☒ | 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 $0.125per share | TER | Nasdaq Stock Market LLC |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Emerging growth company | ☐ | |||
Smaller reporting company | ☐ |
TERADYNE, INC.
INDEX
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Item 1. | |||||||||
1 | |||||||||
2 | |||||||||
3 | |||||||||
4 | |||||||||
5 | |||||||||
6 | |||||||||
Item 2. | |||||||||
Item 3. | |||||||||
Item 4. | |||||||||
Item 1. | |||||||||
Item 1A. | |||||||||
Item 2. | |||||||||
Item 4. | |||||||||
Item 6. |
Item 1: | Financial Statements |
July 3, 2022 | December 31, 2021 | |||||||
(in thousands, except per share amount) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 572,023 | $ | 1,122,199 | ||||
Marketable securities | 209,846 | 244,231 | ||||||
Accounts receivable, less allowance for credit losses of $1,849 and $2,012 at July 3, 2022 and December 31, 2021, respectively | 683,739 | 550,749 | ||||||
Inventories, net | 295,625 | 243,330 | ||||||
Prepayments | 498,093 | 406,266 | ||||||
Other current assets | 11,109 | 9,452 | ||||||
Total current assets | 2,270,435 | 2,576,227 | ||||||
Property, plant and equipment, net | 411,263 | 387,240 | ||||||
Operating lease right-of-use | 66,661 | 68,807 | ||||||
Marketable securities | 111,999 | 133,858 | ||||||
Deferred tax assets | 126,639 | 102,428 | ||||||
Retirement plans assets | 14,245 | 15,110 | ||||||
Other assets | 26,942 | 24,096 | ||||||
Acquired intangible assets, net | 62,509 | 75,635 | ||||||
Goodwill | 397,733 | 426,024 | ||||||
Total assets | $ | 3,488,426 | $ | 3,809,425 | ||||
LIABILITIES | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 175,606 | $ | 153,133 | ||||
Accrued employees’ compensation and withholdings | 190,506 | 253,667 | ||||||
Deferred revenue and customer advances | 163,127 | 146,185 | ||||||
Other accrued liabilities | 133,881 | 124,187 | ||||||
Operating lease liabilities | 17,770 | 19,977 | ||||||
Income taxes payable | 106,863 | 88,789 | ||||||
Current debt | 9,632 | 19,182 | ||||||
Total current liabilities | 797,385 | 805,120 | ||||||
Retirement plans liabilities | 141,884 | 151,141 | ||||||
Long-term deferred revenue and customer advances | 50,357 | 54,921 | ||||||
Long-term other accrued liabilities | 15,530 | 15,497 | ||||||
Deferred tax liabilities | 3,143 | 6,327 | ||||||
Long-term operating lease liabilities | 57,600 | 56,178 | ||||||
Long-term incomes taxes payable | 59,135 | 67,041 | ||||||
Debt | 64,796 | 89,244 | ||||||
Total liabilities | 1,189,830 | 1,245,469 | ||||||
Commitments and contingencies (Note Q) | 0 | 0 | ||||||
Mezzanine equity: | ||||||||
Convertible common shares | — | 1,512 | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common stock, $0.125 par value, 1,000,000 shares authorized; 157,880 and 162,251 shares issued and outstanding at July 3, 2022 and December 31, 2021, respectively | 19,735 | 20,281 | ||||||
Additional paid-in capital | 1,721,586 | 1,811,545 | ||||||
Accumulated other comprehensive loss | (52,959 | ) | (5,948 | ) | ||||
Retained earnings | 610,234 | 736,566 | ||||||
Total shareholders’ equity | 2,298,596 | 2,562,444 | ||||||
Total liabilities, convertible common shares and shareholders’ equity | $ | 3,488,426 | $ | 3,809,425 | ||||
October 2, 2022 | December 31, 2021 | |||||||
(in thousands, except per share amount) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 710,746 | $ | 1,122,199 | ||||
Marketable securities | 65,310 | 244,231 | ||||||
Accounts receivable, less allowance for credit losses of $1,865and $2,012 at October 2, 2022 and December 31, 2021, respectively | 530,349 | 550,749 | ||||||
Inventories, net | 310,754 | 243,330 | ||||||
Prepayments | 502,678 | 406,266 | ||||||
Other current assets | 7,717 | 9,452 | ||||||
Total current assets | 2,127,554 | 2,576,227 | ||||||
Property, plant and equipment, net | 415,181 | 387,240 | ||||||
Operating lease right-of-use assets, net | 61,430 | 68,807 | ||||||
Marketable securities | 111,039 | 133,858 | ||||||
Deferred tax assets | 130,207 | 102,428 | ||||||
Retirement plans assets | 13,805 | 15,110 | ||||||
Other assets | 29,311 | 24,096 | ||||||
Acquired intangible assets, net | 55,580 | 75,635 | ||||||
Goodwill | 375,799 | 426,024 | ||||||
Total assets | $ | 3,319,906 | $ | 3,809,425 | ||||
LIABILITIES | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 167,975 | $ | 153,133 | ||||
Accrued employees’ compensation and withholdings | 168,102 | 253,667 | ||||||
Deferred revenue and customer advances | 143,591 | 146,185 | ||||||
Other accrued liabilities | 126,457 | 124,187 | ||||||
Operating lease liabilities | 17,079 | 19,977 | ||||||
Income taxes payable | 64,141 | 88,789 | ||||||
Current debt | 14,596 | 19,182 | ||||||
Total current liabilities | 701,941 | 805,120 | ||||||
Retirement plans liabilities | 137,317 | 151,141 | ||||||
Long-term deferred revenue and customer advances | 48,488 | 54,921 | ||||||
Long-term other accrued liabilities | 15,506 | 15,497 | ||||||
Deferred tax liabilities | 1,327 | 6,327 | ||||||
Long-term operating lease liabilities | 51,872 | 56,178 | ||||||
Long-term incomes taxes payable | 59,135 | 67,041 | ||||||
Debt | 50,195 | 89,244 | ||||||
Total liabilities | 1,065,781 | 1,245,469 | ||||||
Commitments and contingencies (Note Q) | ||||||||
Mezzanine equity: | ||||||||
Convertible common shares | — | 1,512 | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common stock , $0.125 par value, 1,000,000 shares authorized; 155,782 and 162,251shares issued and outstanding at October 2, 2022 and December 31, 2021, respectively | 19,473 | 20,281 | ||||||
Additional paid-in capital | 1,746,779 | 1,811,545 | ||||||
Accumulated other comprehensive loss | (84,779 | ) | (5,948 | ) | ||||
Retained earnings | 572,652 | 736,566 | ||||||
Total shareholders’ equity | 2,254,125 | 2,562,444 | ||||||
Total liabilities, convertible common shares and shareholders’ equity | $ | 3,319,906 | $ | 3,809,425 | ||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, | July 4, | July 3, | July 4, | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(in thousands, except per share amount) | ||||||||||||||||
Revenues: | ||||||||||||||||
Products | $ | 697,954 | $ | 951,945 | $ | 1,323,829 | $ | 1,612,453 | ||||||||
Services | 142,812 | 133,783 | 272,307 | 254,881 | ||||||||||||
Total revenues | 840,766 | 1,085,728 | 1,596,136 | 1,867,334 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Cost of products | 274,674 | 388,845 | 517,690 | 656,629 | ||||||||||||
Cost of services | 59,703 | 49,894 | 117,124 | 102,098 | ||||||||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) | 334,377 | 438,739 | 634,814 | 758,727 | ||||||||||||
Gross profit | 506,389 | 646,989 | 961,322 | 1,108,607 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling and administrative | 139,533 | 140,187 | 279,718 | 269,984 | ||||||||||||
Engineering and development | 111,951 | 110,021 | 220,067 | 210,423 | ||||||||||||
Acquired intangible assets amortization | 4,871 | 5,402 | 9,934 | 10,938 | ||||||||||||
Restructuring and other | 2,044 | 2,507 | 17,758 | (4,623 | ) | |||||||||||
Total operating expenses | 258,399 | 258,117 | 527,477 | 486,722 | ||||||||||||
Income from operations | 247,990 | 388,872 | 433,845 | 621,885 | ||||||||||||
Non-operating (income) expense: | ||||||||||||||||
Interest income | (951 | ) | (633 | ) | (1,653 | ) | (1,441 | ) | ||||||||
Interest expense | 913 | 5,566 | 1,925 | 11,569 | ||||||||||||
Other (income) expense, net | 9,436 | (87 | ) | 14,622 | 3,738 | |||||||||||
Income before income taxes | 238,592 | 384,026 | 418,951 | 608,019 | ||||||||||||
Income tax provision | 40,805 | 55,707 | 59,236 | 74,188 | ||||||||||||
Net income | $ | 197,787 | $ | 328,319 | $ | 359,715 | $ | 533,831 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 1.24 | $ | 1.98 | $ | 2.24 | $ | 3.21 | ||||||||
