UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 24, 2018
TERADYNE, INC.
(Exact Name of Registrant as Specified in Charter)
| Massachusetts | 001-06462 | 04-2272148 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 600 Riverpark Drive, North Reading, MA | 01864 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (978) 370-2700
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01. | Entry into a Material Definitive Agreement |
On April 25, 2018, Teradyne, Inc. (the “Company”) acquired Mobile Industrial Robots ApS, a Danish limited liability company (“MiR”) pursuant to a Share Sale and Purchase Agreement dated April 25, 2018 (the “Purchase Agreement”) with the holders of all the issued and outstanding shares of MiR, Teradyne Robotics Holdings Denmark ApS, a Danish limited liability company and wholly owned indirect subsidiary of the Company (the “Buyer”), and Thomas Visti Jensen, as the Sellers’ Representative.
Upon the terms and subject to the conditions set forth in the Purchase Agreement, the Buyer acquired all the issued and outstanding shares of MiR (the “Acquisition”), for an aggregate purchase price of approximately €121 million ($148 million), net of MiR’s cash and debt, paid at closing and up to an additional €101 million ($124 million at the current exchange rate) payable upon the achievement of certain revenue-based performance targets through 2020. €24.4 million was withheld from the amount otherwise payable at closing and deposited in an indemnification escrow. The Purchase Agreement includes customary representations and warranties, covenants and indemnification.
The foregoing is a summary of the terms of the Purchase Agreement, and does not purport to summarize or include all terms relating to the transactions contemplated by the Purchase Agreement. The foregoing summary is qualified in its entirety by reference to the Purchase Agreement, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 1, 2018. The representations, warranties and covenants contained in the Purchase Agreement were made only for the purposes of such agreement and as of specified dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties. Certain of the representations and warranties have been made for the purposes of allocating contractual risk between the parties to the agreement instead of establishing these matters as facts. Investors are not third-party beneficiaries under the Purchase Agreement. In addition, the representations and warranties contained in the Purchase Agreement (i) are qualified by information disclosed to the Company and the Buyer in a virtual data room, (ii) were made only as of the date of such agreement or a prior, specified date, and (iii) in some cases are subject to qualifications with respect to materiality, knowledge and/or other matters, including standards of materiality applicable to the contracting parties that differ from those applicable to investors. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Acquisition, which subsequent information may or may not be fully reflected in the Company’s or MiR’s public disclosures. Accordingly, investors should not rely on the representations and warranties as characterizations of the actual state of facts or condition of the Company or MiR or any of their respective subsidiaries or affiliates.
| Item 2.02 | Results of Operations and Financial Condition. |
On April 24, 2018, Teradyne, Inc. (“Teradyne”) issued a press release regarding its financial results for the first quarter ended April 1, 2018. Teradyne’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
| Item 8.01. | Other Items |
On April 25, 2018, the Company issued a press release announcing that it had entered into the Purchase Agreement and simultaneously completed the Acquisition. A copy of the press release is filed as Exhibit 99.2 attached hereto and incorporated herein by reference.
Safe Harbor for Forward-Looking Statements
This Current Report on Form 8-K, including the Exhibit, contains forward-looking statements regarding the Acquisition, additional payments to the former MiR shareholders, Teradyne’s future financial results, and MiR’s future business prospects and market conditions. Such statements are based on the current assumptions and expectations of Teradyne’s management and are neither promises nor guarantees of future performance. You can identify these forward-looking statements based on the context of the statements and by the fact that they use words such as “will,” “anticipate,” “expect,” “project,” “intend,” “plan,” “believe,” “target” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. There can be no assurance that these forward looking statements will be achieved. Important factors that could cause actual results to differ materially from those presently expected include: conditions affecting the markets in which MiR operates; market acceptance of MiR’s new products; competition from both larger, more established and emerging companies in MiR’s markets; the protection of MiR’s intellectual property; potential infringement of third party intellectual property rights; the recruitment and retention of key employees; product warranty claims; compliance with product safety regulations and standards; Teradyne’s ability to successfully grow MiR’s business; and other events, factors and risks disclosed in filings with the SEC, including, but not limited to, the “Risk Factors” section of Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The forward-looking statements provided by Teradyne in this Current Report on Form 8-K, including the Exhibit, represent management’s views as of the date of this report. Teradyne anticipates that subsequent events and developments may cause management’s views to change. However, while Teradyne may elect to update these forward-looking statements at some point in the future, Teradyne specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Teradyne’s views as of any date subsequent to the date of this Current Report on Form 8-K, including the Exhibit.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit |
