QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
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(Address of Principal Executive Offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
per share |
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer |
☐ | Emerging growth company | ||||
Smaller reporting company |
Page No. |
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PART I. FINANCIAL INFORMATION |
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Item 1. |
Financial Statements (Unaudited): |
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1 |
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2 |
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3 |
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4 |
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5 |
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6 |
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Item 2. |
26 |
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Item 3. |
33 |
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Item 4. |
34 |
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PART II. OTHER INFORMATION |
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Item 1. |
34 |
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Item 1A. |
35 |
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Item 2. |
35 |
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Item 4. |
35 |
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Item 6. |
36 |
Item 1: |
Financial Statements |
April 3, 2022 |
December 31, 2021 |
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(in thousands, except per share amount) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Marketable securities |
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Accounts receivable, less allowance for credit losses of $ |
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Inventories, net |
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Prepayments |
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Other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Operating lease right-of-use |
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Marketable securities |
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Deferred tax assets |
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Retirement plans assets |
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Other assets |
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Acquired intangible assets, net |
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Goodwill |
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Total assets |
$ | $ | ||||||
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LIABILITIES |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
Accrued employees’ compensation and withholdings |
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Deferred revenue and customer advances |
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Other accrued liabilities |
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Operating lease liabilities |
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Income taxes payable |
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Current debt |
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Total current liabilities |
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Retirement plans liabilities |
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Long-term deferred revenue and customer advances |
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Long-term other accrued liabilities |
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Deferred tax liabilities |
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Long-term operating lease liabilities |
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Long-term incomes taxes payable |
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Debt |
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Total liabilities |
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Commitments and contingencies ( N ote Q ) |
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Mezzanine equity: |
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Convertible common shares |
— | |||||||
SHAREHOLDERS’ EQUITY |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Retained earnings |
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Total shareholders’ equity |
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Total liabilities, convertible common shares and shareholders’ equity |
$ | $ | ||||||
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For the Three Months Ended |
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April 3, 2022 |
April 4, 2021 |
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(in thousands, except per share amount) |
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Revenues: |
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Products |
$ | $ | ||||||
Services |
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Total revenues |
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Cost of revenues: |
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Cost of products |
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Cost of services |
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Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) |
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Gross profit |
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Operating expenses: |
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Selling and administrative |
