), $0, respectively | (15,974 | ) | (1,776 | ) | — | (17,750 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(121), $(1), respectively | — | (441 | ) | (3 | ) | (444 | ) | |||||||||
Net current period other comprehensive loss, net of tax of $0, $(593), $(1), respectively | (15,974 | ) | (2,217 | ) | (3 | ) | (18,194 | ) | ||||||||
Balance at July 4, 2021, net of tax of $0, $1,317, $(1,127), respectively | $ | 9,415 | $ | 4,737 | $ | 1,170 | $ | 15,322 | ||||||||
Foreign Currency Translation Adjustment | Unrealized (Losses) Gains on Marketable Securities | Unrealized (Losses) Gains on Cash Flow Hedges | Retirement Plans Prior Service Credit | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Three Months Ended April 2, 2023 | ||||||||||||||||||||
Balance at December 31, 2022, net of tax of $0, $(2,308), $(708), $(1,130), respectively | $ | (39,849 | ) | $ | (8,661 | ) | $ | (2,517 | ) | $ | 1,159 | $ | (49,868 | ) | ||||||
Other comprehensive gain before reclassifications, net of tax of $0, $503, $167, $0, respectively | 9,309 | 2,294 | 596 | — | 12,199 | |||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $2, $338, $0, respectively | — | 5 | 1,200 | (2 | ) | 1,203 | ||||||||||||||
Net current period other comprehensive gain (loss), net of tax of $0, $505, $505 $0, respectively | 9,309 | 2,299 | 1,796 | (2 | ) | 13,402 | ||||||||||||||
Balance at April 2, 2023, net of tax of $0, $(1,803), $(203), $(1,130) respectively | $ | (30,540 | ) | $ | (6,362 | ) | $ | (721 | ) | $ | 1,157 | $ | (36,466 | ) | ||||||
Three Months Ended April 3, 2022 | ||||||||||||||||||||
Balance at December 31, 2021, net of tax of $0, $1,055, $0, $(1,128), respectively | $ | (10,818 | ) | $ | 3,704 | $ | — | $ | 1,166 | $ | (5,948 | ) | ||||||||
Other comprehensive loss before reclassifications, net of tax of $0, $(1,333), $0, $0, respectively | (8,076 | ) | (5,388 | ) | — | — | (13,464 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(18), $0, $0, respectively | — | (65 | ) | — | (2 | ) | (67 | ) | ||||||||||||
Net current period other comprehensive loss, net of tax of $0, $(1,351), $0, $0, respectively | (8,076 | ) | (5,453 | ) | — | (2 | ) | (13,531 | ) | |||||||||||
Balance at April 3, 2022, net of tax of $0, $(296), $0, $(1,128), respectively | $ | (18,894 | ) | $ | (1,749 | ) | $ | — | $ | 1,164 | $ | (19,479 | ) | |||||||
Details about Accumulated Other Comprehensive Income (Loss) Components | For the Three Months Ended | For the Six Months Ended | Affected Line Item in the Statements of Operations | |||||||||||||||
July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | |||||||||||||||
(in thousands) | ||||||||||||||||||
Available-for-sale | ||||||||||||||||||
Unrealized (losses) gains, net of tax of $(77), $(2), $(59), $121, respectively | $ | (274 | ) | $ | (3 | ) | $ | (209 | ) | $ | 441 | Other (income) | ||||||
Defined benefit postretirement plan: | ||||||||||||||||||
Amortization of prior service credit, net of tax of $0, $0, $1, $1, respectively | 2 | 2 | 3 | 3 | (a) | |||||||||||||
Total reclassifications, net of tax of $(77), $(2), $(58), $122, respectively | $ | (272 | ) | $ | (1 | ) | $ | (206 | ) | $ | 444 | Net income | ||||||
Details about Accumulated Other Comprehensive Income (Loss) Components | For the Three Months Ended | Affected Line Item in the Statements of Operations | ||||||||||
April 2, | April 3, | |||||||||||
2023 | 2022 | |||||||||||
(in thousands) | ||||||||||||
Available-for-sale | ||||||||||||
Unrealized (losses) gains, net of tax of $(2) and $18, respectively | $ | (5 | ) | $ | 65 | Other (income) expense, net | | |||||
Cash flow hedges: | ||||||||||||
Unrealized losses, net of tax of $(338) and $0, respectively | (1,200 | ) | — | Revenue | ||||||||
Defined benefit pension and postretirement plans: | ||||||||||||
Amortization of prior service benefit, net of tax of $0 and $0, respectively | 2 | 2 | (a) | |||||||||
Total reclassifications, net of tax of $(340) and $18, respectively | $ | (1,203 | ) | $ | 67 | Net income | ||||||
(a) | The amortization of prior service credit is included in the computation of net periodic postretirement benefit cost. See Note O : “Retirement Plans.” |
Industrial Automation | Wireless Test | Semiconductor Test | System Test | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance at December 31, 2021 | ||||||||||||||||||||
Goodwill | $ | 405,971 | $ | 361,819 | $ | 262,101 | $ | 158,699 | $ | 1,188,590 | ||||||||||
Accumulated impairment losses | — | (353,843 | ) | (260,540 | ) | (148,183 | ) | (762,566 | ) | |||||||||||
Total Goodwill | 405,971 | 7,976 | 1,561 | 10,516 | 426,024 | |||||||||||||||
Foreign currency translation adjustment | (28,225 | ) | — | (66 | ) | — | (28,291 | ) | ||||||||||||
Balance at July 3, 2022 | ||||||||||||||||||||
Goodwill | 377,746 | 361,819 | 262,035 | 158,699 | 1,160,299 | |||||||||||||||
Accumulated impairment losses | — | (353,843 | ) | (260,540 | ) | (148,183 | ) | (762,566 | ) | |||||||||||
Total Goodwill | $ | 377,746 | $ | 7,976 | $ | 1,495 | $ | 10,516 | $ | 397,733 | ||||||||||
Robotics | Wireless Test | Semiconductor Test | System Test | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Balance at December 31, 2022 | ||||||||||||||||||||
Goodwill | $ | 383,166 | $ | 361,819 | $ | 262,077 | $ | 158,699 | $ | 1,165,761 | ||||||||||
Accumulated impairment losses | — | (353,843 | ) | (260,540 | ) | (148,183 | ) | (762,566 | ) | |||||||||||
383,166 | 7,976 | 1,537 | 10,516 | 403,195 | ||||||||||||||||
Foreign currency translation adjustment | 6,609 | — | 24 | — | 6,633 | |||||||||||||||
Balance at April 2, 2023 | ||||||||||||||||||||
Goodwill | 389,775 | 361,819 | 262,101 | 158,699 | 1,172,394 | |||||||||||||||
Accumulated impairment losses | — | (353,843 | ) | (260,540 | ) | (148,183 | ) | (762,566 | ) | |||||||||||
$ | 389,775 | $ | 7,976 | $ | 1,561 | $ | 10,516 | $ | 409,828 | |||||||||||
Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation Adjustment | Net Carrying Amount | |||||||||||||
Balance at July 3, 2022 | (in thousands) | |||||||||||||||
Developed technology | $ | 272,547 | $ | (229,766 | ) | $ | (6,182 | ) | $ | 36,599 | ||||||
Customer relationships | 57,739 | (50,058 | ) | 149 | 7,830 | |||||||||||
Tradenames and trademarks | 59,387 | (39,706 | ) | (1,601 | ) | 18,080 | ||||||||||
Total intangible assets | $ | 389,673 | $ | (319,530 | ) | $ | (7,634 | ) | $ | 62,509 | ||||||
Balance, December 31, 2021 | ||||||||||||||||
Developed technology | $ | 272,547 | $ | (223,413 | ) | $ | (4,093 | ) | $ | 45,041 | ||||||
Customer relationships | 57,739 | (48,921 | ) | 209 | 9,027 | |||||||||||
