01—Abstract
Summary
Summary of the 10-K filed March 1, 2013. Cited figures are marked; the original filing is the authoritative source.
Teradyne, Inc.'s 2013 10-K filing details its position as a leading global supplier of automatic test equipment (ATE) for semiconductors, wireless devices, and other electronic systems.
The company strategically expanded its offerings through acquisitions, notably LitePoint in 2011, significantly boosting its Wireless Test segment. The report highlights the cyclical nature of the semiconductor industry and its impact on Teradyne's revenue, as well as the increasing importance of international sales, particularly from China and Taiwan. Key financial performance indicators show a revenue increase in 2012 driven by the LitePoint acquisition, though the Semiconductor Test segment experienced a decline compared to the prior year.
The company emphasizes its focus on product development and technological advancement, as evidenced by substantial engineering and development expenditures. Investors should note the company's concentration of revenue from its top customers and its ongoing efforts to manage costs and adapt to market dynamics.
02—Key points
Key Highlights
- Teradyne operates in three main segments: Semiconductor Test, Wireless Test, and Systems Test Group.
- The acquisition of LitePoint in 2011 significantly expanded the Wireless Test segment, contributing a substantial portion of the 2012 revenue increase.
- The Semiconductor Test segment, historically the largest, saw a revenue decrease from 2010 to 2011 due to lower demand, but a slight increase from 2011 to 2012.
- International sales are critical, with China and Taiwan being the largest geographic markets for revenue.
- The company faces significant competition and relies on a few key customers, with one customer representing 10% of consolidated net revenues in 2012.
- Teradyne made substantial investments in engineering and development, indicating a commitment to innovation.
- The company has a history of stock repurchases but has not paid cash dividends, reinvesting earnings into growth.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Teradyne, Inc kept $0.13.
- Revenue$1.66B100.0%
- Cost of revenue−$770.7M46.5%
- Gross profit$886.0M53.5%
- Operating costs−$598.7M36.1%
- Operating income$287.4M17.3%
- Interest, other & tax−$70.3M4.2%
- Net income$217.0M13.1%
Where FY2012 revenue went
$1.66B- Cost of revenue: $770.7M, 47% of revenue
- Other operating costs: $321.7M, 19% of revenue
- SG&A: $277.0M, 17% of revenue
- Net income: $217.0M, 13% of revenue
- Interest, other & tax: $70.3M, 4.2% of revenue
Kept 13% as net incomeNet income $217.0M · 13%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed March 1, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $1.66B$1.43B | +15.9% |
| Cost of Revenue | $770.71M$717.24M | +7.5% |
| Gross Profit | $886.04M$711.82M | +24.5% |
| SG&A Expenses | $277.02M$232.09M | +19.4% |
| Operating Expenses | $598.67M$480.32M | +24.6% |
| Operating Income | $287.37M$231.50M | +24.1% |
| Interest Expense | $24.53M$23.69M | +3.5% |
| Net Income | $217.05M$369.87M | −41.3% |
| EPS (Basic) | $1.16$2.00 | −42.0% |
| EPS (Diluted) | $0.94$1.63 | −42.3% |
| Shares Outstanding (Basic) | 186.88M184.68M | +1.2% |
| Shares Outstanding (Diluted) | 230.25M226.82M | +1.5% |
05—Questions
Frequently Asked Questions
What is Teradyne's primary business and market focus?
Teradyne is a global supplier of automatic test equipment (ATE) used for testing semiconductors, wireless products, hard disk drives, and circuit boards. Its primary markets span consumer electronics, wireless communications, automotive, industrial, computing, and aerospace and defense industries.
How has recent acquisitions impacted Teradyne's business segments?
The acquisition of LitePoint in October 2011 significantly bolstered Teradyne's Wireless Test segment. This acquisition contributed substantially to the company's revenue growth in 2012 and shifted the revenue mix, with Wireless Test growing from 2% of revenue in 2011 to 17% in 2012. The earlier acquisitions of Nextest and Eagle Test had previously strengthened the Semiconductor Test segment.
What are the key financial trends or risks highlighted in the filing?
Key trends include the cyclical nature of the semiconductor industry impacting the Semiconductor Test segment's revenue, the growing importance of international markets (especially China and Taiwan), and revenue concentration with top customers. Risks mentioned include economic cycles, intense competition, reliance on key customers, and the need for continuous new product development. The company also reported significant engineering and development expenditures to maintain its competitive edge.
Has Teradyne paid any dividends to shareholders?
No, Teradyne has not paid any cash dividends. The company's policy has been to reinvest earnings into expansion and growth. The decision to pay future dividends is at the discretion of the Board of Directors.
06—Continue