Description | |
| 99.1 | Press Release dated April 24, 2018. | |
| 99.2 | Press Release dated April 25, 2018. | |
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. | ||||||
| Dated: April 25, 2018 | By: | /S/ GREGORY R. BEECHER | ||||
| Name: | Gregory R. Beecher | |||||
| Title: | Vice President, Chief Financial Officer and Treasurer | |||||
Exhibit 99.1
Teradyne Reports Revenue and Earnings Growth in First Quarter 2018
| • | Q1’18 Revenue of $487 million, up 7% from Q1’17 |
| • | Record Memory Test sales, up 210% from Q1’17 |
| • | Universal Robots sales up 34% from Q1’17, expect 50%+ full year growth |
| • | Decline in demand outlook for mobile device test equipment in 2018 |
| Q1’18 | Q1’17 | Q4’17 | ||||||||||
| Revenue (mil) |
$ | 487 | $ | 457 | $ | 479 | ||||||
| GAAP EPS |
$ | 0.43 | $ | 0.42 | ($ | 0.54 | ) | |||||
| Non-GAAP EPS |
$ | 0.45 | $ | 0.44 | $ | 0.46 | ||||||
NORTH READING, Mass. – April 24, 2018 – Teradyne, Inc. (NYSE: TER) reported revenue of $487 million for the first quarter of 2018 of which $373 million was in Semiconductor Test, $49 million in Industrial Automation, $43 million in System Test, and $23 million in Wireless Test. GAAP net profit for the first quarter was $87.0 million or $0.43 per share. On a non-GAAP basis, Teradyne’s net income in the first quarter was $89.4 million, or $0.45 per diluted share, which excluded acquired intangible asset amortization, restructuring and other charges, non-cash convertible debt interest, discrete income tax adjustments, and included the related tax impact on non-GAAP adjustments.
“Despite the strong first quarter results, the demand outlook for 2018 mobile device test capacity declined sharply in the quarter and our second quarter guidance reflects that revised outlook. Those strong first quarter results included record Nextest memory shipments and the highest Eagle analog test shipments in over two years reflecting healthy demand in the automotive, industrial, and NAND Flash markets,” said CEO and President Mark Jagiela. “Universal Robots’ high growth continued in the quarter driven by broad based demand for UR’s easy to use collaborative robots and the group is on-track for 50%+ full year growth.”
Guidance for the second quarter of 2018 is revenue of $490 million to $520 million, with GAAP net income of $0.39 to $0.46 per diluted share and non-GAAP net income of $0.45 to $0.52 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization, non-cash convertible debt interest, restructuring and other charges and includes the related tax impact on non-GAAP adjustments.
Webcast
A conference call to discuss the first quarter results, along with management’s business outlook, will follow at 8:00 a.m. ET, Wednesday, April 25. Interested investors should access the webcast at investors.teradyne.com/events-presentations at least five minutes before the call begins. Presentation materials will be available starting at 8:00 a.m. ET. A replay will be available on the Teradyne website at www.teradyne.com/investors.
Non-GAAP Results
In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses non-GAAP results of operations that exclude certain income items and charges. These results are provided as a complement to results provided in accordance with GAAP. Non-GAAP income from operations and non-GAAP net income exclude acquired intangible assets amortization, non-cash convertible debt interest, pension actuarial gains and losses, discrete income tax adjustments, and restructuring and other. GAAP requires that these items be included in determining income from operations and net income. Non-GAAP income from operations, non-GAAP net income, non-GAAP income from operations and non-GAAP net income as a percentage of revenue, and non-GAAP net income per share are non-GAAP performance measures presented to provide meaningful supplemental information regarding Teradyne’s baseline performance before gains, losses or other charges that may not be indicative of Teradyne’s current core business or future outlook. These non-GAAP performance measures are used to make operational decisions, to determine employee compensation, to forecast future operational results, and for comparison with Teradyne’s business plan, historical operating results and the operating results of Teradyne’s competitors. Non-GAAP gross margin excludes pension actuarial gains and losses. GAAP requires that these items be included in determining gross margin. Non-GAAP gross margin dollar amount and percentage are non-GAAP performance measures that management believes provide useful supplemental information for management and the investor. Management uses non-GAAP gross margin as a performance measure for Teradyne’s current core business and future outlook and for comparison with Teradyne’s business plan, historical gross margin results and the gross margin results of Teradyne’s competitors. Non-GAAP diluted shares include the impact of Teradyne’s call option on its shares. Management believes each of these non-GAAP performance measures provides useful supplemental information for investors, allowing greater transparency to the information used by management in its operational decision making and in the review of Teradyne’s financial and operational performance, as well as facilitating meaningful comparisons of Teradyne’s results in the current period compared with those in prior and future periods. A reconciliation of each available GAAP to non-GAAP financial measure discussed in this press release is contained in the attached exhibits and on the Teradyne website at www.teradyne.com by clicking on “Investors” and then selecting the “GAAP to Non-GAAP Reconciliation” link. The non-GAAP performance measures discussed in this press release may not be comparable to similarly titled measures used by other companies. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.