Tradenames and trademarks | 59,387 | (37,237 | ) | (583 | ) | 21,567 | ||||||||||
Total intangible assets | $ | 389,673 | $ | (309,571 | ) | $ | (4,467 | ) | $ | 75,635 | ||||||
Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation Adjustment | Net Carrying Amount | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at April 2, 2023 | ||||||||||||||||
Developed technology | $ | 270,967 | $ | (237,269 | ) | $ | (5,560 | ) | $ | 28,138 | ||||||
Customer relationships | 57,739 | (51,756 | ) | 184 | 6,167 | |||||||||||
Tradenames and trademarks | 59,387 | (43,101 | ) | (1,345 | ) | 14,941 | ||||||||||
Total intangible assets | $ | 388,093 | $ | (332,126 | ) | $ | (6,721 | ) | $ | 49,246 | ||||||
Balance, December 31, 2022 | ||||||||||||||||
Developed technology | $ | 270,967 | $ | (234,208 | ) | $ | (5,935 | ) | $ | 30,824 | ||||||
Customer relationships | 57,739 | (51,186 | ) | 172 | 6,725 | |||||||||||
Tradenames and trademarks | 59,387 | (41,930 | ) | (1,528 | ) | 15,929 | ||||||||||
Total intangible assets | $ | 388,093 | $ | (327,324 | ) | $ | (7,291 | ) | $ | 53,478 | ||||||
Year | Amortization Expense | Amortization Expense | ||||||
(in thousands) | (in thousands) | |||||||
2022 | $ | 9,547 | ||||||
2023 | 18,642 | $ | 14,219 | |||||
2024 | 18,336 | 18,749 | ||||||
2025 | 11,154 | 11,320 | ||||||
2026 | 2,333 | 2,371 | ||||||
2027 | 1,155 | |||||||
Thereafter | 2,497 | 1,432 |
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | |||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
Net income for basic and diluted net income per share | $ | 197,787 | $ | 328,319 | $ | 359,715 | $ | 533,831 | ||||||||
Weighted average common shares-basic | 159,563 | 165,995 | 160,805 | 166,243 | ||||||||||||
Effect of dilutive potential common shares: | ||||||||||||||||
Convertible note hedge warrant shares (1) | 9,029 | 10,073 | 9,528 | 9,751 | ||||||||||||
Incremental shares from assumed conversion of convertible notes (2) | 1,900 | 9,578 | 2,220 | 9,944 | ||||||||||||
Restricted stock units | 581 | 1,015 | 730 | 1,205 | ||||||||||||
Stock options | 54 | 78 | 61 | 93 | ||||||||||||
Employee stock purchase plan | 32 | 11 | 23 | 9 | ||||||||||||
Dilutive potential common shares | 11,596 | 20,755 | 12,562 | 21,002 | ||||||||||||
Weighted average common shares-diluted | 171,159 | 186,750 | 173,367 | 187,245 | ||||||||||||
Net income per common share-basic | $ | 1.24 | $ | 1.98 | $ | 2.24 | $ | 3.21 | ||||||||
Net income per common share-diluted | $ | 1.16 | $ | 1.76 | $ | 2.07 | $ | 2.85 | ||||||||
For the Three Months Ended | ||||||||
April 2, | April 3, | |||||||
2023 | 2022 | |||||||
(in thousands, except per share amounts) | ||||||||
Net income for basic and diluted net income per share | $ | 83,531 | $ | 161,928 | ||||
Weighted average common shares-basic | 155,904 | 162,048 | ||||||
Effect of dilutive potential common shares: | ||||||||
Convertible note hedge warrant shares (1) | 8,983 | 10,028 | ||||||
Incremental shares from assumed conversion of convertible notes (2) | 914 | 2,541 | ||||||
Restricted stock units | 453 | 875 | ||||||
Stock options | 48 | 69 | ||||||
Employee stock purchase plan | 6 | 14 | ||||||
Dilutive potential common shares | 10,404 | 13,527 | ||||||
Weighted average common shares-diluted | 166,308 | 175,575 | ||||||
Net income per common share-basic | $ | 0.54 | $ | 1.00 | ||||
Net income per common share-diluted | $ | 0.50 | $ | 0.92 | ||||
(1) | Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price, multiplied by the number of warrant shares. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period. |
(2) | Incremental shares from assumed conversion of the convertible notes were calculated using the difference between the average Teradyne stock price for the period and the conversion price, multiplied by the number of convertible notes shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period. |
For the Three Months Ended | ||||||||||||||||
July 3, 2022 | July 4, 2021 | |||||||||||||||
United States | Foreign | United States | Foreign | |||||||||||||
(in thousands) | ||||||||||||||||
Service cost | $ | 397 | $ | 180 | $ | 452 | $ | 245 | ||||||||
Interest cost | 1,221 | 120 | 1,096 | 88 | ||||||||||||
Expected return on plan assets | (732 | ) | (18 | ) | (936 | ) | (17 | ) | ||||||||
Net actuarial gain | (45 | ) | — | (400 | ) | — | ||||||||||
Total net periodic pension cost | $ | 841 | $ | 282 | $ | 212 | $ | 316 | ||||||||
For the Six Months Ended | ||||||||||||||||
July 3, 2022 | July 4, 2021 | |||||||||||||||
United States | Foreign | United States | Foreign | |||||||||||||
(in thousands) | ||||||||||||||||
Service cost | $ | 794 | $ | 386 | $ | 905 | $ | 491 | ||||||||
Interest cost | 2,443 | 238 | 2,196 | 175 | ||||||||||||
Expected return on plan assets | (1,463 | ) | (38 | ) | (1,872 | ) | (33 | ) | ||||||||
Net actuarial gain | (45 | ) | — | (400 | ) | — | ||||||||||
Total net periodic pension cost | $ | 1,729 | $ | 586 | $ | 829 | $ | 633 | ||||||||
For the Three Months Ended | ||||||||||||||||
April 2, 2023 | April 3, 2022 | |||||||||||||||
United States | Foreign | United States | Foreign | |||||||||||||
(in thousands) | ||||||||||||||||
Service cost | $ | 272 | $ | 109 | $ | 397 | $ | 206 | ||||||||
Interest cost | 1,711 | 262 | 1,222 | 118 | ||||||||||||
Expected return on plan assets | (1,285 | ) | (9 | ) | (732 | ) | (20 | ) | ||||||||
Total net periodic pension cost | $ | 698 | $ | 362 | $ | 887 | $ | 304 | ||||||||
For the Three Months Ended | ||||||||
April 2, | April 3, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Service cost | $ | 9 | $ | 17 | ||||
Interest cost | 61 | 44 | ||||||
Amortization of prior service credit | (2 | ) | (2 | ) | ||||
Total net periodic postretirement benefit cost | $ | 68 | $ | 59 | ||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Service cost | $ | 15 | $ | 17 | $ | 32 | $ | 33 | ||||||||
Interest cost | 45 | 41 | 88 | 85 | ||||||||||||
Amortization of prior service credit | (2 | ) | (2 | ) | (4 | ) | (4 | ) | ||||||||
Net actuarial loss (gain) | 54 | (228 | ) | 54 | (228 | ) | ||||||||||
Total net periodic postretirement benefit cost (credit) | $ | 112 | $ | (172 | ) | $ | 170 | $ | (114 | ) | ||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | |||||||||||||
U.S. statutory federal tax rate | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | ||||||||
Non-deductible officers’ compensation | 1.4 | 0.8 | 1.3 | 0.8 | ||||||||||||
Foreign taxes | (3.2 | ) | (4.3 | ) | (3.3 | ) | (4.5 | ) | ||||||||
Tax credits | (2.0 | ) | (1.2 | ) | (1.8 | ) | (1.2 | ) | ||||||||
International provisions of the U.S. Tax Cuts and Jobs Act of 2017 | (1.0 | ) | (1.7 | ) | (1.2 | ) | (1.6 | ) | ||||||||
