1
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 JULY 1, 2001
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 July 27, 2001 was 175,763,795 shares.
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TERADYNE, INC.
INDEX
PAGE NO.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets as of
July 1, 2001 and December 31, 2000 ........................... 3
Condensed Consolidated Statements of Operations for the
Three and Six Months Ended July 1, 2001 and July 2, 2000...... 4
Condensed Consolidated Statements of Cash Flows for the
Six Months Ended July 1, 2001 and July 2, 2000 ............... 5
Notes to Condensed Consolidated Financial Statements ........... 6-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ................ 11-15
Item 3. Quantitative and Qualitative Disclosures about Market Risk ..... 15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings .............................................. 16
Item 4. Submission of Matters to a Vote of Security Holders ............ 16
Item 6. Exhibits and Reports on Form 8-K ............................... 16
Exhibit Index .......................................................... 17
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TERADYNE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
JULY 1, 2001 DECEMBER 31, 2000
------------ -----------------
(IN THOUSANDS)
Current assets:
Cash and cash equivalents .................................................. $ 144,036 $ 242,421
Marketable securities ...................................................... 56,449 60,154
Accounts receivable ........................................................ 235,085 420,040
Inventories:
Parts ...................................................................... 341,158 318,790
Assemblies in process ...................................................... 133,914 159,123
Finished goods ............................................................. 307 34,650
----------- -----------
475,379 512,563
Deferred tax assets ........................................................ 73,058 93,958
Prepayments and other current assets ....................................... 37,548 48,698
----------- -----------
Total current assets .................................................. 1,021,555 1,377,834
Property, plant, and equipment, at cost: ....................................... 1,406,068 1,254,957
Less: accumulated depreciation ............................................. (564,734) (521,171)
----------- -----------
Net property, plant, and equipment .................................... 841,334 733,786
Marketable securities .......................................................... 146,644 161,848
Other assets ................................................................... 81,243 82,400
----------- -----------
Total assets .......................................................... $ 2,090,776 $ 2,355,868
=========== ===========
LIABILITIES
Current liabilities:
Notes payable - banks ...................................................... $ 6,851 $ 7,389
Current portion of long-term debt .......................................... 266 169
Accounts payable ........................................................... 71,321 153,897
Accrued employees' compensation and withholdings ........................... 75,127 158,817
Deferred revenue and customer advances ..................................... 64,419 183,465
Other accrued liabilities .................................................. 61,497 86,637
Income taxes payable ....................................................... 4,291 28,914
----------- -----------
Total current liabilities ............................................. 283,772 619,288
Deferred tax liabilities ....................................................... 21,985 21,257
Long-term debt ................................................................. 7,957 8,352
----------- -----------
Total liabilities ..................................................... 313,714 648,897
----------- -----------
SHAREHOLDERS' EQUITY
Common stock, $0.125 par value, 1,000,000 shares authorized, 175,014 and
172,559 net shares issued and outstanding at July 1, 2001 and
December 31, 2000, respectively ............................................. 21,877 21,570
Additional paid-in capital ..................................................... 388,687 334,241
Accumulated other comprehensive income ......................................... 1,560 --
Retained earnings .............................................................. 1,364,938 1,351,160
----------- -----------
Total shareholders' equity ............................................ 1,777,062 1,706,971
----------- -----------
Total liabilities and shareholders' equity ............................ $ 2,090,776 $ 2,355,868
=========== ===========
The accompanying notes, together with the Notes to Consolidated Financial
Statements included in Teradyne's Annual Report on Form 10-K for the year ended
December 31, 2000 are an integral part of the condensed consolidated financial
statements.
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TERADYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
---------------------------------- ----------------------------------
JULY 1, 2001 JULY 2, 2000 JULY 1, 2001 JULY 2, 2000
------------ ------------ ------------ ------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Net sales ........................................ $ 365,823 $ 747,458 $ 971,012 $ 1,362,816
Expenses:
Cost of sales ............................... 311,261 403,529 696,868 742,013
Engineering and development ................. 61,324 73,637 132,521 142,662
Selling and administrative .................. 65,130 91,982 139,901 170,938
----------- ----------- ----------- -----------
437,715 569,148 969,290 1,055,613
----------- ----------- ----------- -----------
(Loss) income from operations .................... (71,892) 178,310 1,722 307,203
Interest and other income .................... 19,928 6,235 26,122 11,197
Interest and other expense ................... (2,157) (412) (4,881) (837)
----------- ----------- ----------- -----------
(Loss) income before taxes and cumulative
effect of change in accounting principle ..... (54,121) 184,133 22,963 317,563
(Benefit) provision for income taxes ............. (13,940) 55,240 9,185 95,269
----------- ----------- ----------- -----------
(Loss) income before cumulative effect of
change in accounting principle ............... (40,181) 128,893 13,778 222,294
Cumulative effect of change in accounting
principle, net of applicable tax of $27,488 .. -- -- -- (64,138)
----------- ----------- ----------- -----------
Net (loss) income ................................ $ (40,181) $ 128,893 $ 13,778 $ 158,156
=========== =========== =========== ===========
(Loss) income per common share before
cumulative effect of change in accounting
principle - basic ............................ $ (0.23) $ 0.74 $ 0.08 $ 1.29
=========== =========== =========== ===========
Cumulative effect of change in accounting
principle - basic ............................ $ -- $ -- $ -- $ (0.37)
=========== =========== =========== ===========
Net (loss) income per common share - basic ....... $ (0.23) $ 0.74 $ 0.08 $ 0.92
=========== =========== =========== ===========
(Loss) income per common share before
cumulative effect of change in accounting
principle - diluted .......................... $ (0.23) $ 0.71 $ 0.08 $ 1.23
=========== =========== =========== ===========
Cumulative effect of change in accounting
principle - diluted .......................... $ -- $ -- $ -- $ (0.35)
=========== =========== =========== ===========
Net (loss) income per common share - diluted ..... $ (0.23) $ 0.71 $ 0.08 $ 0.87
=========== =========== =========== ===========
Shares used in calculations of net (loss) income
per common share - basic ..................... 174,538 173,158 174,164 172,643
=========== =========== =========== ===========
Shares used in calculations of net (loss) income
per common share - diluted ................... 174,538 181,697 180,151 181,285
=========== =========== =========== ===========
================================================================================
The accompanying notes, together with the Notes to Consolidated Financial
Statements included in Teradyne's Annual Report on Form 10-K for the year ended
December 31, 2000 are an integral part of the condensed consolidated financial
statements.