About Teradyne
Teradyne (NYSE:TER) is a leading supplier of automation equipment for test and industrial applications. Teradyne Automatic Test Equipment (ATE) is used to test semiconductors, wireless products, data storage and complex electronic systems, which serve consumer, communications, industrial and government customers. Our Industrial Automation products include collaborative robots used by global manufacturing and light
Page 2
industrial customers to improve quality and increase manufacturing efficiency. In 2017, Teradyne had revenue of $2.14 billion and currently employs approximately 4,500 people worldwide. For more information, visit www.teradyne.com. Teradyne(R) is a registered trademark of Teradyne, Inc. in the U.S. and other countries.
Safe Harbor Statement
This release contains forward-looking statements regarding Teradyne’s future business prospects, results of operations, market conditions, earnings per share, the payment of a quarterly dividend, the repurchase of Teradyne common stock pursuant to a share repurchase program, use of proceeds and potential dilution from the senior convertible notes offering, potential borrowings under a senior secured credit facility, and the impact of the U.S. tax reform law. Such statements are based on the current assumptions and expectations of Teradyne’s management and are neither promises nor guarantees of future performance, events, earnings per share, use of cash, payment of dividends, repurchases of common stock, payment of the senior convertible notes, availability of, or borrowing under, the credit facility, or the impact of the U.S. tax reform law. There can be no assurance that management’s estimates of Teradyne’s future results or other forward-looking statements will be achieved. Additionally, the current dividend and share repurchase programs may be modified, suspended or discontinued at any time. Important factors that could cause actual results, earnings per share, use of cash, dividend payments, repurchases of common stock, payment of the senior convertible notes or borrowings under the credit facility to differ materially from those presently expected include: conditions affecting the markets in which Teradyne operates; decreased or delayed product demand from one or more significant customers; development, delivery and acceptance of new products; the ability to grow the Industrial Automation business; increased research and development spending; deterioration of Teradyne’s financial condition; the consummation and success of any mergers or acquisitions; unexpected cash needs; insufficient cash flow to make required payments and pay the principal amount on the senior convertible notes; the business judgment of the board of directors that a declaration of a dividend, the repurchase of common stock or borrowing under the credit facility is not in the company’s best interests; additional U.S. tax regulations or IRS guidance; the impact of any tariffs imposed in the U.S. or China; and other events, factors and risks disclosed in filings with the SEC, including, but not limited to, the “Risk Factors” section of Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The forward-looking statements provided by Teradyne in this press release represent management’s views as of the date of this release. Teradyne anticipates that subsequent events and developments may cause management’s views to change. However, while Teradyne may elect to update these forward-looking statements at some point in the future, Teradyne specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Teradyne’s views as of any date subsequent to the date of this release.