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Engineering and development |
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Acquired intangible assets amortization |
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Restructuring and other |
( |
) | ||||||
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Total operating expenses |
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Income from operations |
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Non-operating (income) expense: |
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Interest income |
( |
) | ( |
) | ||||
Interest expense |
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Other (income) expense, net |
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Income before income taxes |
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Income tax provision |
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Net income |
$ | $ | ||||||
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Net income per common share: |
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Basic |
$ | $ | ||||||
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Diluted |
$ | $ | ||||||
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Weighted average common shares—basic |
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Weighted average common shares—diluted |
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For the Three Months Ended |
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April 3, 2022 |
April 4, 2021 |
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(in thousands) |
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Net income |
$ | $ |
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Other comprehensive income, net of tax: |
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Foreign currency translation adjustment, net of tax of $ |
( |
) | ( |
) | ||||
Available-for-sale |
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Unrealized losses on marketable securities arising during period, net of tax of $( |
( |
) | ( |
) | ||||
Less: Reclassification adjustment for gains included in net income, net of tax of $( |
( |
) | ( |
) | ||||
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( |
) | ( |
) | |||||
Defined benefit post-retirement plan: |
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Amortization of prior service credit, net of tax of $ |
( |
) | ( |
) | ||||
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Other comprehensive loss |
( |
) | ( |
) | ||||
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Comprehensive income |
$ |
$ |
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Shareholders’ Equity |
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Convertible Common Shares Value |
Common Stock Shares |
Common Stock Par Value |
Additional Paid-in Capital |
Accumulated Other Comprehensive (Loss) Income |
Retained Earnings |
Total Shareholders’ Equity |
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(in thousands) |
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For the Three Months Ended April 3, 2022 |
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Balance, December 31, 2021 |
$ | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||
Net issuance of common stock under stock-based plans |
( |
) | ( |
) | ||||||||||||||||||||||||
Stock-based compensation expense |
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Repurchase of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Cash dividends ($ |
( |
) | ( |
) | ||||||||||||||||||||||||
Settlements of convertible notes |
( |
) | ( |
) | ||||||||||||||||||||||||
Exercise of convertible notes hedge call options |
( |
) | ( |
) | — | |||||||||||||||||||||||
Cumulative-effect of change in accounting principle related to convertible debt |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Net income |
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Other comprehensive loss |
( |
) | ( |
) | ||||||||||||||||||||||||
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Balance, April 3, 2022 |
$ | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||||
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For the Three Months Ended April 4, 2021 |
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Balance, December 31, 2020 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
Net issuance of common stock under stock-based plans |
( |
) | ( |
) | ||||||||||||||||||||||||
Stock-based compensation expense |
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Repurchase of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Cash dividends ($ |
( |
) | ( |
) | ||||||||||||||||||||||||
Settlements of convertible notes |
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Exercise of convertible notes hedge call options |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Convertible common shares |
( |
) | ||||||||||||||||||||||||||
Net income |
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Other comprehensive loss |
( |
) | ( |
) | ||||||||||||||||||||||||
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Balance, April 4, 2021 |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
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For the Three Months Ended |
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April 3, 2022 |
April 4, 2021 |
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(in thousands) |
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Cash flows from operating activities: |
