☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Massachusetts
|
04-2272148
|
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
(I.R.S. Employer
Identification No.)
|
|
600 Riverpark Drive, North Reading,
Massachusetts
|
01864
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange
on which registered
|
||
Common Stock, par value $0.125 per share
|
TER
|
Nasdaq Stock Market LLC
|
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated
filer
|
☐ | Emerging growth company | ☐ | |||
Smaller reporting company | ☐ |
|
|
October 3, 2021
|
|
|
December 31, 2020
|
|
||
|
|
|
|
|
|
|
||
|
|
(in thousands, except per share amount)
|
|
|||||
ASSETS
|
|
|
||||||
Current assets:
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
1,079,454 |
|
|
$
|
914,121 |
|
Marketable securities
|
|
|
233,397 |
|
|
|
522,280 |
|
Accounts receivable, less allowance for credit losses of $1,913 and $2,034 at October 3, 2021 and December 31, 2020, respectively
|
|
|
597,124 |
|
|
|
497,506 |
|
Inventories, net
|
|
|
224,242 |
|
|
|
222,189 |
|
Prepayments and other current assets
|
|
|
386,967 |
|
|
|
259,338 |
|
|
|
|
|
|||||
Total current assets
|
|
|
2,521,184 |
|
|
|
2,415,434 |
|
Property, plant and equipment, net
|
|
|
390,545 |
|
|
|
394,800 |
|
Operating lease
right-of-use
|
|
|
61,608 |
|
|
|
54,569 |
|
Marketable securities
|
|
|
136,664 |
|
|
|
117,980 |
|
Deferred tax assets
|
|
|
96,808 |
|
|
|
87,913 |
|
Retirement plans assets
|
|
|
16,958 |
|
|
|
17,468 |
|
Other assets
|
|
|
23,340 |
|
|
|
9,384 |
|
Acquired intangible assets, net
|
|
|
81,677 |
|
|
|
100,939 |
|
Goodwill
|
|
|
433,398 |
|
|
|
453,859 |
|
|
|
|
|
|||||
Total assets
|
|
$
|
3,762,182 |
|
|
$
|
3,652,346 |
|
|
|
|
|
|||||
LIABILITIES
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
154,912 |
|
|
$
|
133,663 |
|
Accrued employees’ compensation and withholdings
|
|
|
196,928 |
|
|
|
220,321 |
|
Deferred revenue and customer advances
|
|
|
140,380 |
|
|
|
134,662 |
|
Other accrued liabilities
|
|
|
135,492 |
|
|
|
77,581 |
|
Operating lease liabilities
|
|
|
20,601 |
|
|
|
20,573 |
|
Income taxes payable
|
|
|
73,077 |
|
|
|
80,728 |
|
Current debt
|
|
|
32,219 |
|
|
|
33,343 |
|
|
|
|
|
|||||
Total current liabilities
|
|
|
753,609 |
|
|
|
700,871 |
|
Retirement plans liabilities
|
|
|
153,249 |
|
|
|
151,140 |
|
Long-term deferred revenue and customer advances
|
|
|
60,022 |
|
|
|
58,359 |
|
Long-term contingent consideration
|
|
|
—
|
|
|
|
7,227 |
|
Long-term other accrued liabilities
|
|
|
19,704 |
|
|
|
19,352 |
|
Deferred tax liabilities
|
|
|
6,907 |
|
|
|
10,821 |
|
Long-term operating lease liabilities
|
|
|
48,492 |
|
|
|
42,073 |
|
Long-term incomes taxes payable
|
|
|
67,041 |
|
|
|
74,930 |
|
Debt
|
|
|
112,784 |
|
|
|
376,768 |
|
|
|
|
|
|||||
Total liabilities
|
|
|
1,221,808 |
|
|
|
1,441,541 |
|
|
|
|
|
|||||
Commitments and contingencies
|
|
|
|
|
||||
Mezzanine equity:
|
|
|
|
|
|
|
|
|
Convertible common shares
|
|
|
2,881 |
|
|
|
3,787 |
|
SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
Common stock, $0.125 par value, 1,000,000 shares authorized; 163,728 and 166,123 shares issued and outstanding at October 3, 2021 and December 31, 2020, respectively
|
|
|
20,466 |
|
|
|
20,765 |
|
Additional
paid-in
capital
|
|
|
1,800,373 |
|
|
|
1,765,323 |
|
Accumulated other comprehensive income
|
|
|
4,217 |
|
|
|
33,516 |
|
Retained earnings
|
|
|
712,437 |
|
|
|
387,414 |
|
|
|
|
|
|||||
Total shareholders’ equity
|
|
|
2,537,493 |
|
|
|
2,207,018 |
|
|
|
|
|
|||||
Total liabilities, convertible common shares and shareholders’ equity
|
|
$
|
3,762,182 |
|
|
$
|
3,652,346 |
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
For the Nine Months
Ended
|
|
||||||||||
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
(in thousands, except per share amount)
|
|
|||||||||||||
Revenues:
|
|
|
|
|
||||||||||||
Products
|
$ | 825,448 | $ | 697,745 | $ | 2,437,901 | $ | 2,043,281 | ||||||||
Services
|
125,053 | 121,739 | 379,934 | 319,219 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues
|
950,501 | 819,484 | 2,817,835 | 2,362,500 | ||||||||||||
Cost of revenues:
|
||||||||||||||||
Cost of products
|
333,229 | 300,174 | 989,859 | 882,902 | ||||||||||||
Cost of services
|
46,271 | 60,382 | 148,368 | 143,647 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)
|
379,500 | 360,556 | 1,138,227 | 1,026,549 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit
|
571,001 | 458,928 | 1,679,608 | 1,335,951 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Selling and administrative
|
134,829 | 115,840 | 404,812 | 340,488 | ||||||||||||
Engineering and development
|
107,220 | 94,909 | 317,644 | 274,170 | ||||||||||||
Acquired intangible assets amortization
|
5,355 | 6,219 | 16,293 | 25,052 | ||||||||||||
Restructuring and other
|
1,197 | (27,701 | ) | (3,426 | ) | 1,915 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses
|
248,601 | 189,267 | 735,323 | 641,625 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income from operations
|
322,400 | 269,661 | 944,285 | 694,326 | ||||||||||||
Non-operating
(income) expense:
|
||||||||||||||||
Interest income
|
(626 | ) | (1,071 | ) | (2,066 | ) | (5,189 | ) | ||||||||
Interest expense
|
3,785 | 6,237 | 15,354 | 17,831 | ||||||||||||
Other (income) expense, net
|
21,486 | 764 | 25,223 | 3,595 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes
|
297,755 | 263,731 | 905,774 | 678,089 | ||||||||||||
Income tax provision
|
41,037 | 41,013 | 115,225 | 90,274 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income
|
$ | 256,718 | $ | 222,718 | $ | 790,549 | $ | 587,815 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income per common share:
|
||||||||||||||||
Basic
|
$ | 1.56 | $ | 1.34 | $ | 4.77 | $ | 3.54 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted
|
$ | 1.41 | $ | 1.21 | $ | 4.26 | $ | 3.23 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average common shares—basic
|
164,583 | 166,014 | 165,690 | 166,131 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average common shares—diluted
|
181,987 | 184,338 | 185,492 | 181,777 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
For the Nine Months
Ended
|
|
||||||||||
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
(in thousands)
|
|
|||||||||||||
Net income
|
$ | 256,718 | $ | 222,718 | $ | 790,549 | $ | 587,815 | ||||||||
Other comprehensive income, net of tax:
|
||||||||||||||||
Foreign currency translation adjustment, net of tax of $0, $0, $0, $0, respectively
|
(10,698 | ) | 17,104 | (26,672 | ) | 24,131 | ||||||||||
Available-for-sale
|
||||||||||||||||
Unrealized (losses) gains on marketable securities arising during period, net of tax of $(44), $139, $(516), and $1,410, respectively
|
(176 | ) | 335 | (1,952 | ) | 5,165 | ||||||||||
Less: Reclassification adjustment for gains included in net income, net of tax of $(65), $(194), $(186), $(615), respectively
|
(229 | ) | (689 | ) | (670 | ) | (2,188 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(405 | ) | (354 | ) | (2,622 | ) | 2,977 | ||||||||||
Defined benefit post-retirement plan:
|
||||||||||||||||
Amortization of prior service credit, net of tax of $0, $0, $(2), $(1), respectively
|
(2 | ) | (2 | ) | (5 | ) | (6 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive (loss) income
|
(11,105 | ) | 16,748 | (29,299 | ) | 27,102 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive income
|
$ | 245,613 | $ | 239,466 | $ | 761,250 | $ | 614,917 | ||||||||
|
|
|
|
|
|
|
|
Shareholders’ Equity
|
||||||||||||||||||||||||||||
Convertible
Common Share
s
Value |
Common
Stock Shares |
Common
Stock Par Value |
Additional
Paid-in
Capital |
Accumulated
Other Comprehensive Income (Loss) |
Retained
Earnings (Accumulated Deficit) |
Total
Shareholders’ Equity |
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||
For the Three Months Ended October 3, 2021
|
||||||||||||||||||||||||||||
Balance, July 4, 2021
|
$ | 21,386 | 165,444 | $ | 20,680 | $ | 1,772,302 | $ | 15,322 | $ | 684,952 | $ | 2,493,256 | |||||||||||||||
Net issuance of common stock under stock-based plans
|
8 | 1 | (259 | ) | (258 | ) | ||||||||||||||||||||||
Stock-based compensation expense
|
10,042 | 10,042 | ||||||||||||||||||||||||||
Repurchase of common stock
|
(1,724 | ) | (215 | ) | (212,781 | ) | (212,996 | ) | ||||||||||||||||||||
Cash dividends ($0.10 per share)
|
(16,452 | ) | (16,452 | ) | ||||||||||||||||||||||||
Settlements of convertible notes
|
5,589 | 699 | 636,798 | 637,497 | ||||||||||||||||||||||||
Exercise of convertible notes hedge call options
|
(5,589 | ) | (699 | ) | (637,015 | ) | (637,714 | ) | ||||||||||||||||||||
Convertible common shares
|
(18,505 | ) | 18,505 | 18,505 | ||||||||||||||||||||||||
Net income
