01—Abstract
Summary
Summary of the 10-K filed February 29, 2016. Cited figures are marked; the original filing is the authoritative source.
Teradyne, Inc. reported stable revenues for the fiscal year ended December 31, 2015, totaling $1.64 billiona, a slight decrease from the previous year.
The company successfully integrated the Universal Robots acquisition in June 2015, contributing positively to the newly formed Industrial Automation segment. Despite a decline in Semiconductor Test revenue due to market shifts, this segment remained the largest revenue contributor. System Test saw growth driven by storage test products.
However, the Wireless Test segment experienced a decline, leading to a significant goodwill impairment charge of $98.9 millionb in 2014, which impacted the prior year's results more heavily. Net income for 2015 was $206.5 million, a substantial increase from $81.3 million in 2014, largely due to the absence of the prior year's impairment charge and improved gross profit margins. Teradyne continues to focus on innovation and strategic acquisitions to drive growth.
The company's financial position remains robust, with a significant cash balance and no outstanding debt. Management is committed to returning value to shareholders through dividends and share repurchases. Investors should monitor the company's ability to adapt to cyclical market conditions and leverage its new industrial automation segment for future growth.
02—Key points
Key Highlights
- Teradyne reported 2015 revenues of $1.64 billion, a slight decrease from 2014, demonstrating stable performance amidst market fluctuations.
- The acquisition of Universal Robots in June 2015 established a new Industrial Automation segment, adding $41.9 million in revenue for 2015.
- Semiconductor Test, the largest segment, saw an 8% revenue decrease in 2015, primarily due to lower demand in specific product markets.
- System Test revenue grew by 30% in 2015, driven by strong performance in the Storage Test business unit.
- Wireless Test revenue remained flat year-over-year, but the segment experienced a $98.9 million goodwill impairment charge in 2014 due to market condition changes.
- Net income increased significantly to $206.5 million in 2015, up from $81.3 million in 2014, largely due to the absence of the prior year's impairment charge and improved gross profit margins.
- The company ended 2015 with a strong cash position of $1.01 billion and no long-term debt, supporting its dividend and share repurchase programs.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Teradyne, Inc kept $0.13.
- Revenue$1.64B100.0%
- Cost of revenue−$723.9M44.2%
- Gross profit$915.6M55.8%
- Operating costs−$672.7M41.0%
- Operating income$243.0M14.8%
- Interest, other & tax−$36.5M2.2%
- Net income$206.5M12.6%
Where FY2015 revenue went
$1.64B- Cost of revenue: $723.9M, 44% of revenue
- Other operating costs: $366.4M, 22% of revenue
- SG&A: $306.3M, 19% of revenue
- Net income: $206.5M, 13% of revenue
- Interest, other & tax: $36.5M, 2.2% of revenue
Kept 13% as net incomeNet income $206.5M · 13%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 29, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $1.64B$1.65B | −0.5% |
| Cost of Revenue | $723.93M$769.02M | −5.9% |
| Gross Profit | $915.64M$878.81M | +4.2% |
| SG&A Expenses | $306.31M$319.71M | −4.2% |
| Operating Expenses | $672.67M$782.38M | −14.0% |
| Operating Income | $242.97M$96.42M | +152.0% |
| Interest Expense | $1.88M$6.93M | −72.9% |
| Net Income | $206.48M$81.27M | +154.1% |
| EPS (Basic) | $0.98$0.40 | +145.0% |
| EPS (Diluted) | $0.97$0.37 | +162.2% |
| Shares Outstanding (Basic) | 211.54M202.91M | +4.3% |
| Shares Outstanding (Diluted) | 213.32M222.55M | −4.1% |
05—Questions
Frequently Asked Questions
What were Teradyne's key business segments and their performance in 2015?
Teradyne operates in four reportable segments: Semiconductor Test (73% of revenue), System Test (13% of revenue), Wireless Test (11% of revenue), and Industrial Automation (3% of revenue). Semiconductor Test saw a revenue decline, while System Test grew due to strong storage test sales. Wireless Test revenue was flat, but the segment experienced a significant goodwill impairment in the prior year. The new Industrial Automation segment, from the Universal Robots acquisition, contributed positively.
How did the acquisition of Universal Robots impact Teradyne's financial results?
The acquisition of Universal Robots in June 2015 added $41.9 million in revenue for the latter half of 2015 and established the Industrial Automation segment. While the segment reported a loss of $7.6 million in 2015, it represents a strategic diversification for Teradyne, and management views it as a future growth engine.
What is the significance of the $98.9 million goodwill impairment charge in 2014?
The $98.9 million goodwill impairment charge in 2014 was recorded in the Wireless Test segment due to a decrease in projected demand and market size attributed to factors like equipment reuse and price competition. This charge significantly impacted the company's net income in 2014, making the 2015 net income appear substantially higher on a comparative basis, even with similar revenue levels.
How is Teradyne managing its financial resources and shareholder returns?
Teradyne ended 2015 with a strong cash position of $1.01 billion and no long-term debt. The company paid quarterly dividends and repurchased $300 million of its common stock in 2015, demonstrating a commitment to returning value to shareholders. Management anticipates continuing these activities, subject to financial performance and market conditions.
06—Continue