10-KPeriod: FY2011

TERADYNE, INC Annual Report, Year Ended Dec 30, 2011

Filed February 29, 2012For Securities:TER

Summary

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 billion 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 million 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.

Financial Highlights

51 data points
Beta

Revenue

$1.43B

49.8% Gross Margin

Net Income

$369.87M

25.9% Net Margin

EPS (Diluted)

$1.63

Total Assets

$2.19B

Cash & Equivalents

$573.74M

Free Cash Flow

$188.76M

Financial Statements
Beta
Revenue$1.43B
Cost of Revenue$717.24M
Gross Profit$711.82M
SG&A Expenses$232.09M
Operating Expenses$480.32M
Operating Income$231.50M
Interest Expense$23.69M
Net Income$369.87M
EPS (Basic)$2.00
EPS (Diluted)$1.63
Shares Outstanding (Basic)184.68M
Shares Outstanding (Diluted)226.82M

Key Highlights

  • 1Acquisition of LitePoint Corporation in October 2011 expanded Teradyne's offerings in the wireless test sector.
  • 2Net revenues decreased by 8.1% to $1.43 billion in 2011, primarily driven by a 22% decline in the Semiconductor Test segment.
  • 3The Systems Test Group saw significant growth, with revenues increasing by 93% to $294.5 million, largely due to strong performance in Storage Test systems.
  • 4Teradyne 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.
  • 5The company maintained a strong cash and marketable securities balance of $754.6 million at the end of 2011.
  • 6Engineering and development expenses remained robust, totaling $195.6 million in 2011, reflecting continued investment in product innovation.
  • 7No single customer accounted for more than 10% of consolidated net revenue in 2011 and 2010, indicating diversified customer relationships.

Frequently Asked Questions

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.

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.

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.

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.