• Q1’19 GAAP earnings per share grew 44% and Non-GAAP earnings per share grew 20% from Q1’18
  • Industrial Automation revenue up 35% from Q1’18 on Universal Robots growth of 16% and the addition of Mobile Industrial Robots (MiR)
  • Expect 8% sequential revenue growth in Q2’19 at mid-point of guidance
 Q1’19Q1’18Q4’18
Revenue (mil)$494 $487 $520
GAAP EPS$0.62$0.43 $0.79
Non-GAAP EPS$0.54 $0.45 $0.63

NORTH READING, Mass., April 23, 2019 (GLOBE NEWSWIRE) --  Teradyne, Inc. (NASDAQ: TER) reported revenue of $494 million for the first quarter of 2019 of which $341 million was in Semiconductor Test, $66 million in Industrial Automation, $58 million in System Test and $29 million in Wireless Test. GAAP net income for the first quarter was $109.1 million or $0.62 per share. On a non-GAAP basis, Teradyne’s net income in the first quarter was $94.6 million, or $0.54 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.

"First quarter sales and earnings were above our January guidance as test shipments were slightly stronger with favorable product mix, resulting in higher margins than expected," said Teradyne President and CEO Mark Jagiela. "Pockets of strength, such as 5G test, have been balanced by softness in areas, such as automotive test, so our full year outlook remains essentially unchanged from our January view."

Guidance for the second quarter of 2019 is revenue of $520 million to $550 million, with GAAP net income of $0.48 to $0.56 per diluted share and non-GAAP net income of $0.56 to $0.65 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization, non-cash convertible debt interest 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 10 a.m. ET, Wednesday, April 24. 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 10 a.m. ET. A replay will be available on the Teradyne website at 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, and include the related tax impact on non-GAAP adjustments. 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 as a percentage of revenue, 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 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 (NASDAQ:TER) brings high-quality innovations such as smart devices, life-saving medical equipment and data storage systems to market, faster. Its advanced test solutions for semiconductors, electronic systems, wireless devices and more ensure that products perform as they were designed. Its Industrial Automation offerings include collaborative and mobile robots that help manufacturers of all sizes improve productivity and lower costs. In 2018, Teradyne had revenue of $2.1 billion and today employs 5,000 people worldwide. For more information, visit teradyne.com. Teradyne® 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, export and tariff laws. 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, export and tariff laws. 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 or export controls 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, 2018. 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.

         
TERADYNE, INC. REPORT FOR FIRST FISCAL QUARTER OF 2019        
            
CONDENSED  CONSOLIDATED  STATEMENTS OF OPERATIONS  
(In thousands, except per share amounts)      
            
     Quarter Ended  
     March 31,
2019
 December 31,
2018
 April 1,
2018
  
            
Net revenues $494,099  $519,558  $487,467   
            
 Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1)  206,464   210,023   217,635   
            
Gross profit  287,635   309,535   269,832   
            
Operating expenses:        
 Selling and administrative  102,013   100,552   90,505   
 Engineering and development  76,791   74,706   74,408   
 Acquired intangible assets amortization  10,634   10,558   7,698   
 Restructuring and other (2)  5,112   11,446   (313)  
   Operating expenses  194,550   197,262   172,298   
            
Income from operations  93,085   112,273   97,534   
            
 Interest and other (income) expense (3)  (894)  1,145   1,714   
            
Income before income taxes  93,979   111,128   95,820   
 Income tax (benefit) provision (4)  (15,159)  (32,662)  8,846   
Net income $109,138  $143,790  $86,974   
            
Net income per common share:        
Basic   $0.63  $0.80  $0.45   
Diluted   $0.62  $0.79  $0.43   
            
Weighted average common shares - basic  173,532   178,958   195,255   
            
Weighted average common shares - diluted (5)  176,972   181,520   203,484   
            
            
Cash dividend declared per common share $0.09  $0.09  $0.09   
            
            
(1)Cost of revenues includes: Quarter Ended  
     March 31,
2019
 December 31,
2018
 April 1,
2018
  
   Provision for excess and obsolete inventory $2,397  $1,720  $3,522   
   Sale of previously written down inventory  (778)  (1,501)  (2,243)  
     $1,619  $219  $1,279   
            
            
(2)Restructuring and other consists of: Quarter Ended  
     March 31,
2019
 December 31,
2018
 April 1,
2018
  
   Contingent consideration fair value adjustment $2,970  $10,223  $(4,968)  
   Acquisition related expenses and compensation  1,343   455   774   
   Employee severance  799   768   3,881   
     $5,112  $11,446  $(313)  
            
            
(3)Interest and other (income) expense, includes: Quarter Ended  
     March 31,
2019
 December 31,
2018
 April 1,
2018
  
   Non-cash convertible debt interest $3,368  $3,327  $3,206   
   Pension actuarial gain  -   (3,512)  -   
     $3,368  $(185) $3,206   
            
            
(4)For the quarter ended Mach 31, 2019, income tax (benefit) provision includes a $26 million tax benefit from the release of uncertain tax position reserves due to the IRS completion of its audit of Teradyne's 2015 Federal tax return. For the quarter ended December 31, 2018, income tax (benefit) provision includes a $52 million tax benefit related to the finalization of our toll tax charge.  
            
