☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Massachusetts
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04-2272148
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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600 Riverpark Drive, North Reading,
Massachusetts
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01864
|
|
(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
|
Trading
Symbol(s)
|
Name of each exchange
on which registered
|
||
Common Stock, par value $0.125 per share
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TER
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Nasdaq Stock Market LLC
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Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated
filer
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☐ | Emerging growth company | ☐ | |||
Smaller reporting company
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☐
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Page No.
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Item 1.
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1
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2
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3
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4
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5
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6
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Item 2.
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30
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Item 3.
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42
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Item 4.
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43
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Item 1.
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43
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Item 1A.
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43
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Item 2.
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46
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Item 4.
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46
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Item 6.
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47
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September 27,
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December 31,
|
|||||||
2020
|
2019
|
|||||||
(in thousands,
except per share amount)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 945,180 | $ | 773,924 | ||||
Marketable securities
|
287,789 | 137,303 | ||||||
Accounts receivable, less allowance for doubtful accounts of $1,891 and $1,736 at September 27, 2020 and December 31, 2019, respectively
|
587,243 | 362,368 | ||||||
Inventories, net
|
191,317 | 196,691 | ||||||
Prepayments and other current assets
|
232,103 | 188,598 | ||||||
|
|
|
|
|||||
Total current assets
|
2,243,632 | 1,658,884 | ||||||
Property, plant and equipment, net
|
386,170 | 320,216 | ||||||
Operating lease
right-of-use
|
54,724 | 57,539 | ||||||
Marketable securities
|
108,254 | 104,490 | ||||||
Deferred tax assets
|
78,243 | 75,185 | ||||||
Retirement plans assets
|
14,915 | 18,457 | ||||||
Other assets
|
11,650 | 10,332 | ||||||
Acquired intangible assets, net
|
103,672 | 125,480 | ||||||
Goodwill
|
435,252 | 416,431 | ||||||
|
|
|
|
|||||
Total assets
|
$ | 3,436,512 | $ | 2,787,014 | ||||
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|
|||||
LIABILITIES
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 150,427 | $ | 126,617 | ||||
Accrued employees’ compensation and withholdings
|
175,286 | 163,883 | ||||||
Deferred revenue and customer advances
|
129,438 | 104,876 | ||||||
Other accrued liabilities
|
117,108 | 70,871 | ||||||
Operating lease liabilities
|
20,311 | 19,476 | ||||||
Contingent consideration
|
— | 9,106 | ||||||
Income taxes payable
|
79,270 | 44,200 | ||||||
|
|
|
|
|||||
Total current liabilities
|
671,840 | 539,029 | ||||||
Retirement plans liabilities
|
134,650 | 134,471 | ||||||
Long-term deferred revenue and customer advances
|
59,099 | 45,974 | ||||||
Long-term contingent consideration
|
22,531 | 30,599 | ||||||
Long-term other accrued liabilities
|
20,141 | 19,535 | ||||||
Deferred tax liabilities
|
11,462 | 14,070 | ||||||
Long-term operating lease
liabilities
|
42,137 | 45,849 | ||||||
Long-term incomes taxes payable
|
74,930 | 82,642 | ||||||
Debt
|
406,178 | 394,687 | ||||||
|
|
|
|
|||||
Total liabilities
|
1,442,968 | 1,306,856 | ||||||
|
|
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|
|||||
Commitments and contingencies (See Note
R
)
|
||||||||
SHAREHOLDERS’ EQUITY
|
||||||||
Common stock, $0.125 par value, 1,000,000 shares authorized; 166,043 and 166,410 shares issued and outstanding at September 27, 2020 and December 31, 2019, respectively
|
20,755 | 20,801 | ||||||
Additional
paid-in
capital
|
1,756,831 | 1,720,129 | ||||||
Accumulated other comprehensive
income (
loss
)
|
8,248 | (18,854 | ) | |||||
Retained earnings (accumulated deficit)
|
207,710 | (241,918 | ) | |||||
|
|
|
|
|||||
Total shareholders’ equity
|
1,993,544 | 1,480,158 | ||||||
|
|
|
|
|||||
Total liabilities and shareholders’ equity
|
$ | 3,436,512 | $ | 2,787,014 | ||||
|
|
|
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For the Three Months
Ended
|
For the Nine Months
Ended
|
|||||||||||||||
September 27,
|
September 29,
|
September 27,
|
September 29,
|
|||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands, except per share amount)
|
||||||||||||||||
Revenues:
|
||||||||||||||||
Products
|
$ | 697,745 | $ | 488,170 | $ | 2,043,281 | $ | 1,339,123 | ||||||||
Services
|
121,739 | 93,868 | 319,219 | 301,192 | ||||||||||||
|
|
|
|
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|
|||||||||
Total revenues
|
819,484 | 582,038 | 2,362,500 | 1,640,315 | ||||||||||||
Cost of revenues:
|
||||||||||||||||
Cost of products
|
300,174 | 197,196 | 882,902 | 555,863 | ||||||||||||
Cost of services
|
60,382 | 39,804 | 143,647 | 127,861 | ||||||||||||
|
|
|
|
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|
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|
|||||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)
|
360,556 | 237,000 | 1,026,549 | 683,724 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit
|
458,928 | 345,038 | 1,335,951 | 956,591 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Selling and administrative
|
115,840 | 109,166 | 340,488 | 319,990 | ||||||||||||
Engineering and development
|
94,909 | 77,804 | 274,170 | 236,030 | ||||||||||||
Acquired intangible assets amortization
|
6,219 | 9,647 | 25,052 | 30,363 | ||||||||||||
Restructuring and other
|
(27,701 | ) | (6,500 | ) | 1,915 | (11,792 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses
|
189,267 | 190,117 | 641,625 | 574,591 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income from operations
|
269,661 | 154,921 | 694,326 | 382,000 | ||||||||||||
Non-operating
(income) expense:
|
||||||||||||||||
Interest income
|
(1,071 | ) | (4,433 | ) | (5,189 | ) | (13,805 | ) | ||||||||
Interest expense
|
6,237 | 5,463 | 17,831 | 16,846 | ||||||||||||
Other (income) expense, net
|
764 | 2,158 | 3,595 | 2,070 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes
|
263,731 | 151,733 | 678,089 | 376,889 | ||||||||||||
Income tax provision
|
41,013 | 15,873 | 90,274 | 34,494 | ||||||||||||
|
|
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|
|
|
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|
|||||||||
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|
|||||||||
Net income
|
$ | 222,718 | $ | 135,860 | $ | 587,815 | $ | 342,395 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income per common share:
|
||||||||||||||||
Basic
|
$ | 1.34 | $ | 0.80 | $ | 3.54 | $ | 2.00 | ||||||||
|
|
|
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|
|||||||||
Diluted
|
$ | 1.21 | $ | 0.75 | $ | 3.23 | $ | 1.92 | ||||||||
|
|
|
|
|
|
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|
|||||||||
Weighted average common shares—basic
|
166,014 | 169,641 | 166,131 | 171,471 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average common shares—diluted
|
184,338 | 180,494 | 181,777 | 178,685 | ||||||||||||
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
|||||||||||||||
September 27,
|
September 29,
|
September 27,
|
September 29,
|
|||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Net income
|
$ | 222,718 | $ | 135,860 | $ | 587,815 | $ | 342,395 | ||||||||
Other comprehensive income
(loss)
, net of tax:
|
||||||||||||||||
Foreign currency translation adjustment, net of tax of $0, $0, $0, $0, respectively
|
17,104 | (18,002 | ) | 24,131 | (17,019 | ) | ||||||||||
Available-for-sale
|
||||||||||||||||
Unrealized gains on debt securities arising during period, net of tax of $139, $507, $1,410, $1,762, respectively
|
335 | 1,754 | 5,165 | 6,391 | ||||||||||||
Less: Reclassification adjustment for gains included in net income, net of tax of $
(
194
)
, $(99), $
(
615
)
, $(125), respectively
|
(689 | ) | (345 | ) | (2,188 | ) | (442 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(354 | ) | 1,409 | 2,977 | 5,949 | ||||||||||||
Defined benefit retirement plans:
|
||||||||||||||||
Amortization of prior service
credit
, net of tax of $0, $(11), $(1), $(32), respectively
|
(2 | ) | (37 | ) | (6 | ) | (111 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income
(loss)
|
16,748 | (16,630 | ) | 27,102 | (11,181 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive income
|
$ | 239,466 | $ | 119,230 | $ | 614,917 | $ | 331,214 | ||||||||
|
|
|
|
|
|
|
|
Common Stock
Shares |
Common Stock
Par Value |
Additional Paid-in
Capital |
Accumulated
Other Comprehensive (Loss) Income |
Retained
Earnings (Accumulated Deficit) |
Total
Shareholders’ Equity |
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
For the Three Months Ended
|
||||||||||||||||||||||||
Balance, June 28, 2020
|
165,806 | $ | 20,725 | $ | 1,730,716 | $ | (8,500 | ) | $ | 1,610 | $ | 1,744,551 | ||||||||||||
Net issuance of common stock under
|
237 | 30 | 13,515 | 13,545 | ||||||||||||||||||||
Stock-based compensation expense
|
12,600 | 12,600 | ||||||||||||||||||||||
Cash dividends ($0.10 per share)
|
(16,618 | ) | (16,618 | ) | ||||||||||||||||||||
Net income
|
222,718 | 222,718 | ||||||||||||||||||||||
Other comprehensive income
|
16,748 | 16,748 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, September 27, 2020
|
166,043 | $ | 20,755 | $ | 1,756,831 | $ | 8,248 | $ | 207,710 | $ | 1,993,544 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
For the Three Months Ended
|
||||||||||||||||||||||||
Balance, June 30, 2019
|
170,436 | $ | 21,305 | $ | 1,688,211 | $ | (7,591 | ) | $ | (222,513 | ) | $ | 1,479,412 | |||||||||||
Net issuance of common stock under stock-based plans
|
377 | 46 | 14,041 | 14,087 | ||||||||||||||||||||
Stock-based compensation expense
|
9,933 | 9,933 | ||||||||||||||||||||||
Repurchase of common stock
|
(2,323 | ) | (290 | ) | (124,473 | ) | (124,763 | ) | ||||||||||||||||
Cash dividends ($0.09 per share)
|
(15,264 | ) | (15,264 | ) | ||||||||||||||||||||
Net income
|
135,860 | 135,860 | ||||||||||||||||||||||
Other comprehensive
loss
|
(16,630 | ) | (16,630 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, September 29, 2019
|
168,490 | $ | 21,061 | $ | 1,712,185 | $ | (24,221 | ) | $ | (226,390 | ) | $ | 1,482,635 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
For the Nine Months Ended September 27, 2020
|
||||||||||||||||||||||||
Balance, December 31, 2019
|
166,410 | $ | 20,801 | $ | 1,720,129 | $ | (18,854 | ) | $ | (241,918 | ) | $ | 1,480,158 | |||||||||||
Net issuance of common stock under stock-based plans
|
1,150 | 144 | 3,019 | 3,163 | ||||||||||||||||||||
Stock-based compensation expense
|
33,683 | 33,683 | ||||||||||||||||||||||
Repurchase of common stock
|
(1,517 | ) | (190 | ) | (88,275 | ) | (88,465 | ) | ||||||||||||||||
Cash dividends ($0.10 per share)
|
(49,912 | ) | (49,912 | ) | ||||||||||||||||||||
Net income
|
587,815 | 587,815 | ||||||||||||||||||||||
Other comprehensive income
|
27,102 | 27,102 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, September 27, 2020
|
166,043 | $ | 20,755 | $ | 1,756,831 | $ | 8,248 | $ | 207,710 | $ | 1,993,544 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
For the Nine Months Ended September 29, 2019
|
||||||||||||||||||||||||
Balance, December 31, 2018
|
175,522 | $ | 21,940 | $ | 1,671,645 | $ | (13,040 | ) | $ | (158,191 | ) | $ | 1,522,354 | |||||||||||
Net issuance of common stock under stock-based plans
|
1,762 | 220 | 14,511 | 14,731 | ||||||||||||||||||||
Stock-based compensation expense
|
26,029 | 26,029 | ||||||||||||||||||||||
Repurchase of common stock
|
(8,794 | ) | (1,099 | ) | (364,287 | ) | (365,386 | ) | ||||||||||||||||
Cash dividends ($0.09 per share)
|
(46,307 | ) | (46,307 | ) | ||||||||||||||||||||
Net income
|
342,395 | 342,395 | ||||||||||||||||||||||
Other comprehensive
loss
|
(11,181 | ) | (11,181 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, September 29, 2019
|
168,490 | $ | 21,061 | $ | 1,712,185 | $ | (24,221 | ) | $ | (226,390 | ) | $ | 1,482,635 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended |
||||||||
September 27,
|
September 29,
|
|||||||
2020
|
2019
|
|||||||
(in thousands)
|
||||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 587,815 | $ | 342,395 | ||||
Adjustments to reconcile net income from operations to net cash provided by operating activities:
|
||||||||
Depreciation
|
58,111 | 51,508 | ||||||
Amortization
|
36,577 | 36,849 | ||||||
Stock-based compensation
|
33,028 | 28,822 | ||||||
Provision for excess and obsolete inventory
|
13,116 | 8,848 | ||||||
Contingent consideration adjustment
|
(7,967 | ) | (16,460 | ) | ||||
Deferred taxes
|
(4,547 | ) | (2,977 | ) | ||||
Gains on investments
|
(3,515 | ) | (4,158 | ) | ||||
Retirement plan actuarial losses
|
2,589 | 448 | ||||||
Other
|
750 | 610 | ||||||
Changes in operating assets and liabilities, net of businesses acquired:
|
||||||||
Accounts receivable
|
(222,015 | ) | (66,789 | ) | ||||
Inventories
|
16,998 | (14,143 | ) | |||||
Prepayments and other assets
|
(40,751 | ) | (16,118 | ) | ||||
Accounts payable and other liabilities
|
81,557 | 20,807 | ||||||
Deferred revenue and customer advances
|
36,589 | 27,779 | ||||||
Retirement plans contributions
|
(3,884 | ) | (3,775 | ) | ||||
Income taxes
|
24,060 | (31,224 | ) | |||||
|
|
|
|
|||||
Net cash provided by operating activities
|
608,511 | 362,422 | ||||||
|
|
|
|
|||||
Cash flows from investing activities:
|
||||||||
Purchases of property, plant and equipment
|
(146,872 | ) | (96,048 | ) | ||||
Purchases of marketable securities
|
(488,428 | ) | (605,539 | ) | ||||
Proceeds from maturities of marketable securities
|
309,407 | 393,472 | ||||||
Proceeds from sales of marketable securities
|
32,611 | 60,274 | ||||||
Proceeds from life insurance
|
546 | 2,912 | ||||||
Acquisition of businesses, net of cash acquired
|
149 | (21,970 | ) | |||||
|
|
|
|
|||||
Net cash used for investing activities
|
(292,587 | ) | (266,899 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities:
|
||||||||
Issuance of common stock under stock purchase and stock option plans
|
26,528 | 29,280 | ||||||
Repurchase of common stock
|
(88,465 | ) | (368,782 | ) | ||||
Dividend payments
|
(49,870 | ) | (46,269 | ) | ||||
Payments related to net settlement of employee stock compensation awards
|
(22,735 | ) | (14,550 | ) | ||||
Payments of contingent consideration
|
(8,852 | ) | (27,615 | ) | ||||
|
|
|
|
|||||
Net cash used for financing activities
|
(143,394 | ) | (427,936 | ) | ||||
|
|
|
|
|||||
Effects of exchange rate changes on cash and cash equivalents
|
(1,274 | ) | (400 | ) | ||||
|
|
|
|
|||||
Inc
in cash and cash equivalents
rease (decrease)
|
171,256 | (332,813 | ) | |||||
Cash and cash equivalents at beginning of period
|
773,924 | 926,752 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period
|
$ | 945,180 | $ | 593,939 | ||||
|
|
|
|
|||||
Supplemental cash flow disclosure
|
|
|
|
|||||
Non-cash investing activities:
|
|
|
|
|||||
Capital Expenditures incurred but not yet paid
|
|
$
|
3,119
|
|
|
$
|
2,922
|
|
• |
semiconductor test (“Semiconductor Test”) systems;
|
• |
defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, storage and system level test (“Storage Test”) systems, and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”);
|
• |
industrial automation (“Industrial Automation”) products; and
|
• |
wireless test (“Wireless Test”) systems.