Page 3
TERADYNE, INC. REPORT FOR FIRST FISCAL QUARTER OF 2018
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
| Quarter Ended | ||||||||||||
| April 1, 2018 |
December 31, 2017 (1) |
April 2, 2017 (1) |
||||||||||
| Net revenues |
$ | 487,467 | $ | 479,415 | $ | 456,913 | ||||||
| Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (2) |
217,635 | 208,485 | 191,897 | |||||||||
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|||||||
| Gross profit |
269,832 | 270,930 | 265,016 | |||||||||
| Operating expenses: |
||||||||||||
| Selling and administrative |
90,505 | 87,880 | 84,792 | |||||||||
| Engineering and development |
74,408 | 72,070 | 75,978 | |||||||||
| Acquired intangible assets amortization |
7,698 | 7,384 | 7,952 | |||||||||
| Restructuring and other (3) |
(313 | ) | 8,970 | 2,511 | ||||||||
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|||||||
| Operating expenses |
172,298 | 176,304 | 171,233 | |||||||||
| Income from operations |
97,534 | 94,626 | 93,783 | |||||||||
| Interest and other (4) |
(1,714 | ) | 3,458 | (1,767 | ) | |||||||
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| Income before income taxes |
95,820 | 98,084 | 92,016 | |||||||||
| Income tax provision (5) |
8,846 | 204,007 | 6,795 | |||||||||
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| Net income (loss) |
$ | 86,974 | $ | (105,923 | ) | $ | 85,221 | |||||
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| Net income (loss) per common share: |
||||||||||||
| Basic |
$ | 0.45 | $ | (0.54 | ) | $ | 0.43 | |||||
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| Diluted |
$ | 0.43 | $ | (0.54 | ) | $ | 0.42 | |||||
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| Weighted average common shares — basic |
195,255 | 196,010 | 200,005 | |||||||||
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| Weighted average common shares — diluted (6) |
203,484 | 196,010 | 201,936 | |||||||||
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| Cash dividend declared per common share |
$ | 0.09 | $ | 0.07 | $ | 0.07 | ||||||
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| (1) Certain prior period amounts were reclassified to conform with the first quarter 2018 adoption of new accounting guidance for the presentation of pension and post retirement costs. |
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| (2) Cost of revenues includes: |
||||||||||||
| Quarter Ended | ||||||||||||
| April 1, 2018 |
December 31, 2017 |
April 2, 2017 |
||||||||||
| Provision for excess and obsolete inventory |
$ | 3,522 | $ | 1,690 | $ | 2,726 | ||||||
| Sale of previously written down inventory |
(2,243 | ) | (1,048 | ) | (1,134 | ) | ||||||
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| $ | 1,279 | $ | 642 | $ | 1,592 | |||||||
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| (3) Restructuring and other consists of: |
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| Quarter Ended | ||||||||||||
| April 1, 2018 |
December 31, 2017 |
April 2, 2017 |
||||||||||
| Employee severance |
$ | 3,881 | $ | 1,801 | $ | 583 | ||||||
| Acquisition costs |
774 | — | — | |||||||||
| Contingent consideration fair value adjustment |
(4,968 | ) | 5,973 | 634 | ||||||||
| Impairment of fixed assets |
— | 1,124 | — | |||||||||
| Facility related |
— | 72 | 1,294 | |||||||||
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| $ | (313 | ) | $ | 8,970 | $ | 2,511 | ||||||
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| (4) Interest and other includes: |
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| Quarter Ended | ||||||||||||
| April 1, 2018 |
December 31, 2017 |
April 2, 2017 |
||||||||||
| Non-cash convertible debt interest expense |
$ | 3,206 | $ | 3,166 | $ | 3,050 | ||||||
| Pension actuarial (gains) losses |
— | (3,786 | ) | — | ||||||||
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| $ | 3,206 | $ | (620 | ) | $ | 3,050 | ||||||
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| (5) For the quarter ended December 31, 2017, income tax provision includes an expense of $186 million related to the estimated impact of U.S. tax law changes. |
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| (6) | Under GAAP, when calculating diluted earnings per share, convertible debt must be assumed to have converted if the effect on EPS would be dilutive. Diluted shares assume the conversion of the convertible debt as the effect would be dilutive. Accordingly, for the quarter ended April 1, 2018, 4.4 million shares have been included in diluted shares. For the quarter ended April 1, 2018, diluted shares also included 1.8 million shares from the convertible note hedge transaction. |
