"In the second quarter, our FLEX System-On-a-Chip (SOC) semiconductor tester continued to gather momentum, " said Teradyne President and CEO Mike Bradley, "with a broadening of customers and applications driving record orders for the system. The FLEX has now moved on to customer production floors in a wide range of parallel test SOC applications."
“with a broadening of customers and applications driving record orders for the system. The FLEX has now moved on to customer production floors in a wide range of parallel test SOC applications.”
In the third quarter, the company's guidance is for sales to be between $350 and $370 million, with a loss per share between $0.08 and $0.15. This guidance includes approximately $17 million, or $0.09 per share, in net restructuring and other charges.
Conference Call/Webcast
Teradyne will be conducting its conference call tomorrow, July 20, 2005, at 10:00 a.m. EDT The call will be webcast at www.teradyne.com (click on "Investors"). A replay will be available via phone starting at noon EDT and continuing through August 3, 2005. The replay may be accessed by calling 1-800-642-1687 in the US and Canada, or 706-645-9291 outside the US and Canada, and providing conference code 7400188, or by visiting www.teradyne.com and clicking on "Investors" for a link to the replay.
About Teradyne
Teradyne (NYSE:TER) is a leading supplier of Automatic Test Equipment and interconnection systems. The company's products deliver competitive advantage to the world's leading semiconductor, electronics, automotive and network systems companies. In 2004, Teradyne had sales of $1.8 billion, and currently employs about 5,700 people worldwide. For more information, visit www.teradyne.com. Teradyne(R) is a registered trademark of Teradyne, Inc. in the US and other countries. All product names are trademarks of Teradyne, Inc. (including its subsidiaries) or their respective owners.
Safe Harbor Statement
This release contains statements regarding expected future revenues and earnings and future market conditions which are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Such statements are based on the current assumptions and expectations of Teradyne's management and are neither promises nor guarantees but involve risks and uncertainties, both known and unknown, that could cause Teradyne's actual results to differ materially from those projected in the forward-looking statements. There can be no assurance that such estimates of future results will be achieved. Important factors that could cause actual results to differ materially from those presently expected include: adverse changes in general economic or market conditions, including market demand for electronics and downturns in the semiconductor industry; reductions or delays in capital investment by our customers; the decision by customers to cancel or defer orders that previously had been accepted; reduced bookings; the "hockey-stick" pattern of sales resulting in a disproportionately large percentage of total quarterly sales occurring in the last month and weeks of each quarter; the historically cyclical nature and volatility of the markets that Teradyne serves; war or the threat of terrorist attacks; disruptions or delays in Teradyne's supply chain; new product development introductions and transitions and any delays; uncertainty of customer acceptance of new product offerings including the timing, price and mix of new product acceptance; competitive pressures including new products, pricing and gross margin pressures; the effectiveness of our implementation of cost cutting and expense control measures, including facility consolidations, employee reductions, the centralization of certain shared services, seeking lower prices from suppliers and the outsourcing of selected manufacturing and engineering activities; insufficient, excess or obsolete inventory; disruptions, delays or shortages in an adequate supply of raw materials, components or internal and external manufacturing capability; incoming quality of components or raw materials; the impact of our ability to manage the effects of past or future acquisitions or divestitures; any material litigation against Teradyne; the increase in our debt service obligations and debt to capital ratio resulting from our issuance of $400 million aggregate principal amount of senior convertible notes in 2001; the availability of additional financing; Teradyne's obligations in the event of a change of control; the impact of being required to account for stock options as an expense; the ability to attract and retain key employees; the risks of potential environmental liability; the risks of operating internationally, which include political and economic instability and unexpected changes in legal and regulatory requirements and in policy changes affecting international markets; and other events, factors and risks previously and from time to time disclosed in our filings with the Securities and Exchange Commission including, but not limited to, Teradyne's annual report on Form 10-K for the period ending December 31, 2004. The "forward-looking statements" included herein are made only as of the date of publication and Teradyne undertakes no obligation to update the information set forth in this release.