Discrete benefit related to equity compensation | (0.2 | ) | (0.2 | ) | (2.9 | ) | (2.4 | ) | ||||||||
Other, net | 1.1 | 0.1 | 1.0 | 0.1 | ||||||||||||
Effective tax rate | 17.1 | % | 14.5 | % | 14.1 | % | 12.2 | % | ||||||||
For the Three Months Ended | ||||||||
April 2, | April 3, | |||||||
2023 | 2022 | |||||||
US statutory federal tax rate | 21.0 | % | 21.0 | % | ||||
Non-deductible officers’ compensation | 0.9 | 1.1 | ||||||
Discrete benefit related to equity compensation | (3.3 | ) | (6.6 | ) | ||||
International provisions of the U.S. Tax Cuts and Jobs Act of 2017 | (3.2 | ) | (1.3 | ) | ||||
Tax credits | (2.5 | ) | (1.6 | ) | ||||
Foreign taxes | (0.6 | ) | (3.4 | ) | ||||
Other, net | 1.7 | 1.0 | ||||||
Effective tax rate | 14.0 | % | 10.2 | % | ||||
Semiconductor Test | System Test | Industrial Automation | Wireless Test | Corporate and Eliminations | Consolidated | Semiconductor Test | System Test | Robotics | Wireless Test | Corporate and Eliminations | Consolidated | |||||||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended July 3, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended April 2, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | $ | 541,348 | $ | 134,702 | $ | 101,055 | $ | 63,854 | $ | (193 | ) | $ | 840,766 | $ | 415,009 | $ | 74,631 | $ | 89,214 | $ | 38,675 | $ | — | $ | 617,529 | |||||||||||||||||||||||
Income (loss) before income taxes (1)(2) | 177,782 | 54,042 | (6,406 | ) | 25,393 | (12,219 | ) | 238,592 | 96,185 | 15,275 | (18,490 | ) | 9,352 | (5,238 | ) | 97,084 | ||||||||||||||||||||||||||||||||
Total assets (3) | 1,449,878 | 229,359 | 644,099 | 118,445 | 1,046,645 | 3,488,426 | 1,386,851 | 173,669 | 676,092 | 87,875 | 1,058,920 | 3,383,407 | ||||||||||||||||||||||||||||||||||||
Three Months Ended July 4, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended April 3, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | $ | 833,976 | $ | 104,819 | $ | 92,186 | $ | 54,893 | $ | (146 | ) | $ | 1,085,728 | $ | 482,341 | $ | 118,668 | $ | 103,189 | $ | 51,518 | $ | (346 | ) | $ | 755,370 | ||||||||||||||||||||||
Income (loss) before income taxes (1)(2) | 337,302 | 33,954 | (9,837 | ) | 21,472 | 1,135 | 384,026 | 149,705 | 41,322 | (5,098 | ) | 18,619 | (24,189 | ) | 180,359 | |||||||||||||||||||||||||||||||||
Total assets (3) | 1,518,941 | 146,296 | 687,022 | 117,702 | 1,530,961 | 4,000,922 | 1,296,070 | 187,283 | 675,560 | 113,821 | 1,336,420 | 3,609,154 | ||||||||||||||||||||||||||||||||||||
Six Months Ended July 3, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | $ | 1,023,688 | $ | 253,371 | $ | 204,244 | $ | 115,372 | $ | (539 | ) | $ | 1,596,136 | |||||||||||||||||||||||||||||||||||
Income (loss) before income taxes (1)(2) | 327,487 | 95,365 | (11,504 | ) | 44,012 | (36,409 | ) | 418,951 | ||||||||||||||||||||||||||||||||||||||||
Total assets (3) | 1,449,878 | 229,359 | 644,099 | 118,445 | 1,046,645 | 3,488,426 | ||||||||||||||||||||||||||||||||||||||||||
Six Months Ended July 4, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | $ | 1,362,039 | $ | 237,656 | $ | 172,137 | $ | 95,791 | $ | (289 | ) | $ | 1,867,334 | |||||||||||||||||||||||||||||||||||
Income (loss) before income taxes (1)(2) | 513,670 | 85,015 | (22,804 | ) | 31,088 | 1,050 | 608,019 | |||||||||||||||||||||||||||||||||||||||||
Total assets (3) | 1,518,941 | 146,296 | 687,022 | 117,702 | 1,530,961 | 4,000,922 |
(1) | Included in Corporate and Eliminations are: modification of Teradyne’s former chief executive officer’s outstanding equity awards. |
(2) | Included in income (loss) before taxes are 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 | ||||||||
April 2, | April 3, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Semiconductor Test: | ||||||||
Cost of revenues—inventory charge | $ | 3,768 | $ | — | ||||
Restructuring and other—employee severance | 794 | — | ||||||
System Test: | ||||||||
Cost of revenues—inventory charge | $ | 675 | — | |||||
Robotics: | ||||||||
Cost of revenues—inventory charge | $ | 782 | $ | — | ||||
Wireless: | ||||||||
Cost of revenues—inventory charge | $ | — | $ | 877 | ||||
Corporate and Other: | ||||||||
Selling and administrative - equity modification charge | $ | 5,889 | $ | — | ||||
Restructuring and other—employee severance | 659 | — | ||||||
Restructuring and other—legal settlement charge | — | 14,700 |
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Semiconductor Test: | ||||||||||||||||
Cost of revenues—inventory charge | $ | 2,071 | $ | — | $ | 2,315 | $ | 1,234 | ||||||||
Industrial Automation: | ||||||||||||||||
Cost of revenues—inventory charge | $ | 831 | $ | — | $ | 1,197 | $ | 1,285 | ||||||||
Restructuring and other—acquisition related expenses and compensation | — | — | — | 550 | ||||||||||||
Wireless: | ||||||||||||||||
Cost of revenues—inventory charge | $ | 2,099 | $ | — | $ | 2,976 | $ | 672 | ||||||||
Corporate and Eliminations: | ||||||||||||||||
Restructuring and other—other | $ | 1,500 | $ | 1,700 | $ | 2,000 | $ | 1,846 | ||||||||
Restructuring and other—legal settlement charge | — | — | 14,700 | — | ||||||||||||
Other (income) expense, net—loss on convertible debt conversions | — | 1,175 | — | 5,244 | ||||||||||||
Restructuring and other—AutoGuide contingent consideration adjustment | — | — | — | (7,227 | ) | |||||||||||
Restructuring and other—acquisition related expenses and compensation | — | — | — | (513 | ) |
Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Statements in this Quarterly Report on Form
Overview
We are a leading global supplier of automationautomated test equipment for test and industrial applications.robotics solutions. We design, develop, manufacture and sell automatic test systems and robotics products. Our automatic test systems are used to test semiconductors, wireless products, data storage and complex electronics systems in many industries including the consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Our industrial automationrobotics products include collaborative robotic arms and autonomous mobile robots (“AMRs”) and advanced robotic control software used by global manufacturing, logistics and light industrial customers to improve quality, increase manufacturing and material handling efficiency and decrease manufacturing and logistics costs. Our automatic test equipment and industrial automationrobotics products and services include:
semiconductor test (“Semiconductor Test”) systems;
storage and system level test (“Storage Test”) systems, defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”);
wireless test (“Wireless Test”) systems; and
robotics (“Industrial Automation”Robotics”) products.