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
| April 1, 2018 |
December 31, 2017 |
|||||||
| Assets |
||||||||
| Cash and cash equivalents |
$ | 637,873 | $ | 429,843 | ||||
| Marketable securities |
860,526 | 1,347,979 | ||||||
| Accounts receivable, net |
413,978 | 272,783 | ||||||
| Inventories, net |
131,857 | 107,525 | ||||||
| Prepayments and other current assets |
112,191 | 112,151 | ||||||
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| Total current assets |
2,156,425 | 2,270,281 | ||||||
| Property, plant and equipment, net |
281,284 | 268,447 | ||||||
| Marketable securities |
89,259 | 125,926 | ||||||
| Deferred tax assets |
77,705 | 84,026 | ||||||
| Other assets |
12,479 | 12,275 | ||||||
| Retirement plans assets |
17,928 | 17,491 | ||||||
| Acquired intangible assets, net |
84,413 | 79,088 | ||||||
| Goodwill |
275,700 | 252,011 | ||||||
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| Total assets |
$ | 2,995,193 | $ | 3,109,545 | ||||
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| Liabilities |
||||||||
| Accounts payable |
$ | 103,950 | $ | 86,393 | ||||
| Accrued employees’ compensation and withholdings |
86,292 | 141,694 | ||||||
| Deferred revenue and customer advances |
85,892 | 83,614 | ||||||
| Other accrued liabilities |
58,387 | 59,083 | ||||||
| Contingent consideration |
15,581 | 24,497 | ||||||
| Income taxes payable |
34,828 | 59,055 | ||||||
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| Total current liabilities |
384,930 | 454,336 | ||||||
| Retirement plans liabilities |
124,689 | 119,776 | ||||||
| Long-term deferred revenue and customer advances |
21,726 | 30,127 | ||||||
| Deferred tax liabilities |
6,185 | 6,720 | ||||||
| Long-term other accrued liabilities |
16,683 | 10,273 | ||||||
| Long-term contingent consideration |
— | 20,605 | ||||||
| Long-term income taxes payable |
160,181 | 148,075 | ||||||
| Long-term debt |
369,421 | 365,987 | ||||||
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| Total liabilities |
1,083,815 | 1,155,899 | ||||||
| Shareholders’ equity |
1,911,378 | 1,953,646 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 2,995,193 | $ | 3,109,545 | ||||
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
| Quarter Ended | ||||||||
| April 1, 2018 |
April 2, 2017 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ | 86,974 | $ | 85,221 | ||||
| Adjustments to reconcile net income to net cash used for operating activities: |
||||||||
| Depreciation |
16,336 | 16,143 | ||||||
| Amortization |
9,204 | 11,070 | ||||||
| Stock-based compensation |
9,544 | 8,945 | ||||||
| Provision for excess and obsolete inventory |
3,522 | 2,726 | ||||||
| Contingent consideration fair value adjustment |
(4,968 | ) | 634 | |||||
| Deferred taxes |
8,696 | (3,477 | ) | |||||
| Other |
1,393 | 2 | ||||||
| Changes in operating assets and liabilities, net of business acquired: |
|
|||||||
| Accounts receivable |
(140,747 | ) | (123,792 | ) | ||||
| Inventories |
(21,017 | ) | (62,152 | ) | ||||
| Prepayments and other assets |
(679 | ) | 1,104 | |||||
| Accounts payable and accrued expenses |
(46,706 | ) | (7,553 | ) | ||||
| Deferred revenue and customer advances |
9,644 | (3,333 | ) | |||||
| Retirement plans contributions |
(1,020 | ) | (947 | ) | ||||
| Income taxes |
(12,106 | ) | 14,288 | |||||
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| Net cash used for operating activities |
(81,930 | ) | (61,121 | ) | ||||
| Cash flows from investing activities: |
||||||||
| Purchases of property, plant and equipment |
(34,797 | ) | (22,066 | ) | ||||
| Purchases of available-for-sale marketable securities |
(490,324 | ) | (153,317 | ) | ||||
| Proceeds from sales of available-for-sale marketable securities |
800,671 | 213,593 | ||||||
| Proceeds from maturities of available-for-sale marketable securities |
212,698 | 88,184 | ||||||
| Acquisition of business, net of cash acquired |
(25,356 | ) | — | |||||
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| Net cash provided by investing activities |
462,892 | 126,394 | ||||||
| Cash flows from financing activities: |
||||||||
| Issuance of common stock under stock purchase and stock option plans |
10,654 | 15,084 | ||||||
| Repurchase of common stock |
(134,276 | ) | (37,730 | ) | ||||
| Dividend payments |
(17,588 | ) | (14,021 | ) | ||||