(5)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 quarters ended March 31, 2019, December 31, 2018, and April 1, 2018, 2.2 million, 0.9 million and 4.4 million shares, respectively, 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)    
        
     March 31,
2019
 December 31,
2018
Assets      
 Cash and cash equivalents $483,728 $926,752
 Marketable securities  421,088  190,096
 Accounts receivable, net  333,840  291,267
 Inventories, net  161,342  153,541
 Prepayments and other current assets  194,044  170,826
   Total current assets  1,594,042  1,732,482
        
 Property, plant and equipment, net  283,300  279,821
 Operating lease right-of-use assets, net  50,733  -
 Marketable securities  91,926  87,731
 Deferred tax assets  69,687  70,848
 Other assets  11,279  11,509
 Retirement plans assets  16,791  16,883
 Acquired intangible assets, net  119,372  125,482
 Goodwill  379,513  381,850
        
   Total assets $2,616,643 $2,706,606
        
Liabilities     
 Accounts payable $118,816 $100,688
 Accrued employees' compensation and withholdings  89,089  148,566
 Deferred revenue and customer advances  84,764  77,711
 Other accrued liabilities  67,422  78,272
 Contingent consideration  22,803  34,865
 Operating lease liabilities  17,176  -
 Income taxes payable  41,898  36,185
        
   Total current liabilities  441,968  476,287
        
 Retirement plans liabilities  121,205  117,456
 Long-term deferred revenue and customer advances  32,843  32,750
 Deferred tax liabilities  19,614  20,662
 Long-term other accrued liabilities  9,732  37,547
 Long-term contingent consideration  15,510  35,678
 Long-term operating lease liabilities  38,062  -
 Long-term income taxes payable  83,891  83,891
 Long-term debt  383,590  379,981
        
   Total liabilities  1,146,415  1,184,252
        
Shareholders' equity  1,470,228  1,522,354
        
   Total liabilities and shareholders' equity $2,616,643 $2,706,606
        


CONDENSED  CONSOLIDATED  STATEMENTS OF CASH FLOWS (In thousands)    
        
     Quarter Ended
     March 31,
2019
 April 1,
2018
Cash flows from operating activities:    
 Net income $109,138  $86,974 
 Adjustments to reconcile net income to net cash provided by operating activities:    
  Depreciation  16,651   16,336 
  Amortization  12,942   9,204 
  Stock-based compensation  9,474   9,544 
  Deferred taxes  1,206   8,696 
  Provision for excess and obsolete inventory  2,397   3,522 
  Contingent consideration fair value adjustment  2,970   (4,968)
  (Gains) losses on investments  (2,828)  1,241 
  Other  (349)  152 
  Changes in operating assets and liabilities, net of businesses acquired:   
   Accounts receivable  (41,706)  (140,747)
   Inventories  (2,917)  (21,017)
   Prepayments and other assets  (19,165)  (679)
   Accounts payable and accrued expenses  (52,806)  (46,706)
   Deferred revenue and customer advances  6,455   9,644 
   Retirement plans contributions  (1,210)  (1,020)
   Income taxes  (22,236)  (12,106)
Net cash provided by (used for) operating activities  18,016   (81,930)
        
Cash flows from investing activities:    
 Purchases of property, plant and equipment  (25,711)  (34,797)
 Purchases of marketable securities  (375,184)  (490,324)
 Proceeds from sales of marketable securities  5,440   800,671 
 Proceeds from maturities of marketable securities  141,201   212,698 
 Proceeds from life insurance  273   - 
 Acquisition of businesses, net of cash acquired  (6,970)  (25,356)
Net cash (used for) provided by investing activities  (260,951)  462,892 
        
Cash flows from financing activities:    
 Issuance of common stock under stock purchase and stock option plans  14,122   10,654 
 Repurchase of common stock  (156,468)  (134,276)
 Dividend payments  (15,627)  (17,588)
 Payment related to net settlement of employee stock compensation awards  (14,172)  (19,629)
 Payment of contingent consideration  (27,615)  (13,571)
Net cash used for financing activities  (199,760)  (174,410)
        
Effects of exchange rate changes on cash and cash equivalents  (329)  1,478 
        
(Decrease) increase in cash and cash equivalents  (443,024)  208,030 
Cash and cash equivalents at beginning of period  926,752   429,843 
Cash and cash equivalents at end of period $483,728  $637,873 
        


