01—Abstract
Summary
Summary of the 10-K filed March 1, 2011. Cited figures are marked; the original filing is the authoritative source.
Teradyne, Inc. (TER) in its March 1, 2011 10-K filing showcases a significant recovery in its Semiconductor Test segment, which rebounded strongly in 2010 after a challenging 2009 impacted by the global economic downturn.
This segment now represents 88%a of the company's revenue, a substantial increase from 67% in 2009. The Systems Test Group, while smaller, saw a revenue decrease in 2010 but still contributes to the diversified portfolio which includes Mil/Aero, HDD, and Commercial Board Test. Financially, the company demonstrated a strong turnaround, posting significant income from continuing operations in 2010 after losses in 2008 and 2009, largely driven by the Semiconductor Test segment's recovery and effective cost management.
Teradyne has also bolstered its financial position by increasing its cash and marketable securities balance substantially in 2010. The company's strategic acquisitions of Nextest and Eagle Test in 2008 have expanded its product offerings and market reach within the semiconductor testing space.
02—Key points
Key Highlights
- Strong rebound in Semiconductor Test revenue in 2010, reaching 88% of total revenue, up from 67% in 2009, driven by market recovery.
- Significant improvement in profitability with income from continuing operations in 2010, recovering from losses in the previous two years.
- Effective cost management and restructuring efforts implemented in 2008-2009 contributed to improved profitability at comparable revenue levels.
- Strategic acquisitions of Nextest and Eagle Test in 2008 have expanded the company's product portfolio and market position in semiconductor testing.
- Increased cash and marketable securities balance to $1.055 billion by the end of 2010, indicating improved financial health.
- The company experienced a significant goodwill impairment of $329.7 million in 2008, reflecting the severe impact of the economic downturn on its reporting units.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Teradyne, Inc kept $0.25.
- Revenue$1.57B100.0%
- Cost of revenue−$708.6M45.2%
- Gross profit$857.6M54.8%
- Operating costs−$442.6M28.3%
- Operating income$414.9M26.5%
- Interest, other & tax−$30.1M1.9%
- Net income$384.8M24.6%
Where FY2010 revenue went
$1.57B- Cost of revenue: $708.6M, 45% of revenue
- Net income: $384.8M, 25% of revenue
- SG&A: $225.3M, 14% of revenue
- Other operating costs: $217.3M, 14% of revenue
- Interest, other & tax: $30.1M, 1.9% of revenue
Kept 25% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed March 1, 2011Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $1.57B$777.42M | +101.5% |
| Cost of Revenue | $708.58M$477.98M | +48.2% |
| Gross Profit | $857.58M$299.45M | +186.4% |
| SG&A Expenses | $225.33M$195.35M | +15.3% |
| Operating Expenses | $442.65M$424.30M | +4.3% |
| Operating Income | $414.94M-$124.85M | +432.3% |
| Interest Expense | $24.45M$22.45M | +8.9% |
| Net Income | $384.82M-$133.84M | +387.5% |
| EPS (Basic) | $2.14$-0.77 | +377.9% |
| EPS (Diluted) | $1.75$-0.77 | +327.3% |
| Shares Outstanding (Basic) | 179.92M173.60M | +3.6% |
| Shares Outstanding (Diluted) | 226.81M173.60M | +30.6% |
05—Questions
Frequently Asked Questions
What is Teradyne's primary business and which segments are reported?
Teradyne is a leading global supplier of automatic test equipment. Its primary business involves designing, developing, manufacturing, and selling automatic test systems and solutions for complex electronics. The company reports two main segments: Semiconductor Test and Systems Test Group (which includes Mil/Aero, Hard Disk Drive, Commercial Board Test, and Diagnostic Solutions).
How did the company perform financially in 2010 compared to 2009?
Teradyne showed a significant financial recovery in 2010. Revenue increased substantially, primarily driven by a strong rebound in the Semiconductor Test segment. This top-line growth, coupled with effective cost management, led to a strong positive income from continuing operations in 2010, a stark contrast to the net losses reported in 2009 and 2008.
What impact did the 2008 economic downturn have on Teradyne, and how did they respond?
The 2008 economic downturn severely impacted Teradyne, leading to significant revenue declines, especially in the Semiconductor Test segment, and substantial losses. This resulted in a goodwill impairment charge of $329.7 million in 2008. In response, the company implemented cost control and reduction measures, including headcount reductions and facility consolidations throughout 2008 and 2009 to mitigate the impact.
What is the significance of the acquisitions of Nextest and Eagle Test?
The acquisitions of Nextest in January 2008 and Eagle Test in November 2008 were strategic moves to expand Teradyne's product portfolio and market presence within the semiconductor testing industry. Nextest strengthened its position in flash memory and System-on-a-Chip (SoC) testing, while Eagle Test enhanced its capabilities in analog, mixed-signal, and radio frequency semiconductor testing, particularly for high-growth consumer electronics markets.
06—Continue