| Payment related to net settlement of employee stock compensation awards |
(19,629 | ) | (12,289 | ) | ||||
| Payment of contingent consideration |
(13,571 | ) | (1,050 | ) | ||||
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| Net cash used for financing activities |
(174,410 | ) | (50,006 | ) | ||||
| Effects of exchange rate changes on cash and cash equivalents |
1,478 | 1,595 | ||||||
| Increase in cash and cash equivalents |
208,030 | 16,862 | ||||||
| Cash and cash equivalents at beginning of period |
429,843 | 307,884 | ||||||
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| Cash and cash equivalents at end of period |
$ | 637,873 | $ | 324,746 | ||||
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GAAP to Non-GAAP Earnings Reconciliation
(In millions, except per share amounts)
| Quarter Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
| April 1, 2018 |
% of Net Revenues |
December 31, 2017 (1) |
% of Net Revenues |
April 2, 2017 (1) |
% of Net Revenues |
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| Net revenues |
$ | 487.5 | $ | 479.4 | $ | 456.9 | ||||||||||||||||||||||||||||||||||||||||||
| Gross profit |
$ | 269.8 | 55.3 | % | $ | 270.9 | 56.5 | % | $ | 265.0 | 58.0 | % | ||||||||||||||||||||||||||||||||||||
| Income from operations - GAAP |
$ | 97.5 | 20.0 | % | $ | 94.6 | 19.7 | % | $ | 93.8 | 20.5 | % | ||||||||||||||||||||||||||||||||||||
| Acquired intangible assets amortization |
7.7 | 1.6 | % | 7.4 | 1.5 | % | 8.0 | 1.8 | % | |||||||||||||||||||||||||||||||||||||||
| Restructuring and other (2) |
(0.3 | ) | -0.1 | % | 9.0 | 1.9 | % | 2.5 | 0.5 | % | ||||||||||||||||||||||||||||||||||||||
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| Income from operations - non-GAAP |
$ | 104.9 | 21.5 | % | $ | 111.0 | 23.2 | % | $ | 104.3 | 22.8 | % | ||||||||||||||||||||||||||||||||||||
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| Net Income per Common Share |
Net (Loss) Income per Common Share |
Net Income per Common Share |
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| April 1, 2018 |
% of Net Revenues |
Basic | Diluted | December 31, 2017 |
% of Net Revenues |
Basic | Diluted | April 2, 2017 |
% of Net Revenues |
Basic | Diluted | |||||||||||||||||||||||||||||||||||||
| Net income (loss) - GAAP |
$ | 87.0 | 17.8 | % | $ | 0.45 | $ | 0.43 | $ | (105.9 | ) | -22.1 | % | $ | (0.54 | ) | $ | (0.54 | ) | $ | 85.2 | 18.6 | % | $ | 0.43 | $ | 0.42 | |||||||||||||||||||||
| Acquired intangible assets amortization |
7.7 | 1.6 | % | 0.04 | 0.04 | 7.4 | 1.5 | % | 0.04 | 0.04 | 8.0 | 1.8 | % | 0.04 | 0.04 | |||||||||||||||||||||||||||||||||
| Interest and other (3) |
3.2 | 0.7 | % | 0.02 | 0.02 | (0.6 | ) | -0.1 | % | (0.00 | ) | (0.00 | ) | 3.1 | 0.7 | % | 0.02 | 0.02 | ||||||||||||||||||||||||||||||
| Restructuring and other (2) |
(0.3 | ) | -0.1 | % | — | — | 9.0 | 1.9 | % | 0.05 | 0.05 | 2.5 | 0.5 | % | 0.01 | 0.01 | ||||||||||||||||||||||||||||||||
| Exclude discrete tax adjustments (4) |
(6.3 | ) | -1.3 | % | (0.03 | ) | (0.03 | ) | 184.4 | 38.5 | % | 0.94 | 0.93 | (7.0 | ) | -1.5 | % | (0.04 | ) | (0.03 | ) | |||||||||||||||||||||||||||
| Non-GAAP tax adjustments |
(1.9 | ) | -0.4 | % | (0.01 | ) | (0.01 | ) | (2.9 | ) | -0.6 | % | (0.01 | ) | (0.01 | ) | (3.1 | ) | -0.7 | % | (0.02 | ) | (0.02 | ) | ||||||||||||||||||||||||
| Convertible share adjustment |
— | — | — | 0.01 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
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| Net income - non-GAAP |
$ | 89.4 | 18.3 | % | $ | 0.46 | $ | 0.45 | $ | 91.4 | 19.1 | % | $ | 0.47 | $ | 0.46 | $ | 88.7 | 19.4 | % | $ | 0.44 | $ | 0.44 | ||||||||||||||||||||||||
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| GAAP and non-GAAP weighted average common shares - basic |
195.3 | 196.0 | 200.0 | |||||||||||||||||||||||||||||||||||||||||||||
| GAAP weighted average common shares - diluted |
203.5 | 196.0 | 201.9 | |||||||||||||||||||||||||||||||||||||||||||||
| Exclude dilutive shares related to convertible note transaction |
(6.2 | ) | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Include dilutive shares |
— | 3.0 | — | |||||||||||||||||||||||||||||||||||||||||||||
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| Non-GAAP weighted average common shares - diluted |
197.3 | 199.0 | 201.9 | |||||||||||||||||||||||||||||||||||||||||||||
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| (1) Certain prior period amounts were reclassified to conform with the first quarter 2018 adoption of new accounting guidance for the presentation of pension and post retirement costs. |
