UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q/A
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(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 2, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ______________
Commission File No. 1-6462
TERADYNE, INC.
(Exact name of registrant as specified in its charter)
Massachusetts 04-2272148
(State or Other Jurisdiction (I.R.S.Employer
Incorporation or Organization) Identification No.)
321 Harrison Avenue, Boston, Massachusetts 02118
(Address of principal executive offices) (Zip Code)
617-482-2700
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to the
filing requirements for the past 90 days. Yes X No _
The number of shares outstanding of the registrant's only class of Common
Stock as of July 28, 1995 was 75,631,248 shares.
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<CAPTION>
TERADYNE, INC.
INDEX
Page No.
<S> <C>
Part I. Financial Information:
Condensed Consolidated Balance Sheets -
July 2, 1995 and December 31, 1994.......................................................3
Condensed Consolidated Statements of Income -
Quarters and Six Months Ended July 2, 1995 and July 3, 1994..............................4
Condensed Consolidated Statements of Cash Flows -
Six Months Ended July 2, 1995 and July 3, 1994...........................................5
Notes to Condensed Consolidated Financial Statements..........................................6
Management's Discussion and Analysis of
Financial Condition and Results of Operations...........................................7-8
Part II. Other Information:
Item 4. Submission of Matters to a Vote of Security Holders...................................9
Item 6(b). Reports on Form 8-K...............................................................9
</TABLE>
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<TABLE>
<CAPTION>
TERADYNE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
July 2, 1995 December 31, 1994
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents.......................................... $ 145,519 $ 182,811
Marketable securities.............................................. 98,902 19,766
Accounts receivable - trade........................................ 178,514 129,074
Inventories:
Parts......................................................... 69,148 49,216
Assemblies in progress........................................ 43,664 42,667
---------- -----------
112,812 91,883
Refundable income taxes............................................ 1,064
Deferred tax assets................................................ 14,767 14,767
Prepayments and other current assets............................... 9,980 7,294
---------- -----------
Total current assets.......................................... 560,494 446,659
Property, at cost....................................................... 421,958 395,248
Less accumulated depreciation...................................... (223,207) (211,606)
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Net property.................................................. 198,751 183,642
Other assets............................................................ 28,311 25,641
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Total assets.................................................. $ 787,556 $ 655,942
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LIABILITIES
Current liabilities:
Notes payable - banks.............................................. $ 9,835 $ 8,431
Current portion of long term debt.................................. 394 250
Accounts payable - trade........................................... 25,400 13,305
Accrued employees' compensation and withholdings................... 46,419 38,263
Unearned service revenue and customer advances..................... 50,021 46,386
Other accrued liabilities.......................................... 28,515 27,088
Income taxes payable............................................... 12,247 5,437
----------- -----------
Total current liabilities..................................... 172,831 139,160
Deferred tax liabilities................................................ 14,722 14,722
Long-term debt.......................................................... 9,284 8,806
----------- -----------
Total liabilities............................................. 196,837 162,688
----------- -----------
SHAREHOLDERS' EQUITY
Common stock $0.125 par value, authorized 125,000,000 shares
(75,000,000 in 1994), issued and outstanding after deduction
of reacquired shares 75,221,296 (36,351,527 in 1994)................ 9,400 4,544
Additional paid-in capital.............................................. 273,621 248,497
Retained earnings....................................................... 307,698 240,213
----------- ----------
Total shareholders' equity.................................... 590,719 493,254
----------- -----------
Total liabilities and shareholders' equity.................... $ 787,556 $ 655,942
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<FN>
The accompanying notes, together with the Notes to Consolidated Financial
Statements included in the Company's Form 10-K for the year ended December 31,
1994 are an integral part of the condensed consolidated financial statements.
