SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-Q
__________________
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 2, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to ______________
Commission File No. 1-6462
TERADYNE, INC.
(Exact name of registrant as specified in its charter)
Massachusetts 04-2272148
(State or Other Jurisdiction (I.R.S.Employer
Incorporation or Organization) Identification No.)
321 Harrison Avenue, Boston, Massachusetts 02118
(Address of principal executive offices) (Zip Code)
617-482-2700
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to the filing requirements for the past 90 days. Yes X No _
The number of shares outstanding of the registrant's only class of
Common Stock as of April 14, 1995 was 38,765,372 shares.
TERADYNE, INC.
INDEX
Page No.
Part I. Financial Information:
Condensed Consolidated Balance Sheets -
April 2, 1995 and December 31, 1994 3
Condensed Consolidated Statements of Income -
Quarters Ended April 2, 1995 and April 3, 1994 4
Condensed Consolidated Statements of Cash Flows -
Quarters Ended April 2, 1995 and April 3, 1994 5
Notes to Condensed Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-8
TERADYNE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
April 2, 1995 Dec.31,1994
------------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $147,519 $182,811
Marketable securities 78,083 19,766
Accounts receivable - trade 149,526 129,074
Inventories:
Parts 55,681 49,216
Assemblies in progress 40,332 42,667
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96,013 91,883
Refundable income taxes 1,064
Deferred tax assets 14,767 14,767
Prepayments and other current assets 9,357 7,294
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Total current assets 495,265 446,659
Property, at cost 408,049 395,248
Less accumulated depreciation (216,934) (211,606)
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Net property 191,115 183,642
Other assets 29,411 25,641
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Total assets $715,791 $655,942
======== ========
LIABILITIES
Current liabilities:
Notes payable - banks $ 9,306 $ 8,431
Current portion of long term debt 371 250
Accounts payable - trade 22,337 13,305
Accrued employees' compensation
and withholdings 34,364 38,263
Unearned service revenue and
customer advances 49,330 46,386
Other accrued liabilities 24,929 27,088
Income taxes payable 12,167 5,437
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Total current liabilities 152,804 139,160
Deferred tax liabilities 14,722 14,722
Long-term debt 9,133 8,806
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Total liabilities 176,659 162,688
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SHAREHOLDERS' EQUITY
Common stock $0.125 par value,
authorized 75,000,000 shares, issued
and outstanding after deduction of
reacquired shares 37,162,714
(36,351,527 in 1994) 4,645 4,544
Additional paid-in capital 265,543 248,497
Retained earnings 268,944 240,213
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Total shareholders' equity 539,132 493,254
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Total liabilities and
shareholders' equity $715,791 $655,942
======== ========
The accompanying notes, together with the Notes to Consolidated
Financial Statements included in the Company's Form 10-K for the year
ended December 31, 1994 are an integral part of the condensed consolidated
financial statements.
TERADYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
For the Quarters Ended
(Dollars in thousands except per share amounts)
April 2, 1995 April 3, 1994
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Net sales $ 213,249 $ 152,012
Expenses:
Cost of sales 117,621 85,662
Engineering and development 19,510 15,857
Selling and administrative 34,431 31,871
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171,562 133,390
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Income from operations 41,687 18,622
Other income (expense):
Interest income 2,963 1,088
Interest expense (449) (470)
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Income before income taxes 44,201 19,240
Provision for income taxes 15,470 5,772
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Net income $ 28,731 $ 13,468
======== ========
Net income per common share $0.76 $0.36
====== ======
Shares used in calculations of
net income per common share 37,912,000 37,226,000
The accompanying notes, together with the Notes to Consolidated
Financial Statements included in the Company's Form 10-K for the year
ended December 31, 1994 are an integral part of the condensed consolidated
financial statements.
TERADYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Three Months Ended
April 2, 1995 April 3, 1994
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(Dollars in thousands)
Cash flows from operating activities:
Net income $ 28,731 $ 13,468
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 7,742 7,908
Amortization 1,006 743
Other non-cash items, net 1,392 967
Changes in operating assets and
liabilities:
Accounts receivable (20,452) (12,780)
Inventories (4,130) (1,376)
Refundable income taxes 1,064 1,736
Other assets (7,331) (4,293)
Accounts payable and accruals 5,918 (8,935)
Income taxes payable 6,730 1,143
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Net cash provided by
(used in) operating
activities 20,670 (1,419)
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Cash flows from investing activities:
Additions to property (12,108) (4,813)
Increase in equipment manufactured
by the Company (3,176) (518)
Purchase of marketable securities (77,591)
Maturities of marketable securities 19,766
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Net cash used in
investing activities (73,109) (5,331)
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Cash flows from financing activities:
Payments of long term debt (208)
Issuance of common stock under
employee stock option and
stock purchase plans 11,815 9,141
Tax benefit from stock options 5,332 2,744
Acquisition of treasury stock (20,536)
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Net cash flows provided
by (used in) financing
activities 17,147 (8,859)
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Decrease in cash and cash equivalents (35,292) (15,609)
Cash and cash equivalents at beginning
of period 182,811 143,578
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Cash and cash equivalents at end
of period $147,519 $127,969
======== ========
Supplementary disclosure of cash flow information:
Cash paid during the period for:
Interest $ 516 $ 753
Income taxes 2,344 149
The accompanying notes, together with the Notes to Consolidated
Financial Statements included in the Company's Form 10-K for the year
ended December 31, 1994 are an integral part of the condensed
consolidated financial statements.
TERADYNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
A. Financial Information
The accompanying condensed consolidated financial statements are
unaudited. However, in the opinion of management, all adjustments
(consisting only of normal recurring accrual entries) necessary for
a fair presentation of such information have been made.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations:
SELECTED RELATIONSHIPS WITHIN THE CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
For the Quarters Ended
April 2, 1995 April 3, 1994
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(Dollars in thousands)
Net sales $213,249 $152,012
======== ========
Net income $ 28,731 $ 13,468
======== ========
Percentage of net sales:
Net sales 100% 100%
Expenses:
Cost of sales 55 56
Engineering and development 9 10
Selling and administrative 16 21
Interest, net (1) 0
----- ----
79 87
Income before income taxes 21 13
Provision for income taxes 7 4
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Net income 14% 9%
===== =====
Provision for income taxes as a percentage
of income before income taxes 35% 30%
===== =====
Sales increased 40% to $213.2 million in the first quarter of 1995 compared
to the first quarter of 1994. Sales increased in each of the major product
lines of the Company - semiconductor test systems, circuit-board test
systems, telecommunications test systems, and backplane connection systems.
The largest increases in sales occurred in semiconductor test systems and
backplane connection systems. Sales of semiconductor test systems grew as
semiconductor manufacturers continued to add capacity in respons
ology products in the Company's commercial customer base. As a result
of the increase in sales volume, income before taxes increased $25 million
to $44.2 million in the first quarter of 1995 compared to the same period
in 1994.
Incoming orders increased 84% in the first quarter of 1995 to $289 million.
Backlog at the end of the first quarter of 1995 was $490 million, compared
to $414 million at December 31, 1994.
Cost of sales was 55% of sales in the first quarter of 1995 compared to 56%
in the first quarter of 1994. This reduction is due to the fact that the
increase in sales volume has permitted increased utilization of certain
fixed and semi-variable components of the Company's overhead structure.
Engineering and development expenses were 9% of sales in the first quarter
of 1995, compared to 10% in the first quarter of 1994. This decline is
attributed to the dollar amount of these expenses increasing at a lesser
rate than sales are increasing. Engineering and development expenses grew
$3.7 million in the first quarter of 1995 compared to the first quarter of
1994, as a result of increased investment in new product development of
semiconductor test systems.
Selling and administrative expenses decreased from 21% of sales to 16% of
sales in the first quarter of 1995 compared to the first quarter of 1994,
as the dollar amount of these expenses increased only 8% while sales
increased 40%.
In the first three months of 1995, the Company had net interest income of
$2.5 million compared to $0.6 million in the first three months of 1994.
This change was due to higher levels of invested cash and higher interest
rates in the first three months of 1995 compared to the first three months
of 1994.
During the first quarter of 1995, the Company's effective tax rate was 35%
compared to 31% for the year ended December 31, 1994. The Company was able
to operate with an effective tax rate below the federal statutory rate of
35% in 1994 through the utilization of tax credit carryforward and foreign
loss carryforward amounts.
Changes in Financial Condition During the First Three Months of 1995
- - --------------------------------------------------------------------
During the first three months of 1995, cash and marketable securities
increased $23 million to a balance of $226 million. Cash flow provided by
operations was $20.7 million. Additional cash of $17.1 million was
generated from the Company's employee stock option and stock purchase plans,
including the related tax benefit. Cash of $15.3 million was used to fund
additions to property, plant and equipment in the first quarter of 1995.
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
OWEN W. ROBBINS
---------------
Owen W. Robbins
Executive Vice President
May 3, 1995