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| (2) Restructuring and other consists of: |
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| Quarter Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
| April 1, 2018 |
December 31, 2017 |
April 2, 2017 |
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| Employee severance |
$ | 3.9 | $ | 1.8 | $ | 0.6 | ||||||||||||||||||||||||||||||||||||||||||
| Acquisition costs |
0.8 | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Contingent consideration fair value adjustment |
(5.0 | ) | 6.0 | 0.6 | ||||||||||||||||||||||||||||||||||||||||||||
| Impairment of fixed assets |
— | 1.1 | — | |||||||||||||||||||||||||||||||||||||||||||||
| Facility related |
— | 0.1 | 1.3 | |||||||||||||||||||||||||||||||||||||||||||||
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| $ | (0.3 | ) | $ | 9.0 | $ | 2.5 | ||||||||||||||||||||||||||||||||||||||||||
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| (3) For the quarters ended April 1, 2018, December 31, 2017 and April 2, 2017, adjustment to exclude non-cash convertible debt interest expense. For the quarter ended December 31, 2017, adjustment to exclude actuarial (gains) losses recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting. |
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| (4) For the quarters ended April 1, 2018, December 31, 2017 and April 2, 2017, adjustment to exclude discrete income tax items. For the quarter ended December 31, 2017, adjustment to treat $186 million expense related to the estimated impact of U.S. tax law changes as a discrete item. |
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| GAAP to Non-GAAP Reconciliation of Second Quarter 2018 guidance: | ||||||||||||||||||||||||||||||||||||||||||||||||
| GAAP and non-GAAP second quarter revenue guidance: |
$ | 490 million | to | $ | 520 million | |||||||||||||||||||||||||||||||||||||||||||
| GAAP net income per diluted share |
$ | 0.39 | $ | 0.46 | ||||||||||||||||||||||||||||||||||||||||||||
| Exclude acquired intangible assets amortization |
0.04 | 0.04 | ||||||||||||||||||||||||||||||||||||||||||||||
| Exclude non-cash convertible debt interest |
0.02 | 0.02 | ||||||||||||||||||||||||||||||||||||||||||||||
| Exclude restructuring and other |
0.01 | 0.01 | ||||||||||||||||||||||||||||||||||||||||||||||
| Tax effect of non-GAAP adjustments |
(0.01 | ) | (0.01 | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Convertible share adjustment |
0.01 | 0.01 | ||||||||||||||||||||||||||||||||||||||||||||||
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| Non-GAAP net income per diluted share |
$ | 0.45 | $ | 0.52 | ||||||||||||||||||||||||||||||||||||||||||||
| For press releases and other information of interest to investors, please visit Teradyne’s homepage at http://www.teradyne.com. Contact: Teradyne, Inc. | ||||||||||||||||||||||||
|
Andy Blanchard 978-370-2425 | ||||||||||||||||||||||||
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Vice President of Corporate Relations | ||||||||||||||||||||||||
Exhibit 99.2
| FOR IMMEDIATE RELEASE
For more information, contact:
|
| Andy Blanchard |
| Investor Relations, Teradyne |
| 978.370.2425 investorrelations@teradyne.com
|
| Thomas Visti |
| CEO, MIR |
| +45 CEO, +45 60 48 21 46 tv@mir-robots.com |
Teradyne and Mobile Industrial Robots (MiR) Announce Teradyne’s
Acquisition of MiR, Leader in Collaborative Autonomous Mobile Industrial Robots
| - | Collaborative Autonomous Mobile Industrial Robots are an emerging, fast growing segment of the automation market |
| - | MiR expands Teradyne’s role in flexible, easy to use, ‘Next Generation’ automation products |
| - | Teradyne provides financial strength and global reach to drive MiR’s growth |
| - | Cash transaction, immediately accretive |
NORTH READING, Mass. and ODENSE, Denmark— April 25, 2018 — Teradyne, Inc. (NYSE:TER) and the shareholders of Mobile Industrial Robots (MiR) today announced the acquisition of privately held MiR of Odense, Denmark for €121 million ($148 million) net of cash acquired plus €101 million ($124 million at current exchange rate) if certain performance targets are met extending through 2020.
MiR is a leading supplier of collaborative autonomous mobile robots (AMRs) for industrial applications. The AMR market is an emerging category within the approximately $1.1 billion logistics systems segment of the professional services robot market and is expected to grow rapidly in the years ahead.