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TERADYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE SIX MONTHS ENDED
-------------------------------
JULY 1, 2001 JULY 2, 2000
------------ ------------
(IN THOUSANDS)
Cash flows from operating activities:
Net income ................................................. $ 13,778 $ 158,156
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation .............................................. 62,333 51,003
Amortization .............................................. 3,386 804
Gain in sale of business................................... (14,779) --
Deferred income tax provision (credit) .................... 20,588 (37,949)
Other non-cash items, net ................................. 4,264 951
Changes in operating assets and liabilities net of
business sold:
Accounts receivable ..................................... 180,856 (176,665)
Inventories ............................................. 32,416 (186,870)
Other assets ............................................ 5,954 4,728
Accounts payable and accruals ........................... (310,755) 303,636
Income taxes payable .................................... (17,122) 66,732
--------- ---------
Net cash (used for) provided by operating activities . (19,081) 184,526
--------- ---------
Cash flows from investing activities:
Additions to property, plant and equipment ................. (138,844) (116,346)
Increase in equipment manufactured by Teradyne ............. (34,635) (26,488)
Proceeds from sale of business ............................. 26,250 --
Purchases of available-for-sale marketable securities ...... (84,253) (200,462)
Maturities of available-for-sale marketable securities ..... 77,161 194,790
Purchases of held-to-maturity marketable securities ........ (938) (118,325)
Maturities of held-to-maturity marketable securities ....... 29,539 59,487
--------- ---------
Net cash used for investing activities ............... (125,720) (207,344)
--------- ---------
Cash flows from financing activities:
Payments of long term debt ................................ (836) (91)
Acquisition of treasury stock ............................. -- (46,293)
Issuance of common stock under employee stock
option and stock purchase plans ......................... 47,252 51,104
--------- ---------
Net cash flows provided by financing activities ...... 46,416 4,720
--------- ---------
Decrease in cash and cash equivalents ........................ (98,385) (18,098)
Cash and cash equivalents at beginning of period ............. 242,421 181,345
--------- ---------
Cash and cash equivalents at end of period ................... $ 144,036 $ 163,247
========= =========
Supplementary disclosure of cash flow information:
Cash paid during the period for:
Interest ............................................. $ 480 $ 809
Income taxes ......................................... $ 27,381 $ 19,192
The accompanying notes, together with the Notes to Consolidated Financial
Statements included in Teradyne's Annual Report on Form 10-K for the year ended
December 31, 2000 are an integral part of the condensed consolidated financial
statements.
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TERADYNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
A. TERADYNE, INC.
We design, manufacture, market and service test and inspection systems and
related software, as well as backplanes and associated connectors. Teradyne
currently has four principal product lines:
- semiconductor test systems;
- connection systems;
- circuit-board test and inspection systems; and
- broadband test systems.
Semiconductor Test Systems. We produce semiconductor test systems for use
by electronic component manufacturers in the design and testing of a wide
variety of semiconductor products, including logic, memory, mixed signal, and
"system on a chip" integrated circuits. Semiconductor test systems are sold to
semiconductor manufacturers and subcontractors to the semiconductor industry.
Semiconductor manufacturers use our semiconductor test systems to:
- measure product performance;
- improve product quality;
- shorten time to market;
- enhance manufacturability;
- minimize labor costs; and
- increase production yields.
Connection Systems. Our connection systems include backplane assemblies,
connectors and electro-mechanical systems integration for customers in the
telecom, data networking, storage, and server industries. A backplane is an
assembly into which printed circuit boards are inserted that provides for the
interconnection of electrical signals between the circuit boards and the other
elements of the system. Connection systems provide design and applications
engineering along with manufacturing for a total interconnect solution for our
customers. Connection systems product technology can be found in diverse
products such as Internet routers, computer servers, mass data storage, and
telecom switches.
Circuit-board Test and Inspection Systems. Electronic equipment
manufacturers use our circuit-board test and inspection systems for the design,
inspection and testing of circuit boards and other assemblies. We also sell
circuit-board test and inspection systems to customers across most sectors of
the electronics industry and to companies in other industries that use
electronic devices in high volume. Similar to semiconductor test systems, our
customers use their systems and related software to increase product
performance, to improve product quality, to shorten time to market, to enhance
manufacturability, to minimize labor costs, and to increase production yields.
Broadband Test Systems. Broadband test systems are used by the
communications industry for Internet testing, customer care and voice network
maintenance. Broadband test systems perform qualification testing for Digital
Subscriber Line (DSL) services, assist customer care centers in isolating
network service problems, and perform integrated surveillance and maintenance
for voice networks.
B. RISKS AND UNCERTAINTIES
Teradyne's future results of operations involve a number of risks and
uncertainties. These factors include, but are not limited to, the slowdown in
economies worldwide, the current and anticipated market for electronics, risks
associated with any remedial measures we take to address the current slowdown in
the market, enforcement of our intellectual property, failure to develop new
technologies, risks associated with acquisitions and divestitures, competition,
risks of operating internationally, competitive pricing pressures, changes in
product mix, timing of customer orders or any deferral or cancellation of orders
previously received, market acceptance of our products, new product
introductions from our competitors, reliance on sole source supplies, potential
retrofit costs, and the timing of investments in engineering and development. It
is reasonably possible that Teradyne may incur additional charges in the future
related to inventory or long-lived asset carrying values if demand for our
products weaken.
