01—Abstract
Summary
Summary of the 10-K filed March 1, 2017. Cited figures are marked; the original filing is the authoritative source.
Teradyne, Inc.'s Form 10-K for the fiscal year ended December 31, 2016, reveals a challenging year marked by a significant net loss of $43.4 milliona, largely driven by substantial impairment charges within its Wireless Test segment.
This segment experienced a sharp decline in projected demand, leading to a goodwill impairment charge of $254.9 millionb and an acquired intangible asset impairment of $83.3 million. Despite this, the company's core Semiconductor Test segment showed resilience, with revenues increasing by 14% due to strong demand in the mobile application processor market. The company continues to invest in innovation, with engineering and development expenses remaining stable.
The acquisition of Universal Robots in 2015 has established a new growth engine in the Industrial Automation segment, contributing significantly to revenue growth in 2016. However, overall financial performance was impacted by the significant write-downs and industry cyclicality. Teradyne is focused on managing costs and market share while navigating these challenges, as evidenced by its ongoing share repurchase program and dividend payments.
02—Key points
Key Highlights
- Teradyne reported a net loss of $43.4 million for the fiscal year ended December 31, 2016, a significant reversal from the $206.5 million net income in the prior year.
- The Wireless Test segment incurred substantial impairment charges, including $254.9 million for goodwill and $83.3 million for intangible assets, due to a sharp decline in projected demand.
- The Semiconductor Test segment was a key performer, with revenues increasing by 14% to $1.37 billion, driven by demand in the mobile application processor market.
- The Industrial Automation segment, bolstered by the acquisition of Universal Robots, saw significant revenue growth, contributing $99.0 million in 2016.
- The company repurchased $146.3 million of its common stock in 2016 and plans to repurchase at least $200 million in 2017.
- Teradyne continues to pay a quarterly cash dividend, increasing it to $0.07 per share in January 2017.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2016, Teradyne, Inc lost $0.02.
- Revenue$1.75B100.0%
- Cost of revenue−$794.6M45.3%
- Gross profit$958.6M54.7%
- Operating costs−$1.02B58.3%
- Operating income−$63.0M3.6%
- Interest, other & tax$19.5M1.1%
- Net income−$43.4M2.5%
04—Financials
Financial Highlights
Figures from 10-KFY2016filed March 1, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $1.75B$1.64B | +6.9% |
| Cost of Revenue | $793.68M$723.93M | +9.6% |
| Gross Profit | $958.61M$915.64M | +4.7% |
| SG&A Expenses | $316.54M$306.31M | +3.3% |
| Operating Expenses | $1.02B$672.67M | +51.9% |
| Operating Income | -$62.97M$242.97M | −125.9% |
| Interest Expense | $3.64M$1.88M | +93.9% |
| Net Income | -$43.42M$206.48M | −121.0% |
| EPS (Basic) | $-0.21$0.98 | −121.4% |
| EPS (Diluted) | $-0.21$0.97 | −121.6% |
| Shares Outstanding (Basic) | 202.58M211.54M | −4.2% |
| Shares Outstanding (Diluted) | 202.58M213.32M | −5.0% |
05—Questions
Frequently Asked Questions
What was Teradyne's financial performance in 2016?
Teradyne reported a net loss of $43.4 million for the fiscal year ended December 31, 2016, a significant shift from a net income of $206.5 million in 2015. This was largely due to substantial impairment charges in the Wireless Test segment, offset by revenue growth in the Semiconductor Test segment.
What caused the significant net loss in 2016?
The primary driver for the net loss was significant impairment charges within the Wireless Test segment. This included a $254.9 million goodwill impairment and an $83.3 million intangible asset impairment, stemming from a sharp decline in projected demand and a smaller estimated future wireless test market.
How did the Universal Robots acquisition impact the company?
The acquisition of Universal Robots in June 2015 established the Industrial Automation segment. This segment contributed $99.0 million in revenue in 2016, demonstrating strong growth and serving as a new engine for the company, complementing its existing test segments.
What is the company's strategy regarding shareholder returns?
Teradyne continues to prioritize shareholder returns through a share repurchase program and dividend payments. In 2016, the company repurchased $146.3 million of its common stock and increased its quarterly cash dividend to $0.07 per share in January 2017. A new $500 million share repurchase authorization was also approved, with plans to repurchase at least $200 million in 2017.
06—Continue