|
Purchase Price
Allocation
|
||||
(in thousands)
|
||||
Goodwill
|
$ | 41,223 | ||
Intangible assets
|
37,660 | |||
Tangible assets acquired and liabilities assumed:
|
||||
Other current assets
|
3,661 | |||
Non-current
assets
|
1,227 | |||
Accounts payable and current liabilities
|
(1,223 | ) | ||
Long-term other liabilities
|
(949 | ) | ||
|
|
|||
Total purchase price
|
$ | 81,599 | ||
|
|
Fair Value
|
Estimated Useful
Life
|
|||||||
(in thousands)
|
(in years)
|
|||||||
Developed technology
|
$ | 24,590 | 6.0 | |||||
Customer relationships
|
7,360 | 6.0 | ||||||
Trademarks and tradenames
|
5,450 | 7.0 | ||||||
Backlog
|
260 | 0.3 | ||||||
|
|
|||||||
Total intangible assets
|
$ | 37,660 | 6.1 | |||||
|
|
For the Three Months
Ended |
For the Nine Months
Ended |
|||||||
September 29, 2019
|
September 29, 2019
|
|||||||
(in thousands)
|
||||||||
Revenue
|
$ | 585,238 | $ | 1,646,815 | ||||
Net income
|
134,911 | 338,149 | ||||||
Net income per common share:
|
||||||||
|
|
|
|
|||||
Basic
|
$ | 0.80 | $ | 1.97 | ||||
|
|
|
|
|||||
Diluted
|
$ | 0.75 | $ | 1.89 | ||||
|
|
|
|
Semiconductor
Test
|
Industrial
Automation
|
|||||||||||||||||||||||||||||||||||
System
on a
Chip |
Memory
|
System
Test
|
Universal
Robots |
Mobile
Industrial Robots |
AutoGuide
|
Wireless
Test
|
|
|
Corporate
and
Other
|
|
|
Total
|
||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||||||
For the Three Months Ended September 27, 2020
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Timing of Revenue Recognition
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Point in Time
|
|
$
|
393,717
|
|
|
$
|
137,929
|
|
|
$
|
101,045
|
|
|
$
|
51,523
|
|
|
$
|
10,175
|
|
|
$
|
4,076
|
|
|
$
|
37,901
|
|
|
$
|
(41
|
)
|
|
$
|
736,325
|
|
Over Time
|
|
|
55,988
|
|
|
|
4,507
|
|
|
|
17,124
|
|
|
|
1,686
|
|
|
|
59
|
|
|
|
1,192
|
|
|
|
2,603
|
|
|
|
—
|
|
|
|
83,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
449,705
|
|
|
$
|
142,436
|
|
|
$
|
118,169
|
|
|
$
|
53,209
|
|
|
$
|
10,234
|
|
|
$
|
5,268
|
|
|
$
|
40,504
|
|
|
$
|
(41
|
)
|
|
$
|
819,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographical Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Asia Pacific
|
|
$
|
420,821
|
|
|
$
|
137,286
|
|
|
$
|
78,534
|
|
|
$
|
14,471
|
|
|
$
|
1,566
|
|
|
$
|
—
|
|
|
$
|
33,865
|
|
|
$
|
—
|
|
|
$
|
686,543
|
|
Americas
|
|
|
17,678
|
|
|
|
3,730
|
|
|
|
35,140
|
|
|
|
16,527
|
|
|
|
3,981
|
|
|
|
5,268
|
|
|
|
5,211
|
|
|
|
(41
|
)
|
|
|
87,494
|
|
Europe, Middle East
,
and Africa
|
|
|
11,206
|
|
|
|
1,420
|
|
|
|
4,495
|
|
|
|
22,211
|
|
|
|
4,687
|
|
|
|
—
|
|
|
|
1,428
|
|
|
|
—
|
|
|
|
45,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
449,705
|
|
|
$
|
142,436
|
|
|
$
|
118,169
|
|
|
$
|
53,209
|
|
|
$
|
10,234
|
|
|
$
|
5,268
|
|
|
$
|
40,504
|
|
|
$
|
(41
|
)
|
|
$
|
819,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 29, 2019 (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Timing of Revenue Recognition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Point in Time
|
|
$
|
273,111
|
|
|
$
|
68,510
|
|
|
$
|
61,988
|
|
|
$
|
57,426
|
|
|
$
|
9,631
|
|
|
$
|
—
|
|
|
$
|
39,948
|
|
|
$
|
(160
|
)
|
|
$
|
510,454
|
|
Over Time
|
|
|
51,366
|
|
|
|
4,750
|
|
|
|
11,317
|
|
|
|
1,835
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,316
|
|
|
|
—
|
|
|
|
71,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
324,477
|
|
|
$
|
73,260
|
|
|
$
|
73,305
|
|
|
$
|
59,261
|
|
|
$
|
9,631
|
|
|
$
|
—
|
|
|
$
|
42,264
|
|
|
$
|
(160
|
)
|
|
$
|
582,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographical Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Asia Pacific
|
|
$
|
297,590
|
|
|
$
|
68,646
|
|
|
$
|
32,259
|
|
|
$
|
15,855
|
|
|
$
|
1,800
|
|
|
$
|
—
|
|
|
$
|
34,652
|
|
|
$
|
—
|
|
|
$
|
450,802
|
|
Americas
|
|
|
14,804
|
|
|
|
4,085
|
|
|
|
33,868
|
|
|
|
16,775
|
|
|
|
2,820
|
|
|
|
—
|
|
|
|
6,344
|
|
|
|
(160
|
)
|
|
|
78,536
|
|
Europe, Middle East
,
and Africa
|
|
|
12,083
|
|
|
|
529
|
|
|
|
7,178
|
|
|
|
26,631
|
|
|
|
5,011
|
|
|
|
—
|
|
|
|
1,268
|
|
|
|
—
|
|
|
|
52,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
324,477
|
|
|
$
|
73,260
|
|
|
$
|
73,305
|
|
|
$
|
59,261
|
|
|
$
|
9,631
|
|
|
$
|
—
|
|
|
$
|
42,264
|
|
|
$
|
(160
|
)
|
|
$
|
582,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September 27, 2020 (2)
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Timing of Revenue Recognition
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Point in Time
|
|
$
|
1,261,468
|
|
|
$
|
298,150
|
|
|
$
|
259,498
|
|
|
$
|
140,829
|
|
|
$
|
30,468
|
|
|
$
|
8,608
|
|
|
$
|
125,304
|
|
|
$
|
(294
|
)
|
|
$
|
2,124,031
|
|
Over Time
|
|
|
162,159
|
|
|
|
14,000
|
|
|
|
46,553
|
|
|
|
5,628
|
|
|
|
176
|
|
|
|
2,083
|
|
|
|
7,870
|
|
|
|
—
|
|
|
|
238,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,423,627
|
|
|
$
|
312,150
|
|
|
$
|
306,051
|
|
|
$
|
146,457
|
|
|
$
|
30,644
|
|
|
$
|
10,691
|
|
|
$
|
133,174
|
|
|
$
|
(294
|
)
|
|
$
|
2,362,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographical Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Asia Pacific
|
|
$
|
1,330,463
|
|
|
$
|
296,679
|
|
|
$
|
197,208
|
|
|
$
|
39,665
|
|
|
$
|
4,391
|
|
|
$
|
—
|
|
|
$
|
113,576
|
|
|
$
|
—
|
|
|
$
|
1,981,982
|
|
Americas
|
|
|
51,315
|
|
|
|
11,481
|
|
|
|
91,924
|
|
|
|
42,634
|
|
|
|
9,836
|
|
|
|
10,691
|
|
|
|
15,253
|
|
|
|
(294
|
)
|
|
|
232,840
|
|
Europe, Middle East
,
and Africa
|
|
|
41,849
|
|
|
|
3,990
|
|
|
|
16,919
|
|
|
|
64,158
|
|
|
|
16,417
|
|
|
|
—
|
|
|
|
4,345
|
|
|
|
—
|
|
|
|
147,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,423,627
|
|
|
$
|
312,150
|
|
|
$
|
306,051
|
|
|
$
|
146,457
|
|
|
$
|
30,644
|
|
|
$
|
10,691
|
|
|
$
|
133,174
|
|
|
$
|
(294
|
)
|
|
$
|
2,362,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September 29, 2019 (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Timing of Revenue Recognition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Point in Time
|
|
$
|
776,589
|
|
|
$
|
169,877
|
|
|
$
|
167,500
|
|
|
$
|
174,820
|
|
|
$
|
29,243
|
|
|
$
|
—
|
|
|
$
|
106,705
|
|
|
$
|
(402
|
)
|
|
$
|
1,424,332
|
|
Over Time
|
|
|
153,701
|
|
|
|
13,322
|
|
|
|
37,434
|
|
|
|
5,690
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,836
|
|
|
|
—
|
|
|
|
215,983
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
930,290
|
|
|
$
|
183,199
|
|
|
$
|
204,934
|
|
|
$
|
180,510
|
|
|
$
|
29,243
|
|
|
$
|
—
|
|
|
$
|
112,541
|
|
|
$
|
(402
|
)
|
|
$
|
1,640,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographical Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Asia Pacific
|
|
$
|
840,564
|
|
|
$
|
157,726
|
|
|
$
|
94,736
|
|
|
$
|
49,291
|
|
|
$
|
6,208
|
|
|
$
|
—
|
|
|
$
|
95,315
|
|
|
$
|
—
|
|
|
$
|
1,243,840
|
|
Americas
|
|
|
46,594
|
|
|
|
21,728
|
|
|
|
90,591
|
|
|
|
50,557
|
|
|
|
9,152
|
|
|
|
—
|
|
|
|
14,511
|
|
|
|
(402
|
)
|
|
|
232,731
|
|
Europe, Middle East
,
and Africa
|
|
|
43,132
|
|
|
|
3,745
|
|
|
|
19,607
|
|
|
|
80,662
|
|
|
|
13,883
|
|
|
|
—
|
|
|
|
2,715
|
|
|
|
—
|
|
|
|
163,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
930,290
|
|
|
$
|
183,199
|
|
|
$
|
204,934
|
|
|
$
|
180,510
|
|
|
$
|
29,243
|
|
|
$
|
—
|
|
|
$
|
112,541
|
|
|
$
|
(402
|
)
|
|
$
|
1,640,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Includes $1.7 million and $1.5 million in 2020 and 2019, respectively, for leases of Teradyne’s systems recognized outside Accounting Standards Codification (“ASC”) 606 “
Revenue from Contracts with Customers.”
|
(2) |
Includes $6.1 million and $4.9 million in 2020 and 2019, respectively, for leases of Teradyne’s systems recognized outside ASC 606 “
Revenue from Contracts with Customers.”