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TERADYNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
C. ACCOUNTING POLICIES
Basis of Presentation
The condensed consolidated interim financial statements include the
accounts of Teradyne and its subsidiaries. All significant intercompany balances
and transactions have been eliminated. The year-end condensed consolidated
balance sheet data were derived from audited financial statements, but do not
include all disclosures required by generally accepted accounting principles.
The results for the three and six months ended July 2, 2000 have been
adjusted to reflect the adoption of Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements" (SAB 101).
Preparation of Financial Statements
The accompanying condensed consolidated interim financial statements are
unaudited. However, in the opinion of management, all adjustments (consisting
only of normal recurring accrual entries) necessary for a fair statement of the
results for the interim periods have been made. The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the dates of the financial statements and the reported amounts of revenues and
expenses during the reported periods. Actual results could differ from those
estimates.
Other Comprehensive Income
The components of comprehensive (loss) income are as follows (in thousands):
For the Three Months Ended For the Six Months Ended
------------------------------- ------------------------------
July 1, 2001 July 2, 2000 July 1, 2001 July 2, 2000
------------ ------------ ------------ ------------
Net (loss) income .............................. $(40,181) $128,893 $ 13,778 $158,156
Unrealized (loss) gain on marketable
securities, net of applicable tax of $124
and $1,040 for the three and six
months ended July 1, 2001 .................... (578) -- 1,560 --
-------- -------- -------- --------
Comprehensive (loss) income, after tax ......... $(40,759) $128,893 $ 15,338 $158,156
======== ======== ======== ========
D. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 141 ("SFAS 141"), "Business
Combinations." SFAS 141 requires the purchase method of accounting for business
combinations initiated after June 30, 2001 and eliminates the
pooling-of-interest method.
In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill and
Other Intangible Assets", which is effective for Teradyne on January 1, 2002.
SFAS 142 requires, among other things, the discontinuance of goodwill
amortization and includes provisions for the reclassification of certain
existing recognized intangibles as goodwill, reassessment of the useful lives of
existing recognized intangibles, and reclassification of certain intangibles out
of previously reported goodwill. SFAS 142 also requires Teradyne to complete a
transitional goodwill impairment test six months from the date of adoption.
Teradyne is currently assessing but has not yet determined the impact of SFAS
142 on its financial position and results of operations.
E. DERIVATIVE FINANCIAL INSTRUMENTS
Teradyne adopted SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities" as amended by SFAS No. 137 and SFAS No. 138 in the first
fiscal quarter of 2001. SFAS 133 requires Teradyne to recognize all derivatives
on the balance sheet at fair value. Adoption of SFAS 133 did not have a material
impact on Teradyne's financial position or results of operations.
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TERADYNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
E. DERIVATIVE FINANCIAL INSTRUMENTS -(CONTINUED)
Teradyne conducts business in a number of foreign countries, with certain
transactions denominated in local currencies. The purpose of Teradyne's foreign
currency management is to minimize the effect of exchange rate fluctuations on
certain foreign denominated cash flows. The terms of currency instruments used
for hedging purposes are consistent with the timing of the transactions being
hedged. We do not use derivative financial instruments for trading or
speculative purposes.
Teradyne hedges certain forecasted foreign currency denominated sales, over
a maximum period of twelve months, using forward exchange contracts. These
derivatives are designated as cash-flow hedges, and changes in their fair value
are carried in accumulated other comprehensive income until the underlying
transaction occurs. Once the underlying forecasted transaction is realized, the
appropriate gain or loss from the derivative designated as a hedge of the
transaction is reclassified from accumulated other comprehensive income to net
sales. During the three and six months ended July 1, 2001 the amount of net
realized gains was immaterial. As of July 1, 2001 there were no outstanding
cash-flow hedges and therefore there is no amount to be reclassed from
accumulated other comprehensive income.
In addition, we enter into foreign currency forward contracts to hedge
those currency exposures associated with certain assets and liabilities
denominated in non-functional currencies. Changes in the fair value of these
derivatives are recorded immediately in earnings to offset the changes in the
fair value of the assets or liabilities being hedged.
F. DIVESTITURES
On June 22, 2001, Teradyne sold its aerospace and defense connector and
backplane business to Amphenol Corporation of Wallingford, Connecticut for cash
proceeds of $26.3 million. This transaction resulted in a pre-tax gain of $14.8
million which has been recorded in interest and other income.
G. NET INCOME (LOSS) PER COMMON SHARE
The following table sets forth the computation of basic and diluted net
income (loss) per common share (in thousands, except per share amounts):
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
---------------------------- ----------------------------
JULY 1, 2001 JULY 2, 2000 JULY 1, 2001 JULY 2, 2000
------------ ------------ ------------ ------------
(Loss) income before cumulative effect of change in
accounting principle ................................... $ (40,181) $ 128,893 $ 13,778 $ 222,294
Cumulative effect of change in accounting principle..... -- -- -- (64,138)
--------- --------- --------- ---------
Net (loss) income ...................................... $ (40,181) $ 128,893 $ 13,778 $ 158,156
========= ========= ========= =========
Shares used in net (loss) income per common share -
basic .................................................. 174,538 173,158 174,164 172,643
Effect of dilutive securities:
Employee and director stock options ................ -- 8,265 5,669 8,468
Employee stock purchase rights ..................... -- 274 318 174
--------- --------- --------- ---------
Dilutive potential common shares ..................... -- 8,539 5,987 8,642
--------- --------- --------- ---------
Shares used in net (loss) income per common share -
diluted ................................................ 174,538 181,697 180,151 181,285
========= ========= ========= =========
(Loss) income before cumulative effect of change in
accounting principle per common share - basic .......... $ (0.23) $ 0.74 $ 0.08 $ 1.29
========= ========= ========= =========
Cumulative effect of change in accounting principle -
basic .................................................. $ -- $ -- $ -- $ (0.37)
========= ========= ========= =========
Net (loss) income per common share - basic ............. $ (0.23) $ 0.74 $ 0.08 $ 0.92
========= ========= ========= =========
(Loss) income before cumulative effect of change in
accounting principle per common share - diluted ........ $ (0.23) $ 0.71 $ 0.08 $ 1.23
========= ========= ========= =========
Cumulative effect of change in accounting principle -
diluted ................................................ $ -- $ -- $ -- $ (0.35)
========= ========= ========= =========
Net (loss) income per common share - diluted ........... $ (0.23) $ 0.71 $ 0.08 $ 0.87
========= ========= ========= =========
For the three month period ended July 1, 2001, a total of 20.3 million options
were not included in the calculation because the effect would have been
antidilutive. For purposes of computing diluted earnings per share, weighted
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TERADYNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
G. NET INCOME (LOSS) PER COMMON SHARE - (CONTINUED)
average common share equivalents do not include stock options with an exercise
price that exceeds the average fair market value of Teradyne's common stock
during the three and six month periods presented above. Accordingly, options to
purchase 68,300 shares of common stock during the three months ended July 2,
2000 and 1,247,744 and 49,362 shares during the six months ended July 1, 2001
and July 2, 2000 were outstanding during the periods then ended. These options
were not included in the calculation of diluted net income per common share
because the options' exercise price was greater than the average market price of
the common shares during those periods.