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Net income |
$ | $ | ||||||
Adjustments to reconcile net income from operations to net cash provided by operating activities: |
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Depreciation |
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Stock-based compensation |
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Amortization |
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Deferred taxes |
( |
) | ||||||
Losses (gains) on investments |
( |
) | ||||||
Provision for excess and obsolete inventory |
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Loss on convertible debt conversion s |
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Contingent consideration fair value adjustment s |
( |
) | ||||||
Other |
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Changes in operating assets and liabilities |
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Accounts receivable |
( |
) | ||||||
Inventories |
( |
) | ( |
) | ||||
Prepayments and other assets |
( |
) | ( |
) | ||||
Accounts payable and other accrued expenses |
( |
) | ( |
) | ||||
Deferred revenue and customer advances |
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Retirement plan contributions |
( |
) | ( |
) | ||||
Income taxes |
( |
) | ||||||
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Net cash provided by operating activities |
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Cash flows from investing activities: |
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Purchases of property, plant and equipment |
( |
) | ( |
) | ||||
Purchases of marketable securities |
( |
) | ( |
) | ||||
Proceeds from maturities of marketable securities |
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Proceeds from sales of marketable securities |
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Net cash (used for) provided by investing activities |
( |
) | ||||||
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Cash flows from financing activities: |
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Issuance of common stock under stock purchase and stock option plans |
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Repurchase of common stock |
( |
) | ( |
) | ||||
Payments related to net settlement of employee stock compensation awards |
( |
) | ( |
) | ||||
Payments of convertible debt principal |
( |
) | ( |
) | ||||
Dividend payments |
( |
) | ( |
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Net cash used for financing activities |
( |
) | ( |
) | ||||
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Effects of exchange rate changes on cash and cash equivalents |
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Decrease in cash and cash equivalents |
( |
) | ( |
) | ||||
Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
$ | $ | ||||||
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Non-cash investing activities: |
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Capital expenditures incurred but not yet paid: |
$ | $ |
• | semiconductor test (“Semiconductor Test”) systems; |
• | storage and system level test (“Storage Test”) systems, defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”); |
• | wireless test (“Wireless Test”) systems; and |
• | industrial automation (“Industrial Automation”) products. |
Semiconductor Test |
Industrial Automation |
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System on-a- Chip |
Memory |
System Test |
Universal Robots |
Mobile Industrial Robots |
AutoGuide |
Wireless Test |
Corporate and Eliminations |
Total |
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(in thousands) |
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For the Three Months Ended April 3, 2022 (1) |
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Timing of Revenue Recognition |
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Point in Time |
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
Over Time |
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Total |
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
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Geographical Market |
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Asia Pacific |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Americas |
( |
) | ||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa |
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Total |
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
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For the Three Months Ended April 4, 2021 (1) |
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Timing of Revenue Recognition |
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Point in Time |
$ | $ | $ | $ | $ | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||||||
Over Time |
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Total |
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
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Geographical Market |
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Asia Pacific |
$ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Americas |
( |
) | ||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa |
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Total |
$ | $ | $ | $ | $ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
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(1) | Includes $ “Revenue from Contracts with Customers.” |
April 3, 2022 |
December 31, 2021 |
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(in thousands) |