“We are excited to have MiR join Teradyne’s widening portfolio of advanced, intelligent, automation products,” said Mark Jagiela, President and CEO of Teradyne. “MiR is the market leader in the nascent, but fast growing market for collaborative autonomous mobile robots (AMRs). Like Universal Robots’ collaborative robots, MiR collaborative AMRs lower the barrier for both large and small enterprises to incrementally automate their operations without the need for specialty staff or a re-layout of their existing workflow. This, combined with a fast return on investment, opens a vast new automation market. Following
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the path proven with Universal Robots, we expect to leverage Teradyne’s global capabilities to expand MiR’s reach.”
MiR was profitable in 2017 with annual revenue of $12 million USD, more than triple 2016 revenues and had Q1’18 sales of $5 million.
“Joining Teradyne allows us to advance our engineering and development investments to provide greater value to our customers and further expand our market leadership in industrial autonomous mobile robots,” said Thomas Visti, CEO of MiR. “Teradyne’s worldwide reach, world-class engineering and support capabilities, financial strength and proven model for leveraging those strengths will help us grow in new and existing markets worldwide.”
“My main focus is to get our mobile robots out to the entire world,” said Niels Jul Jacobsen, CSO, founder of MiR. “With Teradyne as the owner, we will have strong backing to ensure MiR’s continued growth in the global market.”
A webcast to discuss the acquisition and Teradyne’s Q1-2018 financial results will be held on Wednesday April 25, 2018 at 8:00 a.m. EDT. Interested parties should access the webcast at investors.teradyne.com/events-presentations at least five minutes before the call begins. Interested parties can also call 1-800 865-4424 (U.S. and Canada) and 1-706-902-0224 (outside the U.S. and Canada). The conference ID is 7168509. A replay will be available on the Teradyne website, www.teradyne.com.
About MiR
Mobile Industrial Robots (MiR) develops and markets the industry’s most advanced line of collaborative and safe autonomous mobile robots (AMRs) that quickly, easily, and cost-effectively manage internal logistics, freeing employees for higher-value activities. Hundreds of mid-sized through large multinational manufacturers have installed MiR’s innovative robots. MiR has quickly established a global distribution network in more than 40 countries, with regional offices in New York, San Diego, Singapore, Dortmund, Barcelona and Shanghai. MiR has grown quickly since its founding in 2013, with sales increasing fivefold from 2015 to 2016, and with a tripling in revenue from 2016 to 2017. Sales are expected to continue to grow rapidly in the years ahead as new users recognize the value of MIR’s easy to use, collaborative AMRs. For more information, visit http://www.mobile-industrial-robots.com
About Teradyne
Teradyne (NYSE:TER) is a leading supplier of automation equipment for test and industrial applications. Teradyne Automatic Test Equipment (ATE) is used to test semiconductors, wireless products, data storage and complex electronic systems, which serve consumer, communications, industrial and government customers. Our Industrial Automation products include collaborative robots used by global manufacturing and light industrial customers to improve quality and increase manufacturing efficiency. In 2017, Teradyne had revenue of $2.14 billion and currently employs approximately 4,500 people worldwide. For more information, visit www.teradyne.com. Teradyne(R) is a registered trademark of Teradyne, Inc. in the U.S. and other countries.
Paeg 3
Safe Harbor Statement
This release contains forward-looking statements regarding the transaction, Teradyne’s future financial results, and MiR future business prospects and market conditions. Such statements are based on the current assumptions and expectations of Teradyne’s management and are neither promises nor guarantees of future performance. There can be no assurance that these forward looking statements will be achieved. Important factors that could cause actual results to differ materially from those presently expected include: conditions affecting the markets in which MiR operates; market acceptance of MiR new products; competition from both larger, more established and emerging companies in MiR markets; the protection of MiR intellectual property; potential infringement of third party intellectual property rights; the recruitment and retention of key employees; product warranty claims; compliance with product safety regulations and standards; Teradyne’s ability to successfully grow MiR business; and other events, factors and risks disclosed in filings with the SEC, including, but not limited to, the “Risk Factors” section of Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. The forward-looking statements provided by Teradyne in this press release represent management’s views as of the date of this release. Teradyne anticipates that subsequent events and developments may cause management’s views to change. However, while Teradyne may elect to update these forward-looking statements at some point in the future, Teradyne specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Teradyne’s views as of any date subsequent to the date of this release.