GAAP to Non-GAAP Earnings Reconciliation                       
                           
(In millions, except per share amounts)                       
            Quarter Ended            
    March 31,
2019
 % of Net
Revenues
     December 31,
2018
 % of Net
Revenues
     April 1,
2018
 % of Net Revenues    
                           
Net revenues $494.1        $519.6        $487.5       
                           
Gross profit GAAP and non-GAAP$287.6   58.2%     $309.5  59.6%     $269.8  55.3%    
                           
Income from operations - GAAP$93.1   18.8%     $112.3  21.6%     $97.5  20.0%    
 Acquired intangible assets amortization 10.6   2.1%      10.6  2.0%      7.7  1.6%    
 Restructuring and other (1) 5.1   1.0%      11.4  2.2%      (0.3) -0.1%    
Income from operations - non-GAAP$108.8   22.0%     $134.3  25.8%     $104.9  21.5%    
                           
        Net Income
per Common Share
     Net Income
per Common Share
     Net Income
per Common Share
    March 31,
2019
 % of Net
Revenues
 Basic  Diluted December 31,
2018
 % of Net
Revenues
 Basic  Diluted April 1,
2018
 % of Net Revenues Basic  Diluted
Net income - GAAP$109.1   22.1% $0.63  $0.62  $143.8  27.7% $0.80  $0.79  $87.0  17.8% $0.45  $0.43 
 Acquired intangible assets amortization 10.6   2.1%  0.06   0.06   10.6  2.0%  0.06   0.06   7.7  1.6%  0.04   0.04 
 Interest and other (2) 3.4   0.7%  0.02   0.02   3.3  0.6%  0.02   0.02   3.2  0.7%  0.02   0.02 
 Restructuring and other (1) 5.1   1.0%  0.03   0.03   11.4  2.2%  0.06   0.06   (0.3) -0.1%  -   - 
 Pension mark-to-market adjustment (2) -      -   -   (3.5) -0.7%  (0.02)  (0.02)  -     -   - 
 Exclude discrete tax adjustments (3) (30.1)  -6.1%  (0.17)  (0.17)  (52.9) -10.2%  (0.30)  (0.29)  (6.3) -1.3%  (0.03)  (0.03)
 Non-GAAP tax adjustments (3.5)  -0.7%  (0.02)  (0.02)  0.3  0.1%  0.00   0.00   (1.9) -0.4%  (0.01)  (0.01)
 Convertible share adjustment -   -   -   0.01   -     -   -   -  -   -   0.01 
Net income - non-GAAP$94.6   19.1% $0.55  $0.54  $113.0  21.7% $0.63  $0.63  $89.4  18.3% $0.46  $0.45 
                           
GAAP and non-GAAP weighted average common shares - basic 173.5         179.0         195.3       
GAAP weighted average common shares - diluted 177.0         181.5         203.5       
 Exclude dilutive shares related to convertible note transaction (2.2)        (0.9)        (6.2)      
Non-GAAP weighted average common shares - diluted 174.8         180.6         197.3       
                           
                           
(1)Restructuring and other consists of:                       
    Quarter Ended      
    March 31,
2019
       December 31,
2018
       April 1,
2018
      
  Contingent consideration fair value adjustment$3.0        $10.2        $(5.0)      
  Acquisition related expenses and compensation 1.3         0.8         0.8       
  Employee severance 0.8         0.5         3.9       
    $5.1        $11.4        $(0.3)      
                           
(2)For the quarters ended March 31, 2019, December 31, 2018, and April 1, 2018,  adjustment to exclude non-cash convertible debt interest expense and adjustment to exclude actuarial gains recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting.
                           
(3)For the quarters ended March 31, 2019, December 31, 2018, and April 1, 2018, adjustment to exclude discrete income tax items. For the quarter ended Mach 31, 2019, income tax (benefit) provision includes a $26 million tax benefit from the release of uncertain tax position reserves due to the IRS completion of its audit of Teradyne's 2015 Federal tax return. For the quarter ended December 31, 2018, adjustment to treat the $52 million tax benefit related to the finalization of our toll tax charge as a discrete item.
                           
                           
GAAP to Non-GAAP Reconciliation of Second Quarter 2019 guidance:                      
                           
GAAP and non-GAAP second quarter revenue guidance:  $520 million to$550 million                   
GAAP net income per diluted share  $0.48  $0.56                   
 Exclude acquired intangible assets amortization   0.06   0.06                   
 Exclude non-cash convertible debt interest   0.02   0.02                   
 Exclude restructuring and other   0.01   0.01                   
 Tax effect of non-GAAP adjustments   (0.02)  (0.02)                  
 Convertible share adjustment   0.02   0.02                   
Non-GAAP net income per diluted share  $0.56  $0.65                   
                           
For press releases and other information of interest to investors, please visit Teradyne's investor site at investors.teradyne.com.                  
 Contact: Teradyne, Inc.                       
  Andy Blanchard 978-370-2425                       
  Vice President of Corporate Relations