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Maintenance, service and training |
$ |
$ |
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Customer advances, undelivered elements and other |
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Extended warranty |
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Total deferred revenue and customer advances |
$ |
$ |
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April 3, 2022 |
December 31, 2021 |
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(in thousands) |
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Raw material |
$ | $ | ||||||
Work-in-process |
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Finished goods |
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$ | $ | |||||||
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April 3, 2022 |
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Quoted Prices in Active Markets for Identical Instruments (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total |
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(in thousands) |
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Assets |
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Cash |
$ | $ | $ | $ | ||||||||||||
Cash equivalents |
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Available-for-sale |
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Commercial paper |
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U.S. Treasury securities |
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Corporate debt securities |
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Debt mutual funds |
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U.S. government agency securities |
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Certificates of deposit and time deposits |
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Non-U.S. government securities |
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Equity securities: |
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Mutual funds |
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$ | $ | $ | $ | |||||||||||||
Derivative assets |
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Total |
$ | $ | $ | $ | ||||||||||||
Liabilities |
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Derivative liabilities |
$ | $ | $ | $ | ||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
Reported as follows: |
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(Level 1) |
(Level 2) |
(Level 3) |
Total |
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(in thousands) |
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Assets |
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Cash and cash equivalents |
$ | $ | $ | $ | ||||||||||||
Marketable securities |
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Long-term marketable securities |
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Prepayments |
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Total |
$ | $ | $ | $ | ||||||||||||
Liabilities |
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Other current liabilities |
$ | $ | $ | $ | ||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
December 31, 2021 |
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Quoted Prices in Active Markets for Identical Instruments (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Total |
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(in thousands) |
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Assets |
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Cash |
$ | $ | $ | $ | ||||||||||||
Cash equivalents |
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Available for sale securities: |
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Commercial paper |
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U.S. Treasury securities |
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Corporate debt securities |
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Debt mutual funds |
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U.S. government agency securities |
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Certificates of deposit and time deposits |
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Non-U.S. government securities |
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Equity securities: |
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Mutual funds |
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Total |
$ | $ | $ | $ | ||||||||||||
Derivative assets |
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Total |
$ | $ | $ | $ | ||||||||||||
Liabilities |
||||||||||||||||
Derivative liabilities |
$ | $ | $ | $ | ||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
Reported as follows: |
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(Level 1) |
(Level 2) |
(Level 3) |
Total |
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(in thousands) |
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Assets |
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Cash and cash equivalents |
$ | $ | $ | $ | ||||||||||||
Marketable securities |
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Long-term marketable securities |
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Prepayments |
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Total |
$ | $ | $ | $ | ||||||||||||
Liabilities |
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Other current liabilities |
$ | $ | $ | $ | ||||||||||||
Total |
$ | $ | $ | $ | ||||||||||||
For the Three Months Ended |