The market for our test products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment. A few customers drive significant demand for our test products both through direct sales and sales to the customers’ supply partners. We expect that sales of our test products will continue to be concentrated with a limited number of significant customers for the foreseeable future.
In 2022, we expect lowerthe first quarter of 2023, the demand in the mobility and compute segments of our Semiconductor Test business was lower due to end market slowdown in these segments as well as a slower technology transition in one of our largest
Our Industrial AutomationRobotics segment consists of Universal Robots A/S (“UR”), a leading supplier of collaborative robotic arms and Mobile Industrial Robots A/S (“MiR”), a leading maker of AMRs for industrial automation and AutoGuide, LLC (“AutoGuide”), a maker of high payload AMRs.automation. The market for our Industrial AutomationRobotics segment products is dependent on the adoption of new automation technologies by large manufacturers as well as small and medium enterprises (SMEs)(“SMEs”) throughout the world. We expect our UR and MiR businessesRobotics sales channel expansion combined with new products to continue to growdrive growth in 2022, while our AutoGuide business will focus on continuing to invest to scale and integrate high payload AMR solutions.
In the first quarter of 2023 we met customer demand, in part, through faster than expected recoveries from supply chain constraints. Both our test and industrial automationrobotics businesses may continue tostill be impactedinfluenced by supply constraints during the remainder of 2023, which will in turncould impact our revenue and is expected to, along with inflation, increase costs in 2022. Through thecosts. Our second quarter of 2022, inflation has not had a material impact on our results. In the second quarter 2022, we were unable to supply approximately $40 million of revenue in our test businesses for which we had customer demand. Our third quarter 20222023 forecast excludes approximately $50$25 million of revenue, primarily in our test businesses, due to these continued supply chain constraints.
Our financial statements are denominated in U.S. dollars. While the majority of our revenues are in U.S. dollars, approximately 70 percent of our Robotics revenue is denominated in foreign currencies. In 2022, the strengthening of the U.S. dollar was a factor in lower than forecasted revenues in our Robotics segment. Continued strengthening of the U.S. dollar would negatively affect Robotics revenue growth in 2023.
Our corporate strategy continues to focus on profitably gaining market share in our test businesses through the introduction of differentiated products that target expanding segments and accelerating growth through continued investment in our Industrial AutomationRobotics businesses. We plan to execute on our strategy while balancing capital allocations between returning capital to our shareholders through stock repurchases and dividends and using capital for opportunistic acquisitions.
26
Impact of the
The novel coronavirus
Due to the
We believe the
Supply Chain Constraints and Inflationary Pressures
The global supply shortage of electrical components, including semiconductor chips, continued to impact our supply chain in the secondfirst quarter of 2022.2023. As a result, we experienced, and expect to continue to experience, increases in our lead times and costs for certain components for certain of our products. In addition, while not material, inflationary pressures contributed to increased costs for product components and wage inflation, impacting our cost of products, gross margin and profit for the quarter. Our supply chain team, and our suppliers, continue to manage numerous supply, production, and logistics obstacles. While not material through the secondfirst quarter of 2022,2023, in an effort to mitigate these risks, in some cases, we have incurred higher costs due to investment in supply chain resiliency and to secure available inventory or have extended or placed
See Part II—Item 1A, “Risk Factors,” included in our Annual Report on Form
Critical Accounting Policies and Estimates
We have identified the policies which are critical to understanding our business and our results of operations. There have been no significant changes during the sixthree months ended July 3, 2022April 2, 2023 to the items disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form
Critical accounting estimates are complex and may require significant judgment by management. Changes to the underlying assumptions may have a material impact on our financial condition and results of operations. These estimates may change, as new events occur and additional information is obtained. Actual results could differ significantly from these estimates under different assumptions or conditions.
Preparation of Financial Statements and Use of Estimates
The preparation of consolidated financial statements requires management to make estimates and judgments that affect the amounts reported in the financial statements. Actual results may differ significantly from these estimates under different assumptions or conditions.