H. WORKFORCE REDUCTION AND INVENTORY PROVISION
During the second quarter of 2001, Teradyne recorded a pre-tax charge of
$3.4 million in connection with a workforce reduction. For the six months ended
July 1, 2001, we have recorded pre-tax charges of $9.1 million in connection
with workforce reductions. The $9.1 million provision for severance benefits was
recorded in selling and administrative expenses. There were approximately 650
employees terminated in the first quarter of 2001 and approximately 600
employees in the second quarter of 2001 across all functional groups. Teradyne
has paid $6.9 million in severance benefits during the three and six months
ended July 1, 2001. All remaining benefits will be paid by the end of the third
quarter of 2001.
During the second quarter of 2001, Teradyne recorded a $37.9 million pre-tax
provision for excess inventory due to the sharp decline in incoming
semiconductor test systems and connection systems orders. The inventory
provision was recorded in cost of sales.
I. OPERATING SEGMENT INFORMATION
Teradyne has four principal operating segments which are the design,
manufacturing and marketing of semiconductor test systems, connection systems,
circuit-board test and inspection systems, and broadband test systems. These
operating segments were determined based upon the nature of the products and
services offered. Teradyne has three reportable segments; semiconductor test
systems segment, connection systems segment, and other. The other segment is
comprised of circuit-board test and inspection systems and broadband test
systems. In 2000, the other segment included software test systems.
Teradyne evaluates performance based on several factors, of which the
primary financial measure is business segment income before taxes. The
accounting policies of the business segments are the same as those described in
"Note B: Accounting Policies" in Teradyne's Annual Report on Form 10-K for the
year ended December 31, 2000. Intersegment sales are accounted for at fair value
as if sales were to third parties. Operating segment information for the three
and six month periods ended July 1, 2001 and July 2, 2000 follows (in
thousands):
Semiconductor Other Test &
Test Connection Inspection Corporate
Systems Systems Systems and
Segment Segment Segment Eliminations Consolidated
------------- ----------- ------------ ------------ ------------
Three months ended July 1, 2001:
- --------------------------------
Sales to unaffiliated customers ..... $ 169,703 $ 151,240 $ 44,880 -- $ 365,823
Intersegment sales .................. -- 1,089 -- $ (1,089) --
--------- --------- --------- --------- ---------
Net sales ........................... 169,703 152,329 44,880 (1,089) 365,823
Income (loss) before taxes (1) ...... $ (64,705) $ 18,440 $ (2,666) $ (5,190) $ (54,121)
========= ========= ========= ========= =========
Three months ended July 2, 2000:
- --------------------------------
Sales to unaffiliated customers ..... $ 522,867 $ 169,668 $ 54,923 -- $ 747,458
Intersegment sales .................. -- 8,249 -- $ (8,249) --
--------- --------- --------- --------- ---------
Net sales ........................... 522,867 177,917 54,923 (8,249) 747,458
Income (loss) before taxes (1) ...... $ 180,985 $ 38,313 $ (4,014) $ (31,151) $ 184,133
========= ========= ========= ========= =========
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TERADYNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
I. OPERATING SEGMENT INFORMATION - (CONTINUED)
Semiconductor Other Test &
Test Connection Inspection Corporate
Systems Systems Systems and
Segment Segment Segment Eliminations Consolidated
------------- ----------- ------------ ------------ ------------
Six months ended July 1, 2001:
- ------------------------------
Sales to unaffiliated customers..... $ 525,824 $ 355,883 $ 89,305 -- $ 971,012
Intersegment sales ................. -- 3,073 -- $ (3,073) --
---------- ---------- ---------- ---------- ----------
Net sales .......................... 525,824 358,956 89,305 (3,073) 971,012
Income (loss) before taxes (1) ..... $ (5,212) $ 46,992 $ (7,505) $ (11,312) $ 22,963
========== ========== ========== ========== ==========
Six months ended July 2, 2000:
- ------------------------------
Sales to unaffiliated customers..... $ 946,598 $ 302,310 $ 113,908 -- $1,362,816
Intersegment sales ................. -- 13,666 -- $ (13,666) --
---------- ---------- ---------- ---------- ----------
Net sales .......................... 946,598 315,976 113,908 (13,666) 1,362,816
Income (loss) before taxes (1) ..... $ 310,264 $ 64,977 $ (2,090) $ (55,588) $ 317,563
========== ========== ========== ========== ==========
(1) Income (loss) before taxes of the principal businesses exclude the effects
of employee profit sharing, management incentive compensation, other
unallocated expenses, and net interest and other income.