|
September 27,
2020 |
December 31,
2019 |
|||||||
(in thousands)
|
||||||||
Raw material
|
$ | 117,500 | $ | 118,595 | ||||
Work-in-process
|
28,406 | 32,695 | ||||||
Finished goods
|
45,411 | 45,401 | ||||||
|
|
|
|
|||||
$ | 191,317 | $ | 196,691 | |||||
|
|
|
|
(Level 1)
|
(Level 2)
|
(Level
|
Total
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
$ | 930,314 | $ | 14,866 | $ | — | $ | 945,180 | ||||||||
Marketable securities
|
— | 287,789 | — | 287,789 | ||||||||||||
Long-term marketable securities
|
33,032 | 75,222 | — | 108,254 | ||||||||||||
Prepayments and other current assets
|
— | 25 | — | 25 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 963,346 | $ | 377,902 | $ | — | $ | 1,341,248 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities
|
. | |||||||||||||||
Other current liabilities
|
$ | — | $ | 185 | $ | — | $ | 185 | ||||||||
Long-term contingent consideration
|
— | — | 22,531 | 22,531 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Tota
l
|
$ | — | $ | 185 | $ | 22,531 | $ | 22,716 | ||||||||
|
|
|
|
|
|
|
|
(Level 1)
|
(Level 2)
|
(Level
|
Total
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
$ | 722,260 | $ | 51,664 | $ | — | $ | 773,924 | ||||||||
Marketable securities
|
— | 137,303 | — | 137,303 | ||||||||||||
Long-term marketable securities
|
32,660 | 71,830 | — | 104,490 | ||||||||||||
Prepayments and other current assets
|
— | 528 | — | 528 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 754,920 | $ | 261,325 | $ | — | $ | 1,016,245 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities
|
||||||||||||||||
Other accrued liabilities
|
$ | — | $ | 203 | $ | — | $ | 203 | ||||||||
Contingent consideration
|
— | — | 9,106 | 9,106 | ||||||||||||
Long-term contingent consideration
|
— | — | 30,599 | 30,599 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | — | $ | 203 | $ | 39,705 | $ | 39,908 | ||||||||
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
|||||||||||||||
September 27,
|
September 29,
|
September 27,
|
September 29,
|
|||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Balance at beginning of period
|
$ | 49,737 | $ | 26,847 | $ | 39,705 | $ | 70,543 | ||||||||
Fair value adjustment
(
a)(b)(c)
|
(27,206 | ) | (7,759 | ) | (7,967 | ) | (16,460 | ) | ||||||||
Payments (d
)(e)
|
— | — | (8,852 | ) | (34,590 | ) | ||||||||||
Foreign currency impact
|
— | (1,008 | ) | (355 | ) | (1,413 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at end of period
|
$ | 22,531 | $ | 18,080 | $ |
22,531
|
$ | 18,080 | ||||||||
|
|
|
|
|
|
|
|
(a)
|
In the three and nine months ended September 27, 2020, the fair value of contingent consideration for the earn-outs in connection with the acquisition of AutoGuide decreased by $27.2 million and $4.4 million, respectively, due to lower forecasted results. Teradyne has received a letter from the sellers of AutoGuide alleging
non-compliance
with the
earn-out
provisions of the AutoGuide acquisition agreement. Teradyne disputes the allegations of
non-compliance.
The ultimate amount of contingent consideration for the earn-outs in connection with the acquisition of AutoGuide may be affected by the outcome of the dispute.
|
(b)
|
In the nine months ended September 27, 2020, the fair value of contingent consideration for the earn-outs in connection with the acquisition of MiR decreased by $3.5 million due to lower forecasted results.
|
(c)
|
In the three and nine months ended September 29, 2019, the fair value of contingent consideration for the
earn-out
in connection with the acquisition of MiR decreased by $7.8 million and $16.5 million, respectively, primarily due to a decrease in the forecasted revenue, partially offset by impact from the modification of the
earn-out
structure in the three months ended September 29, 2019.
|
(d)
|
In the nine months ended September 27, 2020, Teradyne paid $8.9 million of contingent consideration for the
earn-out
in connection with the acquisition of MiR.
|
(e)
|
In the nine months ended September 29, 2019, Teradyne paid $30.8 million and $3.8 million of contingent consideration for the earn-outs in connection with the acquisition of MiR and Universal Robots A/S (“Universal Robots”), respectively.
|
Liability
|
September 27,
2020 Fair Value |
Valuation
Technique
|
Unobservable Inputs
|
Weighted
Average
|
||||||||||
(in thousands)
|
||||||||||||||
Contingent consideration
(AutoGuide)
|
$ | 22,531 |
|
Monte Carlo
Simulation
|
|
Revenue volatility | 17.5 | % | ||||||
Discount Rate | 1.4 | % | ||||||||||||
Contingent consideration
(MiR)
|
$ | — |
|
Monte Carlo
Simulation
|
|
Revenue volatility | 10.0 | % | ||||||
Discount Rate | 0.8 | % |
September 27, 2020
|
December 31, 2019
|
|||||||||||||||
Carrying Value
|
Fair Value
|
Carrying Value
|
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
$ | 945,180 | $ | 945,180 | $ | 773,924 | $ | 773,924 | ||||||||
Marketable securities
|
396,043 | 396,043 | 241,793 | 241,793 | ||||||||||||
Derivative assets
|
25 | 25 | 528 | 528 | ||||||||||||
Liabilities
|
||||||||||||||||
Contingent consideration
|
22,531 | 22,531 | 39,705 | 39,705 | ||||||||||||
Derivative liabilities
|
185 | 185 | 203 | 203 | ||||||||||||
Convertible debt (1)
|
406,178 | 1,151,460 | 394,687 | 1,010,275 |
(1) |
The carrying value represents the bifurcated debt component only, while the fair value is based on quoted market prices for the convertible note, which includes the equity conversion features.
|
September 27, 2020
|
||||||||||||||||||||
Available-for-Sale
|
||||||||||||||||||||
Cost
|
Unrealized
Gain
|
Unrealized
(Loss)
|
Fair Market
Value
|
Fair Market
Value of
Investments
with Unrealized
Losses
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
U.S. Treasury securities
|
$ | 201,193 | $ | 1,606 | $ | (33 | ) | $ | 202,766 | $ | 20,611 | |||||||||
Commercial paper
|
102,141 | 8 | — | 102,149 | 500 | |||||||||||||||
Corporate debt securities
|
44,350 | 6,417 | (52 | ) | 50,715 | 2,207 | ||||||||||||||
Debt mutual funds
|
6,661 | 191 | — | 6,852 | — | |||||||||||||||
U.S. government agency securities
|
4,288 | 60 |
(2
|
) | 4,346 |
1,113
|
||||||||||||||
Certificates of deposit and time deposits
|
2,414 | 2 | — | 2,416 | — | |||||||||||||||
Non-U.S. government securities
|
619 | — | — | 619 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 361,666 | $ | 8,284 | $ | (87 | ) | $ | 369,863 | $ | 24,431 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Cost
|
Unrealized
Gain
|
Unrealized
(Loss)
|
Fair Market
Value
|
Fair Market
Value of
Investments
with Unrealized
Losses
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Marketable securities
|
$ | 287,670 | $ | 128 | $ | (9 | ) | $ | 287,789 | $ | 18,953 | |||||||||
Long-term marketable securities
|
73,996 | 8,156 | (78 | ) | 82,074 | 5,478 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ |
361,666
|
$ | 8,284 | $ | (87 | ) | $ | 369,863 | $ | 24,431 | ||||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2019
|
||||||||||||||||||||
Available-for-Sale
|
||||||||||||||||||||
Cost
|
Unrealized
Gain
|
Unrealized
(Loss)
|
Fair
Market
Value
|
Fair Market
Value of
Investments
with Unrealized
Losses
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Corporate debt securities
|
$ | 93,267 | $ | 4,081 | $ | (41 | ) | $ | 97,307 | $ | 2,009 | |||||||||
Commercial paper
|
54,124 | 26 | (1 | ) | 54,149 | 1,391 | ||||||||||||||
U.S. Treasury securities
|
42,167 | 431 | (216 | ) | 42,382 | 17,556 | ||||||||||||||
U.S. government agency securities
|
9,942 | 14 | (4 | ) | 9,952 | 3,043 | ||||||||||||||
Debt mutual funds
|
6,753 | 135 | — | 6,888 | — | |||||||||||||||
Certificates of deposit and time deposits
|
4,751 | — | — | 4,751 | — | |||||||||||||||
Non-U.S.
government securities
|
592 | — | — | 592 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 211,596 | $ | 4,687 | $ | (262 | ) | $ | 216,021 | $ | 23,999 | ||||||||||
|
|
|
|
|
|
|
|
|
|
Cost
|
Unrealized
Gain
|
Unrealized
(Loss)
|
Fair
Market
Value
|
Fair Market
Value of
Investments
with Unrealized
Losses
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Marketable securities
|
$ | 137,144 | $ | 160 | $ | (1 | ) | $ | 137,303 | $ | 2,922 | |||||||||
Long-term marketable securities
|
74,452 | 4,527 | (261 | ) | 78,718 | 21,077 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 211,596 | $ | 4,687 | $ | (262 | ) | $ | 216,021 | $ | 23,999 | ||||||||||
|
|
|
|
|
|
|
|
|
|
September 27, 2020
|
||||||||
Cost
|
Fair Market
Value
|
|||||||
(in thousands)
|
||||||||
Due within one year
|
$ | 287,670 | $ | 287,789 | ||||
Due after 1 year through 5 years
|
20,790 | 21,266 | ||||||
Due after 5 years through 10 years
|
13,021 | 14,211 | ||||||
Due after 10 years
|
33,524 | 39,745 | ||||||
|
|
|
|
|||||
Total
|
$ | 355,005 | $ | 363,011 | ||||
|
|
|
|
Balance Sheet
Location
|
September 27,
2020 |
December 31,
2019 |
||||||||
(in thousands)
|
||||||||||
Derivatives not designated as hedging instruments:
|
||||||||||
Foreign exchange contracts
|
Prepayments | $ | 25 | $ | 528 | |||||
Foreign exchange contracts
|
Other current liabilities | (185 | ) | (203 | ) | |||||
|
|
|
|
|||||||
Total derivatives
|
$ | (160 | ) | $ | 325 | |||||
|
|
|
|
(1) |
The table does not reflect the corresponding gains and losses from the remeasurement of the monetary assets and liabilities denominated in foreign currencies.
|
(2) |
For the three months ended September 27, 2020, net losses from the remeasurement of monetary assets and liabilities denominated in foreign currencies were
$
1.2 million. For the nine months ended September 27, 2020, net gains from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $0.4 million.
|
(3) |
For the three months ended September 29, 2019, net gains from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $1.5 million. For the nine months ended September 29, 2019, net gains from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $3.4 million.