</FN>
</TABLE>
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<TABLE>
<CAPTION>
TERADYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
For the Quarters Ended For the Six Months Ended
(Dollars in thousands except per share amount)
July 2, 1995 July 3, 1994 July 2, 1995 July 3, 1994
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Net sales.................................. $ 256,133 $ 156,497 $ 469,382 $ 308,509
Expenses:
Cost of sales......................... 135,210 87,342 252,831 173,004
Engineering and development........... 25,433 17,305 44,943 33,162
Selling and administrative............ 37,178 31,764 71,609 63,635
------- ------- ------- -------
197,821 136,411 369,383 269,801
------- ------- ------- -------
Income from operations..................... 58,312 20,086 99,999 38,708
Other income (expense):
Interest income........................ 3,440 1,237 2,325 6,403
Interest expense....................... (507) (399) (956) (869)
----- ----- ----- -----
Income before income taxes................. 61,245 20,924 105,446 40,164
Provision for income taxes................. 22,491 6,277 37,961 12,049
------- ------ ------- ------
Net income................................ $ 38,754 $ 14,647 $ 67,485 $ 28,115
------- ------ ------- ------
Net income per common share................ $0.50 $0.20 $0.88 $0.38
Shares used in calculations of
net income per common share............ 77,416,000 73,458,000 76,620,000 73,956,000
---------- ---------- ---------- ----------
<FN>
The accompanying notes, together with the Notes to Consolidated Financial
Statements included in the Company's Form 10-K for the year ended December 31,
1994 are an integral part of the condensed consolidated financial statements.
</FN>
</TABLE>
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<TABLE>
<CAPTION>
TERADYNE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended
July 2, 1995 July 3, 1994
(Dollars in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income........................................................ $ 67,485 $ 28,115
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation................................................... 16,118 15,776
Amortization................................................... 2,138 1,655
Other non-cash items, net...................................... 4,209 1,450
Changes in operating assets and liabilities:
Accounts receivable....................................... (49,440) (2,779)
Inventories............................................... (20,929) (7,557)
Refundable income taxes................................... 1,064 1,800
Other assets.............................................. (9,389) (9,337)
Accounts payable and accruals............................. 25,313 (3,418)
Income taxes payable...................................... 6,810 5,154
------- -------
Net cash provided by operating activities............. 43,379 30,859
------- -------
Cash flows from investing activities:
Additions to property............................................. (24,730) (8,692)
Increase in equipment manufactured by the Company................. (8,582) (2,406)
Maturities of marketable securities............................... 19,766
Purchases of marketable securities................................ (97,007)
--------- --------
Net cash used in investing activities................. (110,553) (11,098)
Cash flows from financing activities:
Payments of long term debt........................................ (98) (1,584)
Issuance of common stock under employee stock
option and stock purchase plans............................... 18,730 10,048
Tax benefit from stock options.................................... 11,250 3,145
Acquisition of treasury stock..................................... (24,597)
------ --------
Net cash flows provided by (used in) financing
activities........................................ 29,882 (12,988)
------ --------
Increase (decrease) in cash and cash equivalents....................... (37,292) 6,773
Cash and cash equivalents at beginning of period....................... 182,811 143,578
------- -------
Cash and cash equivalents at end of period............................. $ 145,519 $ 150,351
------- -------
Supplementary disclosure of cash flow information: Cash paid during
the period for:
Interest................................................ $ 962 $ 880
Income taxes............................................ 18,837 1,950
<FN>
The accompanying notes, together with the Notes to Consolidated Financial
Statements included in the Company's Form 10-K for the year ended December 31,
1994 are an integral part of the condensed consolidated financial statements.
</FN>
</TABLE>
<PAGE>
TERADYNE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
A. Financial Information
The accompanying condensed consolidated financial statements are unaudited.
However, in the opinion of management, all adjustments (consisting only of
normal recurring accrual entries) necessary for a fair presentation of such
information have been made.