J. SUBSEQUENT EVENTS
On August 2, 2001, Teradyne signed a definitive agreement to acquire
GenRad, Inc. of Westford, MA, a leading manufacturer of electronic automatic
test equipment and related software. The proposed acquisition will be part of
the circuit-board test and inspection systems segment. Under the terms of the
proposed acquisition, each outstanding share of GenRad common stock would be
converted into 0.1733 shares of Teradyne common stock. At Teradyne's closing
price of $35.10 on August 1, 2001, the transaction would be valued at
approximately $260 million in the aggregate, excluding the fair value of
employee stock options assumed and transaction costs. This includes the
assumption of debt of approximately $85 million, before considering any proceeds
from the anticipated sale of GenRad's Diagnostic Solutions business unit, which
is expected to occur before the closing with Teradyne. The acquisition of GenRad
by Teradyne is expected to close in the fourth quarter of 2001 and is subject to
approval by both the shareholders of GenRad, Inc. and regulators.
Also on August 2, 2001, Teradyne announced an agreement to acquire a
substantial majority of the domestic assets of E-M-Solutions and the stock of
its foreign subsidiaries. E-M-Solutions, based in Fremont, California is a
leading electronic enclosure manufacturer that provides value-added system
assembly and electro-mechanical integration services. In conjunction with the
agreement, E-M-Solutions voluntarily petitioned for reorganization under Chapter
11 of the U.S. Bankruptcy Code. Terms of the proposed transaction call for a
purchase price of up to $85 million in cash. The acquisition of the
E-M-Solutions assets will expand the capabilities of our connection systems. The
transaction is subject to bankruptcy court approval and customary regulatory
review and is expected to close in the fourth quarter of 2001.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS
SELECTED RELATIONSHIPS WITHIN THE CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
---------------------------------- -------------------------------
JULY 1, 2001 JULY 2, 2000 JULY 1, 2001 JULY 2, 2000
------------ ------------ ------------ ------------
(IN THOUSANDS) (IN THOUSANDS)
Net sales .......................................... $ 365,823 $ 747,458 $ 971,012 $ 1,362,816
========== ========== ========== ============
Net (loss) income .................................. $ (40,181) $ 128,893 $ 13,778 $ 158,156
========== ========== ========== ============
Percentage of net sales:
Net sales ........................................ 100.0% 100.0% 100.0% 100.0%
Expenses:
Cost of sales .................................. 85.1 54.0 71.8 54.5
Engineering and development .................... 16.8 9.9 13.6 10.5
Selling and administrative ..................... 17.8 12.3 14.4 12.5
Other and interest, net ........................ (4.9) (0.8) (2.2) (0.8)
---------- ---------- ---------- ------------
114.8 75.4 97.6 76.7
(Loss) income before taxes and cumulative
effect of change in accounting principle ....... (14.8) 24.6 2.4 23.3
Provision (benefit) for income taxes ............. (3.8) 7.4 1.0 7.0
---------- ---------- ---------- ------------
(Loss) income before cumulative effect of
change in accounting principle ................. (11.0) 17.2 1.4 16.3
Cumulative effect of change in accounting
principle ...................................... -- -- -- (4.7)
---------- ---------- ---------- ------------
Net (loss) income ................................ (11.0)% 17.2% 1.4% 11.6%
========== ========== ========== ============
Provision for income taxes as a percentage of income
before taxes ..................................... 25.8% 30.0% 40.0% 30.0%
========== ========== ========== ============
RESULTS OF OPERATIONS
Teradyne recorded sales of $365.8 million in the second quarter of 2001, a
decrease of $381.6 million or 51% from the second quarter of 2000. Semiconductor
test systems sales and connection systems sales to unaffiliated customers
decreased 68% and 11%, respectively from the second quarter of 2000 which
reflects current industry conditions as described below. Other test systems
sales decreased 18% from the second quarter of 2000 primarily due to the
divestiture of software test systems in December 2000. Circuit-board test and
inspection systems and broadband test systems sales increased by 29% and 25%
respectively. Teradyne recorded sales of $971.0 million in the first six months
of 2001, a decrease of $391.8 million or 29% over the first six months of 2000.
Semiconductor test systems sales decreased 44% when compared to the first six
months of 2000 which reflect current industry conditions as described below.
Connection system sales to unaffiliated customers increased 18% reflecting the
growth in demand from networking, data storage, and telecom customers when
compared against the first six months of 2000. Other test and inspection systems
sales for the first six months of 2001 decreased 22% over the corresponding
period in 2000. Included in the first half of 2001 sales of $971.0 million was a
non-recurring adjustment of $98.7 million which resulted in $48.8 million of
income (net of tax of $20.9 million) related to shipments in 2000 where title
was retained until payment. Teradyne no longer retains title until payment.
Income before taxes and cumulative effect of change in accounting principle in
the second quarter of 2001 decreased $238.3 million from the second quarter of
2000 to a loss of $54.1 million. For the first six months of 2000, income before
taxes and cumulative effect of change in accounting principle decreased $294.6
million to $23.0 million when compared to the first six months of 2000.
As described in "Item 7: Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Certain Factors That May Affect Future
Results" of Form 10-K for the year ended December 31, 2000, our business has
been impacted by the slowdown in economies worldwide. We have been further
affected by the cyclical nature of the electronics and semiconductor industry
with recurring periods of oversupply. These factors have resulted in a downturn
in the demand for our products. We currently do not have visibility as to the
length or severity of the downturn. During the first half of 2001, Teradyne
experienced a significant slowdown in new orders as market conditions weakened.
New orders declined by approximately $903.1 million compared to the third and
fourth quarters of 2000. We do expect new orders to improve once customers
adjust to the period of oversupply and historical levels of capital expenditures
resume. There has been no current evidence, however, that customer buying
patterns will increase in the near term. There is a risk that the slowdown may
be prolonged. If the factors discussed above result in a continued further
decline in the amount of new orders received, the amount of inventory and
certain long-lived assets considered realizable could be reduced. In
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the second quarter of 2001.