Diluted | $ | 1.16 | $ | 1.76 | $ | 2.07 | $ | 2.85 | ||||||||
Weighted average common shares—basic | 159,563 | 165,995 | 160,805 | 166,243 | ||||||||||||
Weighted average common shares—diluted | 171,159 | 186,750 | 173,367 | 187,245 | ||||||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
October 2, 2022 | October 3, 2021 | October 2, 2022 | October 3, 2021 | |||||||||||||
(in thousands, except per share amount) | ||||||||||||||||
Revenues: | ||||||||||||||||
Products | $ | 676,252 | $ | 825,448 | $ | 2,000,081 | $ | 2,437,901 | ||||||||
Services | 150,821 | 125,053 | 423,128 | 379,934 | ||||||||||||
Total revenues | 827,073 | 950,501 | 2,423,209 | 2,817,835 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Cost of products | 277,539 | 333,229 | 795,229 | 989,859 | ||||||||||||
Cost of services | 64,155 | 46,271 | 181,279 | 148,368 | ||||||||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) | 341,694 | 379,500 | 976,508 | 1,138,227 | ||||||||||||
Gross profit | 485,379 | 571,001 | 1,446,701 | 1,679,608 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling and administrative | 135,632 | 134,829 | 415,351 | 404,812 | ||||||||||||
Engineering and development | 111,715 | 107,220 | 331,781 | 317,644 | ||||||||||||
Acquired intangible assets amortization | 4,729 | 5,355 | 14,663 | 16,293 | ||||||||||||
Restructuring and other | 1,796 | 1,197 | 19,554 | (3,426 | ) | |||||||||||
Total operating expenses | 253,872 | 248,601 | 781,349 | 735,323 | ||||||||||||
Income from operations | 231,507 | 322,400 | 665,352 | 944,285 | ||||||||||||
Non-operating (income) expense: | ||||||||||||||||
Interest income | (1,318 | ) | (626 | ) | (2,972 | ) | (2,066 | ) | ||||||||
Interest expense | 779 | 3,785 | 2,704 | 15,354 | ||||||||||||
Other (income) expense, net | 5,849 | 21,486 | 20,472 | 25,223 | ||||||||||||
Income before income taxes | 226,197 | 297,755 | 645,148 | 905,774 | ||||||||||||
Income tax provision | 42,712 | 41,037 | 101,948 | 115,225 | ||||||||||||
Net income | $ | 183,485 | $ | 256,718 | $ | 543,200 | $ | 790,549 | ||||||||
Net income per common share: | ||||||||||||||||
Basic | $ | 1.17 | $ | 1.56 | $ | 3.41 | $ | 4.77 | ||||||||
Diluted | $ | 1.10 | $ | 1.41 | $ | 3.17 | $ | 4.26 | ||||||||
Weighted average common shares—basic | 156,364 | 164,583 | 159,325 | 165,690 | ||||||||||||
Weighted average common shares—diluted | 166,733 | 181,987 | 171,156 | 185,492 | ||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, | July 4, | July 3, | July 4, | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Net income | $ | 197,787 | $ | 328,319 | $ | 359,715 | $ | 533,831 | ||||||||
Other comprehensive income, net of tax: | ||||||||||||||||
Foreign currency translation adjustment, net of tax of $0, $0, $0, $0, respectively | (29,230 | ) | 5,150 | (37,307 | ) | (15,974 | ) | |||||||||
Available-for-sale | ||||||||||||||||
Unrealized (losses) gains on marketable securities arising during period, net of tax of $(1,240), $436, $(2,573), and $(472), respectively | (4,522 | ) | 1,494 | (9,910 | ) | (1,776 | ) | |||||||||
Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $77, $2, $59, $(121), respectively | 274 | 3 | 209 | (441 | ) | |||||||||||
(4,248 | ) | 1,497 | (9,701 | ) | (2,217 | ) | ||||||||||
Defined benefit post-retirement plan: | ||||||||||||||||
Amortization of prior service credit, net of tax of $0, $0, $(1), $(1), respectively | (2 | ) | (2 | ) | (3 | ) | (3 | ) | ||||||||
Other comprehensive (loss) income | (33,480 | ) | 6,645 | (47,011 | ) | (18,194 | ) | |||||||||
Comprehensive income | $ | 164,307 | $ | 334,964 | $ | 312,704 | $ | 515,637 | ||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
October 2, 2022 | October 3, 2021 | October 2, 2022 | October 3, 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Net income | $ | 183,485 | $ | 256,718 | $ | 543,200 | $ | 790,549 | ||||||||
Other comprehensive income, net of tax: | ||||||||||||||||
Foreign currency translation adjustment, net of tax of $0, $0, $0, $0, respectively | (28,951 | ) | (10,698 | ) | (66,258 | ) | (26,672 | ) | ||||||||
Available-for-sale | ||||||||||||||||
Unrealized losses arising during period, net of tax of $(997), $(44), $(3,570), $(516), respectively | (3,581 | ) | (176 | ) | (13,491 | ) | (1,952 | ) | ||||||||
Less: Reclassification adjustment for losses (gains) included in net income, net of tax of $(11), $(65), $48, $(186), respectively | 177 | (229 | ) | 386 | (670 | ) | ||||||||||
(3,404 | ) | (405 | ) | (13,105 | ) | (2,622 | ) | |||||||||
Cash flow hedges: | ||||||||||||||||
Unrealized gains arising during period, net of tax of $0, $0, $0, $0, respectively | 537 | — | 537 | — | ||||||||||||
Defined benefit post-retirement plan: | ||||||||||||||||
Amortization of prior service credit, net of tax of $0, $0, $(2), $(2), respectively | (2 | ) | (2 | ) | (5 | ) | (5 | ) | ||||||||
Other comprehensive loss | (31,820 | ) | (11,105 | ) | (78,831 | ) | (29,299 | ) | ||||||||
Comprehensive income | $ | 151,665 | $ | 245,613 | $ | 464,369 | $ | 761,250 | ||||||||
Shareholders’ Equity | Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Common Shares Value | Common Stock Shares | Common Stock Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total Shareholders’ Equity | Convertible Common Shares Value | Common Stock Shares | Common Stock Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended July 3, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, April 3, 2022 | $ | — | 161,053 | $ | 20,132 | $ | 1,711,690 | $ | (19,479 | ) | $ | 762,189 | $ | 2,474,532 | ||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended October 2, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, July 3, 2022 | $ | — | 157,880 | $ | 19,735 | $ | 1,721,586 | $ | (52,959 | ) | $ | 610,234 | $ | 2,298,596 | ||||||||||||||||||||||||||||||||||||||||||
Net issuance of common stock under stock-based plans | 33 | 4 | (1,675 | ) | (1,671 | ) | 169 | 21 | 12,031 | 12,052 | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 11,658 | 11,658 | 13,194 | 13,194 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (3,206 | ) | (401 | ) | (333,933 | ) | (334,334 | ) | (2,267 | ) | (283 | ) | (203,918 | ) | (204,201 | ) | ||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.11 per share) | (17,561 | ) | (17,561 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($ 0.11per share) | (17,149 | ) | (17,149 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements of convertible notes | 495 | 62 | (149 | ) | (87 | ) | 207 | 26 | (58 | ) | (32 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of convertible notes hedge call options | (495 | ) | (62 | ) | 62 | — | (207 | ) | (26 | ) | 26 | — | ||||||||||||||||||||||||||||||||||||||||||||
Cumulative-effect of change in accounting principle related to convertible debt | 1,752 | 1,752 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | 197,787 | 197,787 | 183,485 | 183,485 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (33,480 | ) | (33,480 | ) | (31,820 | ) | (31,820 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, July 3, 2022 | $ | — | 157,880 | $ | 19,735 | $ | 1,721,586 | $ | (52,959 | ) | $ | 610,234 | $ | 2,298,596 | ||||||||||||||||||||||||||||||||||||||||||
Balance, October 2, 2022 | $ | — | 155,782 | $ | 19,473 | $ | 1,746,779 | $ | (84,779 | ) | $ | 572,652 | $ | 2,254,125 | ||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended July 4, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, April 4, 2021 | $ | 1,233 | 166,419 | $ | 20,802 | $ | 1,765,971 | $ | 8,677 | $ | 529,103 | $ | 2,324,553 | |||||||||||||||||||||||||||||||||||||||||||