|
September 27,
2020 |
December 31,
2019 |
|||||||
(in thousands)
|
||||||||
Debt Principal
|
$ | 459,973 | $ | 460,000 | ||||
Unamortized discount
|
53,795 | 65,313 | ||||||
|
|
|
|
|||||
Net Carrying amount of convertible debt
|
$ | 406,178 | $ | 394,687 | ||||
|
|
|
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
|||||||||||||||
September 27,
2020 |
September 29,
2019 |
September 27,
2020 |
September 29,
2019 |
|||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||
Contractual interest expense on the coupon
|
$ | 1,438 | $ | 1,438 | $ | 4,313 | $ | 4,313 | ||||||||
Amortization of the discount component and debt issue fees recognized as interest expense
|
3,887 | 3,699 | 11,518 | 10,961 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest expense on the convertible debt
|
$ | 5,325 | $ | 5,137 | $ | 15,831 | $ | 15,274 | ||||||||
|
|
|
|
|
|
|
|
September 27,
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
(in thousands)
|
||||||||
Contract manufacturer and supplier prepayments
|
$ | 185,567 | $ | 143,392 | ||||
Prepaid taxes
|
11,278 | 8,046 | ||||||
Prepaid maintenance and other services
|
10,064 | 8,503 | ||||||
Other prepayments
|
14,063 | 16,753 | ||||||
|
|
|
|
|||||
Total prepayments
|
$ | 220,972 | $ | 176,694 | ||||
|
|
|
|
September 27,
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
(in thousands)
|
||||||||
Maintenance, service and training
|
$ | 71,362 | $ | 63,815 | ||||
Customer advances, undelivered elements and other
|
68,472 | 56,358 | ||||||
Extended warranty
|
48,703 | 30,677 | ||||||
|
|
|
|
|||||
Total deferred revenue and customer advances
|
$ | 188,537 | $ | 150,850 | ||||
|
|
|
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
|||||||||||||||
September 27,
|
September 29,
|
September 27,
|
September 29,
|
|||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Balance at beginning of period
|
$ | 13,016 | $ | 8,133 | $ | 8,996 | $ | 7,909 | ||||||||
Acquisition
|
— | — | — | 14 | ||||||||||||
Accruals for warranties issued during the period
|
8,255 | 3,508 | 19,522 | 10,008 | ||||||||||||
Accruals related to
pre-existing
warranties
|
158 | 1,132 | 1,569 | 3,156 | ||||||||||||
Settlements made during the period
|
(6,272 | ) | (4,265 | ) | (14,930 | ) | (12,579 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at end of period
|
$ | 15,157 | $ | 8,508 | $ | 15,157 | $ | 8,508 | ||||||||
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
|||||||||||||||
September 27,
|
September 29,
|
September 27,
|
September 29,
|
|||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Balance at beginning of period
|
$ | 40,178 | $ | 28,716 | $ | 30,677 | $ | 27,422 | ||||||||
Deferral of new extended warranty revenue
|
13,674 | 5,666 | 32,724 | 16,962 | ||||||||||||
Recognition of extended warranty deferred revenue
|
(5,149 | ) | (4,445 | ) | (14,698 | ) | (14,447 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at end of period
|
$ | 48,703 | $ | 29,937 | $ | 48,703 | $ | 29,937 | ||||||||
|
|
|
|
|
|
|
|
For the Nine Months
Ended
|
||||||||
September 27,
|
September 29,
|
|||||||
2020
|
2019
|
|||||||
Risk-free interest rate
|
1.5 | % | 2.6 | % | ||||
Teradyne volatility-historical
|
34.9 | % | 31.9 | % | ||||
NYSE Composite Index volatility-historical
|
11.4 | % | 11.9 | % | ||||
Dividend yield
|
0.6 | % | 1.0 | % |
For the Nine Months
Ended
|
||||||||
September 27,
|
September 29,
|
|||||||
2020
|
2019
|
|||||||
Expected life (years)
|
5.0 | 5.0 | ||||||
Risk-free interest rate
|
1.6 | % | 2.5 | % | ||||
Volatility-historical
|
31.6 | % | 30.1 | % | ||||
Dividend yield
|
0.6 | % | 1.0 | % |
Foreign
Currency
Translation
Adjustment
|
Unrealized
Gains
(Losses) on
Marketable
Securities
|
Retirement
Plans Prior
Service
Credit
|
Total
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Nine Months Ended September 27, 2020
|
||||||||||||||||
Balance at December 31, 2019, net of tax of $0, $946, $(1,124), respectively
|
$ | (23,514 | ) | $ | 3,480 | $ | 1,180 | $ | (18,854 | ) | ||||||
Other comprehensive income before reclassifications, net of tax of $0, $1,410, $0, respectively
|
24,131 | 5,165 | — | 29,296 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(615), $(1), respectively
|
— | (2,188 | ) | (6 | ) | (2,194 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net current period other comprehensive income (loss), net of tax of $0, $795, $(1), respectively
|
24,131 | 2,977 | (6 | ) | 27,102 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at September 27, 2020, net of tax of $0, $1,741, $(1,125), respectively
|
$ | 617 | $ | 6,457 | $ | 1,174 | $ | 8,248 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Nine Months Ended September 29, 2019
|
||||||||||||||||
Balance at December 31, 2018, net of tax of $0, $(521), $(1,081), respectively
|
$ | (12,523 | ) | $ | (1,845 | ) | $ | 1,328 | $ | (13,040 | ) | |||||
Other comprehensive
(loss)
income before reclassifications, net of tax of $0, $1,762, $0, respectively
|
(17,019 | ) | 6,391 | — | (10,628 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(125), $(32), respectively
|
— | (442 | ) | (111 | ) | (553 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net current period other comprehensive
(loss)
income
,
net of tax of $0, $1,637, $(32), respectively
|
(17,019 | ) | 5,949 | (111 | ) | (11,181 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance a
t
September 29, 2019, net of tax of $0, $1,116, $(1,113), respectively
|
$ | (29,542 | ) | $ | 4,104 | $ | 1,217 | $ | (24,221 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
For the Nine Months
Ended
|
|
|
Affected Line Item
in the Statements
of Operations
|
|
|||||||||||
Details about Accumulated Other Comprehensive Income
Components |
|
September 27,
|
|
|
September 29,
|
|
|
September 27,
|
|
|
September 29,
|
|
|
|
|
|||||
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
|
||||||
|
(in thousands)
|
|
|
|
|
|||||||||||||||
Available-for-sale
|
||||||||||||||||||||
Unrealized gains, net of tax of $194, $99, $615,
$125, respectively |
$ | 689 | $ | 345 | $ | 2,188 | $ | 442 | Interest income | |||||||||||
Defined benefit retirement plans:
|
||||||||||||||||||||
Amortization of prior service
cred
it, net of tax of
$0, $11, $1, $32, respectively |
2 | 37 | 6 | 111 | (a) | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total reclassifications, net of tax of $194, $110, $616, $157, respectively
|
$ | 691 | $ | 382 | $ | 2,194 | $ | 553 | Net income | |||||||||||
|
|
|
|
|
|
|
|
(a) |
The amortization of prior service credit is included in the computation of net periodic pension cost and postretirement benefit. See Note Q: “Retirement Plans.”
|
Industrial
Automation
|
System
Test
|
Wireless
Test
|
Semiconductor
Test
|
Total
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Balance at December 31, 2019
|
||||||||||||||||||||
Goodwill
|
$ | 396,483 | $ | 158,699 | $ | 361,819 | $ | 261,996 | $ | 1,178,997 | ||||||||||
Accumulated impairment losses
|
— | (148,183 | ) | (353,843 | ) | (260,540 | ) | (762,566 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
396,483 | 10,516 | 7,976 | 1,456 | 416,431 | ||||||||||||||||
AutoGuide acquisition
|
(149 | ) | — | — | — | (149 | ) | |||||||||||||
Foreign currency translation adjustment
|
18,881 | — | — | 89 | 18,970 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at September 27, 2020
|
||||||||||||||||||||
Goodwill
|
415,215 | 158,699 | 361,819 | 262,085 | 1,197,818 | |||||||||||||||
Accumulated impairment losses
|
— | (148,183 | ) | (353,843 | ) | (260,540 | ) | (762,566 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 415,215 | $ | 10,516 | $ | 7,976 | $ | 1,545 | $ | 435,252 | |||||||||||
|
|
|
|
|
|
|
|
|
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Foreign
Currency Translation Adjustment |
Net
Carrying
Amount
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Balance at September 27, 2020
|
||||||||||||||||
Developed technology
|
$ | 361,787 | $ | (295,801 | ) | $ | (3,806 | ) | $ | 62,180 | ||||||
Customer relationships
|
75,669 | (63,107 | ) | (42 | ) | 12,520 | ||||||||||
Tradenames and trademarks
|
70,120 | (40,891 | ) | (257 | ) | 28,972 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total intangible assets
|
$ | 507,576 | $ | (399,799 | ) | $ | (4,105 | ) | $ | 103,672 | ||||||
|
|
|
|
|
|
|
|
|||||||||
Balance, December 31, 2019
|
||||||||||||||||
Developed technology
|
$ | 361,787 | $ | (279,000 | ) | $ | (5,709 | ) | $ | 77,078 | ||||||
Customer relationships
|
75,669 | (59,077 | ) | (455 | ) | 16,137 | ||||||||||
Tradenames and trademarks
|
70,120 | (36,671 | ) | (1,184 | ) | 32,265 | ||||||||||
Backlog
|
260 | (260 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total intangible assets
|
$ | 507,836 | $ | (375,008 | ) | $ | (7,348 | ) | $ | 125,480 | ||||||
|
|
|
|
|
|
|
|
Year
|
Amortization Expense
|
|||
(in thousands)
|
||||
2020 (remainder)
|
5,721 | |||
2021
|
21,254 | |||
2022
|
20,361 | |||
2023
|
19,874 | |||
2024
|
19,565 | |||
Thereafter
|
16,897 |
For the Three Months
Ended
|
For the Nine Months
Ended
|
|||||||||||||||
September 27,
|
September 29,
|
September 27,
|
September 29,
|
|||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands, except per share amounts)
|
||||||||||||||||
Net income for basic and diluted net income per share
|
$ | 222,718 | $ | 135,860 | $ | 587,815 | $ | 342,395 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average common shares-basic
|
166,014 | 169,641 | 166,131 | 171,471 | ||||||||||||
Effect of dilutive potential common shares:
|
||||||||||||||||
Incremental shares from assumed conversion of convertible
|
9,156 | 5,800 | 8,029 | 4,117 | ||||||||||||
Convertible note hedge warrant shares (2)
|
7,775 | 3,580 | 6,364 | 1,786 | ||||||||||||
Restricted stock units
|
1,237 | 1,313 | 1,104 | 1,112 | ||||||||||||
Stock options
|
141 | 155 | 136 | 186 | ||||||||||||
Employee stock purchase plan
|
15 | 5 | 13 | 13 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Dilutive potential common shares
|
18,324 | 10,853 | 15,646 | 7,214 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average common shares-diluted
|
184,338 | 180,494 | 181,777 | 178,685 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income per common share-basic
|
$ | 1.34 | $ | 0.80 | $ | 3.54 | $ | 2.00 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income per common share-diluted
|
$ | 1.21 | $ | 0.75 | $ | 3.23 | $ | 1.92 | ||||||||
|
|
|
|
|
|
|
|
(1) |
Incremental shares from assumed conversion of the convertible notes was calculated using the difference between the average Teradyne stock price for the period and the conversion price of $31.57, multiplied by 14.6 million shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period.
|
(2) |
Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price of $39.62, multiplied by 14.6 million shares. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period.
|
For the Three Months
Ended |
||||||||||||||||
September 27,
2020
|
September 29,
2019
|
|||||||||||||||
United
States
|
Foreign
|
United
States
|
Foreign
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Service cost
|
$
|
417
|
|
$
|
216
|
|
$
|
402
|
|
$
|
183
|
|
||||
Interest cost
|
|
1,460
|
|
|
123
|
|
|
1,797
|
|
|
168
|
|
||||
Expected return on plan assets
|
|
(1,170
|
)
|
|
(16
|
)
|
|
(1,510
|
)
|
|
(7
|
)
|
||||
Net actuarial loss
|
|
2,238
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlem
ent loss
|
|
|
450
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
||
|
|
|
|
|
|
|
|
|||||||||
Total net periodic pension cost
|
$
|
3,395
|
|
$
|
323
|
|
$
|
689
|
|
$
|
344
|
|
||||
|
|
|
|
|
|
|
|
For the Nine Months
Ended |
||||||||||||||||
September 27,
2020 |
September 29,
2019 |
|||||||||||||||
United
States
|
Foreign
|
United
States
|
Foreign
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Service cost
|
$
|
1,283
|
|
$
|
648
|
|
$
|
1,206
|
|
$
|
550
|
|
||||
Interest cost
|
|
4,505
|
|
|
369
|
|
|
5,392
|
|
|
505
|
|
||||
Expected return on plan assets
|
|
(3,634
|
)
|
|
(47
|
)
|
|
(4,531
|
)
|
|
(21
|
)
|
||||
Net actuarial loss
|
|
2,418
|
|
|
—
|
|
|
252
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|||||||||
Settlem
ent loss
|
|
|
450
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|||||||||
Total net periodic pension cos
t
|
$
|
5,022
|
|
$
|
970
|
|
$
|
2,319
|
|
$
|
1,034
|
|
||||
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
|||||||||||||||
September 27,
|
September 29,
|
September 27,
|
September 29,
|
|||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Service cost
|
$
|
14
|
|
$
|
10
|
|
$
|
43
|
|
$
|
31
|
|
||||
Interest cost
|
|
60
|
|
|
87
|
|
|
180
|
|
|
260
|
|
||||
Amortization of prior service credit
|
|
(2
|
)
|
|
(48
|
)
|
|
(7
|
)
|
|
(143
|
)
|
||||
Net actuarial (gain) loss
|
|
—
|
|
|
—
|
|
|
(279
|
)
|
|
196
|
|
||||
|
|
|
|
|
|
|
|
|||||||||
Total net periodic postretirement benefit cost
(cre
dit)
|
$
|
72
|
|
$
|
49
|
|
$
|
(63
|
)
|
$
|
344
|
|
||||
|
|
|
|
|
|
|
|
For the Three Months
Ended |
For the
Nin
Months
e
Ended |
|||||||||||||||
September
,
27
2020 |
September
29
,
2019 |
September
27
,
2020 |
September
29
,
2019 |
|||||||||||||
US statutory federal tax rate
|
21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | ||||||||
I
n
ternational provisions of the U.S. Tax
C
uts and
Jobs Act
o
f 2017
|
3.6 | 1.2 | 0.7 | 1.0 | ||||||||||||
Foreign taxes
|
(6.9 | ) | (5.1 | ) | (5.8 | ) | (4.9 | ) | ||||||||
Tax cre
dits
|
(1.1 | ) | (1.8 | ) | (1.4 | ) | (2.2 | ) | ||||||||
Discrete (benefit) expense
related to
the
internat
ional provisions of the U.S.
Tax
C
uts
and Jobs Act of 2017
|
(0.6 | ) | (4.0 | ) | (0.2 | ) | 2.3 | |||||||||
Discrete
(
benefit
) expense
related to
release of
reserve
s
for uncertain tax positions
|
(0.5 | ) | 0.1 | (0.2 | ) | (6.9 | ) | |||||||||
Discrete benefit related to equity compensation
|
(0.4 | ) | (0.7 | ) | (1.4 | ) | (1.5 | ) | ||||||||
Other, net
|
0.5 | (0.2 | ) | 0.6 | 0.4 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Effective tax rate
|
15.6 | % | 10.5 | % | 13.3 | % | 9.2 | % | ||||||||
|
|
|
|
|
|
|
|
Semiconductor
Test
|
System
Test
|
Industrial
Automation
|
|
Wireless
Test
|
Corporate
and
Other
|
Consolidated
|
||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Three Months Ended September 27, 2020
|
||||||||||||||||||||||||
Revenues
|
$ | 592,141 | $ | 118,169 | $ | 68,711 | $ | 40,504 | $ | (41 | ) | $ | 819,484 | |||||||||||
Income (loss) before income taxes (1)(2)
|
189,116 | 47,368 | (5,302 | ) | 10,938 | 21,611 | 263,731 | |||||||||||||||||
Total assets (3)
|
1,069,830 | 155,642 | 667,132 | 108,671 | 1,435,237 | 3,436,512 | ||||||||||||||||||
Three Months Ended September 29, 2019
|
||||||||||||||||||||||||
Revenues
|
$ | 397,737 | $ | 73,305 | $ | 68,892 | $ | 42,264 | $ | (160 | ) | $ | 582,038 | |||||||||||
Income (loss) before income taxe
s (1)
(2)
|
116,633 | 24,381 | (1,645 | ) | 11,182 | 1,182 | 151,733 | |||||||||||||||||
Total assets (3)
|
757,422 | 126,452 | 580,635 | 94,789 | 1,139,493 | 2,698,791 | ||||||||||||||||||
Nine Months Ended September 27, 2020
|
||||||||||||||||||||||||
Revenues
|
$ | 1,735,777 | $ | 306,051 | $ | 187,792 | $ | 133,174 | $ | (294 | ) | $ | 2,362,500 | |||||||||||
Income (loss) before income taxes (1)(2)
|
571,719 | 114,968 | (32,041 | ) | 35,640 | (12,197 | ) | 678,089 | ||||||||||||||||
Total assets (3)
|
1,069,830 | 155,642 | 667,132 | 108,671 | 1,435,237 | 3,436,512 | ||||||||||||||||||
Nine Months Ended September 29, 2019
|
||||||||||||||||||||||||
Revenues
|
$ | 1,113,489 | $ | 204,934 | $ | 209,753 | $ | 112,541 | $ | (402 | ) | $ | 1,640,315 | |||||||||||
Income (loss) before income taxes (1)(2)
|
291,037 | 63,254 | (10,670 | ) | 25,740 | 7,528 | 376,889 | |||||||||||||||||
Total assets (3)
|
757,422 | 126,452 | 580,635 | 94,789 | 1,139,493 | 2,698,791 |
(1)
|
Included in Corporate and Other are: contingent consideration adjustments, employee severance charges, interest (income) and
expense
, net foreign exchange (gains) and losses, pension and postretirement plan actuarial (gains) and losses and settlement charges, intercompany eliminations, and certain acquisition related charges and compensation.
|
(2)
|
Included in income (loss) before taxes are charges and credits related to restructuring and other, and inventory charges.
|
(3)
|
Total assets are attributable to each segment. Corporate assets consist of cash and cash equivalents, marketable securities and certain other assets.