B. Common Stock Split
On July 24, 1995 the Company's Board of Directors authorized a two for one
stock split effected in the form of a 100% stock dividend to be distributed
on August 29, 1995 to shareholders of record as of August 8, 1995.
As a result of the stock split, the accompanying condensed consolidated
financial statements reflect an increase in the number of outstanding
shares of common stock and the transfer of the par value of these
additional shares from paid-in capital. All share and per share amounts
have been restated to reflect the retroactive effect of the stock split,
except for the capitalization of the Company at December 31, 1994.
<PAGE>
Management's Discussion and Analysis of Financial Condition
and Results of Operations
<TABLE>
<CAPTION>
Results of Operations:
SELECTED RELATIONSHIPS WITHIN THE CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
For the Quarters Ended For the Six Months Ended
July 2, 1995 July 3, 1994 July 2, 1995 July 3, 1994
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Net sales........................................... $ 256,133 $ 156,479 $ 469,382 $ 308,509
---------- ---------- ---------- ----------
Net income.......................................... $ 38,754 $ 14,647 $ 67,485 $ 28,115
---------- ---------- ---------- ----------
Percentage of net sales:
Net sales...................................... 100% 100% 100% 100%
Expenses:
Cost of sales............................. 53 56 54 56
Engineering and development............... 10 11 10 11
Selling and administrative................ 14 20 15 21
Interest, net............................. (1) 0 (1) (1)
--- --- --- ---
76 87 78 87
Income before income taxes..................... 24 13 22 13
Provision for income taxes..................... 9 4 8 4
--- --- --- ---
Net income..................................... 15% 9% 14% 9%
--- --- --- ---
Provision for income taxes as a percentage
of income before income taxes.................. 37% 30% 36% 30%
--- --- --- ---
<FN>
Sales increased 64% to $256.1 million in the second quarter of 1995
compared to the second quarter of 1994. In the first six months of 1995, sales
increased 52% to $469.4 million compared to the first six months of 1994. The
growth in sales in the second quarter occurred in each of the major product
lines of the Company: semiconductor test systems and telecommunications systems
growing most rapidly followed by strong performance in backplane connection
systems and by more modest growth in assembly test systems. Sales of
semiconductor test systems were the major driver of the sales increase as
semiconductor manufacturers added capacity in response to rising demand for
their products. Telecommunications sales increased with the growing installation
of telephone-line test equipment at the Deutsche Bundepost Telekom in Germany.
Sales of backplane connection systems increased as a result of greater
penetration into the Company's high technology commercial customer base. As a
result of the increase in sales, income before taxes increased $40.3 million in
the second quarter and $65.3 million in the six months ending July 2, 1995 ,
compared to the same periods in 1994.
Incoming orders were $410 million in the second quarter of 1995 compared to
$186 million in the second quarter of 1994. In the second quarter of 1995,
incoming test equipment orders included multi-year military contracts totaling
$98 million. Backlog at the end of the second quarter of 1995 was $644 million
compared to $323 million at the end of the second quarter of 1994.
<PAGE>
Cost of sales decreased from 56% of sales in the second quarter of 1994 to
53% in the second quarter of 1995. In the first six months of 1995, cost of
sales decreased to 54% of sales from 56% in the same period of 1994. The Company
has implemented an aggressive program with its vendors to lower the cost of
incoming materials in order to offset reduced sales prices for its products.
Additionally, cost of sales reduction comes as a result of sales volume
increasing while certain overhead components of cost of sales remain fixed.
Engineering and development expenses were 10% of sales in the second
quarter and the first six months of 1995, compared to 11% in the second quarter
and first six months of 1994. The dollar amount of these expenses has increased
at a lesser rate than sales have increased. The dollar amount increase was for
support of new product development efforts in semiconductor test systems, and
included a non-recurring charge of approximately $3 million.
Selling and administrative expenses decreased from 20% of sales to 14% of
sales in the second quarter of 1995 compared to the second quarter of 1994 and
from 21% of sales to 15% in the first six months of 1995 as compared to the
first six months of 1994. The dollar increase of these expenses has not kept
pace with the increase in the Company's sales.