27
SELECTED RELATIONSHIPS WITHIN THE CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | |||||||||||||
Percentage of revenues: | ||||||||||||||||
Revenues: | ||||||||||||||||
Products | 83 | % | 88 | % | 83 | % | 86 | % | ||||||||
Services | 17 | 12 | 17 | 14 | ||||||||||||
Total revenues | 100 | 100 | 100 | 100 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Cost of products | 33 | 36 | 32 | 35 | ||||||||||||
Cost of services | 7 | 5 | 7 | 5 | ||||||||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) | 40 | 40 | 40 | 41 | ||||||||||||
Gross profit | 60 | 60 | 60 | 59 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling and administrative | 17 | 13 | 18 | 14 | ||||||||||||
Engineering and development | 13 | 10 | 14 | 11 | ||||||||||||
Acquired intangible assets amortization | — | — | 1 | 1 | ||||||||||||
Restructuring and other | — | — | 1 | — | ||||||||||||
Total operating expenses | 31 | 24 | 33 | 26 | ||||||||||||
Income from operations | 29 | 36 | 27 | 33 | ||||||||||||
Non-operating (income) expense: | ||||||||||||||||
Interest income | — | — | — | — | ||||||||||||
Interest expense | — | 1 | — | 1 | ||||||||||||
Other (income) expense, net | 1 | — | 1 | — | ||||||||||||
Income before income taxes | 28 | 35 | 26 | 33 | ||||||||||||
Income tax provision | 5 | 5 | 4 | 4 | ||||||||||||
Net income | 24 | % | 30 | % | 23 | % | 29 | % | ||||||||
For the Three Months Ended | ||||||||
April 2, | April 3, | |||||||
2023 | 2022 | |||||||
Percentage of revenues: | ||||||||
Revenues: | ||||||||
Products | 77 | % | 83 | % | ||||
Services | 23 | 17 | ||||||
|
|
|
| |||||
Total revenues | 100 | 100 | ||||||
Cost of revenues: | ||||||||
Cost of products | 32 | 32 | ||||||
Cost of services | 10 | 8 | ||||||
|
|
|
| |||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) | 42 | 40 | ||||||
|
|
|
| |||||
Gross profit | 58 | 60 | ||||||
Operating expenses: | ||||||||
Selling and administrative | 24 | 19 | ||||||
Engineering and development | 17 | 14 | ||||||
Acquired intangible assets amortization | 1 | 1 | ||||||
Restructuring and other | — | 2 | ||||||
|
|
|
| |||||
Total operating expenses | 43 | 36 | ||||||
|
|
|
| |||||
Income from operations | 15 | 25 | ||||||
Non-operating (income) expense: | ||||||||
Interest income | (1 | ) | — | |||||
Interest expense | — | — | ||||||
Other (income) expense, net | — | 1 | ||||||
|
|
|
| |||||
Income before income taxes | 16 | 24 | ||||||
Income tax provision | 2 | 2 | ||||||
|
|
|
| |||||
Net income | 14 | % | 21 | % | ||||
|
|
|
|
Results of Operations
First Quarter 20222023 Compared to SecondFirst Quarter 2021
Revenues
Revenues by our reportable segments were as follows:
For the Three Months Ended | ||||||||||||
July 3, 2022 | July 4, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 541.3 | $ | 834.0 | $ | (292.7 | ) | |||||
System Test | 134.7 | 104.8 | 29.9 | |||||||||
Industrial Automation | 101.1 | 92.2 | 8.9 | |||||||||
Wireless Test | 63.9 | 54.9 | 9.0 | |||||||||
Corporate and Eliminations | (0.2 | ) | (0.1 | ) | (0.1 | ) | ||||||
$ | 840.8 | $ | 1,085.7 | $ | (244.9 | ) | ||||||
For the Three Months Ended | ||||||||||||
April 2, | April 3, | Dollar | ||||||||||
2023 | 2022 | Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 415.0 | $ | 482.3 | $ | (67.3 | ) | |||||
System Test | 74.6 | 118.7 | (44.1 | ) | ||||||||
Robotics | 89.2 | 103.2 | (14.0 | ) | ||||||||
Wireless Test | 38.7 | 51.5 | (12.8 | ) | ||||||||
|
|
|
|
|
| |||||||
$ | 617.5 | $ | 755.4 | $ | (137.9 | ) | ||||||
|
|
|
|
|
|
The decrease in Semiconductor Test revenues of $292.7$67.3 million, or 35.1%14.0%, was driven primarily by lower tester sales in high performance compute processor and mobile applications and lower memory test sales of flashDRAM memory testers. The increasedecrease in System Test revenues of $29.9$44.1 million, or 28.5%37.2%, was primarily due to higherlower sales in Storage Test of system level and hard disk drive testers.testers and lower sales in Defense/Aerospace. The increasedecrease in Industrial AutomationRobotics revenues of $8.9$14.0 million, or 9.7%13.6%, was driven primarily by higherlower demand for UR’s collaborative robotic arms and MiR’s autonomous mobile robots. The risedecrease in Wireless Test revenues of $9.0$12.8 million, or 16.4%24.9%, was primarily due to increasea decrease in connectivity test products.
28
Revenues by country as a percentage of total revenues were as follows (1):
For the Three Months Ended | ||||||||
July 3, 2022 | July 4, 2021 | |||||||
Taiwan | 25 | % | 44 | % | ||||
Korea | 17 | 9 | ||||||
United States | 14 | 9 | ||||||
China | 13 | 15 | ||||||
Europe | 8 | 5 | ||||||
Thailand | 6 | 3 | ||||||
Malaysia | 5 | 2 | ||||||
Japan | 5 | 5 | ||||||
Philippines | 3 | 6 | ||||||
Singapore | 2 | 1 | ||||||
Rest of World | 2 | 1 | ||||||
100 | % | 100 | % | |||||
For the Three Months Ended | ||||||||
April 2, 2023 | April 3, 2022 | |||||||
Taiwan | 18 | % | 18 | % | ||||
United States | 18 | 15 | ||||||
Korea | 12 | 13 | ||||||
Europe | 12 | 10 | ||||||
China | 10 | 19 | ||||||
Japan | 9 | 6 | ||||||
Singapore | 8 | 4 | ||||||
Philippines | 5 | 2 | ||||||
Malaysia | 3 | 5 | ||||||
Thailand | 3 | 5 | ||||||
Rest of World | 2 | 3 | ||||||
|
|
|
| |||||
100 | % | 100 | % | |||||
|
|
|
|
(1) | Revenues attributable to a country are based on location of customer site. |
Gross Profit
Our gross profit was as follows:
For the Three Months Ended | ||||||||||||
July 3, 2022 | July 4, 2021 | Dollar/Point Change | ||||||||||
(in millions) | ||||||||||||
Gross profit | $ | 506.4 | $ | 647.0 | $ | (140.6 | ) | |||||
Percent of total revenues | 60.2 | % | 59.6 | % | 0.6 |
For the Three Months Ended | ||||||||||||
April 2, 2023 | April 3, 2022 | Dollar/Point Change | ||||||||||
(in millions) | ||||||||||||
Gross profit | $ | 356.4 | $ | 454.9 | $ | (98.5 | ) | |||||
Percent of total revenues | 57.7 | % | 60.2 | % | (2.5 | ) |
Gross profit as a percent of revenue increaseddecreased by 0.62.5 points, primarily due to favorablelower volume and product mix in Semiconductor Test partially offset byand higher material costs due to inflation.
Selling and Administrative
Selling and administrative expenses were as follows:
For the Three Months Ended | ||||||||||||
July 3, 2022 | July 4, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Selling and administrative | $ | 139.5 | $ | 140.2 | $ | (0.7 | ) | |||||
Percent of total revenues | 16.6 | % | 12.9 | % |
For the Three Months Ended | ||||||||||||
April 2, 2023 | April 3, 2022 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Selling and administrative | $ | 151.0 | $ | 140.2 | $ | 10.8 | ||||||
Percent of total revenues | 24.4 | % | 18.6 | % |
The decreaseincrease of $0.7$10.8 million in selling and administrative expenses was primarily due to the charge of $5.9 million recorded in the three months ended April 2, 2023, related to the modification of Teradyne’s chief executive officer’s outstanding equity awards in connection with his retirement and higher spending in Robotics, Semiconductor Test and System Test, partially offset by lower variable compensation.