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
||||||||||||||||
September 27,
|
September 29,
|
September 27,
|
September 29,
|
||||||||||||||
2020
|
2019
|
2020
|
2019
|
||||||||||||||
(in thousands)
|
|||||||||||||||||
Semiconductor Test:
|
|||||||||||||||||
Cost of revenues - inventory charge
|
$ | 1,131 | $ | 1,867 | $ | 7,956 | $ | 5,319 | |||||||||
Restructuring and other - contract termination settlement fee
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,000
|
|
|
|
—
|
|
Restructuring and other - employee severance
|
— | — | — | 1,009 | |||||||||||||
Wireless:
|
|||||||||||||||||
Cost of revenues - inventory charge
|
$ | 1,802 | $ | 724 | $ | 3,957 | $ | 1,892 | |||||||||
Restructuring and other - employee severance
|
— | — | — | 566 | |||||||||||||
Industrial Automation:
|
|||||||||||||||||
Cost of revenues - inventory charge
|
$
|
— |
$
|
— |
$
|
505 |
$
|
508 | |||||||||
Restructuring and other - acquisition related compensation and expenses
|
—
|
|
|
|
—
|
|
|
|
790
|
|
|
|
1,330
|
||||
Restructuring and other - employee severance
|
— | — | 664 | 604 | |||||||||||||
System Test:
|
|||||||||||||||||
Cost of revenues - inventory charge
|
$ | — | $ | — | $ | 698 | $ | 1,129 | |||||||||
Corporate and Other:
|
|||||||||||||||||
Restructuring and other - AutoGuide contingent consideration adjustment
|
$
|
(27,206
|
)
|
|
$
|
—
|
|
|
$
|
(4,421
|
)
|
|
$
|
—
|
|||
Restructuring and other - acquisition related compensation and expenses
|
(1,086 | ) | 816 | 2,629 | 928 | ||||||||||||
Restructuring and other - MiR contingent consideration adjustment
|
— | (7,759 | ) | (3,546 | ) | (16,427 | ) | ||||||||||
Selling and administrative - equity modification charge
|
— | 2,108 | — | 2,108 |
Item 2:
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
• |
semiconductor test (“Semiconductor Test”) systems;
|
• |
defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, storage and system level test (“Storage Test”) systems, and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”);
|
• |
industrial automation (“Industrial Automation”) products; and
|
• |
wireless test (“Wireless Test”) systems.
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
|||||||||||||||
September 27,
2020 |
September 29,
2019 |
September 27,
2020 |
September 29,
2019 |
|||||||||||||
Percentage of revenues:
|
||||||||||||||||
Revenues:
|
||||||||||||||||
Products
|
85 | % | 84 | % | 86 | % | 82 | % | ||||||||
Services
|
15 | 16 | 14 | 18 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues
|
100 | 100 | 100 | 100 | ||||||||||||
Cost of revenues:
|
||||||||||||||||
Cost of products
|
37 | 34 | 37 | 34 | ||||||||||||
Cost of services
|
7 | 7 | 6 | 8 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)
|
44 | 41 | 43 | 42 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit
|
56 | 59 | 57 | 58 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Selling and administrative
|
14 | 19 | 14 | 20 | ||||||||||||
Engineering and development
|
12 | 13 | 12 | 14 | ||||||||||||
Acquired intangible assets amortization
|
1 | 2 | 1 | 2 | ||||||||||||
Restructuring and other
|
(3 | ) | (1 | ) | — | (1 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses
|
23 | 33 | 27 | 35 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income from operations
|
33 | 27 | 29 | 23 | ||||||||||||
Non-operating
(income) expense:
|
||||||||||||||||
Interest income
|
— | (1 | ) | — | (1 | ) | ||||||||||
Interest expense
|
1 | 1 | 1 | 1 | ||||||||||||
Other (income) expense, net
|
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes
|
32 | 26 | 29 | 23 | ||||||||||||
Income tax provision
|
5 | 3 | 4 | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income
|
27 | % | 23 | % | 25 | % | 21 | % | ||||||||
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
||||||||||||
September 27,
2020 |
September 29,
2019 |
Dollar
Change |
||||||||||
(in millions)
|
||||||||||||
Semiconductor Test
|
$ | 592.1 | $ | 397.7 | $ | 194.4 | ||||||
System Test
|
118.2 | 73.3 | 44.9 | |||||||||
Industrial Automation
|
68.7 | 68.9 | (0.2 | ) | ||||||||
Wireless Test
|
40.5 | 42.3 | (1.8 | ) | ||||||||
Corporate and Other
|
— | (0.2 | ) | 0.2 | ||||||||
|
|
|
|
|
|
|||||||
$ | 819.5 | $ | 582.0 | $ | 237.5 | |||||||
|
|
|
|
|
|
For the Three Months
Ended
|
||||||||
September 27,
|
September 29,
|
|||||||
2020
|
2019
|
|||||||
Taiwan
|
37 | % | 21 | % | ||||
Korea
|
16 | 10 | ||||||
China
|
15 | 31 | ||||||
United States
|
10 | 14 | ||||||
Europe
|
6 | 9 | ||||||
Thailand
|
5 | 4 | ||||||
Japan
|
2 | 4 | ||||||
Singapore
|
2 | 3 | ||||||
Philippines
|
2 | 2 | ||||||
Malaysia
|
2 | 2 | ||||||
Rest of World
|
3 | — | ||||||
|
|
|
|
|||||
100 | % | 100 | % | |||||
|
|
|
|
(1) |
Revenues attributable to a country are based on location of customer site.
|
For the Three Months
Ended
|
||||||||||||
September 27,
2020 |
September 29,
2019 |
Dollar/Point
Change |
||||||||||
(in millions)
|
||||||||||||
Gross profit
|
$ | 458.9 | $ | 345.0 | $ | 113.9 | ||||||
Percent of total revenues
|
56.0 | % | 59.3 | % | (3.3 | ) |
For the Three Months
Ended
|
||||||||||||
September 27,
2020 |
September 29,
2019 |
Dollar
Change |
||||||||||
(in millions)
|
||||||||||||
Selling and administrative
|
$ | 115.8 | $ | 109.2 | $ | 6.7 | ||||||
Percent of total revenues
|
14.1 | % | 18.8 | % |
For the Three Months
Ended
|
||||||||||||
September 27,
2020 |
September 29,
2019 |
Dollar
Change |
||||||||||
(in millions)
|
||||||||||||
Engineering and development
|
$ | 94.9 | $ | 77.8 | $ | 17.1 | ||||||
Percent of total revenues
|
11.6 | % | 13.4 | % |
For the Three Months
Ended
|
||||||||||||
September 27,
2020 |
September 29,
2019 |
Dollar
Change |
||||||||||
(in millions)
|
||||||||||||
Interest income
|
$ | (1.1 | ) | $ | (4.4 | ) | $ | 3.4 | ||||
Interest expense
|
6.2 | 5.5 | 0.8 | |||||||||
Other (income) expense, net
|
0.8 | 2.2 | (1.4 | ) |
For the Three Months
Ended
|
||||||||||||
September 27,
2020 |
September 29,
2019 |
Dollar
Change |
||||||||||
(in millions)
|
||||||||||||
Semiconductor Test
|
$
|
189.1
|
|
$
|
116.6
|
|
$
|
72.5
|
|
|||
System Test
|
|
47.4
|
|
|
24.4
|
|
|
23.0
|
|
|||
Wireless Test
|
|
10.9
|
|
|
11.2
|
|
|
(0.2
|
)
|
|||
Industrial Automation
|
|
(5.3
|
)
|
|
(1.6
|
)
|
|
(3.6
|
)
|
|||
Corporate and Other (1)
|
|
21.6
|
|
|
1.2
|
|
|
20.4
|
|
|||
|
|
|
|
|
|
|||||||
$
|
263.7
|
|
$
|
151.7
|
|
$
|
112.0
|
|
||||
|
|
|
|
|
|
(1) |
Included in Corporate and Other are: contingent consideration adjustments, employee severance charges, interest (income) and expense, net foreign exchange (gains) and losses, pension and postretirement plan actuarial (gains) and losses and settlement charges, intercompany eliminations, and certain acquisition related charges and compensation.
|
For the Nine Months
Ended
|
||||||||||||
September 27,
2020 |
September 29,
2019 |
Dollar
Change |
||||||||||
(in millions)
|
||||||||||||
Semiconductor Test
|
$ | 1,735.8 | $ | 1,113.5 | $ | 622.3 | ||||||
System Test
|
306.1 | 204.9 | 101.2 | |||||||||
Industrial Automation
|
187.8 | 209.8 | (22.0 | ) | ||||||||
Wireless Test
|
133.2 | 112.5 | 20.7 | |||||||||
Corporate and Other
|
(0.3 | ) | (0.4 | ) | 0.1 | |||||||
|
|
|
|
|
|
|||||||
$ | 2,362.5 | $ | 1,640.3 | $ | 722.2 | |||||||
|
|
|
|
|
|
For the Nine Months
Ended
|
||||||||
September 27,
2020 |
September 29,
2019 |
|||||||
Taiwan
|
40 | % | 22 | % | ||||
China
|
15 | 23 | ||||||
Korea
|
12 | 10 | ||||||
United States
|
9 | 14 | ||||||
Europe
|
6 | 10 | ||||||
Japan
|
5 | 7 | ||||||
Thailand
|
4 | 4 | ||||||
Singapore
|
2 | 4 | ||||||
Malaysia
|
2 | 3 | ||||||
Philippines
|
2 | 3 | ||||||
Rest of World
|
3 | — | ||||||
|
|
|
|
|||||
100 | % | 100 | % | |||||
|
|
|
|
(1) |
Revenues attributable to a country are based on location of customer site.
|
For the Nine Months
Ended
|
||||||||||||
September 27,
2020 |
September 29,
2019 |
Dollar/Point
Change |
||||||||||
(in millions)
|
||||||||||||
Gross profit
|
$ | 1,336.0 | $ | 956.6 | $ | 379.4 | ||||||
Percent of total revenues
|
56.5 | % | 58.3 | % | (1.8 | ) |
For the Nine Months
Ended
|
||||||||||||
September 27,
2020 |
September 29,
2019 |
Dollar
Change |
||||||||||
(in millions)
|
||||||||||||
Selling and administrative
|
$ | 340.5 | $ | 320.0 | $ | 20.5 | ||||||
Percent of total revenues
|
14.4 | % | 19.5 | % |
For the Nine Months
Ended
|
||||||||||||
September 27,
2020 |
September 29,
2019 |
Dollar
Change |
||||||||||
(in millions)
|
||||||||||||
Engineering and development
|
$ | 274.2 | $ | 236.0 | $ | 38.1 | ||||||
Percent of total revenues
|
11.6 | % | 14.4 | % |
|
|
|
||||||||||
For the Nine Months
Ended
|
||||||||||||
September 27,
2020 |
September 29,
2019 |
Dollar
Change |
||||||||||
(in millions)
|
||||||||||||
Interest income
|
$
|
(5.2
|
)
|
$
|
(13.8
|
)
|
$
|
8.6
|
|
|||
Interest expense
|
|
17.8
|
|
|
16.8
|
|
|
1.0
|
|
|||
Other (income) expense, net
|
|
3.6
|
|
|
2.1
|
|
|
1.5
|
|
|
|
|
||||||||||
For the Nine Months
Ended
|
||||||||||||
September 27,
2020 |
September 29,
2019 |
Dollar
Change |
||||||||||
(in millions)
|
||||||||||||
Semiconductor Test
|
$
|
571.7
|
|
$
|
291.0
|
|
$
|
280.7
|
|
|||
System Test
|
|
115.0
|
|
|
63.3
|
|
|
51.7
|
|
|||
Wireless Test
|
|
35.6
|
|
|
25.7
|
|
|
9.9
|
|
|||
Industrial Automation
|
|
(32.0
|
)
|
|
(10.7
|
)
|
|
(21.3
|
)
|
|||
Corporate and Other (1)
|
|
(12.2
|
)
|
|
7.5
|
|
|
(19.8
|
)
|
|||
|
|
|
|
|
|
|||||||
$
|
678.1
|
|
$
|
376.9
|
|
$
|
301.2
|
|
||||
|
|
|
|
|
|
(1) |
Included in Corporate and Other are: contingent consideration adjustments, employee severance charges, interest (income) and expense, net foreign exchange (gains) and losses, pension and postretirement plan actuarial (gains) and losses and settlement charges, intercompany eliminations, and certain acquisition related charges and compensation.