Incoming orders were $210.2 million net of cancellations of $77.7 million
in the second quarter of 2001 compared to $826.4 million in the second quarter
of 2000. The decrease in incoming orders impacted all of Teradyne segments and
was led by an 88% decrease in semiconductor test systems orders and a 49%
decrease in connection system orders. For the six month periods ended July 1,
2001 and July 2, 2000, incoming orders were $567.2 million and $1,850.6 million,
respectively. The decrease in incoming orders was led by a 86% decrease in
semiconductor test system orders and a 25% decrease in connection systems
orders. Teradyne's backlog was $962.2 million at the end of the second quarter
of 2001 compared with $1,593.4 million at the end of the second quarter of 2000.
Teradyne's experience indicates that a portion of orders included in the backlog
may be canceled or rescheduled. We have recently experienced an increase in the
volume of the rescheduling of delivery dates by some of our customers, and thus
the timing of the delivery of a significant portion of the backlog is uncertain.
In the first six months of 2001, Teradyne has experienced cancellations of
$102.6 million.
Cost of sales increased from 54% of sales in the second quarter of 2000 to
85% of sales in the second quarter of 2001 and from 54% in the first six months
of 2000 to 72% in the first six months of 2001. These percentage increases were
primarily attributable to an inventory provision in the second quarter 2001 of
$37.9 million due to the sharp decline in incoming semiconductor test systems
and connection systems orders compared to an inventory provision of $3.9 million
in the second quarter of 2000 and decreased utilization of Teradyne's
manufacturing overhead, as sales volume decreased while certain components of
cost of sales remained fixed. An additional factor in the increase in cost of
sales percentage was the mix change between the semiconductor test systems to
connection systems business segments.
Engineering and development expenses, as a percentage of sales, increased
from 10% in the second quarter and first six months of 2000 to 17% and 14%,
respectively in the second quarter and first six months of 2001, with spending
decreasing by $12.3 million and $10.1 million, respectively. This spending
decrease was primarily due to lower material costs and the impact of work
furloughs.
Selling and administrative expenses increased from 12% of sales in the
second quarter of 2000 to 18% of sales in the second quarter of 2001 with
spending decreasing by $26.9 million. The decrease in spending was primarily due
to workforce reductions and furloughs which offset a workforce reduction
provision of $3.4 million. Selling and administrative expense as a percentage of
sales was 14% for the first half of 2001 and 13% for the first half of 2000,
with spending decreasing by $31.0 million. The decrease in spending was again
due to workforce reductions and furloughs which offset a workforce reduction
provision of $9.1 million.
During the second quarter of 2001, Teradyne recorded a charge of $3.4
million in connection with a workforce reduction. For the six months ended July
1, 2001, we have recorded charges of $9.1 million in connection with workforce
reductions. The $9.1 million provision for severance benefits was recorded in
selling and administrative expenses. There were approximately 650 employees
terminated in the first quarter of 2001 and approximately 600 employees
terminated in the second quarter across all functional groups. Teradyne has paid
$6.9 million in severance benefits during the three and six months ended July 1,
2001. All remaining benefits will be paid by the end of the third quarter of
2001.
Included in interest and other income is a gain from sale of connections
systems aerospace and defense business of $14.8 million. Included in interest
and other expense is our share of a loss related to an equity investment.
Interest income decreased by $1.0 million to $4.9 million in the second quarter
of 2001 compared to the second quarter of 2000 and increased by $0.4 million to
$10.8 million in the first six months of 2001 compared to the first six months
of 2000. The second quarter decrease which was attributable to decreases in the
average invested balances was offset by higher interest rates for the first half
of the year.
Teradyne's overall effective tax rate was 25.8% in the second quarter of
2001 and 40% for the first six months of 2001. The overall effective tax rate
for the year ended 2000 was 30%. The change in the tax rate is a result of an
anticipated loss for the full year which cause our favorable tax attributes from
the foreign sales corporation and Ireland manufacturing operations to lower our
tax burden, and accordingly increase our tax rate in periods of losses.
LIQUIDITY AND CAPITAL RESOURCES
Teradyne's cash, cash equivalents and marketable securities balance
decreased $117.3 million in the first six months of 2001, to $347.1 million.
Teradyne used cash from operating activities of $19.1 million in the first six
months of 2001 and generated cash of $184.5 million in the six months of 2000.
Cash generated from net income, excluding the effects of non-cash items, was
$89.6 million and $173.0 million for the first six months of 2001 and 2000,
respectively. Changes in operating assets and liabilities net of business sold
used cash of $108.7 million in the first six months of 2001 as accounts payable
and accruals balances decreased as purchases slowed and accrued compensation and
withholdings balances were paid at the beginning of the period. The use of cash
by accounts payable and accruals was partially offset by a lower accounts
receivable balance. In the first six months of 2000, changes in operating assets
and liabilities provided cash of $11.6 million.
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Teradyne used $125.7 million of cash for investing activities in the first
six months of 2001 and $207.3 million in the first six months of 2000. Investing
activities consist of purchases, sales, and maturities of marketable securities,
proceeds from the sale of business, and purchases of capital assets to support
long-term growth. Capital expenditures were $173.5 million in the first six
months of 2001 and $142.8 million in the first six months of 2000. The increase
in capital expenditures was due to continued capacity expansion on specific
buildings and improvement, machinery and equipment, and information technology
projects that were started in 2000.
Financing activities provided $46.4 million and $4.7 million of cash during
the first six months of 2001 and 2000. Financing activities include issuance of
Teradyne's common stock through employee stock option and stock purchase plans,
repurchase of common stock through a stock buyback program and repayments of
debt. During the first six months of 2001, net common stock activity provided
cash of $47.3 million. During the first six months of 2000, net common stock
activity provided cash of $4.8 million. Since 1996, Teradyne has used $540.8
million of cash to repurchase 20.0 million shares of its common stock on the
open market.