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April 3, 2022 |
April 4, 2021 |
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(in thousands) |
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Balance at beginning of period |
$ | $ | ||||||
Fair value adjustment (a) |
( |
) | ||||||
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Balance at end of period |
$ | $ | ||||||
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(a) | In the three months ended April 4, 2021, the fair value of contingent consideration for the earn-outs in connection with the acquisition of AutoGuide was reduced to zero, which resulted in a benefit of $ |
April 3, 2022 |
December 31, 2021 |
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Carrying Value |
Fair Value |
Carrying Value |
Fair Value |
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(in thousands) |
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Assets |
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Cash and cash equivalents |
$ | $ | $ | $ | ||||||||||||
Marketable securities |
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Derivative assets |
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Liabilities |
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Derivative liabilities |
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Convertible debt |
April 3, 2022 |
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Available-for-Sale |
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Cost |
Unrealized Gain |
Unrealized (Loss) |
Fair Market Value |
Fair Market Value of Investments with Unrealized Losses |
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(in thousands) |
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Commercial paper |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||
U.S. Treasury securities |
( |
) | ||||||||||||||||||
Corporate debt securities |
( |
) | ||||||||||||||||||
Debt mutual funds |
— | ( |
) | — | ||||||||||||||||
U.S. government agency securities |
— | ( |
) | |||||||||||||||||
Certificates of deposit and time deposits |
— | — | — | |||||||||||||||||
Non-U.S. government securities |
— | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | $ | $ | ( |
) | $ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
Cost |
Unrealized Gain |
Unrealized (Loss) |
Fair Market Value |
Fair Market Value of Investments with Unrealized Losses |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Marketable securities |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||
Long-term marketable securities |
( |
) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | $ | $ | ( |
) | $ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
||||||||||||||||||||
Available-for-Sale |
||||||||||||||||||||
Cost |
Unrealized Gain |
Unrealized (Loss) |
Fair Market Value |
Fair Market Value of Investments with Unrealized Losses |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Commercial paper |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||
U.S. Treasury securities |
( |
) | ||||||||||||||||||
Corporate debt securities |
( |
) | ||||||||||||||||||
Debt mutual funds |
— | — | ||||||||||||||||||
U.S. government agency securities |
( |
) | ||||||||||||||||||
Certificates of deposit and time deposits |
— | — | — | |||||||||||||||||
Non-U.S. government securities |
— | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | $ | $ | ( |
) | $ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
Cost |
Unrealized Gain |
Unrealized (Loss) |
Fair Market Value |
Fair Market Value of Investments with Unrealized Losses |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Marketable securities |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||
Long-term marketable securities |
( |
) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | $ | $ | ( |
) | $ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
April 3, 2022 |
||||||||
Cost |
Fair Market Value |
|||||||
(in thousands) |
||||||||
Due within one year |
$ | $ | ||||||
Due after 1 year through 5 years |
||||||||
Due after 5 years through 10 years |
||||||||
Due after 10 years |
||||||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
April 3, 2022 |
December 31, 2021 |
|||||||||||||||||||||||
Buy Position |
Sell Position |
Net Total |
Buy Position |
Sell Position |
Net Total |
|||||||||||||||||||
(in millions) |
||||||||||||||||||||||||
Japanese Yen |
$ |
( |
) |
$ |
— |
$ |
( |
) |
$ |
( |
) |
$ |
— |
$ |
( |
) | ||||||||
Taiwan Dollar |
( |
) |
— |
( |
) |
( |
) |
— |
( |
) | ||||||||||||||
Korean Won |
( |
) |
— |
( |
) |
( |
) |
— |
( |
) | ||||||||||||||
British Pound Sterling |
( |
) |
— |
( |
) |
( |
) |
— |
( |
) | ||||||||||||||
Singapore Dollar |
— |
— |
||||||||||||||||||||||
Euro |
— |
— |
||||||||||||||||||||||
Philippine Peso |
— |
— |
||||||||||||||||||||||
Chinese Yuan |
— |
— |
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ |
( |
) |
$ |
$ |
$ |
( |
) |
$ |
$ |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Location |
April 3, 2022 |
December 31, 2021 |
||||||||
(in thousands) |
||||||||||
Derivatives not designated as hedging instruments: |
||||||||||
Foreign exchange contracts |
Prepayments | $ |
$ |
|||||||
Foreign exchange contracts |
Other current liabilities | ( |
) |
( |
) | |||||
|
|
|
|
|||||||
Total derivatives |
$ |
( |
) |
$ |
( |
) | ||||
|
|
|
|
Location of (Gains) Losses |
For the Three Months Ended |
|||||||||||
Recognized in Statement of Operations |
April 3, 2022 |
April 4, 2021 |
||||||||||
(in thousands) |
||||||||||||
Derivatives not designated as hedging instruments: |
||||||||||||