|
Payments Due by Period
|
||||||||||||||||||||||||
Total
|
Less than
1 year
|
1-3
years
|
3-5
years
|
More than
5 years
|
Other
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Purchase obligations
|
$ | 669,317 | $ | 663,007 | $ | 6,310 | $ | — | $ | — | $ | — | ||||||||||||
Convertible debt
|
459,973 | — | — | 459,973 | — | — | ||||||||||||||||||
Retirement plans contributions
|
134,650 | 5,322 | 10,422 | 10,384 | 108,522 | — | ||||||||||||||||||
Transition tax payable (1)
|
82,819 | 7,889 | 15,795 | 34,539 | 24,596 | — | ||||||||||||||||||
Operating lease obligations
|
69,629 | 22,856 | 27,627 | 12,353 | 6,793 | — | ||||||||||||||||||
Interest on long-term debt
|
20,125 | 5,750 | 11,500 | 2,875 | — | — | ||||||||||||||||||
Fair value of contingent consideration
|
22,531 | — | 22,531 | — | — | — | ||||||||||||||||||
Other long-term liabilities reflected on the balance sheet under GAAP (2)
|
90,702 | — | 51,944 | 6,717 | 438 | 31,603 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total
|
$ | 1,549,746 | $ | 704,824 | $ | 146,129 | $ | 526,841 | $ | 140,349 | $ | 31,603 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Represents the transition tax liability associated with our accumulated foreign earnings as a result of enactment of the Tax Reform Act on December 22, 2017.
|
(2) |
Included in other long-term liabilities are liabilities for customer advances, extended warranty, uncertain tax positions, deferred tax liabilities and other obligations. For certain long-term obligations, we are unable to provide a reasonably reliable estimate of the timing of future payments relating to these obligations and therefore we included these amounts in the column marked “Other.”
|
Item 3:
|
Quantitative and Qualitative Disclosures about Market Risks
|
Hypothetical
percentage |
||||||||||||
Estimated
change |
increase
(decrease) in |
|||||||||||
Hypothetical Change in Teradyne Stock Price
|
Fair Value
|
in fair value
|
fair value
|
|||||||||
10% Increase
|
$ | 1,258,430 | $ | 106,970 | 9.3 | % | ||||||
No Change
|
1,151,460 | — | — | |||||||||
10% Decrease
|
1,046,260 | (105,200 | ) | (9.1 | ) |
Item 4:
|
Controls and Procedures
|
Item 1:
|
Legal Proceedings
|
Item 1A:
|
Risk Factors
|
• |
make it difficult to make payments on this indebtedness and our other obligations;
|
• |
make it difficult to obtain any necessary future financing for working capital, capital expenditures, debt service requirements or other purposes;
|
• |
require the dedication of a substantial portion of any cash flow from operations to service for indebtedness, thereby reducing the amount of cash flow available for other purposes, including capital expenditures; and
|
• |
limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we compete.
|
Item 2:
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
(a) Total
Number of
Shares
(or Units)
Purchased
|
(b) Average
Price Paid per
Share (or Unit)
|
(c) Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs
|
(d) Maximum Number
(or Approximate Dollar
Value) of Shares (or
Units) that may Yet Be
Purchased Under the
Plans or Programs
|
||||||||||||
June 29, 2020 - July 26, 2020
|
1 | $ | 85.60 | — | $ | 911,535 | ||||||||||
July 27, 2020 – August 23, 2020
|
1 | $ | 90.26 | — | $ | 911,535 | ||||||||||
August 24, 2020 – September 27, 2020
|
1 | $ | 82.55 | — | $ | 911,535 | ||||||||||
|
|
|
|
|
|
|||||||||||
3 | (1) | $ | 85.00 | (1) | — | |||||||||||
|
|
|
|
|
|
(1) |
Includes approximately three thousand shares at an average price of $85.00 withheld from employees for the payment of taxes.
|
Item 4:
|
Mine Safety Disclosures
|
Item 6:
|
Exhibits
|
TERADYNE, INC.
Registrant
/s/ SANJAY MEHTA
|
Sanjay Mehta
Vice President,
Chief Financial Officer and Treasurer
(Duly Authorized Officer
and Principal Financial Officer)
November 2, 2020
|
Exhibit 10.1
EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT
EXECUTIVE OFFICER CHANGE IN CONTROL AGREEMENT entered into this 1st day of October 2020 by and between Teradyne, Inc. (including its subsidiaries, Teradyne), and the undersigned executive officer Teradyne (Employee).
WITNESSETH:
WHEREAS, Teradyne and Employee desire to set forth certain terms and conditions relating to the termination of Employees employment upon the occurrence of a Change in Control (as hereinafter defined) of Teradyne.
NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, the parties hereto hereby agree as follows:
1. Entitlements Upon a Termination Event. If, within twenty-four (24) months following a Change in Control or in contemplation of a Change in Control, there is a Termination Event, and subject to the conditions set forth herein and the performance by Employee of the undertakings and duties set forth herein, Employee shall be entitled to the rights, payments and other benefits set forth below:
(a) Treatment of Awards. Equity Awards that are not subject to Performance Criteria shall be governed by Section 1(b) below, and Cash Awards and Equity Awards that are subject to Performance Criteria shall be governed by Section 1(c) below. The parties hereto acknowledge that, except as otherwise provided herein, the terms of this Agreement are intended to modify the terms of Employees existing Cash Award and Equity Award agreements and to be a supplement to Cash Award and Equity Award agreements granted on or subsequent to the date hereof.
(b) Acceleration of Equity Awards. All of Employees unvested or unexercisable Equity Awards or Equity Awards subject to restrictions on transfer imposed by Teradyne or repurchase rights in favor of Teradyne, as applicable, granted prior to, on, or after the date hereof (but only (I) such Equity Awards as have been granted to Employee by Teradyne as of the date of the Change in Control or (II) such Equity Awards as have been assumed by an acquiring company at the time of a Change in Control or such new cash and equity awards that have been substituted by an acquiring company for Equity Awards existing at the time of a Change in Control, each pursuant to the terms of any Teradyne incentive plan) shall automatically become fully vested, exercisable or free of restrictions on transfer imposed by Teradyne or repurchase rights in favor of Teradyne, as applicable, as of the date of such Termination Event, and all Equity Awards granted on or after the date hereof shall, to the extent applicable, remain exercisable for the remainder of the generally applicable term of such Equity Award.
(c) Satisfaction of Performance Criteria. All of Employees Cash Awards and Equity Awards that are subject to Performance Criteria shall be settled and paid in the following manner: Employee shall be deemed to have satisfied the necessary percentage of the Performance Criteria to which such Cash Awards and Equity Awards are subject as of the date of the Termination Event, that will provide Employee with the target level of such Cash Awards and Equity Awards; and Employee shall be entitled to receive that portion of each Cash Award and Equity Award payable, at the target level. For purposes of the Cash Awards, the payment shall be multiplied by a fraction, the numerator of which shall be the number of calendar months that have passed during the period in which the Performance Criteria are to be measured (treating the month in which the Termination Event occurs as a full calendar month) and the denominator of which shall be the total number of calendar months in such period. For purposes of this Agreement, target level is that percentage of the Performance Criteria established at the beginning of each calendar year in order for the Employee to achieve Model Compensation. Unless otherwise required under Section 1(e) below, such Cash Awards and Equity Awards shall be paid to Employee or the restrictions on transfer removed not later than 10 days following the Termination Event.
(d) Salary Continuation. Unless otherwise required under Section 1 (e) below, Teradyne shall pay Employee monthly an amount equal to 1/12th of Employees current annual Model Compensation as of the Termination Event for a period of 24 months following the date of the Termination Event (the Salary Continuation Period). In the event a Termination Event constitutes termination for Good Reason on account of a material reduction in Model Compensation, the payment obligation pursuant to this Section 1(d) shall be calculated without giving effect to any such reductions in Model Compensation. All such continued payments shall be made in accordance with Teradynes customary pay practices. Subject to Section 1(e)(i) of this Agreement but notwithstanding any other provision of this Agreement to the contrary, the continued payments to Employee contemplated by this Section 1(d) and any benefits provided to Employee that are subject to Section 409A of the Code shall commence on the 60th day following the Termination Event provided Employee has complied with the requirements of Section 1(g) of this Agreement and the release of claims has become irrevocable under applicable law no later than on the 60th day following his Termination Event.
(e) Deferred Compensation/Section 409A.
(i) Notwithstanding any other provision of this Agreement, if the Employee is a specified employee at the time of the Employees separation from service as defined in Section 409A of the Code , all payments, benefits, or removal of restrictions on the transfer of equity under this Agreement with respect to the Employees separation from service that constitute compensation deferred under a nonqualified deferred compensation plan as defined in Section 409A of the Code to which such specified employee would otherwise be entitled during the first six months following the date of separation from service shall be made on the first day of the seventh month after the date of separation from service (or, if earlier, the date of death of the Employee).
(ii) For purposes of this Agreement, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Section 409A, and any payments that are due within the short term deferral period as defined in Section 409A or payments that are made under separation pay plans as described in Treasury Regulation Section 1.409A-1(b)(9)(ii), (iii) or (iv), shall not be treated as deferred compensation unless applicable law requires otherwise. Neither Teradyne nor the Employee shall have the right to accelerate or defer the delivery of any payments or benefits under this Agreement except to the extent specifically permitted or required by Section 409A.
2
(iii) This Agreement is intended to comply with the provisions of Section 409A and the Agreement shall, to the extent practicable, be construed in accordance therewith. Terms defined in the Agreement shall have the meanings given such terms under Section 409A if and to the extent required to comply with Section 409A. In any event, Teradyne makes no representations or warranty and shall have no liability to Employee or any other person if any provisions of or payments under this Agreement are determined to constitute deferred compensation subject to Code Section 409A but not to satisfy the conditions of that section.
(iv) If any amount is payable under the provisions of paragraph (f), below, as a reimbursement of Employees expenses, under the provisions of Section 2 and 13, or any other provision of this Agreement that constitutes a reimbursement of expenses under Section 409A then, notwithstanding the other provisions of this Agreement with respect to the payment of such reimbursement, the following limitations shall apply; (A) the expenses eligible for reimbursement may not affect the expenses eligible for reimbursement in any other taxable year; (B) such reimbursement must be made on or before the last day of the year following the year in which the expenses are incurred; (C) the right to reimbursement is not subject to liquidation or exchange for another benefit; and (D) in connection with reimbursements under Section 13 the period during which such expenses can be incurred extends to the end of the period permitted for such claims under the applicable statute of limitations.
(f) Benefit Continuation. During the Salary Continuation Period, Teradyne shall arrange or provide for continued health, dental and vision insurance plan coverage for the Employee at the same levels of coverage in existence prior to the Termination Event subject to Teradyne and Employee each contributing to the applicable insurance premium payments on the same basis and in the same proportions as in existence at the date of the Termination Event. If the Employee is not eligible for continued health, dental and vision insurance plan coverage for any portion of the twenty-four (24) month period defined herein, Teradyne shall provide or reimburse Employee for comparable individual insurance and, if such provision or reimbursement constitutes taxable income to the Employee, such additional amount as is necessary to place the Employee in substantially the same after tax position as he was while an employee of Teradyne with respect to such insurance plan coverages. All other benefits, including but not limited to flex/vacation time accrual, short and long term disability insurance, life insurance, contributions (including company matches) into savings plan and savings plan plus, profit sharing payments and participation in the Employee stock purchase plan shall cease as of the date of the Termination Event.
To the extent that amounts paid by Teradyne to provide the benefits under this paragraph (f) are deemed to be deferred compensation subject to Section 409A, then such payments shall be made monthly and any payment to preserve the Employees after tax position shall be made within 60 days after the end of each calendar year in which the taxable provision or reimbursement occurs.
3
(g) Release. Notwithstanding any other provision of this Agreement to the contrary, no payment, benefit or removal of restriction on the transfer of equity provided for under or by virtue of the provisions of this Agreement shall be paid or otherwise made available unless Teradyne shall have first received from Employee a valid, binding and irrevocable general release, in the form of Attachment A to this Agreement within twenty-one (21) days of the date of the Termination Event. Employee shall sign such release within twenty-one (21) days of a Termination Event subsequent to a Change in Control. Teradyne agrees to provide Employee an estimate relating to payments to be made under this Agreement upon Employees written request. All rights, benefits, payments and other entitlements contemplated to be provided or paid to Employee under this Agreement shall be forfeited as of the 60th day following Employees Termination Event if Employee has not provided Teradyne with a valid, irrevocable release of claims as of such 60th day.
(h) Certain Definitions. For purposes of this Agreement, the following terms shall have the following meanings:
Cash Awards shall mean any cash-based bonus, cash incentive or other cash awards provided by Teradyne to Employee pursuant to incentive plans that Teradyne maintains, including but not limited to its 2006 Equity and Cash Compensation Incentive Plan.
Cause shall mean conduct involving one or more of the following: (i) the substantial and continuing failure of Employee, after notice thereof, to render services to Teradyne in accordance with the terms or requirements of his or her employment as established by the Teradyne Board of Directors from time to time and communicated to the Employee; (ii) Employees disloyalty, gross negligence, willful misconduct, dishonesty, fraud or breach of fiduciary duty to Teradyne, each in connection with Employees employment by Teradyne; (iii) Employees deliberate disregard of the rules or policies of, or breach of an agreement with, Teradyne which results in direct or indirect material loss, damage or injury to Teradyne; (iv) the intentional unauthorized disclosure by Employee of any trade secret or confidential information of Teradyne; (v) the commission by Employee of an act which constitutes unfair competition with Teradyne; or (vi) the conviction of, or the entry of a plea of guilty or nolo contendere by the Employee, to any crime involving moral turpitude or any felony. In the event that Teradyne determines that Cause may exist pursuant to clauses (i), (iii) and (v) above, Teradyne shall give Employee written notice of the facts constituting such Cause and Employee shall have 30 days following receipt of such notice to remedy such Cause.