|
256,718 | 256,718 | ||||||||||||||||||||||||||
Other comprehensive loss
|
(11,105 | ) | (11,105 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, October 3, 2021
|
$ | 2,881 | 163,728 | $ | 20,466 | $ | 1,800,373 | $ | 4,217 | $ | 712,437 | $ | 2,537,493 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
For the Three Months Ended September 27, 2020
|
||||||||||||||||||||||||||||
Balance, June 28, 2020
|
$ | — | 165,806 | $ | 20,725 | $ | 1,730,716 | $ | (8,500 | ) | $ | 1,610 | $ | 1,744,551 | ||||||||||||||
Net issuance of common stock under stock-based plans
|
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 Nine Months Ended October 3, 2021
|
||||||||||||||||||||||||||||
Balance, December 31, 2020
|
$ | 3,787 | 166,123 | $ | 20,765 | $ | 1,765,323 | $ | 33,516 | $ | 387,414 | $ | 2,207,018 | |||||||||||||||
Net issuance of common stock under stock-based plans
|
893 | 112 | (48 | ) | 64 | |||||||||||||||||||||||
Stock-based compensation expense
|
35,915 | 35,915 | ||||||||||||||||||||||||||
Repurchase of common stock
|
(3,288 | ) | (411 | ) | (415,769 | ) | (416,180 | ) | ||||||||||||||||||||
Cash dividends ($0.30 per share)
|
(49,757 | ) | (49,757 | ) | ||||||||||||||||||||||||
Settlements of convertible notes
|
7,178 | 897 | 840,305 | 841,202 | ||||||||||||||||||||||||
Exercise of convertible notes hedge call options
|
(7,178 | ) | (897 | ) | (842,028 | ) | (842,925 | ) | ||||||||||||||||||||
Convertible common shares
|
(906 | ) | 906 | 906 | ||||||||||||||||||||||||
Net income
|
790,549 | 790,549 | ||||||||||||||||||||||||||
Other comprehensive loss
|
(29,299 | ) | (29,299 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance, October 3, 2021
|
$ | 2,881 | 163,728 | $ | 20,466 | $ | 1,800,373 | $ | 4,217 | $ | 712,437 | $ | 2,537,493 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
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 ($0.30 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
|
||||||||
October 3,
2021 |
September 27,
2020 |
|||||||
(in thousands)
|
||||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 790,549 | $ | 587,815 | ||||
Adjustments to reconcile net income from operations to net cash provided by operating activities:
|
||||||||
Depreciation
|
67,866 | 58,111 | ||||||
Stock-based compensation
|
34,649 | 33,028 | ||||||
Amortization
|
27,626 | 36,577 | ||||||
Loss on convertible debt conversion
|
25,397 | — | ||||||
Provision for excess and obsolete inventory
|
11,775 | 13,116 | ||||||
Deferred taxes
|
(10,732 | ) | (4,547 | ) | ||||
Contingent consideration adjustment
|
(7,227 | ) | (7,967 | ) | ||||
Gains on investments
|
(4,750 | ) | (3,515 | ) | ||||
Retirement plan actuarial (gains) losses
|
(627 | ) | 2,589 | |||||
Other
|
243 | 750 | ||||||
Changes in operating assets and liabilities, net of businesses acquired:
|
||||||||
Accounts receivable
|
(103,299 | ) | (222,015 | ) | ||||
Inventories
|
21,943 | 16,998 | ||||||
Prepayments and other assets
|
(138,564 | ) | (40,751 | ) | ||||
Accounts payable and other liabilities
|
65,064 | 81,557 | ||||||
Deferred revenue and customer advances
|
8,699 | 36,589 | ||||||
Retirement plans contributions
|
(4,123 | ) | (3,884 | ) | ||||
Income taxes
|
(17,406 | ) | 24,060 | |||||
|
|
|
|
|||||
Net cash provided by operating activities
|
767,083 | 608,511 | ||||||
|
|
|
|
|||||
Cash flows from investing activities:
|
||||||||
Purchases of property, plant and equipment
|
(103,162 | ) | (146,872 | ) | ||||
Purchases of marketable securities
|
(509,470 | ) | (488,428 | ) | ||||
Proceeds from maturities of marketable securities
|
571,277 | 309,407 | ||||||
Proceeds from sales of marketable securities
|
209,437 | 32,611 | ||||||
Purchase of investment and acquisition of business
|
(12,000 | ) | 149 | |||||
Proceeds from life insurance
|
— | 546 | ||||||
|
|
|
|
|||||
Net cash provided by (used for) investing activities
|
156,082 | (292,587 | ) | |||||
|
|
|
|
|||||
Cash flows from financing activities:
|
||||||||
Issuance of common stock under stock purchase and stock option plans
|
32,590 | 26,528 | ||||||
Repurchase of common stock
|
(406,180 | ) | (88,465 | ) | ||||
Payments of convertible debt principal
|
(301,997 | ) | — | |||||
Dividend payments
|
(49,711 | ) | (49,870 | ) | ||||
Payments related to net settlement of employee stock compensation awards
|
(32,045 | ) | (22,735 | ) | ||||
Payments of contingent consideration
|
— | (8,852 | ) | |||||
|
|
|
|
|||||
Net cash used for financing activities
|
(757,343 | ) | (143,394 | ) | ||||
|
|
|
|
|||||
Effects of exchange rate changes on cash and cash equivalents
|
(489 | ) | (1,274 | ) | ||||
|
|
|
|
|||||
Increase in cash and cash equivalents
|
165,333 | 171,256 | ||||||
Cash and cash equivalents at beginning of period
|
914,121 | 773,924 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period
|
$ | 1,079,454 | $ | 945,180 | ||||
|
|
|
|
|||||
Non-cash
investing activities:
|
||||||||
Capital expenditures incurred but not yet paid:
|
$ | 2,286 | $ | 3,119 |
• |
semiconductor test (“Semiconductor Test”) systems;
|
• |
storage and system level test (“Storage Test”) systems, defense/aerospace (“Defense/Aerospace”) test instrumentation and systems, and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”);
|
• |
wireless test (“Wireless Test”) systems; and
|
• |
industrial automation (“Industrial Automation”) products.
|
|
|
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 October 3, 2021 (1)
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Timing of Revenue Recognition
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Point in Time
|
|
$
|
508,747 |
|
|
$
|
105,454 |
|
|
$
|
88,155 |
|
|
$
|
76,008 |
|
|
$
|
12,351 |
|
|
$
|
226 |
|
|
$
|
65,409 |
|
|
$
|
(63 |
)
|
|
$
|
856,287 |
|
Over Time
|
|
|
66,270 |
|
|
|
7,761 |
|
|
|
14,450 |
|
|
|
1,742 |
|
|
|
607 |
|
|
|
80 |
|
|
|
3,304 |
|
|
|
—
|
|
|
|
94,214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total
|
|
$
|
575,017 |
|
|
$
|
113,215 |
|
|
$
|
102,605 |
|
|
$
|
77,750 |
|
|
$
|
12,958 |
|
|
$
|
306 |
|
|
$
|
68,713 |
|
|
$
|
(63 |
)
|
|
$
|
950,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Geographical Market
|
||||||||||||||||||||||||||||||||||||
Asia Pacific
|
|
$
|
519,886 |
|
|
$
|
110,362 |
|
|
$
|
62,757 |
|
|
$
|
19,654 |
|
|
$
|
2,788 |
|
|
$
|
—
|
|
|
$
|
54,344 |
|
|
$
|
—
|
|
|
$
|
769,791 |
|
Americas
|
|
|
29,119 |
|
|
|
2,281 |
|
|
|
34,560 |
|
|
|
23,429 |
|
|
|
5,015 |
|
|
|
306 |
|
|
|
11,352 |
|
|
|
(63 |
)
|
|
|
105,999 |
|
Europe, Middle East and Africa
|
|
|
26,012 |
|
|
|
572 |
|
|
|
5,288 |
|
|
|
34,667 |
|
|
|
5,155 |
|
|
|
—
|
|
|
|
3,017 |
|
|
|
—
|
|
|
|
74,711 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total
|
|
$
|
575,017 |
|
|
$
|
113,215 |
|
|
$
|
102,605 |
|
|
$
|
77,750 |
|
|
$
|
12,958 |
|
|
$
|
306 |
|
|
$
|
68,713 |
|
|
$
|
(63 |
)
|
|
$
|
950,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
For the Three Months Ended September 27, 2020 (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Nine Months Ended October 3, 2021 (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timing of Revenue Recognition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Point in Time
|
|
$
|
1,548,895 |
|
|
$
|
291,578 |
|
|
$
|
295,666 |
|
|
$
|
214,427 |
|
|
$
|
41,506 |
|
|
$
|
106 |
|
|
$
|
154,908 |
|
|
$
|
(352 |
)
|
|
$
|
2,546,734 |
|
Over Time
|
|
|
188,022 |
|
|
|
21,776 |
|
|
|
44,595 |
|
|
|
5,001 |
|
|
|
1,483 |
|
|
|
628 |
|
|
|
9,596 |
|
|
|
—
|
|
|
|
271,101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total
|
|
$
|
1,736,917 |
|
|
$
|
313,354 |
|
|
$
|
340,261 |
|
|
$
|
219,428 |
|
|
$
|
42,989 |
|
|
$
|
734 |
|
|
$
|
164,504 |
|
|
$
|
(352 |
)
|
|
$
|
2,817,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Geographical Market
|
||||||||||||||||||||||||||||||||||||
Asia Pacific
|
|
$
|
1,618,117 |
|
|
$
|
301,562 |
|
|
$
|
223,507 |
|
|
$
|
55,531 |
|
|
$
|
8,674 |
|
|
$
|
—
|
|
|
$
|
133,678 |
|
|
$
|
—
|
|
|
$
|
2,341,069 |
|
Americas
|
|
|
71,562 |
|
|
|
9,373 |
|
|
|
98,475 |
|
|
|
66,390 |
|
|
|
17,065 |
|
|
|
734 |
|
|
|
24,228 |
|
|
|
(352 |
)
|
|
|
287,475 |
|
Europe, Middle East and Africa
|
|
|
47,238 |
|
|
|
2,419 |
|
|
|
18,279 |
|
|
|
97,507 |
|
|
|
17,250 |
|
|
|
—
|
|
|
|
6,598 |
|
|
|
—
|
|
|
|
189,291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total
|
|
$
|
1,736,917 |
|
|
$
|
313,354 |
|
|
$
|
340,261 |
|
|
$
|
219,428 |
|
|
$
|
42,989 |
|
|
$
|
734 |
|
|
$
|
164,504 |
|
|
$
|
(352 |
)
|
|
$
|
2,817,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Includes $3.8 million and $1.7 million in 2021 and 2020, respectively, for leases of Teradyne’s systems recognized outside Accounting Standards Codification (“ASC”) 606
“Revenue from Contracts with Customers.”
