10-KPeriod: FY2012

TERADYNE, INC Annual Report, Year Ended Dec 31, 2012

Filed March 1, 2013For Securities:TER

Summary

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.

Financial Highlights

50 data points
Beta

Revenue

$1.66B

53.5% Gross Margin

Net Income

$217.05M

13.1% Net Margin

EPS (Diluted)

$0.94

Total Assets

$2.43B

Cash & Equivalents

$338.92M

Free Cash Flow

$284.00M

Financial Statements
Beta
Revenue$1.66B
Cost of Revenue$770.71M
Gross Profit$886.04M
SG&A Expenses$277.02M
Operating Expenses$598.67M
Operating Income$287.37M
Interest Expense$24.53M
Net Income$217.05M
EPS (Basic)$1.16
EPS (Diluted)$0.94
Shares Outstanding (Basic)186.88M
Shares Outstanding (Diluted)230.25M

Key Highlights

  • 1Teradyne operates in three main segments: Semiconductor Test, Wireless Test, and Systems Test Group.
  • 2The acquisition of LitePoint in 2011 significantly expanded the Wireless Test segment, contributing a substantial portion of the 2012 revenue increase.
  • 3The 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.
  • 4International sales are critical, with China and Taiwan being the largest geographic markets for revenue.
  • 5The company faces significant competition and relies on a few key customers, with one customer representing 10% of consolidated net revenues in 2012.
  • 6Teradyne made substantial investments in engineering and development, indicating a commitment to innovation.
  • 7The company has a history of stock repurchases but has not paid cash dividends, reinvesting earnings into growth.

Frequently Asked Questions

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.

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.

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.

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.