29
Engineering and Development
Engineering and development expenses were as follows:
For the Three Months Ended | ||||||||||||
July 3, 2022 | July 4, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Engineering and development | $ | 112.0 | $ | 110.0 | $ | 2.0 | ||||||
Percent of total revenues | 13.3 | % | 10.1 | % |
For the Three Months Ended | ||||||||||||
April 2, 2023 | April 3, 2022 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Engineering and development | $ | 105.8 | $ | 108.1 | $ | (2.3 | ) | |||||
Percent of total revenues | 17.1 | % | 14.3 | % |
The increasedecrease of $2.0$2.3 million in engineering and development expenses was primarily due to lower variable compensation, partially offset by higher spending in Semiconductor Test and Industrial Automation, partially offset by lower variable compensation.
Restructuring and Other
During the three months ended JulyApril 2, 2023, we recorded $2.0 million of severance charges related to headcount reduction of 67 people primarily in Semiconductor Test, Robotics and Corporate.
During the three months ended April 3, 2022, and July 4, 2021, we recorded a charge of $1.5$14.7 million related to the arbitration claim filed against Teradyne and $1.7 million, respectively,AutoGuide related to an earn-out dispute, which was settled on March 25, 2022 for an increase in environmental and legal liabilities.
Interest and Other
For the Three Months Ended | ||||||||||||
July 3, 2022 | July 4, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Interest income | $ | (1.0 | ) | $ | (0.6 | ) | $ | (0.4 | ) | |||
Interest expense | 0.9 | 5.6 | $ | (4.7 | ) | |||||||
Other (income) expense, net | 9.4 | (0.1 | ) | $ | 9.5 |
For the Three Months Ended | ||||||||||||
April 2, 2023 | April 3, 2022 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Interest income | $ | (5.3 | ) | $ | (0.7 | ) | $ | (4.6 | ) | |||
Interest expense | 1.0 | 1.0 | — | |||||||||
Other (income) expense, net | 0.1 | 5.2 | (5.1 | ) |
Interest expense decreasedincome increased by $4.7$4.6 million primarily due to the January 1, 2022 adoption of ASU
Income (Loss) Before Income Taxes
For the Three Months Ended | ||||||||||||
July 3, 2022 | July 4, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 177.8 | $ | 337.3 | $ | (159.5 | ) | |||||
System Test | 54.0 | 34.0 | 20.0 | |||||||||
Wireless Test | 25.4 | 21.5 | 3.9 | |||||||||
Industrial Automation | (6.4 | ) | (9.8 | ) | 3.4 | |||||||
Corporate and Eliminations (1) | (12.2 | ) | 1.1 | (13.3 | ) | |||||||
$ | 238.6 | $ | 384.0 | $ | (145.4 | ) | ||||||
For the Three Months Ended | ||||||||||||
April 2, 2023 | April 3, 2022 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 96.2 | $ | 149.7 | $ | (53.5 | ) | |||||
System Test | 15.3 | 41.3 | (26.0 | ) | ||||||||
Wireless Test | 9.4 | 18.6 | (9.2 | ) | ||||||||
Robotics | (18.5 | ) | (5.1 | ) | (13.4 | ) | ||||||
Corporate and Other (1) | (5.2 | ) | (24.2 | ) | 19.0 | |||||||
|
|
|
|
|
| |||||||
$ | 97.1 | $ | 180.4 | $ | (83.3 | ) | ||||||
|
|
|
|
|
|
(1) | Included in Corporate and Eliminations are |
The decrease in income before income taxes in Semiconductor Test was driven primarily by lower revenues in compute processor and mobile applications and lower memory test sales of flashDRAM memory testers. The increasedecrease in income before income taxes
30
in System Test was primarily due to higherlower sales in Storage Test of system level and hard disk drive testers. The risedecrease in income before taxes in Wireless Test was driven primarily by an increasea decrease in sales of connectivity test products. The lower lossesdecrease in income before taxes in Industrial AutomationRobotics was driven primarily by higherlower demand for UR’s collaborative robotic arms and MiR’s autonomous mobile robots.
Income Taxes
The effective tax rate for the three months ended JulyApril 2, 2023 and April 3, 2022 was 14.0% and July 4, 2021 was 17.1% and 14.5%10.2%, respectively. The increase in the effective tax rate from the three months ended July 4, 2021April 3, 2022 to the three months ended July 3, 2022April 2, 2023 was primarily attributable to a projected shift in the geographic distribution of income, which increases the income subject to taxation in higher tax rate jurisdictions relative to lower tax rate jurisdictions and a reductiondecrease in the benefit related tofrom equity compensation. These increases in expense were partially offset by increases in benefit from the international provisions of the U.S. Tax Cuts and Jobs Act of 2017 and an increase in
For the Six Months Ended | ||||||||||||
July 3, 2022 | July 4, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 1,023.7 | $ | 1,362.0 | $ | (338.3 | ) | |||||
System Test | 253.4 | 237.7 | 15.7 | |||||||||
Industrial Automation | 204.2 | 172.1 | 32.1 | |||||||||
Wireless Test | 115.4 | 95.8 | 19.6 | |||||||||
Corporate and Eliminations | (0.5 | ) | (0.3 | ) | (0.2 | ) | ||||||
$ | 1,596.1 | $ | 1,867.3 | $ | (271.1 | ) | ||||||
For the Six Months Ended | ||||||||
July 3, 2022 | July 4, 2021 | |||||||
Taiwan | 22 | % | 40 | % | ||||
China | 16 | 17 | ||||||
Korea | 15 | 9 | ||||||
United States | 15 | 9 | ||||||
Europe | 9 | 6 | ||||||
Thailand | 5 | 5 | ||||||
Japan | 5 | 4 | ||||||
Malaysia | 5 | 3 | ||||||
Philippines | 3 | 5 | ||||||
Singapore | 3 | 2 | ||||||
Rest of World | 2 | — | ||||||
100 | % | 100 | % | |||||
For the Six Months Ended | ||||||||||||
July 3, | July 4, | Dollar/Point | ||||||||||
2022 | 2021 | Change | ||||||||||
(in millions) | ||||||||||||
Gross profit | $ | 961.3 | $ | 1,108.6 | $ | (147.3 | ) | |||||
Percent of total revenues | 60.2 | % | 59.4 | % | 0.8 |
For the Six Months Ended | ||||||||||||
July 3, | July 4, | Dollar | ||||||||||
2022 | 2021 | Change | ||||||||||
(in millions) | ||||||||||||
Selling and administrative | $ | 279.7 | $ | 270.0 | $ | 9.7 | ||||||
Percent of total revenues | 17.5 | % | 14.5 | % |
For the Six Months Ended | ||||||||||||
July 3, | July 4, | Dollar | ||||||||||
2022 | 2021 | Change | ||||||||||
(in millions) | ||||||||||||
Engineering and development | $ | 220.1 | $ | 210.4 | $ | 9.7 | ||||||
Percent of total revenues | 13.8 | % | 11.3 | % |
For the Six Months Ended | ||||||||||||
July 3, | July 4, | Dollar | ||||||||||
2022 | 2021 | Change | ||||||||||
(in millions) | ||||||||||||
Interest income | $ | (1.7 | ) | $ | (1.4 | ) | $ | (0.3 | ) | |||
Interest expense | 1.9 | 11.6 | (9.7 | ) | ||||||||
Other (income) expense, net | 14.6 | 3.7 | 10.9 |
For the Six Months Ended | ||||||||||||
July 3, | July 4, | Dollar | ||||||||||
2022 | 2021 | Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 327.5 | $ | 513.7 | $ | (186.2 | ) | |||||
System Test | 95.4 | 85.0 | 10.4 | |||||||||
Wireless Test | 44.0 | 31.1 | 12.9 | |||||||||
Industrial Automation | (11.5 | ) | (22.8 | ) | 11.3 | |||||||
Corporate and Eliminations (1) | (36.4 | ) | 1.1 | (37.5 | ) | |||||||
$ | 419.0 | $ | 608.0 | $ | (189.0 | ) | ||||||
Contractual Obligations
There have been no changes outside of the ordinary course of business to our contractual obligations as disclosed in our Annual Report on Form2021.