|
(2) |
Includes $11.1 million and $6.1 million in 2021 and 2020, respectively, for leases of Teradyne’s systems recognized outside ASC 606 “
Revenue from Contracts with Customers
|
|
|
October 3,
2021
|
|
|
December 31,
2020
|
|
||
|
|
|
|
|
|
|
||
|
|
(in thousands)
|
|
|||||
Raw material
|
$ | 131,807 | $ | 114,133 | ||||
Work-in-process
|
34,911 | 25,408 | ||||||
Finished goods
|
57,524 | 82,648 | ||||||
|
|
|
|
|||||
$ | 224,242 | $ | 222,189 | |||||
|
|
|
|
|
|
October 3, 2021
|
|
|||||||||||||
|
|
Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
(in thousands)
|
|
|||||||||||||
Assets
|
|
|
|
|
||||||||||||
Cash
|
$ | 577,752 | $ | — | $ | — | $ | 577,752 | ||||||||
Cash equivalents
|
176,703 | 324,999 | — | 501,702 | ||||||||||||
Available-for-sale
|
||||||||||||||||
Commercial paper
|
— | 179,629 | — | 179,629 | ||||||||||||
U.S. Treasury securities
|
— | 80,519 | — | 80,519 | ||||||||||||
Corporate debt securities
|
— | 58,648 | — | 58,648 | ||||||||||||
Debt mutual funds
|
8,937 | — | — | 8,937 | ||||||||||||
U.S. government agency securities
|
— | 4,616 | — | 4,616 | ||||||||||||
Certificates of deposit and time deposits
|
— | 1,346 | — | 1,346 | ||||||||||||
Non-U.S.
government securities
|
— | 590 | — | 590 | ||||||||||||
Equity securities:
|
||||||||||||||||
Mutual funds
|
35,776 | — | — | 35,776 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 799,168 | $ | 650,347 | $ | — | $ | 1,449,515 | |||||||||
Derivative assets
|
— | 93 | — | 93 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 799,168 | $ | 650,440 | $ | — | $ | 1,449,608 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities
|
||||||||||||||||
Derivative liabilities
|
— | 433 | — | 433 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | — | $ | 433 | $ | — | $ | 433 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Reported as follows: | ||||||||||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
$ | 754,455 | $ | 324,999 | $ | — | $ | 1,079,454 | ||||||||
Marketable securities
|
— | 233,397 | — | 233,397 | ||||||||||||
Long-term marketable securities
|
44,713 | 91,951 | — | 136,664 | ||||||||||||
Prepayments and other current assets
|
— | 93 | — | 93 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 799,168 | $ | 650,440 | $ | — | $ | 1,449,608 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities
|
||||||||||||||||
Other current liabilities
|
$ | — | $ | 433 | $ | — | $ | 433 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | — | $ | 433 | $ | — | $ | 433 | ||||||||
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|||||||||||||
|
|
Quoted Prices
in Active
Markets for
Identical
Instruments
(Level 1)
|
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
(in thousands)
|
|
|||||||||||||
Assets
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
$ | 443,166 | $ | — | $ | — | $ | 443,166 | ||||||||
Cash equivalents
|
347,768 | 123,187 | — | 470,955 | ||||||||||||
Available-for-sale
|
— | |||||||||||||||
U.S. Treasury securities
|
— | 258,304 | — | 258,304 | ||||||||||||
Commercial paper
|
— | 254,413 | — | 254,413 | ||||||||||||
Corporate debt securities
|
— | 83,615 | — | 83,615 | ||||||||||||
Debt mutual funds
|
8,565 | — | — | 8,565 | ||||||||||||
U.S. government agency securities
|
— | 4,339 | — | 4,339 | ||||||||||||
Certificates of deposit and time deposits
|
— | 979 | — | 979 | ||||||||||||
Non-U.S.
government securities
|
— | 625 | — | 625 | ||||||||||||
Equity securities:
|
||||||||||||||||
Equity mutual funds
|
29,420 | — | — | 29,420 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 828,919 | $ | 725,462 | $ | — | $ | 1,554,381 | |||||||||
Derivative assets
|
— | 95 | — | 95 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 828,919 | $ | 725,557 | $ | — | $ | 1,554,476 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities
|
||||||||||||||||
Contingent consideration
|
$ | — | $ | — | $ | 7,227 | $ | 7,227 | ||||||||
Derivative liabilities
|
— | 504 | — | 504 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | — | $ | 504 | $ | 7,227 | $ | 7,731 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Reported as follows:
|
||||||||||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
$ | 790,934 | $ | 123,187 | $ | — | $ | 914,121 | ||||||||
Marketable securities
|
— | 522,280 | — | 522,280 | ||||||||||||
Long-term marketable securities
|
37,985 | 79,995 | — | 117,980 | ||||||||||||
Prepayments and other current assets
|
— | 95 | — | 95 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 828,919 | $ | 725,557 | $ | — | $ | 1,554,476 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities
|
||||||||||||||||
Other accrued liabilities
|
$ | — | $ | 504 | $ | — | $ | 504 | ||||||||
Long-term contingent consideration
|
— | — | 7,227 | 7,227 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | — | $ | 504 | $ | 7,227 | $ | 7,731 | ||||||||
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
For the Nine Months
Ended
|
|
||||||||||
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
||||
|
|
(in thousands)
|
|
|||||||||||||
Balance at beginning of period
|
$ | — | $ | 49,737 | $ | 7,227 | $ | 39,705 | ||||||||
Fair value adjustment (a)(b)(c)
|
— | (27,206 | ) | (7,227 | ) | (7,967 | ) | |||||||||
Foreign currency impact
|
— | — | — | (355 | ) | |||||||||||
Payments (d)
|
— | — | — | (8,852 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at end of period
|
$ | — | $ | 22,531 | $ | — | $ | 22,531 | ||||||||
|
|
|
|
|
|
|
|
(a) |
In the nine months ended October 3, 2021, the fair value of contingent consideration for the earn-outs in connection with the acquisition of AutoGuide was reduced to zero, which resulted in a benefit of $7.2 million, primarily due to a decrease in forecasted revenues and earnings before interest and taxes. As of October 3, 2021, the maximum amount of contingent consideration that could be paid in connection with the acquisition of AutoGuide is $100.2 million. The remaining
earn-out
periods end on December 31, 2021 and December 31, 2022. The sellers of AutoGuide have filed an arbitration claim against Teradyne related to allegations of
non-compliance
with its
earn-out
obligations. 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 arbitration (see Note R: “Commitments and Contingencies”).
|
(b) |
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 revenues and earnings before interest and taxes.
|
(c) |
In the nine months ended September 27, 2020, the fair value of contingent consideration for the earn-outs in connection with the acquisition of Mobile Industrial Robots (“MiR”) decreased by $3.5 million due to lower forecasted results.
|
(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.
|
|
|
October 3, 2021
|
|
|
December 31, 2020
|
|
||||||||||
|
|
Carrying Value
|
|
|
Fair Value
|
|
|
Carrying Value
|
|
|
Fair Value
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
(in thousands)
|
|
|||||||||||||
Assets
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$ | 1,079,454 | $ | 1,079,454 | $ | 914,121 | $ | 914,121 | ||||||||
Marketable securities
|
370,061 | 370,061 | 640,260 | 640,260 | ||||||||||||
Derivative assets
|
93 | 93 | 95 | 95 | ||||||||||||
Liabilities
|
||||||||||||||||
Contingent consideration
|
— | — | 7,227 | 7,227 | ||||||||||||
Derivative liabilities
|
433 | 433 | 504 | 504 | ||||||||||||
Convertible debt (1)
|
145,003 | 546,464 | 410,111 | 1,739,553 |
(1) |
The carrying value represents the bifurcated debt component only, while the level 2 fair value is based on quoted market prices for the convertible note, which includes the equity conversion features.
|
|
|
October 3, 2021
|
|
|||||||||||||||||
|
|
Available-for-Sale
|
|
|
|
|
||||||||||||||
|
|
Cost
|
|
|
Unrealized
Gain
|
|
|
Unrealized
(Loss)
|
|
|
Fair Market
Value
|
|
|
Fair Market
Value of
Investments
with Unrealized
Losses
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
(in thousands)
|
|
|||||||||||||||||
Commercial paper
|
$ | 179,624 | $ | 5 | $ | — | $ | 179,629 | $ | 20,799 | ||||||||||
U.S. Treasury securities
|
80,370 | 636 | (487 | ) | 80,519 | 17,336 | ||||||||||||||
Corporate debt securities
|
53,329 | 5,421 | (102 | ) | 58,648 | 22,010 | ||||||||||||||
Debt mutual funds
|
8,872 | 65 | — | 8,937 | — | |||||||||||||||
U.S. government agency securities
|
4,610 | 11 | (5 | ) | 4,616 | 3,302 | ||||||||||||||
Certificates of deposit and time deposits
|
1,346 | — | — | 1,346 | — | |||||||||||||||
Non-U.S.
government securities
|
590 | — | — | 590 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 328,741 | $ | 6,138 | $ | (594 | ) | $ | 334,285 | $ | 63,447 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
Unrealized
Gain
|
|
|
Unrealized
(Loss)
|
|
|
Fair Market
Value
|
|
|
Fair Market
Value of
Investments
with Unrealized
Losses
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
(in thousands)
|
|
|||||||||||||||||
Marketable securities
|
$ | 233,327 | $ | 92 | $ | (22 | ) | $ | 233,397 | $ | 28,773 | |||||||||
Long-term marketable securities
|
95,414 | 6,046 | (572 | ) | 100,888 | 34,674 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 328,741 | $ | 6,138 | $ | (594 | ) | $ | 334,285 | $ | 63,447 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 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
|
$ | 257,132 | $ | 1,330 | $ | (158 | ) | $ | 258,304 | $ | 17,243 | |||||||||
Commercial paper
|
254,404 | 10 | (1 | ) | 254,413 | 12,173 | ||||||||||||||
Corporate debt securities
|
76,129 | 7,539 | (53 | ) | 83,615 | 39,896 | ||||||||||||||
Debt mutual funds
|
8,413 | 152 | — | 8,565 | — | |||||||||||||||
U.S. government agency securities
|
4,294 | 46 | (1 | ) | 4,339 | 1,106 | ||||||||||||||
Certificates of deposit and time deposits
|
979 | — | — | 979 | — | |||||||||||||||
Non-U.S.