On August 2, 2001, Teradyne signed a definitive agreement to acquire
GenRad, Inc. of Westford, MA, a leading manufacturer of electronic automatic
test equipment and related software. Under the terms of the proposed
acquisition, each outstanding share of GenRad common stock would be converted
into 0.1733 shares of Teradyne common stock. At Teradyne's closing price of
$35.10 on August 1, 2001, the transaction would be valued at approximately $260
million in the aggregate, excluding the fair value of employee stock options
assumed and transaction costs. This includes the assumption of debt of
approximately $85 million, before considering any proceeds from the anticipated
sale of GenRad's Diagnostic Solutions business unit, which is expected to occur
before the closing with Teradyne. Also on August 2, 2001, Teradyne announced an
agreement to acquire a substantial majority of the domestic assets of
E-M-Solutions and the stock of its foreign subsidiaries. E-M-Solutions, based in
Fremont, California is a leading electronic enclosure manufacturer that provides
value-added system assembly and electro-mechanical integration services. Terms
of the proposed transaction call for a purchase price of up to $85 million in
cash. Both acquisitions are expected to close in the fourth quarter of 2001.
Teradyne believes its cash, cash equivalents, and marketable securities
balance of $347.1 million, together with other sources of funds, including cash
flow generated from operations, will be sufficient to meet working capital,
capital expenditure, and acquisition related requirements for the foreseeable
future. Teradyne may, depending on market conditions and funding requirements,
seek external financing.
Inflation has not had a significant long-term impact on earnings.
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
From time to time, information provided by Teradyne, statements made by its
employees or information included in its filings with the Securities and
Exchange Commission (including this Form 10-Q) contains statements that are not
purely historical, but are forward looking statements, made under the safe
harbor provisions of the Private Securities Litigation Act of 1995, which
involve risks and uncertainties. In particular, forward looking statements
include projections, plans, and objectives for Teradyne's business, financial
condition, operating results, future operations, future economic performance or
statements relating to the sufficiency of capital to meet working capital,
planned capital expenditures and expectations as to customer orders. Teradyne's
actual future results may differ materially from those stated in any forward
looking statements. Factors that may cause such differences, such as the risk
factor that our business could be adversely affected by acquisitions, include,
but are not limited to, the factors discussed below. These factors, and others,
are discussed from time to time in Teradyne's filings with the Securities and
Exchange Commission, including in Teradyne's Annual Report on Form 10-K for the
year ended December 31, 2000.
OUR BUSINESS IS IMPACTED BY THE SLOWDOWN IN ECONOMIES WORLDWIDE.
Our business is dependent on current and anticipated market demand for
electronics, which has been impacted by the slowdown in the economies of the
United States, Asia, and elsewhere that began in second half of 2000. While our
diverse businesses may allow us to perform better than some companies in periods
of economic decline, the effects of the economic decline are being felt across
all of Teradyne's business segments and have significantly slowed customer
orders.
OUR BUSINESS IS DEPENDENT ON THE CURRENT AND ANTICIPATED MARKET FOR ELECTRONICS.
Our business and results of operations depend in significant part upon
capital expenditures of manufacturers of semiconductors and other electronics,
which in turn depend upon the current and anticipated market demand for those
products. The electronic and semiconductor industry has been highly cyclical
with recurring periods of over supply, which often have had a severe effect on
demand for test equipment, including systems manufactured and marketed by us. We
believe that the markets for newer generations of electronic products will also
be subject to similar fluctuations. We are dependent on the timing of customer
orders and the deferral or cancellation of previous customer orders could impact
our results of operations. We cannot assure that any future increase in sales or
bookings for a calendar quarter will be sustained in subsequent quarters. In
addition, any factor adversely affecting the electronic industry or particular
segments within the electronic industry may adversely affect our business,
financial condition and operating results.
WE HAVE TAKEN AND EXPECT TO CONTINUE TO TAKE MEASURES TO ADDRESS THE RECENT
SLOWDOWN IN THE MARKET FOR OUR PRODUCTS WHICH COULD HAVE LONG-TERM EFFECTS ON
OUR BUSINESS.
We have taken and expect to continue to take measures to address the recent
slowdown in the market for our products. In particular, we have reduced our
workforce, frozen hiring, delayed salary increases, reduced senior managers'
pay, implemented furloughs, and reduced our planned capital expenditures and
expense budgets. These measures will reduce our expenses in the face of
decreased revenues due to decreased or cancelled customer orders. However, each
of these measures could have long-term effects on our business by reducing our
pool of technical talent, decreasing or slowing improvements in our products,
and making it more difficult for us to respond to customers.
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OUR BUSINESS MAY BE ADVERSELY IMPACTED BY ACQUISITIONS WHICH MAY AFFECT OUR
ABILITY TO MANAGE AND MAINTAIN OUR BUSINESS.
Since our inception, we have acquired a number of businesses. In the
future, we may undertake additional acquisitions of businesses that complement
our existing operations. Such past or future acquisitions could involve a number
of risks, including:
- the possibility that one or more such acquisition may not close, due
to closing conditions in the acquisition agreements or the inability
to obtain bankruptcy court or regulatory approval or the inability to
meet conditions imposed for government or court approvals for the
transaction;
- the diversion of the attention of management and other key personnel;
- inability to effectively integrate an acquired business into our
culture, product and service delivery methodology and other standards,
controls, procedures and policies;
- inability to retain the management, key personnel and other employees
of an acquired business;
- the inability to retain the customers of an acquired business;
- current customer satisfaction problems caused by an acquired business
could affect our reputation;
- potential known or unknown liabilities associated with an acquired
business, including but not limited to regulatory, environmental and
tax liabilities; and
- the amortization of goodwill, which may adversely affect our reported
results of operations.
In addition, any acquired business could significantly underperform relative to
our expectations.
OUR BUSINESS MAY BE ADVERSELY IMPACTED BY DIVESTITURES OF LINES OF BUSINESS
WHICH MAY AFFECT OUR ABILITY TO MANAGE AND MAINTAIN OUR BUSINESS.