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 | 215 | 27 | 14,283 | 14,310 | 8 | 1 | (259 | ) | (258 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 12,515 | 12,515 | 10,042 | 10,042 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (1,190 | ) | (149 | ) | (155,846 | ) | (155,995 | ) | (1,724 | ) | (215 | ) | (212,781 | ) | (212,996 | ) | ||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.10 per share) | (16,624 | ) | (16,624 | ) | (16,452 | ) | (16,452 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Settlements of convertible notes | 367 | 46 | 45,977 | 46,023 | 5,589 | 699 | 636,798 | 637,497 | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of convertible notes hedge call options | (367 | ) | (46 | ) | (46,291 | ) | (46,337 | ) | (5,589 | ) | (699 | ) | (637,015 | ) | (637,714 | ) | ||||||||||||||||||||||||||||||||||||||||
Convertible common shares | 20,153 | (20,153 | ) | (20,153 | ) | (18,505 | ) | 18,505 | 18,505 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | 328,319 | 328,319 | 256,718 | 256,718 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | 6,645 | 6,645 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (11,105 | ) | (11,105 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, July 4, 2021 | $ | 21,386 | 165,444 | $ | 20,680 | $ | 1,772,302 | $ | 15,322 | $ | 684,952 | $ | 2,493,256 | |||||||||||||||||||||||||||||||||||||||||||
Balance, October 3, 2021 | $ | 2,881 | 163,728 | $ | 20,466 | $ | 1,800,373 | $ | 4,217 | $ | 712,437 | $ | 2,537,493 | |||||||||||||||||||||||||||||||||||||||||||
For the Six Months Ended July 3, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Nine Months Ended October 2, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | 1,512 | 162,251 | $ | 20,281 | $ | 1,811,545 | $ | (5,948 | ) | $ | 736,566 | $ | 2,562,444 | $ | 1,512 | 162,251 | $ | 20,281 | $ | 1,811,545 | $ | (5,948 | ) | $ | 736,566 | $ | 2,562,444 | ||||||||||||||||||||||||||||
Net issuance of common stock under stock-based plans | 585 | 73 | (16,318 | ) | (16,245 | ) | 754 | 95 | (4,287 | ) | (4,192 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 25,862 | 25,862 | 39,056 | 39,056 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (4,956 | ) | (619 | ) | (545,179 | ) | (545,798 | ) | (7,223 | ) | (903 | ) | (749,097 | ) | (750,000 | ) | ||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.22 per share) | (35,470 | ) | (35,470 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.33per share) | (52,617 | ) | (52,617 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements of convertible notes | 1,004 | 125 | (306 | ) | (181 | ) | 1,211 | 151 | (364 | ) | (213 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Exercise of convertible notes hedge call options | (1,004 | ) | (125 | ) | 125 | — | (1,211 | ) | (151 | ) | 151 | — | ||||||||||||||||||||||||||||||||||||||||||||
Convertible common shares | (1,512 | ) | 1,512 | 1,512 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative-effect of change in accounting principle related to convertible debt | (1,512 | ) | (99,322 | ) | 94,602 | (4,720 | ) | (100,834 | ) | 94,600 | (6,234 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Net income | 359,715 | 359,715 | 543,200 | 543,200 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (47,011 | ) | (47,011 | ) | (78,831 | ) | (78,831 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, July 3, 2022 | $ | — | 157,880 | $ | 19,735 | $ | 1,721,586 | $ | (52,959 | ) | $ | 610,234 | $ | 2,298,596 | ||||||||||||||||||||||||||||||||||||||||||
Balance, October 2, 2022 | $ | — | 155,782 | $ | 19,473 | $ | 1,746,779 | $ | (84,779 | ) | $ | 572,652 | $ | 2,254,125 | ||||||||||||||||||||||||||||||||||||||||||
For the Six Months Ended July 4, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | 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 | 885 | 111 | 211 | 322 | 893 | 112 | (48 | ) | 64 | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 25,874 | 25,874 | 35,915 | 35,915 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (1,564 | ) | (196 | ) | (202,988 | ) | (203,184 | ) | (3,288 | ) | (411 | ) | (415,769 | ) | (416,180 | ) | ||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.20 per share) | (33,305 | ) | (33,305 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends ($0.30per share) | (49,757 | ) | (49,757 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlements of convertible notes | 1,589 | 199 | 203,507 | 203,706 | 7,178 | 897 | 840,305 | 841,202 | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of convertible notes hedge call options | (1,589 | ) | (199 | ) | (205,014 | ) | (205,213 | ) | (7,178 | ) | (897 | ) | (842,028 | ) | (842,925 | ) | ||||||||||||||||||||||||||||||||||||||||
Convertible common shares | 17,599 | (17,599 | ) | (17,599 | ) | (906 | ) | 906 | 906 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | 533,831 | 533,831 | 790,549 | 790,549 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (18,194 | ) | (18,194 | ) | (29,299 | ) | (29,299 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, July 4, 2021 | $ | 21,386 | 165,444 | $ | 20,680 | $ | 1,772,302 | $ | 15,322 | $ | 684,952 | $ | 2,493,256 | |||||||||||||||||||||||||||||||||||||||||||
Balance, October 3, 2021 | $ | 2,881 | 163,728 | $ | 20,466 | $ | 1,800,373 | $ | 4,217 | $ | 712,437 | $ | 2,537,493 | |||||||||||||||||||||||||||||||||||||||||||
For the Six Months Ended | ||||||||
July 3, | July 4, | |||||||
2022 | 2021 | |||||||
(in thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 359,715 | $ | 533,831 | ||||
Adjustments to reconcile net income from operations to net cash provided by operating activities: | ||||||||
Depreciation | 44,460 | 45,848 | ||||||
Stock-based compensation | 25,122 | 23,231 | ||||||
Amortization | 10,095 | 19,343 | ||||||
Losses (gains) on investments | 8,973 | (4,650 | ) | |||||
Provision for excess and obsolete inventory | 6,695 | 3,625 | ||||||
Deferred taxes | (23,597 | ) | (800 | ) | ||||
Contingent consideration fair value adjustments | — | (7,227 | ) | |||||
Loss on convertible debt conversions | — | 5,244 | ||||||
Retirement plans actuarial gains | — | (627 | ) | |||||
Other | 522 | 199 | ||||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable | (146,384 | ) | (372,698 | ) | ||||
Inventories | (46,682 | ) | 19,908 | |||||
Prepayments and other assets | (94,751 | ) | (117,416 | ) | ||||
Accounts payable and other liabilities | (43,611 | ) | 86,790 | |||||
Deferred revenue and customer advances | 14,163 | 15,189 | ||||||
Retirement plans contributions | (2,618 | ) | (2,739 | ) | ||||
Income taxes | 10,815 | (2,628 | ) | |||||
Net cash provided by operating activities | 122,917 | 244,423 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property, plant and equipment | (89,743 | ) | (73,957 | ) | ||||
Purchases of marketable securities | (247,881 | ) | (398,086 | ) | ||||
Proceeds from maturities of marketable securities | 139,652 | 460,213 | ||||||
Proceeds from sales of marketable securities | 143,642 | 116,112 | ||||||
Purchase of investment | — | (12,000 | ) | |||||
Net cash (used for) provided by investing activities | (54,330 | ) | 92,282 | |||||
Cash flows from financing activities: | ||||||||
Issuance of common stock under stock purchase and stock option plans | 16,536 | 32,581 | ||||||
Repurchase of common stock | (532,799 | ) | (196,584 | ) | ||||
Payments of convertible debt principal | (42,292 | ) | (66,828 | ) | ||||
Dividend payments | (35,442 | ) | (33,271 | ) | ||||
Payments related to net settlement of employee stock compensation awards | (32,780 | ) | (31,794 | ) | ||||
Net cash used for financing activities | (626,777 | ) | (295,896 | ) | ||||
Effects of exchange rate changes on cash and cash equivalents | 8,014 | (489 | ) | |||||
(Decrease) increase in cash and cash equivalents | (550,176 | ) | 40,320 | |||||