Liquidity and Capital Resources
Our cash, cash equivalents and marketable securities balances decreased by $606.4$146.1 million in the sixthree months ended July 3, 2022April 2, 2023 to $893.9$859.0 million.
Operating activities during the sixthree months ended July 3, 2022April 2, 2023 provided cash of $122.9$19.3 million. Changes in operating assets and liabilities used cash of $309.1 million. This was$106.5 million due to a $287.8$1.9 million increase in operating assets and a $21.3$104.7 million decrease in operating liabilities.
The increase in operating assets was primarily due to a $146.4$23.7 million increase in accounts receivable,inventories, a $94.8$15.4 million increase in prepayments and other assets due to prepayments to our contract manufacturers, andpartially offset by a $46.7$37.2 million increasedecrease in inventories.
The decrease in operating liabilities was due to a $61.7$93.1 million decrease in accrued employee compensation, a $6.9$32.7 million decrease in other accrued liabilities,deferred revenue and $2.6customer advance payments, and $1.2 million of retirement plan contributions, partially offset by a $25.0$12.5 million increase in income taxes, a $9.6 million increase in other accrued liabilities, and a $0.3 million increase in accounts payable, a $14.2 million increase in deferred revenue and customer advance payments, and a $10.8 million increase in income taxes.
Investing activities during the sixthree months ended July 3, 2022April 2, 2023 used cash of $54.3$94.9 million due to $247.9$69.3 million used for purchases of marketable securities, and $89.7$41.4 million used for purchases of property, plant and equipment, partially offset by $139.7$7.9 million and $143.6$7.4 million in proceeds from maturitiessales and salesmaturities of marketable securities, respectively.
Financing activities during the sixthree months ended July 3, 2022April 2, 2023 used cash of $626.8$129.5 million due to $532.8$93.3 million used for the repurchase of 5.00.9 million shares of common stock at an average price of $107.5$104.88 per share, $42.3 million used for payments of convertible debt principal, $35.4 million used for dividend payments, and $32.8$19.9 million used for payment related to net settlements of employee stock compensation awards, $17.2 million used for dividend payments, and $15.2 million used for payments of convertible debt principal, partially offset by $16.0 million from the issuance of common stock under employee stock purchase and stock option plans.
Operating activities during the three months ended April 3, 2022 provided cash of $7.5 million. Changes in operating assets and liabilities used cash of $210.2 million. This was due to an $83.6 million increase in operating assets and a $126.6 million decrease in operating liabilities.
The increase in operating assets was due to a $74.3 million increase in prepayments and other assets due to prepayments to our contract manufacturers, a $9.5 million increase in inventories, partially offset by a $0.2 million decrease in accounts receivable.
The decrease in operating liabilities was due to a $114.0 million decrease in accrued employee compensation, a $13.8 million decrease in other accrued liabilities, a $7.6 million decrease in income taxes, and $1.3 million of retirement plan contributions, partially offset by a $6.7 million increase in deferred revenue and customer advance payments, and a $3.4 million increase in accounts payable.
Investing activities during the three months ended April 3, 2022 used cash of $82.7 million due to $166.0 million used for purchases of marketable securities and $44.0 million used for purchases of property, plant and equipment, partially offset by $96.7 million and $30.6 million in proceeds from maturities and sales of marketable securities, respectively.
31
Financing activities during the three months ended April 3, 2022 used cash of $254.6 million due to $201.5 million used for the repurchase of 1.8 million shares of common stock at an average price of $115.12 per share, $31.0 million used for payment related to net settlements of employee stock compensation awards, $20.7 million used for payments of convertible debt principal, $17.9 million used for dividend payments, partially offset by $16.5 million from the issuance of common stock under employee stock purchase and stock option plans.
In January 2022 and May 2022, Teradyne’s Board of Directors declared a 10% increase in the quarterly cash dividend ofto $0.11 per share. Dividend payments for the three and six months ended JulyApril 3, 2022 were $17.5 million and $35.4 million, respectively.
In January 2021,2023, our Board of Directors cancelled the 2021 repurchase program and approved a new repurchase program for up to $2.0 billion of common stock. Unless terminated by resolution of our Board of Directors, the repurchase program will expire when we have repurchased all shares authorized for repurchase under the share repurchase program. We intend to repurchase a minimumup to $500.0 million of $750.0 millioncommon stock in 2022.
During the sixthree months ended July 3, 2022, TeradyneApril 2, 2023, we repurchased 5.00.9 million shares of common stock for $532.8$93.3 million at an average price of $107.5$104.88 per share. During the sixthree months ended July 4, 2021, TeradyneApril 3, 2022, we repurchased 1.61.8 million shares of common stock for $196.6$201.5 million at an average price of $125.69$115.12 per share. The cumulative repurchases under the $2.0 billion common stock repurchase program as of July 3, 2022 were 9.7 million shares of common stock for $1,132.8 million at an average price per share of $116.45.
While we declared a quarterly cash dividend and authorized a share repurchase program, we may reduce or eliminate the cash dividend or share repurchase program in the future. Future cash dividends and stock repurchases are subject to the discretion of our Board of Directors, which will consider, among other things, our earnings, capital requirements and financial condition.
On May 1, 2020, we entered into a credit agreement providing a three-year, senior secured revolving credit facility of $400 million. On December 10, 2021, the credit agreement was amended to extend the senior secured revolving credit facility to December 10, 2026. On October 5, 2022, the credit agreement was amended to increase the amount of the credit facility to $750.0 million from $400.0 million. As of AugustMay 5, 2022,2023, we have not borrowed any funds under the credit facility.
We believe our cash, cash equivalents and marketable securities balance will be sufficient to pay our quarterly dividend and meet our working capital and expenditure needs for at least the next twelve months. Inflation has not had a significant long-term impact on earnings. At this time, the
Equity Compensation Plans
In addition to our 1996 Employee Stock Purchase Program as discussed in Note Q: “Stock-Based Compensation” in our 20212022 Annual Report on Form
The purpose of the 1996 Employee Stock Purchase Plan is to encourage stock ownership by all eligible employees of Teradyne. The purpose of the 2006 Equity Plan is to provide equity ownership and compensation opportunities in Teradyne to our employees, officers directors, consultants and/or advisors.and directors. Both plans were approved by our shareholders.