|
||||||||||||
Foreign exchange contracts |
Other (income) expense, net |
|
$ | ( |
) | $ |
(1) | The table does not reflect the corresponding gains and losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies. |
(2) | For the three months ended April 3, 2022 , net losses from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $ |
(3) | For the three months ended April 4, 2021, net gains from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $ |
April 3, 2022 |
December 31, 2021 |
|||||||
(in thousands) |
||||||||
Debt principal |
$ | $ | ||||||
Unamortized debt issuance fees (1) |
||||||||
|
|
|
|
|||||
Net carrying amount of convertible debt |
$ | $ | ||||||
|
|
|
|
April 3, 2022 |
December 31, 2021 |
|||||||
(in thousands) |
||||||||
Current debt |
$ | $ | ||||||
Long-term debt |
||||||||
|
|
|
|
|||||
Net carrying amount of convertible debt |
$ | $ | ||||||
|
|
|
|
For the Three Months Ended |
||||||||
April 3, 2022 |
April 4, 2021 |
|||||||
(in thousands) |
||||||||
Contractual interest expense on the coupon |
$ | $ | ||||||
Amortization of debt issuance fees recognized as interest expense (2 ) |
||||||||
|
|
|
|
|||||
Total interest expense on the convertible debt |
$ | $ | ||||||
|
|
|
|
(1) |
Unamortized debt issuance fees as of December 31, 2021 include unamortized debt discount of $ |
(2) |
Three months ended April 4, 2021 includes the amortization of debt discount component, which was eliminated with the adoption of ASU 2020-06 on January 1, 2022. |
April 3, 2022 |
December 31, 2021 |
|||||||
(in thousands) |
||||||||
Contract manufacturer and supplier prepayments |
$ | $ | ||||||
Prepaid maintenance and other services |
||||||||
Prepaid taxes |
||||||||
Other prepayments |
||||||||
Total prepayments |
$ | $ | ||||||
For the Three Months Ended |
||||||||
April 3, 2022 |
April 4, 2021 |
|||||||
(in thousands) |
||||||||
Balance at beginning of period |
$ | $ | ||||||
Accruals for warranties issued during the period |
||||||||
Accruals related to pre-existing warranties |
( |
) | ||||||
Settlements made during the period |
( |
) | ( |
) | ||||
Balance at end of period |
$ | $ | ||||||
For the Three Months Ended |
||||||||
April 3, 2022 |
April 4, 2021 |
|||||||
(in thousands) |
||||||||
Balance at beginning of period |
$ | $ | ||||||
Deferral of new extended warranty revenue |
||||||||
Recognition of extended warranty deferred revenue |
( |
) | ( |
) | ||||
Balance at end of period |
$ | $ | ||||||
For the Three Months Ended |
||||||||
April 3, 2022 |
April 4, 2021 |
|||||||
Risk-free interest rate |
% | % | ||||||
Teradyne volatility-historical |
% | % | ||||||
NYSE Composite Index volatility-historical |
% | % | ||||||
Dividend yield |
% | % |
For the Three Months Ended |
||||||||
April 3, 2022 |
April 4, 2021 |
|||||||
Expected life (years) |
||||||||
Risk-free interest rate |
% | % | ||||||
Volatility-historical |
% | % | ||||||
Dividend yield |
% | % |
Foreign Currency Translation Adjustment |
Unrealized Gains (Losses) on Marketable Securities |
Retirement Plans Prior Service Credit |
Total |
|||||||||||||
(in thousands) |
||||||||||||||||
Three Months Ended April 3, 2022 |
||||||||||||||||
Balance at December 31, 2021, net of tax of $ |
$ | ( |
) | $ | $ | $ | ( |
) | ||||||||
Other comprehensive loss before reclassifications, net of tax of $ |
( |
) | ( |
) | ( |
) | ||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $ |
( |
) | ( |
) | ( |
) | ||||||||||
Net current period other comprehensive loss, net of tax of $ |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Balance at April 3, 2022, net of tax of $ |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||
Three Months Ended April 4, 2021 |
||||||||||||||||
Balance at December 31, 2020, net of tax of $ |
$ | $ | $ | $ | ||||||||||||
Other comprehensive loss before reclassifications, net of tax of $ |
( |
) | ( |
) | ( |
) | ||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $ |
( |
) | ( |
) | ( |
) | ||||||||||
Net current period other comprehensive loss, net of tax of $ |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Balance at April 4, 2021, net of tax of $ |
$ | $ | $ | $ | ||||||||||||
Details about Accumulated Other Comprehensive Income (Loss) Components |
For the Three Months Ended |
Affected Line Item in the Statements of Operations |
||||||||||
April 3, |
April 4, |
|||||||||||
2022 |
2021 |
|||||||||||
(in thousands) |
||||||||||||
Available-for-sale |
||||||||||||
Unrealized gains, net of tax of $ |
$ | $ | Other (income) expense, net |
|||||||||
Defined benefit pension and postretirement plans: |
||||||||||||
Amortization of prior service cre , net of tax of $dit |
(a) | |||||||||||
Total reclassifications, net of tax of $ |
$ | $ | Net income | |||||||||
(a) | The amortization of prior service credit is included in the computation of net periodic postretirement benefit cost. See Note P : “Retirement Plans.” |
Industrial Automation |
Wireless Test |
Semiconductor Test |
System Test |
Total |
||||||||||||||||
(in thousands) |
||||||||||||||||||||
Balance at December 31, 2021 |
||||||||||||||||||||
Goodwill |
$ | $ | $ | $ | $ | |||||||||||||||
Accumulated impairment losses |
— | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
Total goodwill |
||||||||||||||||||||
Foreign currency translation adjustment |
( |
) | ( |
) | ( |
) | ||||||||||||||
Balance at April 3, 2022 |
||||||||||||||||||||
Goodwill |
||||||||||||||||||||
Accumulated impairment losses |
— | ( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
Total goodwill |
$ | $ | $ | $ | $ | |||||||||||||||
Gross Carrying Amount |
