01—Abstract
Summary
Summary of the 10-K filed March 1, 2010. Cited figures are marked; the original filing is the authoritative source.
Teradyne, Inc.'s 2009 10-K report reflects a challenging year marked by the significant impact of the global economic downturn.
Net revenues declined substantially, primarily driven by a nearly 39%a decrease in the Semiconductor Test segment due to customer capacity issues and reduced capital spending. The Systems Test Group saw revenue growth, largely due to the introduction of Hard Disk Drive test systems, but this was insufficient to offset the decline in the larger Semiconductor Test segment. The company implemented significant cost-reduction measures, including workforce reductions and facility consolidations, to navigate the downturn.
Despite the revenue challenges, Teradyne continued to invest in new product introductions, such as the UltraFLEX-M for High Speed DRAM and the Neptune product for the HDD market. The company also completed strategic acquisitions of Nextest and Eagle Test in the prior year, expanding its semiconductor test portfolio. Financially, Teradyne recorded a substantial net loss in 2009, heavily influenced by a goodwill impairment charge of $329.7 millionb taken in 2008, which continued to impact profitability in 2009.
The company also saw increased debt from convertible senior notes issued to strengthen its liquidity. Looking ahead, Teradyne expressed cautious optimism for a market recovery and highlighted its efforts to improve profitability through cost management and strategic product development.
02—Key points
Key Highlights
- Significant revenue decline in 2009, down 26% year-over-year, primarily driven by a 39% drop in the Semiconductor Test segment due to the global economic downturn impacting customer capital expenditures.
- The Systems Test Group showed resilience with a 29% revenue increase, driven by new Hard Disk Drive (HDD) test systems, though this segment is smaller in proportion to Semiconductor Test.
- The company reported a substantial net loss of $133.8 million in 2009, following an even larger net loss in 2008, significantly impacted by a large goodwill impairment charge recognized in the prior year.
- Teradyne issued $190 million in Convertible Senior Notes in April 2009 to bolster liquidity, which increased its indebtedness.
- Significant restructuring charges of $37.9 million were incurred in 2009 related to headcount reductions and facility consolidations to reduce operating costs.
- The company continued R&D investment and launched new products, including the UltraFLEX-M for High Speed DRAM and the Neptune product line for the 2.5-inch HDD market, aiming to expand its market reach.
- Backlog at year-end 2009 significantly increased to $372 million from $236.3 million in 2008, indicating potential for improved future sales, with most expected to be delivered in 2010.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2009, Teradyne, Inc lost $0.17.
- Revenue$777.4M100.0%
- Cost of revenue−$478.0M61.5%
- Gross profit$299.4M38.5%
- Operating costs−$424.3M54.6%
- Operating income−$124.9M16.1%
- Interest, other & tax−$9.0M1.2%
- Net income−$133.8M17.2%
04—Financials
Financial Highlights
Figures from 10-KFY2009filed March 1, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $777.42M$1.11B | −29.8% |
| Cost of Revenue | $477.98M$608.85M | −21.5% |
| Gross Profit | $299.45M$498.19M | −39.9% |
| SG&A Expenses | $195.35M$247.79M | −21.2% |
| Operating Expenses | $424.30M$878.93M | −51.7% |
| Operating Income | -$124.85M-$380.74M | +67.2% |
| Interest Expense | $22.45M— | — |
| Net Income | -$133.84M-$394.23M | +66.1% |
| EPS (Basic) | $-0.77$-2.31 | +66.7% |
| EPS (Diluted) | $-0.77$-2.31 | +66.7% |
| Shares Outstanding (Basic) | 173.60M170.59M | +1.8% |
| Shares Outstanding (Diluted) | 173.60M170.59M | +1.8% |
05—Questions
Frequently Asked Questions
What was Teradyne's financial performance in 2009?
Teradyne experienced a challenging year in 2009, with net revenues decreasing by 26% to $819.4 million, largely due to the global economic downturn affecting the semiconductor industry. The company reported a net loss of $133.8 million.
What segment drove the revenue decline, and which showed strength?
The Semiconductor Test segment saw the most significant revenue decline, down 39%, as customers reduced capital spending. The Systems Test Group, however, demonstrated strength with a 29% revenue increase, driven by new products like the Neptune HDD test system.
What is the outlook for Teradyne's business based on this report?
The company's backlog increased significantly by the end of 2009, suggesting potential for improved sales in the following year. Teradyne also highlighted new product introductions and continued investment in R&D to drive future growth, while emphasizing its cost-reduction measures to enhance profitability.
Did Teradyne undertake any significant financial transactions in 2009?
Yes, Teradyne issued $190 million in Convertible Senior Notes to enhance its liquidity. It also repaid its revolving credit facility with a portion of these proceeds. The company also incurred substantial restructuring charges as it implemented cost-saving measures.
06—Continue