A Change in Control shall be deemed to have occurred upon the occurrence of any of the following events: (i) any consolidation, cash tender offer, reorganization, recapitalization, merger or plan of share exchange following which the capital stock of Teradyne outstanding immediately prior to such transaction constitutes less than a majority of the combined voting power of the then-outstanding securities of the combined corporation or person immediately after such transaction; (ii) any sale, lease, exchange or other transfer of all or substantially all of Teradynes assets; (iii) the adoption by the Board of Directors of Teradyne of any plan or proposal for the liquidation or dissolution of Teradyne; (iv) a change in the majority of the Board of Directors of Teradyne through one or more contested elections occurring within a three-year period; or (v) any person (as that term is used in Section 13(d)(3) or
4
Section 14(d)(2) of the Securities Exchange Act of 1934, as amended) becomes beneficial owner of 30% or more of the combined voting power of Teradynes outstanding voting securities, other than (A) as a result of a consolidation, reorganization, recapitalization, merger or plan of share exchange following which the capital stock of Teradyne outstanding immediately prior to such transaction constitutes at least a majority of combined voting power of the then-outstanding securities of the combined corporation or person immediately after such transaction, (B) by any trustee or other fiduciary holding securities under an employee benefit plan of Teradyne, or (C) by a person temporarily acquiring beneficial ownership in its capacity as an underwriter (as defined pursuant to Section 2(a)(11) of the Securities Act of 1933, as amended) in connection with a public offering of Teradyne securities.
Equity Awards shall mean the equity ownership, participation or appreciation opportunities provided by Teradyne to Employee pursuant to incentive plans that Teradyne maintains, including but not limited to its 2006 Equity and Cash Compensation Incentive Plan, the Teradyne, Inc. 1991 Employee Stock Option Plan and the Teradyne, Inc. 1997 Employee Stock Option Plan, and any stock options, restricted stock units, restricted stock, stock appreciation rights, phantom stock and other stock-based awards granted thereunder.
Good Reason shall mean any one or more of the following: (i) any material reduction of Employees responsibilities (other than for Cause or as a result of death or disability) as they shall exist on the date of the consummation of the Change in Control; (ii) any material reduction in Employees Model Compensation as in effect on the date of the consummation of the Change in Control, or as the same may be increased from time to time, or any failure by Teradyne to pay to Employee any bonus accrued, but not yet paid, upon written notice by Employee to Teradyne, within 45 days; (iii) a material reduction in the value of Employees benefit package from the value of Employees benefit package on the date of the consummation of the Change in Control; or (iv) a requirement that Employee be based at an office that is greater than 50 miles from the location of Employees office immediately prior to the Change in Control except for required travel on Teradynes business to an extent substantially consistent with the business travel obligations which Employee undertook on behalf of Teradyne prior to the date of the consummation of the Change in Control. In the event of a Termination Event in contemplation of a Change in Control, the applicable baseline measurement date shall be six months prior to such Termination Event and not the date of the consummation of the Change in Control.
Model Compensation shall mean Employees annual Model Compensation as determined by Teradynes Compensation Committee or Board of Directors, which consists of (i) a fixed annual salary and (ii) a target annual variable amount.
Performance Criteria shall have the meaning ascribed to that term in the Teradyne, Inc. 2006 Equity and Cash Compensation Incentive Plan.
5
Termination Event shall mean (i) any termination of Employee by Teradyne without Cause or (ii) any voluntary termination by Employee for Good Reason; provided, that it shall not be a Termination Event merely because Employee ceases to be employed by Teradyne and becomes employed by a successor to Teradyne involved in the Change in Control that assumes or is otherwise bound by this Agreement as provided in Section 7(a). It is expressly understood that no Termination Event shall be deemed to have occurred merely because, upon the occurrence of a Change in Control, Employee ceases to be employed by Teradyne and does not become employed by a successor to Teradyne after the Change in Control if the successor makes an offer to employ Employee on terms and conditions which, if imposed by Teradyne, would not give Employee a basis on which to terminate employment for Good Reason.
(i) Termination in Contemplation of a Change in Control. For purposes of this Agreement, including without limitation, this Section 1, a Termination Event occurring in contemplation of a Change in Control means a Termination Event occurring within 3 months prior to an actual Change in Control at the request or direction of a person who enters or has entered into an agreement the consummation of which would cause a Change in Control or who conditions the entry into such an agreement on the Employees termination whether or not such person actually enters into such an agreement. A termination by the Employee for Good Reason shall constitute a Termination Event in contemplation of a Change in Control if the actions constituting Good Reason were taken at the request or direction of a person who has entered into an agreement the consummation of which would cause a Change in Control.
2. Reduction of Payments
(a) Notwithstanding any other provision of this Agreement, in the event that the Company undergoes a Change in Ownership or Control (as defined below), the Company shall not be obligated to provide to the Executive a portion of any Contingent Compensation Payments (as defined below) that the Executive would otherwise be entitled to receive to the extent necessary to eliminate any excess parachute payments (as defined in Section 280G(b)(1) of the Internal Revenue Code of 1986, as amended (the Code)) for the Executive. For purposes of this Section 2, the Contingent Compensation Payments so eliminated shall be referred to as the Eliminated Payments and the aggregate amount (determined in accordance with Treasury Regulation Section 1.280G-1, Q/A-30 or any successor provision) of the Contingent Compensation Payments so eliminated shall be referred to as the Eliminated Amount.
(b) For purposes of this Section 2, the following terms shall have the following respective meanings:
(i) |
Change in Ownership or Control shall mean a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company determined in accordance with Section 280G(b)(2) of the Code. |
(ii) |
Contingent Compensation Payment shall mean any payment (or benefit) in the nature of compensation that is made or made available (under this Agreement or otherwise) to a disqualified individual (as defined in Section 280G(c) of the Code) and that is contingent (within the meaning of Section 280G (b)(2)(A)(i) of the Code) on a Change in Ownership or Control of the Company. |
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(c) If and to the extent that any Contingent Compensation Payments are required to be treated as Eliminated Payments pursuant to this Section 2, then the Payments shall be reduced or eliminated, as determined by the Company, in the following order (i) any cash payments, (ii) any taxable benefits, (iii) any nontaxable benefits and (iv) any vesting of equity awards, in each case in reverse order beginning with the payments or benefits that are to be paid the farthest in time from the date that triggers the applicability of the excise tax, to the extent necessary to maximize the Eliminated Payments.
3. (a) Non-Competition and Non-Solicitation. From the Termination Event through the end of the Salary Continuation Period, Employee shall not directly or indirectly:
(i) |
Engage in any business or enterprise (whether as an owner, partner, officer, employee, director, investor, lender, consultant, independent contractor or otherwise, except as the holder of not more than 1% of the combined voting power of the outstanding stock of a publicly held company) that is competitive with Teradyne (including but not limited to, any business or enterprise that develops, designs, produces, markets, sells or renders any product or service competitive with any product or service developed, produced, marketed, sold or rendered by Teradyne while Employee was employed by Teradyne); |
(ii) |
Either alone or in association with others, recruit, solicit, hire or engage as an independent contractor, any person who was employed by Teradyne at any time during the period of Employees employment with Teradyne, except for an individual whose employment with Teradyne has been terminated for a period of six months or longer; and |
(iii) |
Either alone or in association with others, solicit, divert or take away, or attempt to divert or to take away, the business or patronage of any client or customer or entity that was a prospective client or customer of Teradyne during the Employees employment. |
(b) If any restriction set forth in this Section 3 is found by any court of competent jurisdiction to be unenforceable because it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it shall be interpreted to extend only over the maximum period of time, range of activities or geographic area as to which it may be enforceable.
(c) Employee acknowledges that the restrictions contained in this Section 3 are necessary for the protection of the business and goodwill of Teradyne and are considered by Employee to be reasonable for such purpose. Employee agrees that any breach of this Section 3 will cause Teradyne irreparable harm and therefore, in the event of any such breach, in addition to such other remedies that may be available, Teradyne shall have the right to seek equitable and/or injunctive relief.
7
(d) The geographic scope of this Section 3 shall extend to anywhere Teradyne or any of its subsidiaries is doing business, has done business or has plans to do business.
(e) Employee agrees that during the Salary Continuation Period, he will make reasonable good faith efforts to give verbal notice to Teradyne of each new business activity he plans to undertake, at least (5) business days prior to beginning any such activity.
(f) If Employee violates the provisions of this Section 3, Teradyne shall be entitled to suspend and recoup any salary continuation payment made per Section 1 (d) above and Employee shall continue to be bound by the restrictions set forth in this Section 3 for an additional period of time equal to the duration of the violation, such additional period not to exceed 24 months.
3A. No Obligation of Employment. Employee understands that the employment relationship between Employee and Teradyne will be at will and Employee understands that, prior to any Change in Control, Teradyne may terminate Employee with or without Cause at any time, including in contemplation of a Change in Control. Following any Change in Control, Teradyne may also terminate Employee with or without Cause at any time subject to Employees rights and Teradynes obligations specified in this Agreement.
4. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the Commonwealth of Massachusetts and this Agreement shall be deemed to be performable in Massachusetts.
5. Severability. In case any one or more of the provisions contained in this Agreement for any reason shall be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement and this Agreement shall be construed to the maximum extent permitted by law.
6. Waivers and Modifications. This Agreement may be modified, and the rights, remedies and obligations contained in any provision hereof may be waived, only in accordance with this Section 6. No waiver by either party of any breach by the other or any provision hereof shall be deemed to be a waiver of any later or other breach thereof or as a waiver of any other provision of this Agreement. This Agreement may not be waived, changed, discharged or terminated orally or by any course of dealing between the parties, but only by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought.
7. Assignment. (a) Teradyne shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of Teradyne expressly to assume and agree to perform under the terms of this Agreement in the same manner and to the same extent that Teradyne and its affiliates would be required to perform it if no such succession had taken place (provided that such a requirement to perform which arises by operation of law shall be deemed to satisfy the requirements for such an express assumption and agreement), and in such event Teradyne (as constituted prior to such succession)
8
shall have no further obligation under or with respect to this Agreement. Failure of Teradyne to obtain such assumption and agreement with respect to Employee prior to the effectiveness of any such succession shall be a breach of the terms of this Agreement with respect to Employee and shall entitle Employee to compensation from Teradyne (as constituted prior to such succession) in the same amount and on the same terms as Employee would be entitled to hereunder were Employees employment terminated for Good Reason following a Change in Control, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the date of the Termination Event. As used in this Agreement, Teradyne shall mean Teradyne as hereinbefore defined and any successor to its business or assets as aforesaid which assumes and agrees (or is otherwise required) to perform this Agreement. Nothing in this Section 7(a) shall be deemed to cause any event or condition which would otherwise constitute a Change in Control not to constitute a Change in Control.
(b) Notwithstanding Section 7(a), Teradyne shall remain liable to Employee upon a Termination Event after a Change in Control if Employee is not offered continuing employment by a successor to Teradyne or is offered continuing employment by a successor to Teradyne only on a basis which would constitute Good Reason for termination of employment hereunder.
(c) This Agreement, and Employees and Teradynes rights and obligations hereunder, may not be assigned by Employee or, except as provided in Section 7(a), Teradyne, respectively; any purported assignment by Employee or Teradyne in violation hereof shall be null and void.
(d) The terms of this Agreement shall inure to the benefit of and be enforceable by the personal or legal representatives, executors, administrators, permitted successors, heirs, distributees, devisees and legatees of Employee. If Employee shall die while an amount would still be payable to Employee hereunder if they had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Employees devisee, legatee or other designee or, if there is no such designee, Employees estate.
8. Entire Agreement. This Agreement constitutes the entire understanding of the parties relating to the subject matter hereof and supersedes and cancels all agreements, written or oral, made prior to the date hereof between Employee and Teradyne relating to the subject matter hereof; provided, however, that Employees existing Cash Award and Equity Award agreements, as modified hereby, shall remain in effect. This Agreement shall not limit any right of Employee to receive any payments or benefits under an employee benefit or Employee compensation plan of Teradyne, initially adopted as of or after the date hereof, which are expressly contingent thereunder upon the occurrence of a Change in Control (including, but not limited to, the acceleration of any rights or benefits thereunder); provided that in no event shall Employee be entitled to any payment or benefit under this Agreement which duplicates a payment or benefit received or receivable by Employee under any severance or similar plan or policy of Teradyne, and in any such case Employee shall only be entitled to receive the greater of the two payments.
9. Notices. All notices hereunder shall be in writing and shall be delivered in person or mailed by certified or registered mail, return receipt requested, addressed as follows:
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If to Teradyne, to: |
Teradyne, Inc. |
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600 Riverpark Drive |
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MS NR600-2-2 (Legal Department) |
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North Reading, MA 01864 |
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Attention: General Counsel |
If to Employee, at Employees address in his employment file on record with the Human Resources Department.
10. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.
11. Section Headings. The descriptive section headings herein have been inserted for convenience only and shall not be deemed to define, limit, or otherwise affect the construction of any provision hereof.
12. Term. The term of this Agreement (the Term) shall commence upon the Effective Date hereof and terminate upon the earlier of (i) twenty-four (24) months following any Change in Control of Teradyne, (ii) the date prior to any Change in Control of Teradyne that Employee for any reason ceases to be an employee of Teradyne (other than a Termination Event in contemplation of a Change in Control) and (iii) the date following any Change in Control of Teradyne that Employee is terminated for Cause or voluntary terminates his employment (other than for Good Reason).