government securities
|
625 | — | — | 625 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 601,976 | $ | 9,077 | $ | (213 | ) | $ | 610,840 | $ | 70,418 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
Unrealized
Gain
|
|
|
Unrealized
(Loss)
|
|
|
Fair Market
Value
|
|
|
Fair Market
Value of
Investments
with Unrealized
Losses
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
(in thousands)
|
|
|||||||||||||||||
Marketable securities
|
$ | 522,228 | $ | 92 | $ | (40 | ) | $ | 522,280 | $ | 61,806 | |||||||||
Long-term marketable securities
|
79,748 | 8,985 | (173 | ) | 88,560 | 8,612 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 601,976 | $ | 9,077 | $ | (213 | ) | $ | 610,840 | $ | 70,418 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
October 3, 2021
|
|
|||||
|
|
Cost
|
|
|
Fair Market
Value
|
|
||
|
|
|
|
|
|
|
||
|
|
(in thousands)
|
|
|||||
Due within one year
|
$ | 233,327 | $ | 233,397 | ||||
Due after 1 year through 5 years
|
46,460 | 46,744 | ||||||
Due after 5 years through 10 years
|
6,120 | 6,586 | ||||||
Due after 10 years
|
33,962 | 38,621 | ||||||
|
|
|
|
|||||
Total
|
$ | 319,869 | $ | 325,348 | ||||
|
|
|
|
|
|
Balance Sheet
Location
|
|
|
October 3,
2021 |
|
|
December 31,
2020 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
(in thousands)
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|||||||||
Foreign exchange contracts
|
Prepayments | $ | 93 | $ | 95 | |||||||
Foreign exchange contracts
|
Other current liabilities | (433 | ) | (504 | ) | |||||||
|
|
|
|
|||||||||
Total derivatives
|
$ | (340 | ) | $ | (409 | ) | ||||||
|
|
|
|
|
|
Location of Losses (Gains)
Recognized in
Statement of Operations
|
|
|
For the Three Months
Ended
|
|
|
For the Nine Months
Ended
|
|
|||||||||||
|
|
October 3,
2021
|
|
|
September 27,
2020
|
|
|
October 3,
2021
|
|
|
September 27,
2020
|
|
||||||||
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
(in thousands)
|
|
||||||||||||||
Derivatives not designated as hedging instruments:
|
||||||||||||||||||||
Foreign exchange contracts
|
Other (income) expense, net | $ | 2,288 | $ | (551 | ) | $ | 5,937 | $ | 3,930 |
(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 and nine months ended October 3, 2021, net gains from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $1.0 million and $1.3 million, respectively.
|
(3) |
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.
|
|
|
October 3,
2021
|
|
|
December 31,
2020 |
|
||
|
|
|
|
|
|
|
||
|
|
(in thousands)
|
|
|||||
Debt principal
|
$ | 157,972 | $ | 459,971 | ||||
Unamortized discount
|
12,969 | 49,860 | ||||||
|
|
|
|
|||||
Net Carrying amount of convertible debt
|
$ | 145,003 | $ | 410,111 | ||||
|
|
|
|
|
|
October 3,
2021
|
|
|
December 31,
2020 |
|
||
|
|
|
|
|
|
|
||
|
|
(in thousands)
|
|
|||||
Current debt
|
$ | 32,219 | $ | 33,343 | ||||
Long-term debt
|
112,784 | 376,768 | ||||||
|
|
|
|
|||||
Net carrying amount of convertible debt
|
$ | 145,003 | $ | 410,111 | ||||
|
|
|
|
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
||||||||||
|
|
October 3,
2021
|
|
|
September 27,
2020
|
|
|
October 3,
2021
|
|
|
September 27,
2020
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
(in thousands)
|
|
|||||||||||||
Contractual interest expense on the coupon
|
$ | 355 | $ | 1,438 | $ | 2,666 | $ | 4,313 | ||||||||
Amortization of the discount component and debt issue fees recognized as interest expense
|
2,424 | 3,887 | 9,771 | 11,518 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest expense on the convertible debt
|
$ | 2,779 | $ | 5,325 | $ | 12,437 | $ | 15,831 | ||||||||
|
|
|
|
|
|
|
|
|
|
October 3,
2021 |
|
|
December 31,
2020 |
|
||
|
|
|
|
|
|
|
||
|
|
(in thousands)
|
|
|||||
Contract manufacturer and supplier prepayments
|
$ | 334,660 | $ | 212,286 | ||||
Prepaid maintenance and other services
|
13,574 | 13,116 | ||||||
Prepaid taxes
|
13,822 | 9,361 | ||||||
Other prepayments
|
12,093 | 15,329 | ||||||
|
|
|
|
|||||
Total prepayments
|
$ | 374,149 | $ | 250,092 | ||||
|
|
|
|
|
|
October 3,
2021 |
|
|
December 31,
2020 |
|
||
|
|
|
|
|
|
|
||
|
|
(in thousands)
|
|
|||||
Maintenance, service and training
|
$ | 83,046 | $ | 77,654 | ||||
Extended warranty
|
67,482 | 51,929 | ||||||
Customer advances, undelivered elements and other
|
49,874 | 63,438 | ||||||
|
|
|
|
|||||
Total deferred revenue and customer advances
|
$ | 200,402 | $ | 193,021 | ||||
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
For the Nine Months
Ended
|
|
||||||||||
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
(in thousands)
|
|
|||||||||||||
Balance at beginning of period
|
$ | 25,676 | $ | 13,016 | $ | 16,633 | $ | 8,996 | ||||||||
Accruals for warranties issued during the period
|
6,641 | 8,255 | 28,719 | 19,522 | ||||||||||||
Accruals related to
pre-existing
warranties
|
(963 | ) | 158 | (3,966 | ) | 1,569 | ||||||||||
Settlements made during the period
|
(5,233 | ) | (6,272 | ) | (15,265 | ) | (14,930 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at end of period
|
$ | 26,121 | $ | 15,157 | $ | 26,121 | $ | 15,157 | ||||||||
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
For the Nine Months
Ended
|
|
||||||||||
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
(in thousands)
|
|
|||||||||||||
Balance at beginning of period
|
$ | 63,525 | $ | 40,178 | $ | 51,929 | $ | 30,677 | ||||||||
Deferral of new extended warranty revenue
|
12,728 | 13,674 | 36,533 | 32,724 | ||||||||||||
Recognition of extended warranty deferred revenue
|
(8,771 | ) | (5,149 | ) | (20,980 | ) | (14,698 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at end of period
|
$ | 67,482 | $ | 48,703 | $ | 67,482 | $ | 48,703 | ||||||||
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended
|
||
|
|
October 3,
2021 |
|
September 27,
2020 |
Risk-free interest rate
|
0.2% | 1.5% | ||
Teradyne volatility-historical
|
43.9% | 34.9% | ||
NYSE Composite Index volatility-historical
|
22.9% | 11.4% | ||
Dividend yield
|
0.4% | 0.6% |
|
|
For the Nine Months Ended
|
||
|
|
October 3,
2021 |
|
September 27,
2020 |
Expected life (years)
|
5.0 | 5.0 | ||
Risk-free interest rate
|
0.4% | 1.6% | ||
Volatility-historical
|
37.8% | 31.6% | ||
Dividend yield
|
0.4% | 0.6% |
|
|
Foreign
Currency
Translation
Adjustment
|
|
|
Unrealized
Gains
(Losses) on
Marketable
Securities
|
|
|
Retirement
Plans
Prior
Service
Credit
|
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
(in thousands)
|
|
|||||||||||||
Nine Months Ended October 3, 2021
|
||||||||||||||||
Balance at December 31, 2020, net of tax of $0, $1,910, $(1,126), respectively
|
$ | 25,389 | $ | 6,954 | $ | 1,173 | $ | 33,516 | ||||||||
Other comprehensive loss before reclassifications, net of tax of $0, $(516), $0, respectively
|
(26,672 | ) | (1,952 | ) | — | (28,624 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(186), $(2), respectively
|
— | (670 | ) | (5 | ) | (675 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net current period other comprehensive loss, net of tax of $0
, $(702), $
(2), respectively
|
(26,672 | ) | (2,622 | ) | (5 | ) | (29,299 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at October 3, 2021, net of tax of $0, $1,208, $(1,128), respectively
|
$ | (1,283 | ) | $ | 4,332 | $ | 1,168 | $ | 4,217 | |||||||
|
|
|
|
|
|
|
|
|||||||||
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 | ||||||||
|
|
|
|
|
|
|
|
Details about Accumulated Other Comprehensive Income Components
|
|
For the Three Months
Ended
|
|
|
For the Nine Months
Ended
|
|
|
Affected Line Item
in the Statements
of Operations
|
|
|||||||||||
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
(in thousands)
|
|
|
|
|
||||||||||||||
Available-for-sale
|
||||||||||||||||||||
Unrealized gains, net of tax of $65, $194, $186, $615, respectively
|
$ | 229 | $ | 689 | $ | 670 | $ | 2,188 |
Other (income)
expense, net |
|
||||||||||
Defined benefit postretirement plan:
|
||||||||||||||||||||
Amortization of prior service credit, net of tax of $0, $0, $2, $1, respectively
|
2 | 2 | 5 | 6 | (a) | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total reclassifications, net of tax of $65, $194, $188, $616, respectively
|
$ | 231 | $ | 691 | $ | 675 | $ | 2,194 | Net income | |||||||||||
|
|
|
|
|
|
|
|
|
|
Industrial
Automation
|
|
|
System
Test |
|
|
Wireless
Test |
|
|
Semiconductor
Test |
|
|
Total
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
(in thousands)
|
|
|||||||||||||||||
Balance at December 31, 2020
|
||||||||||||||||||||
Goodwill
|
$ | 433,752 | $ | 158,699 | $ | 361,819 | $ | 262,155 | $ | 1,216,425 | ||||||||||
Accumulated impairment losses
|
— | (148,183 | ) | (353,843 | ) | (260,540 | ) | (762,566 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
433,752 | 10,516 | 7,976 | 1,615 | 453,859 | ||||||||||||||||
Foreign currency translation adjustment
|
(20,373 | ) | — | — | (88 | ) | (20,461 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at October 3, 2021
|
||||||||||||||||||||
Goodwill
|
413,379 | 158,699 | 361,819 | 262,067 | 1,195,964 | |||||||||||||||
Accumulated impairment losses
|
— | (148,183 | ) | (353,843 | ) | (260,540 | ) | (762,566 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 413,379 | $ | 10,516 | $ | 7,976 | $ | 1,527 | $ | 433,398 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Carrying
Amount
|
|
|
Accumulated
Amortization
|
|
|
Foreign Currency
Translation Adjustment |
|
|
Net
Carrying
Amount
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at October 3, 2021
|
|
|
(in thousands)
|
|
||||||||||||
Developed technology
|
$ | 272,547 | $ | (220,147 | ) | $ | (3,489 | ) | $ | 48,911 | ||||||
Customer relationships
|
57,739 | (48,351 | ) | 174 | 9,562 | |||||||||||
Tradenames and trademarks
|
70,120 | (46,643 | ) | (273 | ) | 23,204 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total intangible assets
|
$ | 400,406 | $ | (315,141 | ) | $ | (3,588 | ) | $ | 81,677 | ||||||
|
|
|
|
|
|
|
|
|||||||||
Balance, December 31, 2020
|
||||||||||||||||
Developed technology
|
$ | 272,547 | $ | (210,479 | ) | $ | (1,610 | ) | $ | 60,458 | ||||||
Customer relationships
|
66,239 | (54,524 | ) | 305 | 12,020 | |||||||||||
Tradenames and trademarks
|
70,120 | (42,344 | ) | 685 | 28,461 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total intangible assets
|
$ | 408,906 | $ | (307,347 | ) | $ | (620 | ) | $ | 100,939 | ||||||
|
|
|
|
|
|
|
|
Year
|
|
Amortization Expense
|
|
|
|
|
(in thousands)
|
|
|
2021 (remainder)
|
$ | 5,199 | ||
2022
|
20,299 | |||
2023
|
19,815 | |||
2024
|
19,507 | |||
2025
|
11,645 | |||
Thereafter
|
5,212 |
|
|
For the Three Months
Ended
|
|
|
For the Nine Months
Ended
|
|
||||||||||
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
(in thousands, except per share amounts)
|
|
|||||||||||||
Net income for basic and diluted net income per share
|
$ | 256,718 | $ | 222,718 | $ | 790,549 | $ | 587,815 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average common shares-basic
|
164,583 | 166,014 | 165,690 | 166,131 | ||||||||||||
Effect of dilutive potential common shares:
|
||||||||||||||||
Convertible note hedge warrant shares (1)
|
9,819 | 7,775 | 9,774 | 6,364 | ||||||||||||
Incremental shares from assumed conversion of convertible notes (2)
|
6,464 | 9,156 | 8,784 | 8,029 | ||||||||||||
Restricted stock units
|
1,035 | 1,237 | 1,147 | 1,104 | ||||||||||||
Stock options
|
73 | 141 | 87 | 136 | ||||||||||||
Employee stock purchase plan
|
13 | 15 | 10 | 13 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Dilutive potential common shares
|
17,404 | 18,324 | 19,802 | 15,646 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average common shares-diluted
|
181,987 | 184,338 | 185,492 | 181,777 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income per common share-basic
|
$ | 1.56 | $ | 1.34 | $ | 4.77 | $ | 3.54 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income per common share-diluted
|
$ | 1.41 | $ | 1.21 | $ | 4.26 | $ | 3.23 | ||||||||
|
|
|
|
|
|
|
|
(1) |
Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price of $39.56
and $39.58, multiplied by
14.6
million shares and 14.6 million shares for the three and nine months ended October 3, 2021, respectively. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period.
