Summary
Teradyne, Inc. reported a significant decline in net revenues for the three and six months ended July 5, 2009, compared to the same periods in the prior year, largely driven by a substantial decrease in its Semiconductor Test segment. This downturn is attributed to the global economic slowdown, leading to excess test capacity among customers. The company also reported a net loss for both periods, a stark contrast to the net income recorded in the previous year. Despite the revenue contraction and net loss, Teradyne has actively managed its financial position. It successfully raised $190 million in convertible senior notes and used a portion to repay its revolving credit facility. The company has also implemented significant cost-saving measures, including workforce reductions, which are expected to yield substantial quarterly savings. While the company faces challenges from the economic environment and some ongoing legal matters, it ended the period with a solid cash and cash equivalents balance, which management believes is sufficient for at least the next twelve months.
Financial Highlights
28 data points| Revenue | $169.58M |
| Cost of Revenue | $122.45M |
| Gross Profit | $47.13M |
| SG&A Expenses | $47.26M |
| Operating Expenses | $109.19M |
| Operating Income | -$62.06M |
| Interest Expense | $8.05M |
| Net Income | -$66.77M |
| EPS (Basic) | $-0.39 |
| EPS (Diluted) | $-0.39 |
| Shares Outstanding (Basic) | 173.02M |
| Shares Outstanding (Diluted) | 173.02M |
Key Highlights
- 1Net revenues decreased significantly, down 61% for the three months and 65% for the six months ended July 5, 2009, year-over-year, primarily due to a sharp decline in the Semiconductor Test segment.
- 2The company reported a net loss of $66.8 million and $157.4 million for the three and six months ended July 5, 2009, respectively, compared to net income of $11.1 million and $13.4 million in the prior year.
- 3Teradyne successfully raised $190 million through the issuance of 4.50% convertible senior notes due 2014 and used proceeds to repay its revolving credit facility.
- 4Significant restructuring and cost-saving initiatives were undertaken, including workforce reductions impacting approximately 800 employees, expected to generate approximately $16.9 million in quarterly savings.
- 5Gross profit margin declined considerably to 27.8% and 27.7% for the three and six months, respectively, impacted by lower sales volume, zero gross margin on certain Hard Disk Drive test system revenues, and inventory charges.
- 6The company's cash and cash equivalents balance stood at $334.1 million as of July 5, 2009, a slight increase from the prior year-end.
- 7Significant debt issuance costs related to the convertible senior notes and write-offs related to the terminated revolving credit facility impacted interest expense and other.