Summary
Teradyne, Inc. (TER) filed an 8-K on September 5, 2008, reporting a material impairment charge related to the sale of two buildings in North Reading, Massachusetts. The sale, completed on September 4, 2008, is part of Teradyne's ongoing strategy to reduce its quarterly breakeven level and consolidate manufacturing with an outsourced partner. The company received net cash proceeds of approximately $26 million from the sale. However, this transaction will result in an estimated non-cash impairment charge of approximately $27 million to be recorded in the third quarter of fiscal 2008. Teradyne is leasing back portions of both buildings, with a nine-month lease on one and a five-year lease on approximately 45% of the second building's square footage.
Key Highlights
- 1Teradyne sold two buildings in North Reading, MA, on September 4, 2008.
- 2The sale is part of a plan to reduce quarterly breakeven levels and consolidate manufacturing.
- 3Net cash proceeds from the sale amounted to approximately $26 million.
- 4An estimated non-cash impairment charge of approximately $27 million will be recorded in Q3 2008.
- 5The company is executing sale-leaseback agreements for portions of both sold buildings.
- 6A nine-month leaseback is in place for one building.
- 7A five-year leaseback is in place for approximately 45% of the second building's space.