What was the financial impact of the Universal Robots acquisition?

The acquisition of Universal Robots on June 11, 2015, for approximately $284 million in cash, added $16.1 million in revenue for the third quarter of 2015. It also significantly increased the company's goodwill and intangible assets on the balance sheet. For the nine months ended October 4, 2015, it contributed $19.8 million in revenue.

How did the different operating segments perform?

The Semiconductor Test segment saw a revenue decline of 14.4% in Q3 2015 compared to Q3 2014, mainly due to lower volumes in application processor and microcontroller markets. The System Test segment experienced strong growth, increasing revenue by 60% in Q3, driven by Storage Test for cloud storage. The newly acquired Industrial Automation segment (Universal Robots) contributed its first revenues in Q3. Wireless Test revenue saw a modest increase.

What is the company's liquidity and capital resources situation?

Teradyne maintained a strong liquidity position, with cash, cash equivalents, and marketable securities totaling $1.077 billion as of October 4, 2015. The company used cash for investing activities, notably the Universal Robots acquisition and marketable securities purchases, and for financing activities, including $226.8 million in share repurchases and $38.4 million in dividend payments during the first nine months of 2015. Management believes these resources are sufficient for the next twelve months.

Were there any significant inventory adjustments?

Yes, Teradyne recorded inventory provisions totaling $3.1 million in Q3 2015 and $18.9 million for the nine-month period, primarily due to downward revisions in forecasted demand for certain products, particularly in the Semiconductor Test and Storage Test businesses. These adjustments are to account for obsolete or excess inventory.

TER 10-Q Filed Nov 13, 2015

Summary

Teradyne, Inc. reported revenues of $465.994 million for the third quarter of 2015, a slight decrease from $478.010 million in the same period last year. Net income for the quarter was $71.453 million, down from $82.949 million in Q3 2014. The company's performance was impacted by a revenue decline in its Semiconductor Test segment, partially offset by growth in System Test and the addition of revenue from the recently acquired Universal Robots (Industrial Automation segment). The nine-month period ending October 4, 2015, saw total revenues of $1.321 billion, relatively flat compared to $1.324 billion in the prior year. Net income for this period increased to $207.118 million from $185.083 million in the same period of 2014. This increase was driven by improved gross profit margins and a significant gain from the sale of an equity investment, despite a revenue decrease in Semiconductor Test. Key financial events during the period include the acquisition of Universal Robots for approximately $284 million, which significantly increased goodwill and intangible assets, and ongoing share repurchases totaling $226.8 million. The company also maintained a strong liquidity position with $1.077 billion in cash, cash equivalents, and marketable securities at the end of the nine-month period.

Key Highlights

1Teradyne reported Q3 2015 revenues of $466.0 million, down 2.5% year-over-year, with net income of $71.5 million, down 13.8%.
2Nine-month revenues were largely flat at $1.321 billion, but net income increased by 11.9% to $207.1 million, boosted by a gain from an equity investment sale and improved gross margins.
3The acquisition of Universal Robots in June 2015 added $16.1 million in revenue in Q3 and significantly increased goodwill and intangible assets on the balance sheet.
4Semiconductor Test segment revenue declined 14.4% in Q3, primarily due to lower system-on-a-chip (SOC) product volumes.
5System Test segment revenue increased 60% in Q3, driven by higher sales in Storage Test for cloud storage applications.
6The company repurchased $226.8 million of its common stock in the first nine months of 2015 under a $500 million authorization.
7Cash, cash equivalents, and marketable securities remained strong at $1.077 billion as of October 4, 2015.

TERADYNE, INC Quarterly Report for Q3 Ended Oct 4, 2015

Summary

Key Highlights

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