01—Abstract
Summary
Summary of the 10-K filed February 27, 2015. Cited figures are marked; the original filing is the authoritative source.
Teradyne, Inc.'s 2014 Form 10-K filing reveals a company navigating shifts in its core markets.
While Semiconductor Test revenue saw a significant increase of 27% in 2014, driven by demand in application processors, the Wireless Test segment experienced a substantial 27% decline, largely due to lower cellular and connectivity product volumes. This decline in Wireless Test led to a goodwill impairment charge of $98.9 milliona, highlighting strategic challenges within that segment. The company's overall revenue grew by 15% to $1.65 billion in 2014, supported by the strong performance in Semiconductor Test.
However, gross profit margin decreased by 3.3 percentage points due to an unfavorable product mix in Semiconductor Test and lower Wireless Test sales. Despite revenue growth, the company's income from operations was significantly impacted by the goodwill impairment and increased pension expenses. Teradyne also initiated a quarterly dividend in 2014 and announced a substantial $500 millionb stock repurchase program in early 2015, signaling a focus on returning capital to shareholders.
02—Key points
Key Highlights
- Semiconductor Test revenue increased by 27% to $1.30 billion in 2014, driven by strong demand in the application processor market.
- Wireless Test revenue decreased by 27% to $184.5 million in 2014, impacting overall segment performance.
- The company recorded a significant goodwill impairment charge of $98.9 million in the Wireless Test segment due to decreased projected demand.
- Total revenues for 2014 reached $1.65 billion, an increase of 15% compared to 2013.
- Gross profit margin decreased to 53.3% in 2014 from 56.6% in 2013, influenced by product mix and lower Wireless Test sales.
- Teradyne initiated a quarterly dividend of $0.06 per share in 2014.
- A new $500 million stock repurchase program was authorized in January 2015.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2014, Teradyne, Inc kept $0.05.
- Revenue$1.65B100.0%
- Cost of revenue−$769.0M46.7%
- Gross profit$878.8M53.3%
- Operating costs−$782.4M47.5%
- Operating income$96.4M5.9%
- Interest, other & tax−$15.2M0.9%
- Net income$81.3M4.9%
Where FY2014 revenue went
$1.65B- Cost of revenue: $769.0M, 47% of revenue
- Other operating costs: $462.7M, 28% of revenue
- SG&A: $319.7M, 19% of revenue
- Net income: $81.3M, 4.9% of revenue
- Interest, other & tax: $15.2M, 0.9% of revenue
Kept 4.9% as net incomeNet income $81.3M · 4.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2014filed February 27, 2015Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $1.65B$1.43B | +15.4% |
| Cost of Revenue | $769.02M$619.13M | +24.2% |
| Gross Profit | $878.81M$808.80M | +8.7% |
| SG&A Expenses | $319.71M$279.56M | +14.4% |
| Operating Expenses | $782.38M$618.14M | +26.6% |
| Operating Income | $96.42M$190.66M | −49.4% |
| Interest Expense | $6.93M$26.10M | −73.4% |
| Net Income | $81.27M$164.95M | −50.7% |
| EPS (Basic) | $0.40$0.86 | −53.5% |
| EPS (Diluted) | $0.37$0.70 | −47.1% |
| Shares Outstanding (Basic) | 202.91M190.77M | +6.4% |
| Shares Outstanding (Diluted) | 222.55M235.60M | −5.5% |
05—Questions
Frequently Asked Questions
What was the primary driver of Teradyne's revenue growth in 2014?
Teradyne's revenue growth in 2014 was primarily driven by a significant increase in its Semiconductor Test segment, which saw a 27% rise in revenue due to strong demand in the application processor test market.
Why did Teradyne incur a goodwill impairment charge?
Teradyne incurred a $98.9 million goodwill impairment charge in its Wireless Test segment. This was a result of decreased projected demand in that market, attributed to factors such as the reuse of wireless test equipment, price competition, and evolving testing techniques.
How did Teradyne's gross profit margin perform in 2014?
Teradyne's gross profit margin decreased to 53.3% in 2014, down from 56.6% in 2013. This was primarily due to an unfavorable product mix within the Semiconductor Test segment and lower sales in the Wireless Test segment.
What is Teradyne's approach to returning capital to shareholders?
In 2014, Teradyne initiated a quarterly cash dividend of $0.06 per share. Furthermore, in January 2015, the company authorized a substantial $500 million stock repurchase program, indicating a commitment to returning capital to its shareholders.
06—Continue