Since our inception, we have divested ourselves of certain lines of our
business. In the future, we may undertake additional such divestitures. Such
past or future divestitures could involve a number of risks, including:
- the diversion of the attention of management and other key personnel;
- disruptions and other effects caused by the divestiture of a line of
business on our culture, product and service delivery methodology and
other standards, controls, procedures and policies;
- customer satisfaction problems caused by the loss of a divested line
of business could affect our reputation; and
- the decreased diversification of our product lines caused by the
divestiture of a line of business may make our operating results
subject to increased market fluctuations.
In addition, any divested line of business could significantly outperform
relative to our expectations.
IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY, WE MAY LOSE A VALUABLE
ASSET OR MAY INCUR COSTLY LITIGATION TO PROTECT OUR RIGHTS.
Our products incorporate technology that we protect in several ways,
including patents, copyrights, and trade secrets. While we believe that our
patents, copyrights, and trade secrets have value, in general no single one is
in itself essential. At times we have been notified that we may be in violation
of patents held by others. An assertion of patent infringement against us, if
successful, could have a material adverse effect on our ability to sell our
products, or could require a lengthy and expensive defense which could adversely
affect our operating results.
IF WE FAIL TO DEVELOP NEW TECHNOLOGIES TO ADAPT TO OUR CUSTOMERS' NEEDS AND IF
OUR CUSTOMERS FAIL TO ACCEPT OUR NEW PRODUCTS, IT WILL ADVERSELY AFFECT OUR
REVENUES.
We believe that our technological position depends primarily on the
technical competence and creative ability of our engineers. Our development of
new technologies, commercialization of those technologies into products, and
market acceptance and customer demand for those products is critical to our
success. Successful product development and introduction depends upon a number
of factors, including:
- new product selection;
- development of competitive products by competitors;
- timely and efficient completion of product design; and
- timely and efficient implementation of manufacturing and assembly
processes and product performance at customer locations.
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INTENSE COMPETITION IN OUR INDUSTRY MAY AFFECT OUR REVENUES.
We face substantial competition, throughout the world, in each of our
operating segments. Some of these competitors also have substantial financial
and other resources to pursue engineering, manufacturing, marketing and
distribution of their products. We also face competition from internal suppliers
at several of our customers. Some of our competitors have introduced or
announced new products with certain performance characteristics which may be
considered equal or superior to those we currently offer. We expect our
competitors to continue to improve the performance of their current products and
to introduce new products or new technologies that provide improved cost of
ownership and performance characteristics. New product introductions by
competitors could cause a decline in sales or loss of market acceptance of our
products. Moreover, increased competitive pressure could lead to intensified
price based competition, which could materially adversely affect our business,
financial condition and results of operations.
WE ARE SUBJECT TO RISKS OF OPERATING INTERNATIONALLY.
We derive a significant portion of our total revenue from customers outside
the United States. Our international sales are subject to significant risks and
difficulties, including:
- unexpected changes in legal and regulatory requirements and in policy
changes affecting our markets;
- changes in tariffs and exchange rates;
- political and economic instability;
- difficulties in accounts receivable collection;
- difficulties in staffing and managing international operations; and
- potentially adverse tax consequences.
OUR OPERATING RESULTS ARE LIKELY TO FLUCTUATE SIGNIFICANTLY.
Our quarterly and annual operating results are affected by a wide variety
of factors that could materially adversely affect revenues and profitability,
including:
- competitive pressures on selling prices;
- the timing of customer orders and the deferral or cancellation of
orders previously received;
- write-offs of excess and obsolete inventory;
- changes in product mix;
- our ability to introduce new products and technologies on a timely
basis;
- introduction of products and technologies by our competitors;
- market acceptance of our and our competitors' products;
- fulfilling backlog on a timely basis;
- reliance on sole source suppliers;
- potential retrofit costs;
- the level of orders received which can be shipped in a quarter; and
- the timing of investments in engineering and development.
In particular, we will introduce a significant number of new, complex test
systems in 2001 and there can be no assurance that Teradyne will not experience
delays in shipment of such products or that such products will achieve customer
acceptance.
As a result of the foregoing and other factors, we have and may continue to
experience material fluctuations in future operating results on a quarterly or
annual basis which could materially and adversely affect our business, financial
condition, operating results and stock price.
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There were no material changes in Teradyne's exposure to market risk from
December 31, 2000.
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PART II. OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
Teradyne is subject to legal proceedings and claims that arise in the
ordinary course of business. Management does not believe these actions will have
a material adverse affect on the financial position or results of operations of
Teradyne.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of security holders of Teradyne was held May 24, 2001. The
following were elected as Directors:
Total Vote Total Vote Withheld
Nominee For Each Nominee For Each Nominee
- ------- ---------------- -------------------
John P. Mulroney 129,544,362 19,046,509
Richard J. Testa 126,810,938 21,779,933
Patricia S. Wolpert 129,557,988 19,032,883
The term of office for the following directors continued after the meeting:
James W. Bagley, Albert Carnesale, George W. Chamillard, Daniel S. Gregory,
Dwight H. Hibbard, Vincent M. O'Reilly, and Roy A. Vallee.
In addition, the security holders ratified the selection of the firm
PricewaterhouseCoopers LLP as auditors for the fiscal year ending December 31,
2001, with 144,668,751 shares voting in favor, 3,423,593 shares voting against,
and 498,527 shares abstaining.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a): EXHIBITS
Exhibit Number Description
- -------------- -----------
10.01 1997 Employee Stock Option Plan, as amended
(b): REPORTS ON FORM 8-K
There were no Form 8-K filings by Teradyne during the quarter ended July 1,
2001.
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/ GREGORY R. BEECHER
---------------------------------------
Gregory R. Beecher
Vice President and
Chief Financial Officer
(Principal Financial Officer)
August 06, 2001
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