|
(2) |
Incremental shares from assumed conversion of the convertible notes were calculated using the difference between the average Teradyne stock price for the period and the conversion price of $31.53
and $31.54, multiplied by
8.7
million shares and 11.7 million shares, for the three and nine months ended October 3, 2021, respectively. 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.
|
|
|
For the Three Months Ended
|
|
|||||||||||||
|
|
October 3, 2021
|
|
|
September 27, 2020
|
|
||||||||||
|
|
United
States
|
|
|
Foreign
|
|
|
United
States
|
|
|
Foreign
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
(in thousands)
|
|
|||||||||||||
Service cost
|
$ | 452 | $ | 240 | $ | 417 | $ | 216 | ||||||||
Interest cost
|
1,098 | 86 | 1,460 | 123 | ||||||||||||
Expected return on plan assets
|
(936 | ) | (17 | ) | (1,170 | ) | (16 | ) | ||||||||
Net actuarial loss
|
— | — | 2,238 | — | ||||||||||||
Settlement loss
|
— | — | 450 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total net periodic pension cost
|
$ | 614 | $ | 309 | $ | 3,395 | $ | 323 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
For the Nine Months Ended
|
||||||||||||||||
October 3, 2021
|
September 27, 2020
|
|||||||||||||||
United
States
|
Foreign
|
United
States
|
Foreign
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Service cost
|
$ | 1,357 | $ | 720 | $ | 1,283 | $ | 648 | ||||||||
Interest cost
|
3,295 | 257 | 4,505 | 369 | ||||||||||||
Expected return on plan assets
|
(2,809 | ) | (50 | ) | (3,634 | ) | (47 | ) | ||||||||
Net actuarial (gain) loss
|
(400 | ) | — | 2,418 | — | |||||||||||
Settlement loss
|
— | — | 450 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total net periodic pension cost
|
$ | 1,443 | $ | 927 | $ | 5,022 | $ | 970 | ||||||||
|
|
|
|
|
|
|
|
|
|
For the Three
Months
Ended
|
|
|
For the Nine Months
Ended
|
|
||||||||||
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
(in thousands)
|
|
|||||||||||||
Service cost
|
$ | 16 | $ | 14 | $ | 48 | $ | 43 | ||||||||
Interest cost
|
43 | 60 | 128 | 180 | ||||||||||||
Amortization of prior service credit
|
(2 | ) | (2 | ) | (7 | ) | (7 | ) | ||||||||
Net actuarial gain
|
— | — | (228 | ) | (279 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total net periodic postretirement benefit cost (credit)
|
$ | 57 | $ | 72 | $ | (59 | ) | $ | (63 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
For the Three
Months
Ended
|
|
|
For the Nine Months
Ended
|
|
||||||||||
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. statutory federal tax rate
|
21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | ||||||||
Foreign taxes
|
(4.4 | ) | (6.9 | ) | (4.4 | ) | (5.8 | ) | ||||||||
Tax credits
|
(1.9 | ) | (1.6 | ) | (1.4 | ) | (1.6 | ) | ||||||||
International provisions of the U.S. Tax Cuts and Jobs Act of 2017
|
(1.5 | ) | 3.0 | (1.6 | ) | 0.5 | ||||||||||
Discrete benefit related to equity compensation
|
(0.1 | ) | (0.4 | ) | (1.6 | ) | (1.4 | ) | ||||||||
Other, net
|
0.7 | 0.5 | 0.7 | 0.6 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Effective tax rate
|
13.8 | % | 15.6 | % | 12.7 | % | 13.3 | % | ||||||||
|
|
|
|
|
|
|
|
|
|
Semiconductor
Test
|
|
|
System
Test
|
|
|
Industrial
Automation
|
|
|
Wireless
Test
|
|
|
Corporate
and
Other
|
|
|
Consolidated
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
(in thousands)
|
|
|||||||||||||||||||||
Three Months Ended October 3, 2021
|
|
|
|
|
|
|
||||||||||||||||||
Revenues
|
$ | 688,232 | $ | 102,605 | $ | 91,014 | $ | 68,713 | $ | (63 | ) | $ | 950,501 | |||||||||||
Income (loss) before income taxes (1)(2)
|
265,017 | 31,773 | (4,226 | ) | 31,726 | (26,535 | ) | 297,755 | ||||||||||||||||
Total assets (3)
|
1,251,549 | 147,970 | 696,792 | 119,568 | 1,546,303 | 3,762,182 | ||||||||||||||||||
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 | ||||||||||||||||||
Nine Months Ended October 3, 2021 (4)
|
||||||||||||||||||||||||
Revenues
|
$ | 2,050,271 | $ | 340,261 | $ | 263,151 | $ | 164,504 | $ | (352 | ) | $ | 2,817,835 | |||||||||||
Income (loss) before income taxes (1)(2)
|
778,687 | 116,788 | (14,586 | ) | 63,810 | (38,925 | ) | 905,774 | ||||||||||||||||
Total assets (3)
|
1,251,549 | 147,970 | 696,792 | 119,568 | 1,546,303 | 3,762,182 | ||||||||||||||||||
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 |
(1) |
Included in Corporate and Other are: contingent consideration adjustments, loss on convertible debt conversions, interest income, interest expense, net foreign exchange gains (losses), pension, intercompany eliminations and acquisition related: (a) charges; (b) legal fees; (c) compensation.
|
(2) |
Included in income (loss) before taxes are charges and credits related to restructuring and other, loss on convertible debt conversions 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.
|
(4)
|
The (loss) before income taxes for the nine months ended October 3, 2021 for Industrial Automation has been decreased and Corporate and Other has been increased to correctly eliminate a
$10.1
million immaterial error in the three and six months ended July 4, 2021 related to intercompany charges. The error is not material to any historical periods.
|
|
|
For the Three Months
Ended
|
|
|
For the Nine Months
Ended
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
|
October 3,
2021 |
|
|
September 27,
2020 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
(in thousands)
|
|
|||||||||||||
Semiconductor Test:
|
|
|
|
|
||||||||||||
Cost of revenues—inventory charge
|
$ | 3,725 | $ | 1,131 | $ | 4,959 | $ | 7,956 | ||||||||
Restructuring and other—Contract termination settlement charge
|
— | — | — | 4,000 | ||||||||||||
Industrial Automation:
|
||||||||||||||||
Cost of revenues—inventory charge
|
$ | 3,656 | $ | — | $ | 4,941 | $ | 505 | ||||||||
Restructuring and other—employee severance
|
476 | — | 965 | 664 | ||||||||||||
Restructuring and other—acquisition related expenses and compensation
|
— | — | 825 | 790 | ||||||||||||
Wireless:
|
||||||||||||||||
Cost of revenues—inventory charge
|
$ | 679 | $ | 1,802 | $ | 1,351 | $ | 3,957 | ||||||||
System Test:
|
||||||||||||||||
Cost of revenues—inventory charge
|
$ | — | $ | — | $ | 524 | $ | 698 | ||||||||
Corporate and Other:
|
||||||||||||||||
Other (income) expense, net—loss on convertible debt conversion
|
$ | 20,153 | $ | — | $ | 25,397 | $ | — | ||||||||
Restructuring and other—other
|
— | — | 1,846 | — | ||||||||||||
Restructuring and other—AutoGuide contingent consideration adjustment
|
— | (27,206 | ) | (7,227 | ) | (4,421 | ) | |||||||||
Restructuring and other—acquisition related expenses and compensation
|
— | (1,086 | ) | (513 | ) | 2,629 | ||||||||||
Restructuring and other—MiR contingent consideration adjustment
|
— | — | — | (3,546 | ) |
Item 2:
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
• |
semiconductor test (“Semiconductor Test”) systems;
|
• |
storage and system level test (“Storage Test”) systems, defense/aerospace (“Defense/Aerospace”) test instrumentation and systems and circuit-board test and inspection (“Production Board Test”) systems (collectively these products represent “System Test”);
|
• |
wireless test (“Wireless Test”) systems; and
|
• |
industrial automation (“Industrial Automation”) products.
