01—Abstract
Summary
Summary of the 10-K filed March 2, 2009. Cited figures are marked; the original filing is the authoritative source.
Teradyne Inc.'s 2008 Form 10-K details a challenging year marked by significant macroeconomic headwinds, including the global financial crisis.
The company experienced a net loss of $397.8 milliona for the year, largely impacted by a substantial goodwill impairment charge of $333.3 million. This impairment reflects the downturn in demand for semiconductor test equipment. Despite the difficult economic climate, Teradyne made strategic acquisitions, notably Eagle Test Systems, Inc. and Nextest Systems Corporation, to expand its product offerings within the semiconductor test segment.
The company's revenue remained relatively stable year-over-year, aided by these acquisitions, though bookings declined. The report highlights the cyclical nature of the semiconductor and electronics industries as a key risk factor. Teradyne's liquidity position remained adequate, with cash and cash equivalents totaling $322.7 millionb at year-end.
02—Key points
Key Highlights
- Reported a net loss of $397.8 million for the fiscal year ended December 31, 2008.
- Recorded a significant goodwill impairment charge of $333.3 million due to a worsening demand outlook.
- Completed the acquisitions of Eagle Test Systems, Inc. for $259.9 million and Nextest Systems Corporation for $311.3 million, strengthening its Semiconductor Test segment.
- Total net revenue remained relatively flat at $1,107.0 million in 2008, compared to $1,102.3 million in 2007, with Semiconductor Test being the dominant segment (81% of revenue).
- Experienced a decline in net bookings, with Semiconductor Test bookings down 15% and Systems Test Group bookings up 2% year-over-year.
- No single customer accounted for more than 10% of consolidated net revenue, indicating a diversified customer base.
- The company temporarily suspended its stock repurchase program in November 2008 due to market conditions.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2008, Teradyne, Inc lost $0.36.
- Revenue$1.11B100.0%
- Cost of revenue−$608.9M55.0%
- Gross profit$498.2M45.0%
- Operating costs−$878.9M79.4%
- Operating income−$380.7M34.4%
- Interest, other & tax−$13.5M1.2%
- Net income−$394.2M35.6%
04—Financials
Financial Highlights
Figures from 10-KFY2008filed March 2, 2009Financial Statements
| Revenue | $1.11B |
| Cost of Revenue | $608.85M |
| Gross Profit | $498.19M |
| SG&A Expenses | $247.79M |
| Operating Expenses | $878.93M |
| Operating Income | -$380.74M |
| Net Income | -$394.23M |
| EPS (Basic) | $-2.31 |
| EPS (Diluted) | $-2.31 |
| Shares Outstanding (Basic) | 170.59M |
| Shares Outstanding (Diluted) | 170.59M |
05—Questions
Frequently Asked Questions
What was Teradyne's financial performance in 2008?
Teradyne reported a net loss of $397.8 million, or $(2.33) per diluted share, for the year ended December 31, 2008. This was significantly impacted by a goodwill impairment charge of $333.3 million, reflecting the challenging economic environment and reduced demand in its key markets. Total net revenue was $1,107.0 million, largely flat compared to the previous year.
What strategic actions did Teradyne take in 2008?
In 2008, Teradyne focused on strategic acquisitions to enhance its market position, completing the acquisitions of Nextest Systems Corporation for $311.3 million and Eagle Test Systems, Inc. for $259.9 million. These acquisitions were aimed at expanding its offerings within the semiconductor test market, particularly in the flash memory and analog/mixed-signal discrete semiconductor segments.
What are the main risks and challenges highlighted in the report?
The primary risks identified include the cyclical nature of the electronics and semiconductor industries, the impact of worldwide economic cycles and financial market disruptions, intense competition, and the company's reliance on developing new technologies and gaining market acceptance for its products. The report explicitly notes the adverse effects of the global economic slowdown on customer capital investments and Teradyne's business.
How did the company's segments perform in 2008?
The Semiconductor Test segment continued to be the largest contributor, accounting for 81% of net revenue ($900.3 million), an increase of 3% from 2007, partly due to the Nextest acquisition. The Systems Test Group segment saw its revenue decrease by 8% to $206.7 million, primarily due to lower sales in Mil/Aero board test programs.
06—Continue