Cash and cash equivalents at beginning of period | 1,122,199 | 914,121 | ||||||
Cash and cash equivalents at end of period | $ | 572,023 | $ | 954,441 | ||||
Non-cash investing activities: | ||||||||
Capital expenditures incurred but not yet paid: | $ | 1,855 | $ | 4,503 |
For the Nine Months Ended | ||||||||
October 2, 2022 | October 3, 2021 | |||||||
(in thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 543,200 | $ | 790,549 | ||||
Adjustments to reconcile net income from operations to net cash provided by operating activities: | ||||||||
Depreciation | 67,902 | 67,866 | ||||||
Stock-based compensation | 37,420 | 34,649 | ||||||
Provision for excess and obsolete inventory | 18,929 | 11,775 | ||||||
Amortization | 15,012 | 27,626 | ||||||
Losses (gains) on investments | 11,436 | (4,750 | ) | |||||
Deferred taxes | (28,373 | ) | (10,732 | ) | ||||
Contingent consideration fair value adjustments | — | (7,227 | ) | |||||
Loss on convertible debt conversions | — | 25,397 | ||||||
Retirement plans actuarial gains | — | (627 | ) | |||||
Other | 740 | 243 | ||||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable | 4,248 | (103,299 | ) | |||||
Inventories | (68,817 | ) | 21,943 | |||||
Prepayments and other assets | (94,331 | ) | (138,564 | ) | ||||
Accounts payable and other liabilities | (71,682 | ) | 65,064 | |||||
Deferred revenue and customer advances | (5,896 | ) | 8,699 | |||||
Retirement plans contributions | (3,897 | ) | (4,123 | ) | ||||
Income taxes | (31,370 | ) | (17,406 | ) | ||||
Net cash provided by operating activities | 394,521 | 767,083 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property, plant and equipment | (128,672 | ) | (103,162 | ) | ||||
Purchases of marketable securities | (267,175 | ) | (509,470 | ) | ||||
Proceeds from sales of marketable securities | 259,200 | 209,437 | ||||||
Proceeds from maturities of marketable securities | 182,092 | 571,277 | ||||||
Purchase of investment | — | (12,000 | ) | |||||
Net cash provided by investing activities | 45,445 | 156,082 | ||||||
Cash flows from financing activities: | ||||||||
Issuance of common stock under stock purchase and stock option plans | 28,733 | 32,590 | ||||||
Repurchase of common stock | (750,000 | ) | (406,180 | ) | ||||
Payments of convertible debt principal | (52,005 | ) | (301,997 | ) | ||||
Dividend payments | (52,578 | ) | (49,711 | ) | ||||
Payments related to net settlement of employee stock compensation awards | (32,987 | ) | (32,045 | ) | ||||
Net cash used for financing activities | (858,837 | ) | (757,343 | ) | ||||
Effects of exchange rate changes on cash and cash equivalents | 7,418 | (489 | ) | |||||
(Decrease) increase in cash and cash equivalents | (411,453 | ) | 165,333 | |||||
Cash and cash equivalents at beginning of period | 1,122,199 | 914,121 | ||||||
Cash and cash equivalents at end of period | $ | 710,746 | $ | 1,079,454 | ||||
Non-cash investing activities: | ||||||||
Capital expenditures incurred but not yet paid: | $ | 2,349 | $ | 2,286 |
Semiconductor Test | Industrial Automation | Semiconductor Test | Industrial Automation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
System on-a-Chip | Memory | System Test | Universal Robots | Mobile Industrial Robots | AutoGuide | Wireless Test | Corporate and Eliminations | Total | System on-a-Chip | Memory | System Test | Universal Robots | Mobile Industrial Robots | Wireless Test | Corporate and Eliminations | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended July 3, 2022 (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended October 2, 2022 (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Point in Time | $ | 395,211 | $ | 74,790 | $ | 118,692 | $ | 80,409 | $ | 16,730 | $ | 1,071 | $ | 60,765 | $ | (193 | ) | $ | 747,475 | $ | 383,801 | $ | 117,943 | $ | 93,248 | $ | 71,300 | $ | 15,025 | $ | 42,885 | $ | — | $ | 724,202 | |||||||||||||||||||||||||||||||||
Over Time | 64,253 | 7,094 | 16,010 | 2,104 | 668 | 73 | 3,089 | — | 93,291 | 66,614 | 7,346 | 22,906 | 2,062 | 680 | 3,263 | — | 102,871 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 459,464 | $ | 81,884 | $ | 134,702 | $ | 82,513 | $ | 17,398 | $ | 1,144 | $ | 63,854 | $ | (193 | ) | $ | 840,766 | $ | 450,415 | $ | 125,289 | $ | 116,154 | $ | 73,362 | $ | 15,705 | $ | 46,148 | $ | — | $ | 827,073 | |||||||||||||||||||||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asia Pacific | $ | 413,537 | $ | 78,996 | $ | 95,584 | $ | 17,357 | $ | 5,317 | $ | — | $ | 44,106 | $ | — | $ | 654,897 | $ | 399,323 | $ | 122,839 | $ | 73,768 | $ | 18,850 | $ | 2,917 | $ | 34,420 | $ | — | $ | 652,117 | ||||||||||||||||||||||||||||||||||
Americas | 28,714 | 2,552 | 33,409 | 27,732 | 6,085 | 1,144 | 17,460 | (193 | ) | 116,903 | 31,719 | 2,129 | 35,865 | 26,515 | 8,877 | 9,481 | — | 114,586 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa | 17,213 | 336 | 5,709 | 37,424 | 5,996 | — | 2,288 | — | 68,966 | 19,373 | 321 | 6,521 | 27,997 | 3,911 | 2,247 | — | 60,370 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 459,464 | $ | 81,884 | $ | 134,702 | $ | 82,513 | $ | 17,398 | $ | 1,144 | $ | 63,854 | $ | (193 | ) | $ | 840,766 | $ | 450,415 | $ | 125,289 | $ | 116,154 | $ | 73,362 | $ | 15,705 | $ | 46,148 | $ | — | $ | 827,073 | |||||||||||||||||||||||||||||||||
For the Three Months Ended July 4, 2021 (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Three Months Ended October 3, 2021 (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Point in Time | $ | 675,958 | $ | 84,232 | $ | 88,197 | $ | 74,412 | $ | 15,091 | $ | — | $ | 51,619 | $ | (146 | ) | $ | 989,363 | $ | 508,747 | $ | 105,454 | $ | 88,155 | $ | 76,008 | $ | 12,577 | $ | 65,409 | $ | (63 | ) | $ | 856,287 | ||||||||||||||||||||||||||||||||
Over Time | 65,712 | 8,074 | 16,622 | 1,665 | 809 | 209 | 3,274 | — | 96,365 | 66,270 | 7,761 | 14,450 | 1,742 | 687 | 3,304 | — | 94,214 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 741,670 | $ | 92,306 | $ | 104,819 | $ | 76,077 | $ | 15,900 | $ | 209 | $ | 54,893 | $ | (146 | ) | $ | 1,085,728 | $ | 575,017 | $ | 113,215 | $ | 102,605 | $ | 77,750 | $ | 13,264 | $ | 68,713 | $ | (63 | ) | $ | 950,501 | ||||||||||||||||||||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asia Pacific | $ | 710,995 | $ | 87,151 | $ | 61,230 | $ | 18,044 | $ | 2,439 | $ | — | $ | 45,802 | $ | — | $ | 925,661 | $ | 519,886 | $ | 110,362 | $ | 62,757 | $ | 19,654 | $ | 2,788 | $ | 54,344 | $ | — | $ | 769,791 | ||||||||||||||||||||||||||||||||||
Americas | 21,664 | 3,672 | 36,256 | 24,808 | 6,897 | 209 | 7,107 | (146 | ) | 100,467 | 29,119 | 2,281 | 34,560 | 23,429 | 5,321 | 11,352 | (63 | ) | 105,999 | |||||||||||||||||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa | 9,011 | 1,483 | 7,333 | 33,225 | 6,564 | — | 1,984 | — | 59,600 | 26,012 | 572 | 5,288 | 34,667 | 5,155 | 3,017 | — | 74,711 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 741,670 | $ | 92,306 | $ | 104,819 | $ | 76,077 | $ | 15,900 | $ | 209 | $ | 54,893 | $ | (146 | ) | $ | 1,085,728 | $ | 575,017 | $ | 113,215 | $ | 102,605 | $ | 77,750 | $ | 13,264 | $ | 68,713 | $ | (63 | ) | $ | 950,501 | ||||||||||||||||||||||||||||||||
For the Six Months Ended July 3, 2022 (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Nine Months Ended October 2, 2022 (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Point in Time | $ | 718,666 | $ | 163,513 | $ | 223,981 | $ | 163,591 | $ | 33,264 | $ | 1,281 | $ | 109,194 | $ | (539 | ) | $ | 1,412,951 | $ | 1,102,467 | $ | 281,456 | $ | 317,230 | $ | 234,352 | $ | 49,570 | $ | 152,079 | $ | — | $ | 2,137,154 | |||||||||||||||||||||||||||||||||