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
|||||||||||||||
October 3,
|
September 27,
|
October 3,
|
September 27,
|
|||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Percentage of revenues:
|
||||||||||||||||
Revenues:
|
||||||||||||||||
Products
|
87 | % | 85 | % | 87 | % | 86 | % | ||||||||
Services
|
13 | 15 | 13 | 14 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues
|
100 | 100 | 100 | 100 | ||||||||||||
Cost of revenues:
|
||||||||||||||||
Cost of products
|
35 | 37 | 35 | 37 | ||||||||||||
Cost of services
|
5 | 7 | 5 | 6 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below)
|
40 | 44 | 40 | 43 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit
|
60 | 56 | 60 | 57 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Selling and administrative
|
14 | 14 | 14 | 14 | ||||||||||||
Engineering and development
|
11 | 12 | 11 | 12 | ||||||||||||
Acquired intangible assets amortization
|
1 | 1 | 1 | 1 | ||||||||||||
Restructuring and other
|
— | (3 | ) | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses
|
26 | 23 | 26 | 27 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income from operations
|
34 | 33 | 34 | 29 | ||||||||||||
Non-operating
(income) expense:
|
||||||||||||||||
Interest income
|
— | — | — | — | ||||||||||||
Interest expense
|
— | 1 | 1 | 1 | ||||||||||||
Other (income) expense, net
|
2 | — | 1 | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes
|
31 | 32 | 32 | 29 | ||||||||||||
Income tax provision
|
4 | 5 | 4 | 4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income
|
27 | % | 27 | % | 28 | % | 25 | % | ||||||||
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
||||||||||||
October 3,
|
September 27,
|
Dollar
|
||||||||||
2021
|
2020
|
Change
|
||||||||||
(in millions)
|
||||||||||||
Semiconductor Test
|
$ | 688.2 | $ | 592.1 | $ | 96.1 | ||||||
System Test
|
102.6 | 118.2 | (15.6 | ) | ||||||||
Industrial Automation
|
91.0 | 68.7 | 22.3 | |||||||||
Wireless Test
|
68.7 | 40.5 | 28.2 | |||||||||
Corporate and Other
|
(0.1 | ) | — | (0.1 | ) | |||||||
|
|
|
|
|
|
|||||||
$ | 950.5 | $ | 819.5 | $ | 131.0 | |||||||
|
|
|
|
|
|
For the Three Months
Ended
|
||||||||
October 3,
|
September 27,
|
|||||||
2021
|
2020
|
|||||||
Taiwan
|
27 | % | 37 | % | ||||
China
|
19 | 15 | ||||||
United States
|
11 | 10 | ||||||
Korea
|
8 | 16 | ||||||
Europe
|
8 | 6 | ||||||
Malaysia
|
6 | 2 | ||||||
Japan
|
5 | 2 | ||||||
Singapore
|
5 | 2 | ||||||
Philippines
|
5 | 2 | ||||||
Thailand
|
3 | 5 | ||||||
Rest of World
|
3 | 3 | ||||||
|
|
|
|
|||||
100 | % | 100 | % | |||||
|
|
|
|
(1) |
Revenues attributable to a country are based on location of customer site.
|
For the Three Months
Ended
|
||||||||||||
October 3,
|
September 27,
|
Dollar/Point
|
||||||||||
2021
|
2020
|
Change
|
||||||||||
(in millions)
|
||||||||||||
Gross profit
|
$ | 571.0 | $ | 458.9 | $ | 112.1 | ||||||
Percent of total revenues
|
60.1 | % | 56.0 | % | 4.1 |
For the Three Months
Ended
|
||||||||||||
October 3,
|
September 27,
|
Dollar
|
||||||||||
2021
|
2020
|
Change
|
||||||||||
(in millions)
|
||||||||||||
Selling and administrative
|
$ | 134.8 | $ | 115.8 | $ | 19.0 | ||||||
Percent of total revenues
|
14.2 | % | 14.1 | % |
For the Three Months
Ended
|
||||||||||||
October 3,
|
September 27,
|
Dollar
|
||||||||||
2021
|
2020
|
Change
|
||||||||||
(in millions)
|
||||||||||||
Engineering and development
|
$ | 107.2 | $ | 94.9 | $ | 12.3 | ||||||
Percent of total revenues
|
11.3 | % | 11.6 | % |
For the Three Months
Ended
|
||||||||||||
October 3,
|
September 27,
|
Dollar
|
||||||||||
2021
|
2020
|
Change
|
||||||||||
(in millions)
|
||||||||||||
Interest income
|
$ | (0.6 | ) | $ | (1.1 | ) | $ | 0.5 | ||||
Interest expense
|
3.8 | 6.2 | $ | (2.4 | ) | |||||||
Other (income) expense, net
|
21.5 | 0.8 | $ | 20.7 |
For the Three Months
Ended
|
||||||||||||
October 3,
|
September 27,
|
Dollar
|
||||||||||
2021
|
2020
|
Change
|
||||||||||
(in millions)
|
||||||||||||
Semiconductor Test
|
$ | 265.0 | $ | 189.1 | $ | 75.9 | ||||||
System Test
|
31.8 | 47.4 | (15.6 | ) | ||||||||
Wireless Test
|
31.7 | 10.9 | 20.8 | |||||||||
Industrial Automation
|
(4.2 | ) | (5.3 | ) | 1.1 | |||||||
Corporate and Other (1)
|
(26.5 | ) | 21.6 | (48.1 | ) | |||||||
|
|
|
|
|
|
|||||||
$ | 297.8 | $ | 263.7 | $ | 34.1 | |||||||
|
|
|
|
|
|
(1) |
Included in Corporate and Other are: contingent consideration adjustments, loss on convertible debt conversions, interest income, interest expense, net foreign exchange gains (losses), pension, intercompany eliminations and acquisition related: (a) charges; (b) legal fees; (c) compensation.
|
For the Nine Months
Ended
|
||||||||||||
October 3,
|
September 27,
|
Dollar
|
||||||||||
2021
|
2020
|
Change
|
||||||||||
(in millions)
|
||||||||||||
Semiconductor Test
|
$ | 2,050.3 | $ | 1,735.8 | $ | 314.5 | ||||||
System Test
|
340.3 | 306.1 | 34.2 | |||||||||
Industrial Automation
|
263.2 | 187.8 | 75.4 | |||||||||
Wireless Test
|
164.5 | 133.2 | 31.3 | |||||||||
Corporate and Other
|
(0.4 | ) | (0.3 | ) | (0.1 | ) | ||||||
|
|
|
|
|
|
|||||||
$ | 2,817.8 | $ | 2,362.5 | $ | 455.3 | |||||||
|
|
|
|
|
|
For the Nine Months
Ended
|
||||||||
October 3,
|
September 27,
|
|||||||
2021
|
2020
|
|||||||
Taiwan
|
36 | % | 40 | % | ||||
China
|
18 | 15 | ||||||
United States
|
10 | 9 | ||||||
Korea
|
8 | 12 | ||||||
Europe
|
7 | 6 | ||||||
Philippines
|
5 | 2 | ||||||
Japan
|
4 | 5 | ||||||
Thailand
|
4 | 4 | ||||||
Malaysia
|
4 | 2 | ||||||
Singapore
|
3 | 2 | ||||||
Rest of World
|
1 | 3 | ||||||
|
|
|
|
|||||
100 | % | 100 | % | |||||
|
|
|
|
(1) |
Revenues attributable to a country are based on location of customer site.
|
For the Nine Months
Ended
|
||||||||||||
October 3,
|
September 27,
|
Dollar/Point
|
||||||||||
2021
|
2020
|
Change
|
||||||||||
(in millions)
|
||||||||||||
Gross profit
|
$ | 1,679.6 | $ | 1,336.0 | $ | 343.6 | ||||||
Percent of total revenues
|
59.6 | % | 56.5 | % | 3.1 |
For the Nine Months
Ended
|
||||||||||||
October 3,
|
September 27,
|
Dollar
|
||||||||||
2021
|
2020
|
Change
|
||||||||||
(in millions)
|
||||||||||||
Selling and administrative
|
$ | 404.8 | $ | 340.5 | $ | 64.3 | ||||||
Percent of total revenues
|
14.4 | % | 14.4 | % |
For the Nine Months
Ended
|
||||||||||||
October 3,
|
September 27,
|
Dollar
|
||||||||||
2021
|
2020
|
Change
|
||||||||||
(in millions)
|
||||||||||||
Engineering and development
|
$ | 317.6 | $ | 274.2 | $ | 43.4 | ||||||
Percent of total revenues
|
11.3 | % | 11.6 | % |
For the Nine Months
Ended
|
||||||||||||
October 3,
|
September 27,
|
Dollar
|
||||||||||
2021
|
2020
|
Change
|
||||||||||
(in millions)
|
||||||||||||
Interest income
|
$ | (2.1 | ) | $ | (5.2 | ) | $ | 3.1 | ||||
Interest expense
|
15.4 | 17.8 | (2.4 | ) | ||||||||
Other (income) expense, net
|
25.2 | 3.6 | 21.6 |
For the Nine Months
Ended
|
||||||||||||
October 3,
|
September 27,
|
Dollar
|
||||||||||
2021
|
2020
|
Change
|
||||||||||
(in millions)
|
||||||||||||
Semiconductor Test
|
$ | 778.7 | $ | 571.7 | $ | 207.0 | ||||||
System Test
|
116.8 | 115.0 | 1.8 | |||||||||
Wireless Test
|
63.8 | 35.6 | 28.2 | |||||||||
Industrial Automation
|
(14.6 | ) | (32.0 | ) | 17.4 | |||||||
Corporate and Other (1)
|
(38.9 | ) | (12.2 | ) | (26.7 | ) | ||||||
|
|
|
|
|
|
|||||||
$ | 905.8 | $ | 678.1 | $ | 227.7 | |||||||
|
|
|
|
|
|
(1) |
Included in Corporate and Other are contingent consideration adjustments, loss on convertible debt conversions, interest income, interest expense, net foreign exchange gains (losses), pension, intercompany eliminations, and acquisition related: (a) charges; (b) legal fees; (c) compensation.