In the first six months of 1995, the Company had net interest income of
$5.4 million compared to net interest income of $1.5 million in the first six
months of 1994. This change was due to higher levels of invested cash in the
first six months of 1995 compared to the first six months of 1994.
During the second quarter of 1995, the Company's effective tax rate
increased to 36% of pre-tax income on a year to date basis, creating a 37%
effective tax rate in the second quarter. The 1994 effective tax rate was 31% as
the Company utilized tax credit carryforward and foreign loss carryforward
amounts. In 1995, these carryforwards are essentially no longer available.
Changes in Financial Condition During the First Six Months of 1995
- - ------------------------------------------------------------------
During the first six months of 1995, cash and cash equivalents and
marketable securities increased $41.8 million to a balance of $244.4 million.
Cash flow provided by operations was $43.4 million. The Company generated cash
of $29.9 million under the Company's employee stock option and stock purchase
plans, including the tax related benefit. The Company used $33.3 million to fund
property and equipment additions during the six month period. While capital
spending outpaced depreciation expense, the net growth in investment in
property, plant and equipment was less than the growth in sales. From the end of
the year 1994, accounts receivable and inventories have increased at
approximately the same rate as the increase in sales.
</FN>
</TABLE>
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<CAPTION>
Item 4. Submission of Matters to a Vote of Security Holders
- - -----------------------------------------------------------
The annual meeting of security holders of the Company was held May 24, 1995. The
following were elected as Directors:
<S> <C> <C>
Total Vote Total Vote Withheld
Nominee For Each Nominee For Each Nominee
John P. Mulroney 29,463,406 206,057
Owen W. Robbins 29,362,125 307,338
Richard J. Testa 29,363,071 306,392
<FN>
The Term of office for the following directors continued after the meeting: Alexander V. d'Arbeloff; Edwin L. Artzt;
Albert Carnesale; Daniel S. Gregory; Dwight H. Hibbard; and James A. Prestridge.
An amendment to the Registrant's Restated Articles of Organization, to increase
the amount of the Registrant's authorized Common Stock, par value $0.125 per
share, from 75,000,000 to 125,000,000, was approved, with 26,581,818 shares
voting in favor, 3,025,951 shares voting against, and 61,694 shares abstaining.
</FN>
</TABLE>
Item 6(b). Reports on Form 8-K
- - -------------------------------
There had been no Form 8-K filings during the quarter ended July 2, 1995 as none
were required.
<TABLE>
<CAPTION>
SIGNATURES
----------
<S> <C>
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
TERADYNE, INC.
------------------------
Registrant
OWEN W.ROBBINS
------------------------
Owen W. Robbins
Executive Vice President
</TABLE>
October 26, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
<CIK> 0000097210
<NAME> TERADYNE, INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUL-02-1995
<EXCHANGE-RATE> 1.00
<CASH> 145,519
<SECURITIES> 98,902
<RECEIVABLES> 178,514
<ALLOWANCES> 0
<INVENTORY> 112,812
<CURRENT-ASSETS> 560,494
<PP&E> 421,958
<DEPRECIATION> 223,207
<TOTAL-ASSETS> 787,556
<CURRENT-LIABILITIES> 172,831
<BONDS> 0
<COMMON> 9,400
0
0
<OTHER-SE> 581,319
<TOTAL-LIABILITY-AND-EQUITY> 787,556
<SALES> 469,382
<TOTAL-REVENUES> 469,382
<CGS> 252,831
<TOTAL-COSTS> 369,383
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 956
<INCOME-PRETAX> 105,446
<INCOME-TAX> 37,961
<INCOME-CONTINUING> 67,485
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 67,485
<EPS-PRIMARY> 0.88
<EPS-DILUTED> 0.88
</TABLE>
