01—Abstract
Summary
Summary of the 10-K filed February 29, 2012. Cited figures are marked; the original filing is the authoritative source.
Teradyne, Inc.'s 2011 10-K filing highlights a year of significant strategic shifts, notably the acquisition of LitePoint Corporation, which bolstered its presence in the wireless test market.
While overall net revenue saw a slight decrease from $1.57 billion in 2010 to $1.43 billiona in 2011, this was largely driven by a downturn in the Semiconductor Test segment, which experienced a 22% revenue decline. This segment, however, still represented the largest portion of revenue at 77%. The company's Systems Test Group saw substantial growth, with revenue increasing by 93% due to strong performance in Storage Test systems.
Despite the revenue dip, Teradyne managed its costs effectively, and importantly, released its deferred tax valuation allowance, significantly boosting net income to $373.8 millionb in 2011 from a loss of $133.8 million in 2009. The company's strong cash position and ongoing investments in R&D position it to navigate the cyclical nature of its end markets.
02—Key points
Key Highlights
- Acquisition of LitePoint Corporation in October 2011 expanded Teradyne's offerings in the wireless test sector.
- Net revenues decreased by 8.1% to $1.43 billion in 2011, primarily driven by a 22% decline in the Semiconductor Test segment.
- The Systems Test Group saw significant growth, with revenues increasing by 93% to $294.5 million, largely due to strong performance in Storage Test systems.
- Teradyne successfully released a significant portion of its deferred tax valuation allowance, contributing to a substantial increase in net income to $373.8 million in 2011.
- The company maintained a strong cash and marketable securities balance of $754.6 million at the end of 2011.
- Engineering and development expenses remained robust, totaling $195.6 million in 2011, reflecting continued investment in product innovation.
- No single customer accounted for more than 10% of consolidated net revenue in 2011 and 2010, indicating diversified customer relationships.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Teradyne, Inc kept $0.26.
- Revenue$1.43B100.0%
- Cost of revenue−$717.2M50.2%
- Gross profit$711.8M49.8%
- Operating costs−$480.3M33.6%
- Operating income$231.5M16.2%
- Interest, other & tax$138.4M9.7%
- Net income$369.9M25.9%
Where FY2011 revenue went
$1.43B- Cost of revenue: $717.2M, 50% of revenue
- Other operating costs: $248.2M, 17% of revenue
- SG&A: $232.1M, 16% of revenue
- Operating income: $231.5M, 16% of revenue
Kept 16% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed February 29, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $1.43B$1.57B | −8.8% |
| Cost of Revenue | $717.24M$708.58M | +1.2% |
| Gross Profit | $711.82M$857.58M | −17.0% |
| SG&A Expenses | $232.09M$225.33M | +3.0% |
| Operating Expenses | $480.32M$442.65M | +8.5% |
| Operating Income | $231.50M$414.94M | −44.2% |
| Interest Expense | $23.69M$24.45M | −3.1% |
| Net Income | $369.87M$384.82M | −3.9% |
| EPS (Basic) | $2.00$2.14 | −6.5% |
| EPS (Diluted) | $1.63$1.75 | −6.9% |
| Shares Outstanding (Basic) | 184.68M179.92M | +2.6% |
| Shares Outstanding (Diluted) | 226.82M226.81M | 0.0% |
05—Questions
Frequently Asked Questions
What was the primary strategic initiative undertaken by Teradyne in 2011?
The primary strategic initiative was the acquisition of LitePoint Corporation in October 2011. This acquisition significantly expanded Teradyne's presence and capabilities in the wireless test market, adding a new reportable segment.
How did Teradyne's revenue performance vary across its segments in 2011?
Teradyne experienced a revenue decline in its largest segment, Semiconductor Test, down 22% year-over-year. However, the Systems Test Group showed strong growth, up 93%, driven by Storage Test systems. The newly acquired Wireless Test segment contributed $28.4 million in revenue for the portion of the year it was part of Teradyne.
What was the impact of the LitePoint acquisition on Teradyne's financial statements?
The LitePoint acquisition resulted in the addition of $352.8 million in goodwill and $310.5 million in other intangible assets. LitePoint contributed $28.4 million in revenue and incurred a pre-tax loss of $20.6 million in 2011. The acquisition also led to increased operating expenses, including amortization and integration costs.
What factors influenced Teradyne's profitability in 2011, particularly regarding taxes?
Teradyne's profitability was significantly boosted by the release of a substantial portion of its deferred tax valuation allowance, amounting to $129.3 million in tax benefit. This release, driven by a reassessment of the realizability of deferred tax assets, significantly improved net income for the year.
06—Continue