|
Item 3:
|
Quantitative and Qualitative Disclosures about Market Risks
|
Hypothetical Change in Teradyne Stock Price
|
Fair Value
|
Estimated change
in fair value |
Hypothetical
percentage increase (decrease) in fair value |
|||||||||
10% Increase
|
$ | 601,331 | $ | 54,867 | 10.0 | % | ||||||
No Change
|
546,464 | — | — | |||||||||
10% Decrease
|
491,600 | (54,864 | ) | (10.0 | ) |
Item 4:
|
Controls and Procedures
|
Item 1:
|
Legal Proceedings
|
Item 1A:
|
Risk Factors
|
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
|
||||||||||||||||||||
July 5, 2021 - August 1, 2021
|
501 | $ | 125.31 | 500 | $ | 1,740,717 | ||||||||||||||||||
August 2, 2021 – August 29, 2021
|
545 | 121.08 | 545 | 1,674,719 | ||||||||||||||||||||
August 30, 2021 – October 3, 2021
|
679 | 119.22 | 679 | 1,593,820 | ||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
1,725 | (1 | ) | $ | 121.58 | (1 | ) | 1,724 | |||||||||||||||||
|
|
|
|
|
|
(1) |
Includes approximately two thousand shares at an average price of $125.40 withheld from employees for the payment of taxes.
|
Item 4:
|
Mine Safety Disclosures
|
Item 6:
|
Exhibits
|
* |
Management Contract or Compensatory Plan
|
TERADYNE, INC.
|
Registrant
|
/
S
/ S
ANJAY
M
EHTA
|
Sanjay Mehta
Vice President,
Chief Financial Officer and Treasurer
(Duly Authorized Officer
and Principal Financial Officer)
|
November 5, 2021
|
Exhibit 4.1
TERADYNE, INC.
and
WILMINGTON TRUST, NATIONAL ASSOCIATION
as Trustee
FIRST SUPPLEMENTAL INDENTURE
Dated as of November 4, 2021
Supplementing the
INDENTURE
Dated as of December 12, 2016
1.25% Senior Convertible Notes due 2023
FIRST SUPPLEMENTAL INDENTURE (this Supplemental Indenture), dated as of November 4, 2021, between Teradyne, Inc., a Massachusetts corporation, as issuer (the Company), and Wilmington Trust, National Association, as trustee (the Trustee).
WHEREAS, the Company and the Trustee have executed and delivered that certain indenture (the Existing Indenture, and the Existing Indenture, as supplemented by this Supplemental Indenture, the Indenture), dated as of December 12, 2016, relating to the Companys 1.25% Senior Convertible Notes due 2023 (the Notes); and
WHEREAS, the execution and delivery of this Supplemental Indenture without the consent of Holders is authorized by Section 9.01(k) of the Existing Indenture.
NOW, THEREFORE, each party to this Supplemental Indenture agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Notes.
Capitalized terms used in this Supplemental Indenture without definition have the respective meanings given to them in the Existing Indenture.
Article 1. AMENDMENTS
Notwithstanding anything to the contrary in Section 10.02(b) of the Existing Indenture, the following Settlement Methods will in no event apply to the conversion of any Note with a Conversion Date that is on or after the date of this Supplemental Indenture: (A) Physical Settlement; or (B) Combination Settlement with a Specified Dollar Amount that is less than $1,000 per $1,000 principal amount of Notes.
Article 2. MISCELLANEOUS
SECTION 2.01. INCORPORATION BY REFERENCE OF CERTAIN PROVISIONS OF THE EXISTING INDENTURE.
The provisions of Sections 11.01 and 11.08 to 11.17 of the Existing Indenture will apply to this Supplemental Indenture with the same force and effect as if such Sections were reproduced in this Supplemental Indenture, mutatis mutandis.
SECTION 2.02. RECITALS.
The Recitals set forth in this Supplemental Indenture are set forth exclusively by the Company, and the Trustee will not have any liability or responsibility with respect to such Recitals.
SECTION 2.03. THE TRUSTEE.
The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the statements contained herein, all of which are made solely by the Issuer, and the Trustee assumes no responsibility for their correctness.
SECTION 2.04. CONTINUING EFFECT.
Except as expressly supplemented and amended by this Supplemental Indenture, the Existing Indenture shall continue in full force and effect in accordance with the provisions thereof, and the Existing Indenture (as supplemented and amended by this Supplemental Indenture) is in all respects hereby ratified and confirmed. This Supplemental Indenture and all the terms and conditions of this Supplemental Indenture, with respect to the Notes, shall be and be deemed to be part of the terms and conditions of the Indenture for any and all purposes.
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
3
IN WITNESS WHEREOF, the parties to this Supplemental Indenture have caused this Supplemental Indenture to be duly executed as of the date first written above.
TERADYNE, INC. |
||
By: | /s/ Sanjay Mehta | |
Name: Sanjay Mehta |
||
Title: Chief Financial Officer | ||
WILMINGTON TRUST, NATIONAL ASSOCIATION, AS TRUSTEE | ||
By: | /s/ Arlene Thelwell | |
Name: Arlene Thelwell | ||
Title: Vice President |
[Signature Page to First Supplemental Indenture]
Exhibit 10.1
Teradyne, Inc.
Deferral Plan for Non-Employee Directors
(Restated Effective January 1, 2005)
WHEREAS, Teradyne, Inc. (the Company) has established the Teradyne, Inc. Deferral Plan for Non-Employee Directors, effective January 1, 2001, and amended as of March 1, 2003, (the Prior Plan) which provides each Non-Employee Director of the Company with an election to defer receipt of his or her Compensation from the Company; and
WHEREAS, the Company wishes to amend and restate such Prior Plan to comply with Section 409A with respect to Compensation deferred after December 31, 2004 and expand the elections permitted under the Prior Plan.
NOW, THEREFORE, the Company hereby amends and restates the Prior Plan to read in its entirety as set forth below, as so amended and restated (the Plan). The Plan has been operated in compliance with Section 409A since January 1, 2005 with respect to amounts subject to Section 409A. This amendment and restatement is intended to memorialize any changes in operation of the Plan as of that date as required by Section 409A. All other changes are effective as otherwise provided herein.
1. |
Eligibility. |
Each person who is a Non-Employee Director on December 1, 2004 is eligible to participate in the Plan for the Plan Year beginning January 1, 2005. All other persons who are Non-Employee Directors on December 1 of any calendar year beginning in or after December 1, 2005 are eligible to participate in the Plan Year beginning the immediately following January 1. A Non-Employee Director who is eligible to participate may become a Participant by making a deferral election with respect to Compensation payable in the following Plan Year under Section 2. Eligibility to participate in the Plan for any Non-Employee Director automatically ends upon the termination of the individuals status as a member of the Board of Directors. If the Non-Employee Director becomes an Employee then any deferral election for Compensation payable in the Plan Year in which such employment commences shall remain in effect for the balance of the Plan Year but no further deferral elections may be made under the Plan.
2. |
Participation. |
A. Each Non-Employee Director who makes an election to defer the receipt of Compensation for any Plan Year must complete a Deferral Election Form, no later than the December 1 prior to the first day of the Plan Year with respect to which it is intended to be effective and deliver such completed form to the Companys HR director or other designated Company Employee. A Deferral Election Form may be modified or withdrawn by the Participant prior to December 1 preceding the Plan Year to which it relates. The last completed form delivered to the HR director prior to or on December 1 and not withdrawn as of that date, shall be considered the Deferral Election Form for the upcoming Plan Year and shall be irrevocable after such December 1.
B. Each Non-Employee Director who does not timely complete and deliver a Deferral Election Form for any Plan Year shall not defer receipt of any Compensation for such Plan Year and shall receive any and all Compensation to which he or she is entitled during such Plan Year in accordance with the Companys customary practices.
3. |
Elections. |
The Deferral Election Form for each Plan Year Deferral shall include the following elections:
A. An election to defer all the cash Compensation or, effective for Plan Years beginning January 1, 2007, all the Shares or both that are otherwise payable to the Non-Employee Director in the next Plan Year.
B. An election of the manner in which the cash portion of the Plan Year Deferral shall be allocated under the terms of Section 4(B)(1), as amended from time to time.
C. An election as to whether the Plan Year Deferral is payable, on distribution, in a lump sum or, effective for Plan Years beginning on or after January 1, 2007, such number of annual installments (up to a maximum of 15) as the Non-Employee Director elects.
4. |
Accounting. |
A. The Company or its designee shall establish an account for each Participant for recordkeeping purposes only, including sufficient subaccounts to reflect all of Participants elections in Section 3 for all such Participants Plan Year Deferrals. The account and subaccounts are intended only for the purposes of determining the amounts to be distributed to the Participant under the Plan. Grandfathered Accounts shall be subject only to the terms of the Plan which were in effect under the Prior Plan, unless the Board elects at any time, to make them subject to the terms of the amended and restated Plan by a resolution to that effect.
B. The account and subaccount shall be adjusted as follows:
1. Cash deferred by any Participant will be allocated, in accordance with the Participants election, to either (a) a notional account, or (b) a Deferred Stock Unit account (DSU Account).
a. Notional Account. Any amount which the Participant has allocated to a notional account, shall be credited with earnings, quarterly, at the rate in effect at the beginning of each Plan Year on 10 year Treasury Notes.
b. DSU Account. Any amount which the Participant has allocated to the DSU Account will be converted into a number of Deferred Stock Units on the date the cash amounts deferred would have been paid to the Participant. The number of Deferred Stock Units credited to the Participants DSU Account with respect to each cash deferral shall be determined by dividing the cash amount deferred by the Fair Market Value of the Common Stock on such date. If any cash dividends are subsequently declared with respect to the Common Stock then the cash that would have been paid to the Participant as dividends if he or she had owned the number of whole shares of Common Stock represented by the Deferred Stock Units shall, on the date such dividend is paid, be
2
deemed to be invested in Deferred Stock Units. The number of Deferred Stock Units credited to the Participants DSU Account with respect to each dividend shall be determined by dividing the amount of the cash dividend by the Fair Market Value of the Common Stock on the date the dividend would have been paid.
2. Any Shares deferred by the Participant shall be separately accounted for under this Section 4(B)(2), in a subaccount of the DSU Account. The number of Shares deferred shall also be converted into Deferred Stock Units, crediting the Participant with one Deferred Stock Unit for each Share deferred. Any Shares which are not vested at the time they are credited to the DSU Account shall continue to vest in accordance with the terms of the applicable agreement evidencing the award of such Shares. Any cash dividends payable with respect to the deferred Shares shall be treated as specified in Section 4(B)(1)(b) and shall vest in accordance with the terms applicable to the Shares.