Over Time | 127,382 | 14,127 | 29,390 | 4,206 | 1,342 | 560 | 6,178 | — | 183,185 | 193,996 | 21,473 | 52,295 | 6,268 | 2,582 | 9,441 | — | 286,055 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 846,048 | $ | 177,640 | $ | 253,371 | $ | 167,797 | $ | 34,606 | $ | 1,841 | $ | 115,372 | $ | (539 | ) | $ | 1,596,136 | $ | 1,296,463 | $ | 302,929 | $ | 369,525 | $ | 240,620 | $ | 52,152 | $ | 161,520 | $ | — | $ | 2,423,209 | |||||||||||||||||||||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asia Pacific | $ | 754,277 | $ | 172,147 | $ | 169,369 | $ | 35,978 | $ | 7,909 | $ | — | $ | 79,052 | $ | — | $ | 1,218,732 | $ | 1,153,599 | $ | 294,986 | $ | 243,135 | $ | 54,828 | $ | 10,826 | $ | 113,472 | $ | — | $ | 1,870,846 | ||||||||||||||||||||||||||||||||||
Americas | 58,428 | 4,598 | 70,017 | 55,880 | 13,952 | 1,841 | 27,147 | (539 | ) | 231,324 | 90,148 | 6,727 | 105,884 | 81,857 | 24,670 | 36,628 | — | 345,914 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa | 33,343 | 895 | 13,985 | 75,939 | 12,745 | — | 9,173 | — | 146,080 | 52,716 | 1,216 | 20,506 | 103,935 | 16,656 | 11,420 | — | 206,449 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 846,048 | $ | 177,640 | $ | 253,371 | $ | 167,797 | $ | 34,606 | $ | 1,841 | $ | 115,372 | $ | (539 | ) | $ | 1,596,136 | $ | 1,296,463 | $ | 302,929 | $ | 369,525 | $ | 240,620 | $ | 52,152 | $ | 161,520 | $ | — | $ | 2,423,209 | |||||||||||||||||||||||||||||||||
For the Six Months Ended July 4, 2021 (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Timing of Revenue Recognition | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Point in Time | $ | 1,040,148 | $ | 186,124 | $ | 207,511 | $ | 138,419 | $ | 29,155 | $ | (120 | ) | $ | 89,499 | $ | (289 | ) | $ | 1,690,447 | ||||||||||||||||||||||||||||||||||||||||||||||||
Over Time | 121,752 | 14,015 | 30,145 | 3,259 | 876 | 548 | 6,292 | — | 176,887 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 1,161,900 | $ | 200,139 | $ | 237,656 | $ | 141,678 | $ | 30,031 | $ | 428 | $ | 95,791 | $ | (289 | ) | $ | 1,867,334 | |||||||||||||||||||||||||||||||||||||||||||||||||
Geographical Market | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asia Pacific | $ | 1,098,231 | $ | 191,200 | $ | 160,750 | $ | 35,877 | $ | 5,886 | $ | — | $ | 79,334 | $ | — | $ | 1,571,278 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Americas | 42,443 | 7,092 | 63,915 | 42,961 | 12,050 | 428 | 12,876 | (289 | ) | 181,476 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa | 21,226 | 1,847 | 12,991 | 62,840 | 12,095 | — | 3,581 | — | 114,580 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 1,161,900 | $ | 200,139 | $ | 237,656 | $ | 141,678 | $ | 30,031 | $ | 428 | $ | 95,791 | $ | (289 | ) | $ | 1,867,334 | |||||||||||||||||||||||||||||||||||||||||||||||||
Semiconductor Test | Industrial Automation | |||||||||||||||||||||||||||||||
System on-a-Chip | Memory | System Test | Universal Robots | Mobile Industrial Robots | Wireless Test | Corporate and Eliminations | Total | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
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 | $ | 41,612 | $ | 154,908 | $ | (352 | ) | $ | 2,546,734 | |||||||||||||||
Over Time | 188,022 | 21,776 | 44,595 | 5,001 | 2,111 | 9,596 | — | 271,101 | ||||||||||||||||||||||||
Total | $ | 1,736,917 | $ | 313,354 | $ | 340,261 | $ | 219,428 | $ | 43,723 | $ | 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 | 17,799 | 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 | $ | 43,723 | $ | 164,504 | $ | (352 | ) | $ | 2,817,835 | |||||||||||||||
(1) | Includes “Revenue from Contracts with Customers.” |
(2) | Includes “Revenue from Contracts with Customers.” |
July 3, | December 31, | |||||||||||||||
2022 | 2021 | |||||||||||||||
October 2, 2022 | December 31, 2021 | |||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Maintenance, service and training | $ | 83,464 | $ | 81,826 | $ | 76,310 | $ | 81,826 | ||||||||
Extended warranty | 65,791 | 64,168 | 61,920 | 64,168 | ||||||||||||
Customer advances, undelivered elements and other | 64,229 | 55,112 | 53,849 | 55,112 | ||||||||||||
Total deferred revenue and customer advances | $ | 213,484 | $ | 201,106 | $ | 192,079 | $ | 201,106 | ||||||||
July 3, | December 31, | |||||||||||||||
2022 | 2021 | October 2, 2022 | December 31, 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
(in thousands) | ||||||||||||||||
Raw material | $ | 193,907 | $ | 155,641 | $ | 228,762 | $ | 155,641 | ||||||||
Work-in-process | 36,184 | 37,740 | 42,093 | 37,740 | ||||||||||||
Finished goods | 65,534 | 49,949 | 39,899 | 49,949 | ||||||||||||
$ | 295,625 | $ | 243,330 | $ | 310,754 | $ | 243,330 | |||||||||
July 3, 2022 | ||||||||||||||||
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 | $ | 447,312 | $ | — | $ | — | $ | 447,312 | ||||||||
Cash equivalents | 95,068 | 29,643 | — | 124,711 | ||||||||||||
Available-for-sale | ||||||||||||||||
Commercial paper | — | 150,443 | — | 150,443 | ||||||||||||
U.S. Treasury securities | — | 73,100 | — | 73,100 | ||||||||||||
Corporate debt securities | — | 49,344 | — | 49,344 | ||||||||||||
Debt mutual funds | 6,514 | — | — | 6,514 | ||||||||||||
U.S. government agency securities | — | 4,693 | — | 4,693 | ||||||||||||
Certificates of deposit and time deposits | — | 1,261 | — | 1,261 | ||||||||||||
Non-U.S. government securities | — | 546 | — | 546 | ||||||||||||
Equity securities: | ||||||||||||||||
Mutual funds | 35,944 | — | — | 35,944 | ||||||||||||
$ | 584,838 | $ | 309,030 | $ | — | $ | 893,868 | |||||||||
Derivative assets | — | 103 | — | 103 | ||||||||||||
Total | $ | 584,838 | $ | 309,133 | $ | — | $ | 893,971 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | $ | — | $ | 233 | $ | — | $ | 233 | ||||||||
Total | $ | — | $ | 233 | $ | — | $ | 233 | ||||||||
October 2, 2022 | ||||||||||||||||
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 | $ | 464,744 | $ | — | $ | — | $ | 464,744 | ||||||||
Cash equivalents | 51,243 | 194,759 | — | 246,002 | ||||||||||||
Available-for-sale | ||||||||||||||||
U.S. Treasury securities | — | 65,354 | — | 65,354 | ||||||||||||
Corporate debt securities | — | 45,864 | — | 45,864 | ||||||||||||
Commercial paper | — | 17,719 | — | 17,719 | ||||||||||||
Debt mutual funds | 6,441 | — | — | 6,441 | ||||||||||||
U.S. government agency securities | — | 4,681 | — | 4,681 | ||||||||||||
Certificates of deposit and time deposits | — | 1,205 | — | 1,205 | ||||||||||||
Non-U.S. government securities | — | 512 | — | 512 | ||||||||||||
Equity securities: | ||||||||||||||||
Mutual funds | 34,573 | — | — | 34,573 | ||||||||||||
$ | 557,001 | $ | 330,094 | $ | — | $ | 887,095 | |||||||||
Derivative assets | — | 546 | — | 546 | ||||||||||||
Total | $ | 557,001 | $ | 330,640 | $ | — | $ | 887,641 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | $ | — | $ | 1,106 | $ | — | $ | 1,106 | ||||||||
Total | $ | — | $ | 1,106 | $ | — | $ | 1,106 | ||||||||
Reported as follows: | ||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 515,987 | $ | 194,759 | $ | — | $ | 710,746 | ||||||||
Marketable securities | — | 65,310 | — | 65,310 | ||||||||||||
Long-term marketable securities | 41,014 | 70,025 | — | 111,039 | ||||||||||||
Prepayments and other current assets | — | 546 | — | 546 | ||||||||||||
Total | $ | 557,001 | $ | 330,640 | $ | — | $ | 887,641 | ||||||||
Liabilities | . | |||||||||||||||
Other cur r ent liabilities | $ | — | $ | 1,106 | $ | — | $ | 1,106 | ||||||||
Total | $ | — | $ | 1,106 | $ | — | $ | 1,106 | ||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 542,380 | $ | 29,643 | $ | — | $ | 572,023 | ||||||||
Marketable securities | — | 209,846 | — | 209,846 | ||||||||||||
Long-term marketable securities | 42,458 | 69,541 | — | 111,999 | ||||||||||||
Prepayments and other current assets | — | 103 | — | 103 | ||||||||||||
Total | $ | 584,838 | $ | 309,133 | $ | — | $ | 893,971 | ||||||||
Liabilities | . | |||||||||||||||