13. Expenses. All reasonable legal fees and expenses incurred in a legal proceeding by Employee in seeking to obtain or enforce any right or benefit provided by this Agreement against a successor to Teradyne shall be the responsibility of and paid for by the successor to Teradyne (but not Teradyne as constituted prior to such succession). Such payments are to be made within twenty (20) days after Employees request for payment accompanied with such evidence of fees and expenses incurred as Teradynes successor reasonably may require; provided that if Employee institutes a proceeding and the judge or other decision-maker presiding over the proceeding affirmatively finds that Employee has failed to prevail substantially, Employee shall pay Employees own costs and expenses (and, if applicable, return any amounts theretofore paid on Employees behalf under this Section 13).
14. Payments. Any payments hereunder shall be made out of the general assets of Teradyne. The Employee shall have the status of general unsecured creditor of Teradyne, and this Agreement constitutes a mere promise by Teradyne to make payments under this Agreement in the future as and to the extent provided herein. Unless otherwise determined by Teradyne in an applicable plan or arrangement, no amounts payable hereunder upon a Termination Event shall be deemed salary or compensation for the purpose of computing benefits under any employee benefit plan or other arrangement of Teradyne for the benefit of its employees. Teradyne shall be entitled to withhold from any payments or deemed payments any amount of tax withholding required by law.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
TERADYNE, INC. | ||||
By: |
/s/ Charles J. Gray |
|||
Name: | Charles J. Gray | |||
Title: | Vice President and General Counsel | |||
EMPLOYEE | ||||
/s/ Richard Burns |
||||
Name: | Richard Burns |
11
ATTACHMENT A
Release
In consideration of the payments and benefits described in the Executive Officer Change in Control Agreement dated October 1, 2020 between me and Teradyne, Inc. (the Company), all of which I acknowledge I would not otherwise be entitled to receive, I hereby fully, forever, irrevocably and unconditionally release, remise and discharge the Company, its successors and assigns and their respective officers, directors, stockholders, corporate affiliates, subsidiaries, parent companies, agents and employees (each in their individual and corporate capacities) (hereinafter, the Released Parties) from any and all claims, charges, complaints, demands, actions, causes of action, suits, rights, debts, sums of money, costs, accounts, reckonings, covenants, contracts, agreements, promises, doings, omissions, damages, executions, obligations, liabilities, and expenses (including attorneys fees and costs), of every kind and nature which I ever had or now have against the Released Parties arising out of my employment with and/or termination or separation from the Company or relating to my relationship as an officer or in any other capacity for the Company, including, but not limited to, all employment discrimination claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., the Americans With Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., and the Worker Adjustment and Retraining Notification Act (WARN), 29 U.S.C. § 2101 et seq., all as amended, the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., the Massachusetts Wage Payment Statute, G.L. c. 149, § 148 et seq., the Massachusetts Sexual Harassment Statute, G.L. c. 214 § 1C, the Massachusetts Consumer Protection Act, G.L. c. 93A, the Massachusetts Equal Rights Act, G.L. c. 93, the Massachusetts Fair Employment Practices Act, M.G.L. c. 151B, § 1 et seq., the Massachusetts Civil Rights Act, M.G.L. c. 12, §§ 11H and 11I, the Massachusetts Equal Rights Act, M.G.L. c. 93, § 102 and M.G.L. c. 214, § 1C, the Massachusetts Labor and Industries Act, M.G.L. c. 149, § 1 et seq., the Massachusetts Privacy Act, M.G.L. c. 214, § 1B, and the Massachusetts Maternity Leave Act , M.G.L. c. 149, § 105D, all as amended; all common law claims including, but not limited to, actions in tort, defamation and breach of contract; all claims to any non-vested ownership interest in the Company, contractual or otherwise, including but not limited to claims to stock or stock options; and any claim or damage arising out of my employment with, termination or separation from the Company (including a claim for retaliation) under any common law theory or any federal, state or local statute or ordinance not expressly referenced above; provided, however, that notwithstanding the foregoing, the Company agrees and hereby acknowledges that this Release Agreement is not intended to and does not (i) apply to any claims Executive may bring to enforce the terms of the Executive Officer Change in Control Agreement, (ii) release the Company of any obligation it may have pursuant to a written agreement, the Companys articles of organization or bylaws, or as mandated by statute to indemnify me as an officer of the Company; and (iii) release the Company of any obligation to provide and/or pay benefits to me or my estate, conservator or designated beneficiary(ies) under and in accordance with the terms of any applicable Company benefit plan and/or program; provided further, that nothing in this Release Agreement prevents me from filing, cooperating with, or participating in any proceeding before the EEOC or a state Fair Employment Practices Agency (except that I acknowledge that I may not be able to recover any monetary benefits in connection with any such claim, charge or proceeding).
Waiver of Rights and Claims Under the Age Discrimination in Employment Act of 1967: Since I am 40 years of age or older, I have been informed that I have or may have specific rights and/or claims under the Age Discrimination in Employment Act of 1967 (ADEA) and I agree that:
in consideration for the payments and benefits described in the Executive Officer Change in Control Agreement, which I am not otherwise entitled to receive, I specifically and voluntarily waive such rights and/or claims under the ADEA I might have against the Released Parties to the extent such rights and/or claims arose prior to the date this Release Agreement was executed;
I understand that rights or claims under the ADEA which may arise after the date this Release Agreement is executed are not waived by me;
I was advised that I have at least 21 days within which to consider the terms of this Release Agreement and to consult with or seek advice from an attorney of my choice or any other person of your choosing prior to executing this Release Agreement;
I have carefully read and fully understand all of the provisions of this Release Agreement, and I knowingly and voluntarily agree to all of the terms set forth in this Release Agreement; and in entering into this Release Agreement I am not relying on any representation, promise or inducement made by the Company or its attorneys with the exception of those promises described in this document.
Period for Review and Consideration of Agreement:
I acknowledge that I was informed and understand that I have twenty-one (21) days to review this Release Agreement and consider its terms before signing it.
The 21-day review period will not be affected or extended by any revisions, whether material or immaterial, that might be made to this Agreement.
Accord and Satisfaction: The amounts set forth in the Executive Officer Change in Control Agreement shall be complete and unconditional payment, settlement, accord and/or satisfaction with respect to all obligations and liabilities of the Released Parties to me, including, without limitation, all claims for back wages, salary, vacation pay, draws, incentive pay, bonuses, cash awards, equity awards, commissions, severance pay, reimbursement of expenses, any and all other forms of compensation or benefits, attorneys fees, or other costs or sums.
Revocation Period: I may revoke this Release Agreement at any time during the seven-day period immediately following my execution hereof. As a result, this Release Agreement shall not become effective or enforceable and the Company shall have no obligation to make any payments or provide any benefits described herein until the seven-day revocation period has expired.
Name: Richard Burns |
Date |
|
Witness |
Date |
2
IF YOU DO NOT WISH TO USE THE 21-DAY PERIOD,
PLEASE CAREFULLY REVIEW AND SIGN THIS DOCUMENT
I, Richard Burns, acknowledge that I was informed and understand that I have 21 days within which to consider the attached Release Agreement, have been advised of my right to consult with an attorney regarding such Agreement and have considered carefully every provision of the Agreement, and that after having engaged in those actions, I prefer to and have requested that I enter into the Agreement prior to the expiration of the 21 day period.
Dated: |
||
Name: Richard Burns |
||
Dated: |
||
Witness |
3
Exhibit 10.2
Employee Agreement
In consideration of and as a condition of my promotion to President, Semiconductor Test by Teradyne, Inc., a Massachusetts corporation (hereinafter referred to as the Company), effective October 1, 2020 and in consideration of the mutual covenants contained in this agreement between the Company and me (the Agreement), the receipt and sufficiency of which is hereby acknowledged, I, the undersigned individual, agree as follows:
1. |
Invention Assignment. I assign any and all rights that I have, may have or may acquire, in any and all Inventions and Work Product (as defined below), including all intellectual property rights, to the Company or its assigns without further compensation. All Inventions and Work Product, including all intellectual property rights, shall immediately become the sole property of the Company or its assigns. I shall promptly disclose to the Company each Invention and Work Product and shall assist the Company in every proper way to obtain and enforce patents, copyrights or other rights or registrations relating to any Inventions and Work Product. For the purposes of this Agreement, the term Invention and Work Product means any invention, modification, discovery, design, development, improvement, process, method, software program, work of authorship, work product, documentation, formulae, data, technique, or know-how that I (either alone or jointly with others) make, conceive, create, discover, invent or reduce to practice during my employment that (i) pertains to the business of the Company, (ii) pertains to any of the products or services developed, manufactured or sold by the Company, (iii) results from tasks assigned to me by the Company, or (iv) results from the use of premises, personal property or intellectual property owned, leased, or contracted for by the Company. |
2. |
Confidential Information. I agree that I will not, during or after the period of my employment with the Company, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any third party, other than in my assigned duties and except as required or permitted by law, any confidential information concerning the Companys or its customers or suppliers intellectual property, trade secrets, organization, finances or business that I learn during the period of my employment. I will observe all government agency rules and regulations relating to the safeguarding of classified information which may be disclosed or entrusted to me in connection with any contract between the Company and a government or any contractor with a government. I acknowledge that I shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that(A) is made(i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Accordingly, I have the right to disclose in confidence trade secrets to Federal, State, and local government officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. I also have the right to disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure. Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by 18 U.S.C. § 1833(b). Upon request or when my employment with the Company terminates, I will immediately deliver to the Company all copies of any and all materials and writings received from, created for, or belonging to the Company including, but not limited to, those which relate to or contain confidential information. |
3. |
Non-Competition. I agree that I will not, during the period of my employment by the Company, directly or indirectly enter the employment of, or render any professional services, except such as are rendered at the request of the Company, to any individual, partnership, association or corporation who or which is a competitor of the Company without the prior permission in writing of the Company. I further agree that I will notify the Company of any |
outside employment in which I am engaged during the period of my employment with the Company. |
4. |
Non-Solicitation. During my employment, and for a period of one (1) year following the termination of employment with the Company for any reason, I (a) shall not call on, solicit or serve any customer, client, supplier, distributor, licensee, licensor, franchisee or other business relation with whom I had had contact or communication in the course of my employment with the Company in the two (2) years immediately prior to my termination or resignation, in order to induce or attempt to induce such person or entity to cease or reduce its business with the Company or any of its affiliates, or in any way interfere with the business relationship between the Company or its affiliates and any such person or entity, or (b) will not solicit, induce, recruit or hire any of the Companys employees either for myself or for any other person or entity, or encourage any such employees to leave their employment with the Company. |
5. |
At-Will Employment. This Agreement in no way alters my status as an at-will employee. |
6. |
No Conflict. I represent that I am not bound by any agreement preventing me from being employed by and performing my job at the Company or any of its affiliates. |
7. |
Code of Conduct. I agree to comply with Teradynes Code of Conduct as posted on the Companys web site and as modified from time to time. |
8. |
Equitable Relief. I agree that any breach of this Agreement by me will cause irreparable damage to the Company and that, in the event of such breach, the Company shall have, in addition to any and all remedies of law, the right to an injunction, specific performance or other equitable relief to prevent the violation of my obligations under this Agreement. |
9. |
Entire Agreement. This Agreement supersedes all previous agreements between me and the Company relating to the subject matter hereof. Any amendment to, waiver of, or modification of this Agreement shall be in writing signed by an officer of the Company. |
10. |
Severability and Construction. I agree that each provision of this Agreement shall be treated as a separate and independent clause, and the unenforceability of any one clause shall in no way impair the enforceability of any of the other clauses herein. If one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity, subject or otherwise so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate judicial body by limiting or reducing it or them, so as to be enforceable to the maximum extent compatible with applicable law. |
11. |
Assignment. The term Company includes any of its parents, subsidiaries, subdivisions, or affiliates. The Company shall have the right to assign this Agreement to its successors and assigns, and all covenants and agreements hereunder shall inure to the benefit of and be enforceable by its successors or assigns. |
12. |
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without giving effect to conflict of laws provisions. Jurisdiction shall be exclusively in the state and federal courts of the Commonwealth of Massachusetts. |
13. |
Employee Acknowledgement. I acknowledge that I have had the opportunity to consult legal counsel in regard to this Agreement, that I have read and understand this Agreement, that I am fully aware of its legal effect, and that I have entered into it voluntarily and based on my own judgment and not on any representations or promises other than those contained in this Agreement. |
Signed: /s/ Richard Burns | Date: Sept 12, 2020 | |
Employee Name: Richard Burns | ||
Accepted on behalf of Teradyne, Inc. | ||
by: /s/ Charles J. Gray |
Exhibit 31.1
CERTIFICATIONS
I, Mark E. Jagiela, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Teradyne, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: November 2, 2020
By: |
/S/ MARK E. JAGIELA |
|
Mark E. Jagiela | ||
Chief Executive Officer |
Exhibit 31.2
CERTIFICATIONS
I, Sanjay Mehta, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Teradyne, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: November 2, 2020
By: |
/S/ SANJAY MEHTA |
|
Sanjay Mehta | ||
Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Teradyne, Inc. (the Company) on Form 10-Q for the period ended September 27, 2020 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Mark E. Jagiela, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C (S) 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
/S/ MARK E. JAGIELA |
Mark E. Jagiela |
Chief Executive Officer |
November 2, 2020 |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Teradyne, Inc. (the Company) on Form 10-Q for the period ended September 27, 2020 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Sanjay Mehta, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C (S) 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
/S/ SANJAY MEHTA |
Sanjay Mehta |
Chief Financial Officer |
November 2, 2020 |