5. |
Voting Rights in Deferred Stock Units. |
No Participant shall be entitled to any voting rights with respect to any amounts or Shares treated as converted into Deferred Stock Units.
6. |
Distributions. |
A. Generally. Distributions of each Plan Year Deferral shall be made as a lump sum, or in installments, in accordance with the terms of the Deferral Election Form the Participant has completed with respect to the Plan Year Deferral. A Participant shall become entitled to distributions following his or her separation from service as defined in Section 409A. Such distributions shall be made or commence within 90 days after the date of the Participants separation from service, subject to the provisions of Section 6(F). If distributions are to be made in installments then each annual installment shall be made within 30 days before or after the anniversary of the first installment distribution, except that if the first installment is delayed in accordance with Section 6(F), then each successive annual installment will be made within 90 days day following the anniversary of the Participants separation from service.
B. Lump Sum. Any distributions of a Plan Year Deferral to be made in a lump sum shall consist of (i) cash, which is an amount equal to the aggregate balance in the Participants notional account with respect to such Plan Year Deferral on the distribution date, and (ii) that number of shares of Common Stock equal to the aggregate number of vested Deferred Stock Units with respect to such Plan Year Deferral in the Participants DSU Account on the distribution date. Any unvested Deferred Stock Units shall be forfeited upon the Participants termination of service as a member of the Board of Directors. The cash and the shares of Common Stock may be distributed separately and at different times within the 90 day payment period.
C. Installments. Each installment distribution of any Plan Year Deferral shall consist of (i) such amount of cash as is determined by dividing the aggregate balance in the Participants notional account with respect to such Plan Year Deferral on the date of such installment distribution by the total number of remaining installment distributions elected by the Participant in his or her Deferral Election Form with respect to such Plan Year Deferral and (ii) that number of shares of Common Stock equal to the aggregate number
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of vested Deferred Stock Units in the Participants DSU Account with respect to such Plan Year Deferral on the date of such installment distribution divided by the total number of remaining installment distributions elected by the Participant in his or her Deferral Election Form with respect to such Plan Year Deferral; provided that the number of shares of Common Stock distributed may be rounded up or down to the nearest one share for ease of administration.
D. Form of Distribution. Amounts allocated to the notional account shall be distributed in cash and amounts allocated to DSU Account shall be distributed in shares of Common Stock. Shares of Common Stock distributed under the Plan shall be issued from either the 2006 Equity and Cash Compensation Incentive Plan of the Company (the 2006 Compensation Plan) with respect to any Shares deferred subsequent to the adoption of the 2006 Compensation Plan by the Companys shareholders, or the Companys 1997 Employee Stock Option Plan with respect to any Shares deferred prior to the adoption of the 2006 Compensation Plan by the Companys shareholders. Distribution shall be made to the Participant, or if the Participant has died to the Participants Beneficiary. The Company may distribute the value of any fractional Deferred Stock Unit in cash, based on the Fair Market Value on the date any shares of Common Stock are distributed.
E. Death. If the Participant dies prior to the total distribution of his or her account then the vested balance that is undistributed at the time of the Participants death, notwithstanding any prior election by the Participant for installment distributions, shall be distributed to the Participants Beneficiary, in a lump sum, within 90 days following the Participants death.
F. Specified Employee. If at the time of separation from service the Participant is considered a specified employee as defined in Section 409A then, notwithstanding the foregoing, the distribution of his or her account shall not be made, or commence, until six months and one day after such separation from service, but installments shall thereafter be distributed as if the initial installment had been made on the date of separation.
G. Special 2008 Election. Notwithstanding the foregoing terms of the Plan, in accordance with the transition provisions of IRS Notice 2007-86, the Participants who have previously made a proper election to defer Compensation for 2005, 2006, 2007 and 2008 may designate, in such manner as the HR director determines, prior to December 31, 2008, whether such Plan Year Deferrals shall be distributed in a lump sum or in installments, and if in installments, the number of such installments.
7. |
Amendments and Termination. |
The Board of Directors may amend or terminate the Plan at any time, which may include, without limitation, action to prohibit any future deferral under the Plan; provided that no such action shall decrease the value of the Participants account with respect to Deferral Elections made prior to such termination or amendment and such amendment or termination shall be consistent with Section 409A.
8. |
Definitions. |
As used in the Plan, the following terms shall have the following meanings:
A. Beneficiary means the person designated or determined under Section 10(C).
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B. Board of Directors means the Board of Directors of the Company.
C. Committee means the Compensation Committee, or any successor to such Compensation Committee, or any other Committee of the Board of Directors authorized by the Board of Directors to administer the Plan.
D. Common Stock means the common stock, $0.125 par value per share, of the Company.
E. Compensation means any meetings fees, retainer or other amounts (except for reimbursed expenses), whether in cash or, effective January 1, 2007, in Shares, payable to the Non-Employee Director for services as such Non-Employee Director.
F. Deferral Election Form means the document or other communication by which the HR Director has Non-Employee Directors elect to defer receipt of Compensation under the Plan.
G. Deferred Stock Units, which are expressed as a number in the DSU account of a Participant refer to the number of shares of Common Stock that a Participant will become entitled to receive upon distribution of his or her Plan Year Deferrals in accordance with Section 6.
H. Employee means a common law employee of Teradyne, Inc. or any of its subsidiaries.
I. Fair Market Value of the Common Stock means, prior to June 1, 2006, the opening price for the date it is being determined, as officially quoted by the New York Stock Exchange. Effective June 1, 2006, Fair Market Value shall have the meaning set forth in the 2006 Compensation Plan.
J. Grandfathered Accounts mean those accounts for Participants which were established with respect to deferrals prior to December 31, 2004 which had not been distributed on such date.
K. Non-Employee Director means any person who is (i) a member of the Board of Directors but who is not an Employee of the Company, and (ii) is eligible to receive awards under the 2006 Compensation Plan (or, prior to its approval by the Companys shareholders, was eligible to receive awards under the Companys 1997 Employee Stock Option Plan).
L. Participant means a Non-Employee Director who is eligible to defer receipt of Compensation under Section 1 and who has delivered a completed Deferral Election Form in accordance with Section 2.
M. Plan Year means the calendar year. The first plan year of the Plan, as amended and restated, begins January 1, 2005.
N. Plan Year Deferral means cash or Shares deferred for any Plan Year in accordance with a Non-Employee Directors Deferral Election Form.
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O. Section 409A means Section 409A of the Internal Revenue Code of 1986, as amended, and guidance issued thereunder from time to time.
P. Shares means either Restricted Stock or Restricted Stock Units granted under the 2006 Compensation Plan of the Company.
9. |
Dilutions and Other Adjustments. |
In the event of any change in the outstanding shares of the Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, spin-off, reorganization, combination or exchange of shares or other similar corporate change, then the Board of Directors or the Committee shall determine, in their sole discretion, that such change equitably requires an adjustment in the number or kind of shares then held in a Participants DSU account, then such adjustments shall be made and such determination shall be conclusive and binding for all purposes.
10. |
Miscellaneous Provisions. |
A. The Plan shall be administered by the Committee, which shall have the exclusive right and full discretion to interpret the Plan and make all determinations necessary or advisable for its administration, including, without limitation, the authority to remedy ambiguities inconsistencies or omissions. All determinations by the Committee shall be final and binding on all persons.
B. The Plan shall be an unfunded plan and a Participants rights and interest under the Plan may not be anticipated, mortgaged, assigned or otherwise encumbered, transferred, or conveyed in advance of actual receipt and any attempt so to do shall be null and void. No part of the amounts payable shall, prior to actual payment be subject to seizure, attachment, garnishment or sequestration for the payment of any debts or judgments of any kind. Any amounts deferred under the Plan shall remain the assets of the Company until paid in accordance with the provisions of the Plan, and in the event of the Companys insolvency, will be subject to the claims of the Companys general creditors. In the event of the Companys insolvency, a Participant shall be a general creditor of the Company with respect to his or her claim for benefits hereunder.
C. Each Participant shall have the right to designate, from time to time, a beneficiary, primary as well as contingent, to receive benefits payable in accordance with the terms of the Plan. If the HR director has not received a completed beneficiary designation form during the Participants life then the Participants beneficiary under the Plan shall be his or her spouse, if any, and if none, his or her estate. The delivery of a completed beneficiary designation form to the HR Director shall replace any prior form.
D. The Company may establish one or more trusts pursuant to one or more trust agreements between the Company and a trustee named in such agreement, and as amended from time to time, on such terms as the Company shall determine (the Trust). The Company may transfer assets to said Trust, as it determines in its sole discretion, for purposes of providing for the payment of its liabilities under the Plan. The provisions of
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the Plan shall govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust shall govern the rights of the Company, the Participants and any creditors of the Company to the assets of the Trust. To the extent any distributions are made from said Trust to any Participant for purposes of satisfying any obligation the Company may have under the Plan that distribution shall reduce the Companys obligation hereunder.
E. The Plan is intended to comply with Section 409A with respect to those accounts which are subject to its terms and to such extent shall be administered in accordance with its terms and that intention; provided that the Company shall have no obligation to any Participant or his or her beneficiary if there is any failure to comply with Section 409A or with respect to any liability incurred by such Participant or any other person as a result of such failure.
F. The Plan is established and shall be construed in accordance with the laws of the Commonwealth of Massachusetts.
G. The provisions of the Plan shall bind and inure to the benefit of the Company and its successors and assigns, or any Participant and his or her beneficiaries.
H. Distributions hereunder shall be subject to any applicable tax withholding and the Company shall have the discretion to withhold cash for such purpose to the extent available to satisfy any withholding obligation with respect to any cash or Common Stock distributed under the Plan.
I. If any distribution is to be made to any person who is a minor or is declared incompetent or to a person the Board of Directors determines in good faith to be incapable of handling the disposition of such persons property (which the Board of Directors shall have no obligation to determine), the Board of Directors may direct payment to the guardian, legal representative or person having the care and custody of such person and such payment shall discharge the Companys obligations hereunder to the extent of such payment.
Approved by the Teradyne, Inc. Board of Directors May 24, 2006.
Amended by the Teradyne, Inc. Board of Directors on November 4, 2008.
Amended by the Teradyne, Inc. Board of Directors on August 18, 2021.
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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 5, 2021
By: | /S/ MARK E. JAGIELA | |
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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 5, 2021
By: | /S/ SANJAY MEHTA | |
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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 October 3, 2021 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 5, 2021 |
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 October 3, 2021 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 5, 2021 |