CONDENSED CONSOLIDATED OPERATING STATEMENTS
(In thousands, except per share amounts)
----------------------------------------------
Quarter Ended Six Months Ended
----------------------------- ---------------------
July 3, April 3, July 4, July 3, July 4,
2005 2005 2004 2005 2004
----------------------------- ---------------------
Net Revenues $320,172 $305,581 $526,463 $625,753 $957,066
Cost of Revenues 222,007 216,441 299,835 438,448 554,463
--------- --------- --------- --------- -----------
Gross Profit 98,165 89,140 226,628 187,305 402,603
Operating Expenses:
Engineering and
Development 60,915 64,240 66,914 125,155 131,608
Selling and
Administrative 67,542 65,315 69,991 132,857 136,233
Restructuring and
Other Charges,
net(1) 10,195 10,628 (713) 20,823 (583)
--------- --------- --------- --------- -----------
Operating
Expenses 138,652 140,183 136,192 278,835 267,258
(Loss)/Income From
Operations (40,487) (51,043) 90,436 (91,530) 135,345
Interest Income 3,841 4,405 3,470 8,246 7,061
Interest Expense (4,153) (4,434) (4,895) (8,587) (9,527)
Other Income and
Expense, net - - 426 - 1,277
--------- --------- --------- --------- -----------
(Loss)/Income Before
Income Taxes (40,799) (51,072) 89,437 (91,871) 134,156
Income Tax Expense 4,665 1,500 8,944 6,165 13,416
--------- --------- --------- --------- -----------
Net (Loss)/Income $(45,464) $(52,572) $80,493 $(98,036) $120,740
========= ========= ========= ========= ===========
(Loss)/Income per Common Share - Basic and Diluted:
---------------------------------------------------
Net (Loss)/Income per
Common Share -
Basic $(0.23) $(0.27) $0.41 $(0.50) $0.62
========= ========= ========= ========= ===========
Shares used in calculation
of Net (Loss)/Income
per Common Share
- Basic 195,757 195,619 194,015 195,688 193,934
========= ========= ========= ========= ===========
Net (Loss)/Income
per Common Share -
Diluted (2) $(0.23) $(0.27) $0.39 $(0.50) $0.60
========= ========= ========= ========= ===========
Shares used in calculation
of Net (Loss)/Income
per Common Share
- Diluted 195,757 195,619 213,486 195,688 214,383
========= ========= ========= ========= ===========
Gross Orders $353,328 $341,986 $557,944 $695,314 $1,109,401
========= ========= ========= ========= ===========
Net Orders $348,952 $340,670 $557,944 $689,622 $1,109,184
========= ========= ========= ========= ===========
(1) Restructuring and Other Charges, net consists of:
July 3, April 3, July 4, July 3, July 4,
2005 2005 2004 2005 2004
------------------- -------------------------------
Severance $4,624 $7,083 $(458) $11,707 $(760)
Facility Related 896 2,536 1,201 3,432 2,136
Long-Lived Asset
Impairment 9,157 595 (100) 9,752 (603)
Gain on Sale of
Real Estate (4,445) - - (4,445) -
Gain on Sale of
Business (612) - (865) (612) (865)
Other 575 414 (491) 989 (491)
--------- --------- --------- --------- -----------
$10,195 $10,628 $(713) $20,823 $(583)
(2) Under GAAP, when calculating diluted earnings per share,
convertible debentures must be assumed to have converted if the effect
on EPS would be dilutive. For Teradyne, dilution occurs when earnings
are greater than $0.24 per share per quarter. Accordingly, for the
quarter and the six months ended July 4, 2004, diluted shares assumes
the conversion of the convertible debentures, as the effect of the
conversion on EPS would be dilutive. Accordingly for the quarter and
the six months ended July 4, 2004, 15.4 million shares have been
included in diluted shares and net interest expense of $3.7 million
and $7.3 million, respectively, has been added back to net income for
the diluted earnings per share calculation.
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
--------------------------------------------------------
July 3, 2005 Dec. 31, 2004
------------ -------------
Assets
Cash and Cash Equivalents $ 199,060 $ 209,147
Marketable Securities 73,224 75,431
Accounts Receivable 235,275 223,491
Inventories 257,619 262,996
Other Current Assets 34,116 34,761
----------- -----------
799,294 805,826
Net Property, Plant and Equipment 528,114 547,075
Long-term Marketable Securities 277,151 406,615
Goodwill 116,176 116,176
Intangible and Other Assets 44,179 46,870
----------- -----------
$ 1,764,914 $ 1,922,562
=========== ===========
Liabilities
Notes Payable - Banks $ 2,705 $ 4,826
Current Portion of Long-term Debt 300 321
Accounts Payable 70,347 62,006
Accrued Employees' Compensation and
Withholdings 54,724 106,298
Deferred Revenue and Customer Advances 34,204 30,399
Other Accrued Liabilities 57,761 60,970
Income Taxes Payable 3,242 11,738
----------- -----------
223,283 276,558
Pension Liability 54,257 69,187
Other Long-term Liabilities 45,057 44,321
Convertible Senior Notes 371,500 391,500
Other Long-term Debt 7,123 7,432
----------- -----------
701,220 788,998
Shareholders' Equity 1,063,694 1,133,564
----------- -----------
$ 1,764,914 $ 1,922,562
=========== ===========
For press releases and other information of interest to investors, please visit Teradyne's homepage on the World Wide Web at http://www.teradyne.com.
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