Other current liabilities | $ | — | $ | 233 | $ | — | $ | 233 | ||||||||
Total | $ | — | $ | 233 | $ | — | $ | 233 | ||||||||
December 31, 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 | $ | 628,740 | $ | — | $ | — | $ | 628,740 | ||||||||
Cash equivalents | 412,212 | 81,247 | — | 493,459 | ||||||||||||
Available-for-sale | — | |||||||||||||||
Commercial paper | — | 189,620 | — | 189,620 | ||||||||||||
U.S. Treasury securities | — | 77,789 | — | 77,789 | ||||||||||||
Corporate debt securities | — | 56,901 | — | 56,901 | ||||||||||||
Debt mutual funds | 7,971 | — | — | 7,971 | ||||||||||||
U.S. government agency securities | — | 4,610 | — | 4,610 | ||||||||||||
Certificates of deposit and time deposits | — | 1,356 | — | 1,356 | ||||||||||||
Non-U.S. government securities | — | 589 | — | 589 | ||||||||||||
Equity securities: | ||||||||||||||||
Mutual Funds | 39,253 | — | — | 39,253 | ||||||||||||
$ | 1,088,176 | $ | 412,112 | $ | — | $ | 1,500,288 | |||||||||
Derivative assets | — | 92 | — | 92 | ||||||||||||
Total | $ | 1,088,176 | $ | 412,204 | $ | — | $ | 1,500,380 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | — | 118 | — | 118 | ||||||||||||
Total | $ | — | $ | 118 | $ | — | $ | 118 | ||||||||
Reported as follows: | ||||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 1,040,952 | $ | 81,247 | $ | — | $ | 1,122,199 | ||||||||
Marketable securities | — | 244,231 | — | 244,231 | ||||||||||||
Long-term marketable securities | 47,224 | 86,634 | — | 133,858 | ||||||||||||
Prepayments and other current assets | — | 92 | — | 92 | ||||||||||||
Total | $ | 1,088,176 | $ | 412,204 | $ | — | $ | 1,500,380 | ||||||||
Liabilities | ||||||||||||||||
Other current liabilities | $ | — | $ | 118 | $ | — | $ | 118 | ||||||||
Total | $ | — | $ | 118 | $ | — | $ | 118 | ||||||||
December 31, 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 | $ | 628,740 | $ | — | $ | — | $ | 628,740 | ||||||||
Cash equivalents | 412,212 | 81,247 | — | 493,459 | ||||||||||||
Available-for-sale | — | |||||||||||||||
Commercial paper | — | 189,620 | — | 189,620 | ||||||||||||
U.S. Treasury securities | — | 77,789 | — | 77,789 | ||||||||||||
Corporate debt securities | — | 56,901 | — | 56,901 | ||||||||||||
Debt mutual funds | 7,971 | — | — | 7,971 | ||||||||||||
U.S. government agency securities | — | 4,610 | — | 4,610 | ||||||||||||
Certificates of deposit and time deposits | — | 1,356 | — | 1,356 | ||||||||||||
Non-U.S. government securities | — | 589 | — | 589 | ||||||||||||
Equity securities: | ||||||||||||||||
Mutual Funds | 39,253 | — | — | 39,253 | ||||||||||||
$ | 1,088,176 | $ | 412,112 | $ | — | $ | 1,500,288 | |||||||||
Derivative assets | — | 92 | — | 92 | ||||||||||||
Total | $ | 1,088,176 | $ | 412,204 | $ | — | $ | 1,500,380 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | — | 118 | — | 118 | ||||||||||||
Total | $ | — | $ | 118 | $ | — | $ | 118 | ||||||||
(Level 1) | (Level 2) | (Level 3) | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 1,040,952 | $ | 81,247 | $ | — | $ | 1,122,199 | ||||||||
Marketable securities | — | 244,231 | — | 244,231 | ||||||||||||
Long-term marketable securities | 47,224 | 86,634 | — | 133,858 | ||||||||||||
Prepayments and other current assets | — | 92 | — | 92 | ||||||||||||
Total | $ | 1,088,176 | $ | 412,204 | $ | — | $ | 1,500,380 | ||||||||
Liabilities | ||||||||||||||||
Other current liabilities | $ | — | $ | 118 | $ | — | $ | 118 | ||||||||
Total | $ | — | $ | 118 | $ | — | $ | 118 | ||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, | July 4, | July 3, | July 4, | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at beginning of period | $ | — | $ | — | $ | — | $ | 7,227 | ||||||||
Fair value adjustment (a) | — | — | — | (7,227 | ) | |||||||||||
Balance at end of period | $ | — | $ | — | $ | — | $ | — | ||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
October 2, 2022 | October 3, 2021 | October 2, 2022 | October 3, 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at beginning of period | $ | — | $ | — | $ | — | $ | 7,227 | ||||||||
Fair value adjustment (a) | — | — | — | (7,227 | ) | |||||||||||
Balance at end of period | $ | — | $ | — | $ | — | $ | — | ||||||||
(a) | In the |
July 3, 2022 | December 31, 2021 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 572,023 | $ | 572,023 | $ | 1,122,199 | $ | 1,122,199 | ||||||||
Marketable securities | 321,845 | 321,845 | 378,089 | 378,089 | ||||||||||||
Derivative assets | 103 | 103 | 92 | 92 | ||||||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | 233 | 233 | 118 | 118 | ||||||||||||
Convertible debt | 74,428 | 233,339 | 108,426 | 604,648 |
October 2, 2022 | December 31, 2021 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 710,746 | $ | 710,746 | $ | 1,122,199 | $ | 1,122,199 | ||||||||
Marketable securities | 176,349 | 176,349 | 378,089 | 378,089 | ||||||||||||
Derivative assets | 546 | 546 | 92 | 92 | ||||||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | 1,106 | 1,106 | 118 | 118 | ||||||||||||
Convertible debt | 64,791 | 154,486 | 108,426 | 604,648 |
July 3, 2022 | October 2, 2022 | |||||||||||||||||||||||||||||||||||||||
Available-for-Sale | Available-for-Sale | |||||||||||||||||||||||||||||||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | |||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||||
Commercial paper | $ | 150,695 | $ | 8 | $ | (260 | ) | $ | 150,443 | $ | 137,162 | |||||||||||||||||||||||||||||
U.S. Treasury securities | 75,962 | 42 | (2,904 | ) | 73,100 | 71,861 | $ | 69,598 | $ | — | $ | (4,244 | ) | $ | 65,354 | $ | 65,354 | |||||||||||||||||||||||
Corporate debt securities | 53,274 | 147 | (4,077 | ) | 49,344 | 46,289 | 52,926 | 1 | (7,063 | ) | 45,864 | 45,622 | ||||||||||||||||||||||||||||
Commercial paper | 17,691 | 35 | (7 | ) | 17,719 | 8,983 | ||||||||||||||||||||||||||||||||||
Debt mutual funds | 6,783 | — | (269 | ) | 6,514 | 3,245 | 6,897 | — | (456 | ) | 6,441 | 3,075 | ||||||||||||||||||||||||||||
U.S. government agency securities | 4,786 | — | (93 | ) | 4,693 | 4,693 | 4,790 | — | (109 | ) | 4,681 | 4,681 | ||||||||||||||||||||||||||||
Certificates of deposit and time deposits | 1,261 | — | — | 1,261 | — | 1,205 | — | — | 1,205 | — | ||||||||||||||||||||||||||||||
Non-U.S. government securities | 546 | — | — | 546 | — | 512 | — | — | 512 | — | ||||||||||||||||||||||||||||||
$ | 293,307 | $ | 197 | $ | (7,603 | ) | $ | 285,901 | $ | 263,250 | $ | 153,619 | $ | 36 | $ | (11,879 | ) | $ | 141,776 | $ | 127,715 | |||||||||||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Marketable securities | $ | 65,744 | $ | 35 | $ | (469 | ) | $ | 65,310 | $ | 55,369 | |||||||||
Long-term marketable securities | 87,875 | 1 | (11,410 | ) | 76,466 | 72,346 | ||||||||||||||
$ | 153,619 | $ | 36 | $ | (11,879 | ) | $ | 141,776 | $ | 127,715 | ||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Marketable securities | $ | 210,598 | $ | 8 | $ | (760 | ) | $ | 209,846 | $ | 195,003 | |||||||||
Long-term marketable securities | 82,709 | 189 | (6,843 | ) | 76,055 | 68,247 | ||||||||||||||
$ | 293,307 | $ | 197 | $ | (7,603 | ) | $ | 285,901 | $ | 263,250 | ||||||||||
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||
Available-for-Sale | December 31, 2021 | |||||||||||||||||||||||||||||||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | Available-for-Sale | |||||||||||||||||||||||||||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||
Commercial paper | $ | 189,614 | $ | 15 | $ | (9 | ) | $ | 189,620 | $ | 22,784 | $ | 189,614 | $ | 15 | $ | (9 | ) | $ | 189,620 | $ | 22,784 | ||||||||||||||||||
U.S. Treasury securities | 77,707 | 551 | (470 | ) | 77,789 | 46,435 | 77,707 | 551 | (470 | ) | 77,789 | 46,435 | ||||||||||||||||||||||||||||
Corporate debt securities | 52,266 | 4,863 | (227 | ) | 56,901 | 19,422 | 52,266 | 4,863 | (227 | ) | 56,901 | 19,422 | ||||||||||||||||||||||||||||