Recently Issued Accounting Pronouncements
For the sixthree months ended July 3, 2022,April 2, 2023, there were no recently issued accounting pronouncements that had, or are expected to have, a material impact to our consolidated financial statements.
Item 3: | Quantitative and Qualitative Disclosures about Market Risks |
For “Quantitative and Qualitative Disclosures about Market Risk” affecting Teradyne, see Part 2 Item 7A, “Quantitative and Qualitative Disclosures about Market Risks,” in our Annual Report on Form
In addition to market risks described in our Annual Report on Form
32
we carry the Notes at face value less unamortized discount on our balance sheet, and we present the fair value for required disclosure purposes only. In connection with the offering of the Notes we also sold warrants to the option counterparties. These transactions have been accounted for as an adjustment to our shareholders’ equity. The convertible note hedge transactions are expected to reduce the potential equity dilution upon conversion of the Notes. The warrants along with any shares issuable upon conversion of the Notes will have a dilutive effect on our earnings per share to the extent that the average market price of our common stock for a given reporting period exceeds the applicable strike price or conversion price of the warrants or Notes, respectively.
Hypothetical Change in Teradyne Stock Price | Fair Value | Estimated change in fair value | Hypothetical percentage increase (decrease) in fair value | |||||||||
10% Increase | $ | 253,683 | $ | 20,344 | 8.7 | % | ||||||
No Change | 233,339 | — | — | |||||||||
10% Decrease | 212,995 | (20,344 | ) | (8.7 | ) |
Hypothetical Change in Teradyne Stock Price | Fair Value | Estimated change in fair value | Hypothetical percentage increase (decrease) in fair value | |||||||||
10% Increase | $ | 131,584 | $ | 11,998 | 10.0 | % | ||||||
No Change | 119,586 | — | — | |||||||||
10% Decrease | 107,588 | (11.998 | ) | (10.0 | ) |
Item 4: | Controls and Procedures |
As of the end of the period covered by this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule
There have been no changes in our internal control over financial reporting (as defined in Rules
PART II. OTHER INFORMATION
Item 1: | Legal Proceedings |
We are subject to various legal proceedings and claims which have arisen in the ordinary course of business such as, but not limited to, patent, employment, commercial and environmental matters. Teradyne believes that it has meritorious defenses against all pending claims and intends to vigorously contest them. While it is not possible to predict or determine the outcomes of any pending claims or to provide possible ranges of losses that may arise, Teradyne believes the potential losses associated with all of these actions are unlikely to have a material adverse effect on its business, financial position or results of operations.
On March 8, 2021, Industrial Automation LLC submitted a demand for arbitration against Teradyne and AutoGuide in Wilmington, Delaware alleging that Teradyne and AutoGuide breached certain provisions of the Membership Interests Purchase Agreement (the “Purchase Agreement”), dated as of October 18, 2019, among Industrial Automation LLC, Teradyne and AutoGuide. The arbitration demand sought full acceleration of the maximum
Item 1A: | Risk Factors |
In addition to other information set forth in this Form
The risks described in our Annual Report on Form
Adverse developments affecting the financial results
On March 10, 2023, Silicon Valley Bank (SVB), who is a lender in our revolving credit facility and where we maintain certain accounts and cash deposits, was placed into receivership with the Federal Deposit Insurance Corporation (FDIC), which resulted in all funds held at SVB being temporarily inaccessible by SVB’s customers. As of March 13, 2023, access to our cash and cash equivalents at SVB was fully restored. Although our cash balances at SVB are insignificant and we do not expect further developments at SVB to have a material impact on our resultscash and cash equivalents, we do hold cash balances in several large financial institutions significantly in excess of operationsFDIC and global insurance limits. If other banks and financial condition.institutions with whom we have banking relationships enter receivership or become insolvent in the future, we may be unable to access, and we may lose, some or all of our existing cash, cash equivalents and investments to the extent those funds are not insured or otherwise protected by the FDIC.
33
Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds |
In January 2021,2023, Teradyne’s Board of Directors cancelled our 2021 repurchase program and approved a new repurchase program for up to $2.0 billion of common stock. During the sixthree months ended July 3, 2022, TeradyneApril 2, 2023, we repurchased 5.00.9 million shares of common stock for $532.8a total cost of $93.7 million at an average price of $107.5$104.88 per share. We record share repurchases at cost, which includes broker commissions and related excise taxes. During the sixthree months ended July 4, 2021, TeradyneApril 3, 2022, we repurchased 1.61.8 million shares of common stock for $196.6$201.5 million at an average price of $125.69$115.12 per share. The cumulative repurchases under the $2.0 billion common stock repurchase program as of July 3, 2022 were 9.7 million shares of common stock for $1,132.8 million at an average price per share of $116.45.
The following table includes information with respect to repurchases we made of our common stock during the three months ended July 3, 2022April 2, 2023 (in thousands except per share price):
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 | ||||||||||||
April 4, 2022 - May 1, 2022 | 853 | $ | 111.53 | 852 | $ | 1,103,537 | ||||||||||
May 2, 2022 - May 29, 2022 | 989 | $ | 104.60 | 974 | $ | 1,001,700 | ||||||||||
May 30, 2022 - July 3, 2022 | 1,381 | $ | 97.45 | 1,380 | $ | 867,202 | ||||||||||
3,223 | (1) | $ | 103.37 | (1) | 3,206 | |||||||||||
Period | Total Number of Shares (or Units) Purchased | Average Price Paid per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may Yet Be Purchased Under the Plans or Programs (2) | ||||||||||||
January 1, 2023 - January 29, 2023 | 147 | $ | 103.09 | — | $ | 2,000,000 | ||||||||||
January 30, 2023 – February 26, 2023 | 414 | $ | 105.18 | 369 | $ | 1,960,941 | ||||||||||
February 27, 2023 – April 2, 2023 | 526 | $ | 104.25 | 524 | $ | 1,906,292 | ||||||||||
|
|
|
|
|
| |||||||||||
1,087 | (1) | $ | 104.44 | (1) | 893 | |||||||||||
|
|
|
|
|
|
(1) | Includes approximately |
(2) | As of January 1, 2023, share repurchases net of share issuances are subject to a 1% excise tax under the Inflation Reduction Act. Excise tax incurred is included as part of the cost basis of shares repurchased in the Condensed Consolidated Statements of Convertible Common Shares and Stockholders’ Equity. |
We satisfy U.S. federal and state minimum withholding tax obligations due upon the vesting and the conversion of restricted stock units into shares of our common stock, by automatically withholding from the shares being issued, a number of shares with an aggregate fair market value on the date of such vesting and conversion that would satisfy the minimum withholding amount due.
Item 4: | Mine Safety Disclosures |
Not Applicable
34
Item 6: | Exhibits |
32.1 | Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) | |
32.2 | Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) | |
101.INS | Inline XBRL Instance Document | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL, and contained in Exhibit 101) |
35
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
TERADYNE, INC. |
Registrant |
/s/ S ANJAY MEHTA |
Sanjay Mehta Vice President, Chief Financial Officer and Treasurer (Duly Authorized Officer and Principal Financial Officer) May 5, |
36