Accumulated Amortization |
Foreign Currency Translation Adjustment |
Net Carrying Amount |
|||||||||||||
(in thousands) |
||||||||||||||||
Balance at April 3, 2022 |
||||||||||||||||
Developed technology |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
Customer relationships |
( |
) | ||||||||||||||
Tradenames and trademarks |
( |
) | ( |
) | ||||||||||||
Total intangible assets |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
Balance, December 31, 2021 |
||||||||||||||||
Developed technology |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
Customer relationships |
( |
) | ||||||||||||||
Tradenames and trademarks |
( |
) | ( |
) | ||||||||||||
Total intangible assets |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
Year |
Amortization Expense |
|||
(in thousands) |
||||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
Thereafter |
For the Three Months Ended |
||||||||
April 3, |
April 4, |
|||||||
2022 |
2021 |
|||||||
(in thousands, except per share amounts) |
||||||||
Net income for basic and diluted net income per share |
$ | $ | ||||||
Weighted average common shares-basic |
||||||||
Effect of dilutive potential common shares: |
||||||||
Convertible note hedge warrant shares (1) |
||||||||
Incremental shares from assumed conversion of convertible notes (2) |
||||||||
Restricted stock units |
||||||||
Stock options |
||||||||
Employee stock purchase plan |
||||||||
Dilutive potential common shares |
||||||||
Weighted average common shares-diluted |
||||||||
Net income per common share-basic |
$ | $ | ||||||
Net income per common share-diluted |
$ | $ | ||||||
(1) | Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price of $ |
(2) | Incremental shares from assumed conversion of the convertible notes were calculated using the difference between the average Teradyne stock price for the period and the conversion price of $ |
For the Three Months Ended |
||||||||||||||||
April 3, 2022 |
April 4, 2021 |
|||||||||||||||
United States |
Foreign |
United States |
Foreign |
|||||||||||||
(in thousands) |
||||||||||||||||
Service cost |
$ | $ | $ | $ | ||||||||||||
Interest cost |
||||||||||||||||
Expected return on plan assets |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Total net periodic pension cost |
$ | $ | $ | $ | ||||||||||||
For the Three Months Ended |
||||||||
April 3, 2022 |
April 4, 2021 |
|||||||
(in thousands) |
||||||||
Service cost |
$ | $ | ||||||
Interest cost |
||||||||
Amortization of prior service credit |
( |
) | ( |
) | ||||
Total net periodic postretirement benefit cost |
$ | $ | ||||||
For the Three Months Ended |
||||||||
April 3, 2022 |
April 4, 2021 |
|||||||
US statutory federal tax rate |
% | % | ||||||
Non-deductible officers’ compensation |
||||||||
Discrete benefit related to equity compensation |
( |
) | ( |
) | ||||
Foreign taxes |
( |
) | ( |
) | ||||
Tax credits |
( |
) | ( |
) | ||||
International provisions of the U.S. Tax Cuts and Jobs Act of 2017 |
( |
) | ( |
) | ||||
Other, net |
||||||||
Effective tax rate |
% | % | ||||||
Semiconductor Test |
System Test |
Industrial Automation |
Wireless Test |
Corporate and Eliminations |
Consolidated |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Three Months Ended April 3, 2022 |
||||||||||||||||||||||||
Revenues |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||
Income (loss) before income taxes (1)(2) |
( |
) | ( |
) | ||||||||||||||||||||
Total assets (3) |
||||||||||||||||||||||||
Three Months Ended April 4, 2021 |
||||||||||||||||||||||||
Revenues |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||
Income (loss) before income taxes (1)(2) |
( |
) | ( |
) | ||||||||||||||||||||
Total assets (3) |
(1) | Included in Corporate and Eliminations are: legal fees, contingent consideration fair value adjustments, interest income, interest expense, severance charges, net foreign exchange gains (losses), acquisition related charges and compensation, intercompany eliminations and for the three months ended April 4, 2021, loss on convertible debt conversions. |
(2) | Included in income (loss) before taxes are charges and credits related to restructuring and other, inventory charges and, for the three months ended April 4, 2021, loss on convertible debt conversions. |
(3) | Total assets are attributable to each segment. Corporate assets consist of cash and cash equivalents, marketable securities, and certain other assets. |
For the Three Months Ended |
||||||||
April 3, 2022 |
April 4, 2021 |
|||||||
(in thousands) |
||||||||
Semiconductor Test: |
||||||||
Cost of revenues—inventory charge |
$ | — |
$ | |||||
Industrial Automation: |
||||||||
Cost of revenues—inventory charge |
$ | — |
$ | |||||
Wireless: |
||||||||
Cost of revenues—inventory charge |
$ | $ | — | |||||
Corporate and Eliminations : |
||||||||
Restructuring and other— legal settlement charge |
$ | $ | ||||||
Restructuring and other—AutoGuide contingent consideration adjustment |
( |
) | ||||||
Other (income) expense, net—loss on convertible debt conversion s |
||||||||
Restructuring and other—acquisition related expenses and compensation |
( |
) |
Item 2: |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | semiconductor test (“Semiconductor Test”) systems; |
• | storage and system level test (“Storage Test”) systems, defense/aerospace (“Defense/Aerospace”) test instrumentation and systems and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”); |
• | wireless test (“Wireless Test”) systems; and |
• | industrial automation (“Industrial Automation”) products. |
For the Three Months Ended |