Debt mutual funds | 7,928 | 43 | — | 7,971 | — | 7,928 | 43 | — | 7,971 | — | ||||||||||||||||||||||||||||||
U.S. government agency securities | 4,617 | 5 | (12 | ) | 4,610 | 3,296 | 4,617 | 5 | (12 | ) | 4,610 | 3,296 | ||||||||||||||||||||||||||||
Certificates of deposit and time deposits | 1,356 | — | — | 1,356 | — | 1,356 | — | — | 1,356 | — | ||||||||||||||||||||||||||||||
Non-U.S. government securities | 589 | — | — | 589 | — | 589 | — | — | 589 | — | ||||||||||||||||||||||||||||||
$ | 334,077 | $ | 5,477 | $ | (718 | ) | $ | 338,836 | $ | 91,937 | $ | 334,077 | $ | 5,477 | $ | (718 | ) | $ | 338,836 | $ | 91,937 | |||||||||||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Marketable securities | $ | 244,213 | $ | 64 | $ | (46 | ) | $ | 244,231 | $ | 54,798 | |||||||||
Long-term marketable securities | 89,864 | 5,413 | (672 | ) | 94,605 | 37,139 | ||||||||||||||
$ | 334,077 | $ | 5,477 | $ | (718 | ) | $ | 338,836 | $ | 91,937 | ||||||||||
Cost | Unrealized Gain | Unrealized (Loss) | Fair Market Value | Fair Market Value of Investments with Unrealized Losses | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Marketable securities | $ | 244,213 | $ | 64 | $ | (46 | ) | $ | 244,231 | $ | 54,798 | |||||||||
Long-term marketable securities | 89,864 | 5,413 | (672 | ) | 94,605 | 37,139 | ||||||||||||||
$ | 334,077 | $ | 5,477 | $ | (718 | ) | $ | 338,836 | $ | 91,937 | ||||||||||
July 3, 2022 | October 2, 2022 | |||||||||||||||
Cost | Fair Market Value | Cost | Fair Market Value | |||||||||||||
(in thousands) | ||||||||||||||||
(in thousands) | ||||||||||||||||
Due within one year | $ | 210,598 | $ | 209,846 | $ | 65,744 | $ | 65,310 | ||||||||
Due after 1 year through 5 years | 32,283 | 31,069 | 35,934 | 34,116 | ||||||||||||
Due after 5 years through 10 years | 5,055 | 4,736 | 4,800 | 4,209 | ||||||||||||
Due after 10 years | 38,588 | 33,736 | 40,244 | 31,700 | ||||||||||||
Total | $ | 286,524 | $ | 279,387 | $ | 146,722 | $ | 135,335 | ||||||||
July 3, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
Buy Position | Sell Position | Net Total | Buy Position | Sell Position | Net Total | October 2, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||
Buy Position | Sell Position | Net Total | Buy Position | Sell Position | Net Total | |||||||||||||||||||||||||||||||||||||||||||
(in millions) | (in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Japanese Yen | $ | (32.5 | ) | $ | — | $ | (32.5 | ) | $ | (31.4 | ) | $ | — | $ | (31.4 | ) | $ | (37.5 | ) | $ | — | $ | (37.5 | ) | $ | (31.4 | ) | $ | — | $ | (31.4 | ) | ||||||||||||||||
Taiwan Dollar | (27.2 | ) | — | (27.2 | ) | (35.1 | ) | — | (35.1 | ) | (35.2 | ) | — | (35.2 | ) | (35.1 | ) | — | (35.1 | ) | ||||||||||||||||||||||||||||
Korean Won | (3.1 | ) | — | (3.1 | ) | (4.2 | ) | — | (4.2 | ) | (5.4 | ) | — | (5.4 | ) | (4.2 | ) | — | (4.2 | ) | ||||||||||||||||||||||||||||
British Pound Sterling | (1.0 | ) | — | (1.0 | ) | (1.8 | ) | — | (1.8 | ) | (1.1 | ) | — | (1.1 | ) | (1.8 | ) | — | (1.8 | ) | ||||||||||||||||||||||||||||
Danish Krone | (0.5 | ) | — | (0.5 | ) | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Singapore Dollar | — | 40.0 | 40.0 | — | 61.9 | 61.9 | — | 24.4 | 24.4 | — | 61.9 | 61.9 | ||||||||||||||||||||||||||||||||||||
Euro | — | 39.8 | 39.8 | — | 44.9 | 44.9 | — | 36.7 | 36.7 | — | 44.9 | 44.9 | ||||||||||||||||||||||||||||||||||||
Philippine Peso | — | 3.2 | 3.2 | — | 3.9 | 3.9 | — | 2.8 | 2.8 | — | 3.9 | 3.9 | ||||||||||||||||||||||||||||||||||||
Chinese Yuan | — | 2.8 | 2.8 | — | 2.8 | 2.8 | — | 2.4 | 2.4 | — | 2.8 | 2.8 | ||||||||||||||||||||||||||||||||||||
Total | $ | (63.8 | ) | $ | 85.8 | $ | 22.0 | $ | (72.5 | ) | $ | 113.5 | $ | 41.0 | $ | (79.7 | ) | $ | 66.3 | $ | (13.4 | ) | $ | (72.5 | ) | $ | 113.5 | $ | 41.0 | |||||||||||||||||||
October 2, 2022 | December 31, 2021 | |||||||||||||||||||||||
Buy Position | Sell Position | Net Total | Buy Position | Sell Position | Net Total | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Japanese Yen | $ | (5.4 | ) | $ | 26.6 | $ | 21.2 | $ | — | $ | — | $ | — | |||||||||||
Taiwan Dollar | (9.2 | ) | 18.3 | 9.1 | — | — | — | |||||||||||||||||
Total | $ | (14.6 | ) | $ | 44.9 | $ | 30.3 | $ | — | $ | — | $ | — | |||||||||||
Balance Sheet Location | July 3, 2022 | December 31, 2021 | ||||||||||||||||||||
Balance Sheet Location | October 2, 2022 | December 31, 2021 | ||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||||
Foreign exchange contracts | Prepayments | $ | 103 | $ | 92 | |||||||||||||||||
Foreign exchange contracts | Other current liabilities | (233 | ) | (118 | ) | |||||||||||||||||
Foreign currency forward contracts | Prepayments | $ | 9 | $ | 92 | |||||||||||||||||
Foreign currency forward contracts | Other current liabilities | (1,106 | ) | (118 | ) | |||||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||||
Foreign currency option contracts | Prepayments | 537 | — | |||||||||||||||||||
Total derivatives | $ | (130 | ) | $ | (26 | ) | $ | (560 | ) | $ | (26 | ) | ||||||||||
Location of (Gains) Losses | For the Three Months Ended | For the Six Months Ended | Location of Losses (Gains) Recognized in Statement of Operations | For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||
Recognized in | July 3, | July 4, | July 3, | July 4, | October 2, 2022 | October 3, 2021 | October 2, 2022 | October 3, 2021 | ||||||||||||||||||||||||||||
Statement of Operations | 2022 | 2021 | 2022 | 2021 | (in thousands) | |||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments: | Derivatives not designated as hedging instruments: | Derivatives not designated as hedging instruments: | ||||||||||||||||||||||||||||||||||
Foreign exchange contracts | Other (income) expense, net | $ | (1,703 | ) | $ | 1,531 | $ | (3,455 | ) | $ | 3,650 | |||||||||||||||||||||||||
Foreign currency forward contracts | Other (income) expense, net | $ | 1,246 | $ | 2,288 | $ | (2,209 | ) | $ | 5,937 | ||||||||||||||||||||||||||
Derivatives designated as hedging instruments: | Derivatives designated as hedging instruments: | |||||||||||||||||||||||||||||||||||
Foreign currency option contracts | Revenue | — | — | — | — | |||||||||||||||||||||||||||||||
Total derivatives | $ | 1,246 | $ | 2,288 | $ | (2,209 | ) | $ | 5,937 | |||||||||||||||||||||||||||
July 3, 2022 | December 31, 2021 | |||||||||||||||
October 2, 2022 | December 31, 2021 | |||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Debt principal | $ | 74,688 | $ | 116,980 | $ | 64,980 | $ | 116,980 | ||||||||
Unamortized debt issuance fees (1) | 260 | 8,554 | 189 | 8,554 | ||||||||||||
Net Carrying amount of convertible debt | $ | 74,428 | $ | 108,426 | $ | 64,791 | $ | 108,426 | ||||||||
July 3, 2022 | December 31, 2021 | |||||||||||||||
October 2, 2022 | December 31, 2021 | |||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Current debt | $ | 9,632 | $ | 19,182 | $ | 14,596 | $ | 19,182 | ||||||||
Long-term debt | 64,796 | 89,244 | 50,195 | 89,244 | ||||||||||||
Net carrying amount of convertible debt | $ | 74,428 | $ | 108,426 | $ | 64,791 | $ | 108,426 | ||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Contractual interest expense on the coupon | $ | 121 | $ | 1,072 | $ | 432 | $ | 2,311 | ||||||||
Amortization of debt issuance fees recognized as interest expense (2) | 64 | 3,511 | 130 | 7,347 | ||||||||||||
Total interest expense on the convertible debt | $ | 185 | $ | 4,583 | $ | 562 | $ | 9,658 | ||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
October 2, 2022 | October 3, 2021 | October 2, 2022 | October 3, 2021 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Contractual interest expense on the coupon | $ | 159 | $ | 355 | $ | 592 | $ | 2,666 | ||||||||