||||||||
April 3, 2022 |
April 4, 2021 |
|||||||
Percentage of revenues: |
||||||||
Revenues: |
||||||||
Products |
83 | % | 85 | % | ||||
Services |
17 | 15 | ||||||
|
|
|
|
|||||
Total revenues |
100 | 100 | ||||||
Cost of revenues: |
||||||||
Cost of products |
32 | 34 | ||||||
Cost of services |
8 | 7 | ||||||
|
|
|
|
|||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) |
40 | 41 | ||||||
|
|
|
|
|||||
Gross profit |
60 | 59 | ||||||
Operating expenses: |
||||||||
Selling and administrative |
19 | 17 | ||||||
Engineering and development |
14 | 13 | ||||||
Acquired intangible assets amortization |
1 | 1 | ||||||
Restructuring and other |
2 | (1 | ) | |||||
Total operating expenses |
36 | 29 | ||||||
|
|
|
|
|||||
Income from operations |
25 | 30 | ||||||
Non-operating (income) expense: |
||||||||
Interest income |
— | — | ||||||
Interest expense |
— | 1 | ||||||
Other (income) expense, net |
1 | — | ||||||
|
|
|
|
|||||
Income before income taxes |
24 | 29 | ||||||
Income tax provision |
2 | 2 | ||||||
|
|
|
|
|||||
Net income |
21 | % | 26 | % | ||||
|
|
|
|
April 3, 2022 |
April 4, 2021 |
Dollar Change |
||||||||||
(in millions) |
||||||||||||
Semiconductor Test |
$ | 482.3 | $ | 528.1 | $ | (45.8 | ) | |||||
System Test |
118.7 | 132.8 | (14.1 | ) | ||||||||
Industrial Automation |
103.2 | 80.0 | 23.2 | |||||||||
Wireless Test |
51.5 | 40.9 | 10.6 | |||||||||
|
|
|
|
|
|
|||||||
$ | 755.4 | $ | 781.7 | $ | (26.3 | ) | ||||||
|
|
|
|
|
|
For the Three Months Ended |
||||||||
April 3, 2022 |
April 4, 2021 |
|||||||
China |
19 | % | 19 | % | ||||
Taiwan |
18 | 33 | ||||||
United States |
15 | 10 | ||||||
Korea |
13 | 8 | ||||||
Europe |
10 | 7 | ||||||
Japan |
6 | 3 | ||||||
Malaysia |
5 | 4 | ||||||
Thailand |
5 | 7 | ||||||
Singapore |
4 | 3 | ||||||
Philippines |
2 | 4 | ||||||
Rest of World |
3 | 2 | ||||||
|
|
|
|
|||||
100 | % | 100 | % | |||||
|
|
|
|
(1) | Revenues attributable to a country are based on location of customer site. |
For the Three Months Ended |
||||||||||||
April 3, 2022 |
April 4, 2021 |
Dollar/Point Change |
||||||||||
(in millions) |
||||||||||||
Gross profit |
$ | 454.9 | $ | 461.6 | $ | (6.7 | ) | |||||
Percent of total revenues |
60.2 | % | 59.1 | % | 1.1 |
For the Three Months Ended |
||||||||||||
April 3, 2022 |
April 4, 2021 |
Dollar Change |
||||||||||
(in millions) |
||||||||||||
Selling and administrative |
$ | 140.2 | $ | 129.8 | $ | 10.4 | ||||||
Percent of total revenues |
18.6 | % | 16.6 | % |
For the Three Months Ended |
||||||||||||
April 3, 2022 |
April 4, 2021 |
Dollar Change |
||||||||||
(in millions) |
||||||||||||
Engineering and development |
$ | 108.1 | $ | 100.4 | $ | 7.7 | ||||||
Percent of total revenues |
14.3 | % | 12.8 | % |
For the Three Months Ended |
||||||||||||
April 3, 2022 |
April 4, 2021 |
Dollar Change |
||||||||||
(in millions) |
||||||||||||
Interest income |
$ | (0.7 | ) | $ | (0.8 | ) | $ | 0.1 | ||||
Interest expense |
1.0 | 6.0 | (5.0 | ) | ||||||||
Other (income) expense, net |
5.2 | 3.8 | 1.4 |
For the Three Months Ended |
||||||||||||
April 3, 2022 |
April 4, 2021 |
Dollar Change |
||||||||||
(in millions) |
||||||||||||
Semiconductor Test |
$ | 149.7 | $ | 176.4 | $ | (26.7 | ) | |||||
System Test |
41.3 | 51.1 | (9.8 | ) | ||||||||
Wireless Test |
18.6 | 9.6 | 9.0 | |||||||||
Industrial Automation |
(5.1 | ) | (13.0 | ) | 7.9 | |||||||
Corporate and Eliminations (1) |
(24.2 | ) | (0.1 | ) | (24.1 | ) | ||||||
|
|
|
|
|
|
|||||||
$ | 180.4 | $ | 224.0 | $ | (43.6 | ) | ||||||
|
|
|
|
|
|
(1) | Included in Corporate and Eliminations are legal fees, contingent consideration adjustments, interest income, interest expense, net foreign exchange gains (losses), intercompany eliminations, acquisition related charges and compensation and for the three months ended April 4, 2021, loss on convertible debt conversions. |
Item 3: |
Quantitative and Qualitative Disclosures about Market Risks |
Hypothetical Change in Teradyne Stock Price |
Fair Value |
Estimated change in fair value |
Hypothetical percentage increase (decrease) in fair value |
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10% Increase |
$ | 359,092 | $ | 35,422 | 10.9 | % | ||||||
No Change |
323,670 | — | — | |||||||||
10% Decrease |
288,248 | (35,422 | ) | (10.9 | ) |
Item 4: |
Controls and Procedures |
Item 1: |
Legal Proceedings |
Item 1A: |
Risk Factors |
Item 2: |
Unregistered Sales of Equity Securities and Use of Proceeds |
Period |
(a) Total Number of Shares (or Units) Purchased |
(b) Average Price Paid per Share (or Unit) |
(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs |
(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may Yet Be Purchased Under the Plans or Programs |
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January 1, 2022 - January 30, 2022 |
194 | $ | 140.33 | — | $ | 1,400,000 | ||||||||||
January 31, 2022 - February 27, 2022 |
793 | $ | 115.59 | 767 | $ | 1,311,601 | ||||||||||
February 28, 2022 - April 3, 2022 |
986 | $ | 114.96 | 984 | $ | 1,198,536 | ||||||||||
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1,973 | (1) | $ | 117.71 | (1) | 1,751 | |||||||||||
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(1) | Includes approximately two hundred twenty-four thousand shares at an average price of $137.98 withheld from employees for the payment of taxes. |
Item 4: |
Mine Safety Disclosures |
Item 6: |
Exhibits |
TERADYNE, INC. |
Registrant |
/s/ S ANJAY MEHTA |
Sanjay Mehta Vice President, Chief Financial Officer and Treasurer (Duly Authorized Officer and Principal Financial Officer) May 6, 2022 |