Amortization of debt issuance fees recognized as interest expense (2) | 43 | 2,424 | 173 | 9,771 | ||||||||||||
Total interest expense on the convertible debt | $ | 202 | $ | 2,779 | $ | 765 | $ | 12,437 | ||||||||
(1) | Unamortized debt issuance fees as of December 31, 2021 include unamortized debt discount of 0 6 |
(2) | Three and 2020-06 on January 1, 2022. |
July 3, | December 31, | |||||||||||||||
2022 | 2021 | |||||||||||||||
October 2, 2022 | December 31, 2021 | |||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Contract manufacturer and supplier prepayments | $ | 460,727 | $ | 364,478 | $ | 466,648 | $ | 364,478 | ||||||||
Prepaid maintenance and other services | 17,421 | 13,660 | 13,760 | 13,660 | ||||||||||||
Prepaid taxes | 8,675 | 15,090 | 12,531 | 15,090 | ||||||||||||
Other prepayments | 11,270 | 13,038 | 9,739 | 13,038 | ||||||||||||
Total prepayments | $ | 498,093 | $ | 406,266 | $ | 502,678 | $ | 406,266 | ||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, | July 4, | July 3, | July 4, | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at beginning of period | $ | 20,105 | $ | 23,893 | $ | 24,577 | $ | 16,633 | ||||||||
Accruals for warranties issued during the period | 6,429 | 10,197 | 10,530 | 22,078 | ||||||||||||
Accruals related to pre-existing warranties | (1,611 | ) | (3,450 | ) | (4,370 | ) | (3,003 | ) | ||||||||
Settlements made during the period | (8,887 | ) | (4,964 | ) | (14,701 | ) | (10,032 | ) | ||||||||
Balance at end of period | $ | 16,036 | $ | 25,676 | $ | 16,036 | $ | 25,676 | ||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
October 2, 2022 | October 3, 2021 | October 2, 2022 | October 3, 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at beginning of period | $ | 16,036 | $ | 25,676 | $ | 24,577 | $ | 16,633 | ||||||||
Accruals for warranties issued during the period | 4,930 | 6,641 | 15,460 | 28,719 | ||||||||||||
Accruals related to pre-existing warranties | (654 | ) | (963 | ) | (5,024 | ) | (3,966 | ) | ||||||||
Settlements made during the period | (6,181 | ) | (5,233 | ) | (20,882 | ) | (15,265 | ) | ||||||||
Balance at end of period | $ | 14,131 | $ | 26,121 | $ | 14,131 | $ | 26,121 | ||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
October 2, 2022 | October 3, 2021 | October 2, 2022 | October 3, 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at beginning of period | $ | 65,791 | $ | 63,525 | $ | 64,168 | $ | 51,929 | ||||||||
Deferral of new extended warranty revenue | 6,987 | 12,728 | 28,550 | 36,533 | ||||||||||||
Recognition of extended warranty deferred revenue | (10,858 | ) | (8,771 | ) | (30,798 | ) | (20,980 | ) | ||||||||
Balance at end of period | $ | 61,920 | $ | 67,482 | $ | 61,920 | $ | 67,482 | ||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, | July 4, | July 3, | July 4, | |||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Balance at beginning of period | $ | 65,726 | $ | 53,908 | $ | 64,168 | $ | 51,929 | ||||||||
Deferral of new extended warranty revenue | 9,788 | 16,290 | 21,563 | 23,805 | ||||||||||||
Recognition of extended warranty deferred revenue | (9,723 | ) | (6,673 | ) | (19,940 | ) | (12,209 | ) | ||||||||
Balance at end of period | $ | 65,791 | $ | 63,525 | $ | 65,791 | $ | 63,525 | ||||||||
For the Nine Months Ended | ||||||||||||||||
For the Six Months Ended | October 2, 2022 | October 3, 2021 | ||||||||||||||
July 3, 2022 | July 4, 2021 | |||||||||||||||
Risk-free interest rate | 1.4 | % | 0.2 | % | 1.4 | % | 0.2 | % | ||||||||
Teradyne volatility-historical | 47.1 | % | 43.9 | % | 47.1 | % | 43.9 | % | ||||||||
NYSE Composite Index volatility-historical | 22.7 | % | 22.9 | % | 22.7 | % | 22.9 | % | ||||||||
Dividend yield | 0.4 | % | 0.4 | % | 0.4 | % | 0.4 | % |
For the Six Months Ended | ||||||||||||||||
For the Nine Months Ended | ||||||||||||||||
July 3, 2022 | July 4, 2021 | October 2, 2022 | October 3, 2021 | |||||||||||||
Expected life (years) | 4.0 | 5.0 | 4.0 | 5.0 | ||||||||||||
Risk-free interest rate | 1.6 | % | 0.4 | % | 1.6 | % | 0.4 | % | ||||||||
Volatility-historical | 43.7 | % | 37.8 | % | 43.7 | % | 37.8 | % | ||||||||
Dividend yield | 0.4 | % | 0.4 | % | 0.4 | % | 0.4 | % |
Foreign Currency Translation Adjustment | Unrealized Gains (Losses) on Marketable Securities | Retirement Plans Prior Service Credit | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Six Months Ended July 3, 2022 | ||||||||||||||||
Balance at December 31, 2021, net of tax of $0, $1,055, $(1,128), $0, respectively | $ | (10,818 | ) | $ | 3,704 | $ | 1,166 | $ | (5,948 | ) | ||||||
Other comprehensive loss before reclassifications, net of tax of $0, $(2,573), $0, respectively | (37,307 | ) | (9,910 | ) | — | $ | (47,217 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $59, $(1), respectively | — | 209 | (3 | ) | 206 | |||||||||||
Net current period other comprehensive loss, net of tax of $0, $(2,514), $(1), respectively | (37,307 | ) | (9,701 | ) | (3 | ) | (47,011 | ) | ||||||||
Balance at July 3, 2022, net of tax of $0, $(1,459), $(1,129), respectively | $ | (48,125 | ) | $ | (5,997 | ) | $ | 1,163 | $ | (52,959 | ) | |||||
Six Months Ended July 4, 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, $(472), $0, respectively | (15,974 | ) | (1,776 | ) | — | (17,750 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(121), $(1), respectively | — | (441 | ) | (3 | ) | (444 | ) | |||||||||
Net current period other comprehensive loss, net of tax of $0, $(593), $(1), respectively | (15,974 | ) | (2,217 | ) | (3 | ) | (18,194 | ) | ||||||||
Balance at July 4, 2021, net of tax of $0, $1,317, $(1,127), respectively | $ | 9,415 | $ | 4,737 | $ | 1,170 | $ | 15,322 | ||||||||
Foreign Currency Translation Adjustment | Unrealized Gains (Losses) on Marketable Securities | Unrealized Gains on Cash Flow Hedges | Retirement Plans Prior Service Credit | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Nine Months Ended October 2, 2022 | ||||||||||||||||||||
Balance at December 31, 2021, net of tax of $0, $1,055, $0, $(1,128), respectively | $ | (10,818 | ) | $ | 3,704 | $ | — | $ | 1,166 | $ | (5,948 | ) | ||||||||
Other comprehensive (loss) gain before reclassifications, net of tax of $0, $(3,570), $0, $0, respectively | (66,258 | ) | (13,491 | ) | 537 | — | (79,212 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $48, $0, $(2), respectively | — | 386 | — | (5 | ) | 381 | ||||||||||||||
Net current period other comprehensive (loss) gain, net of tax of $0, $(3,522), $0, $(2), respectively | (66,258 | ) | (13,105 | ) | 537 | (5 | ) | (78,831 | ) | |||||||||||
Balance at October 2, 2022, net of tax of $0, $(2,467), $0, $(1,130), respectively | $ | (77,076 | ) | $ | (9,401 | ) | $ | 537 | $ | 1,161 | $ | (84,779 | ) | |||||||
Nine Months Ended October 3, 2021 | ||||||||||||||||||||
Balance at December 31, 2020, net of tax of $0, $1,910, $0, $(1,126), respectively | $ | 25,389 | $ | 6,954 | $ | — | $ | 1,173 | $ | 33,516 | ||||||||||
Other comprehensive loss before reclassifications, net of tax of $0, $(516), $0, $0, respectively | (26,672 | ) | (1,952 | ) | — | — | (28,624 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax of $0, $(186), $0, $(2), respectively | — | (670 | ) | — | (5 | ) | (675 | ) | ||||||||||||
Net current period other comprehensive loss, net of tax of $0, $(702), $0, $(2), respectively | (26,672 | ) | (2,622 | ) | — | (5 | ) | (29,299 | ) | |||||||||||
Balance at October 3, 2021, net of tax of $0, $1,208, $0, $(1,128), respectively | $ | (1,283 | ) | $ | 4,332 | $ | — | $ | 1,168 | $ | 4,217 | |||||||||
Details about Accumulated Other Comprehensive Income (Loss) Components | For the Three Months Ended | For the Six Months Ended | Affected Line Item in the Statements of Operations | For the Three Months Ended | For the Nine Months Ended | Affected Line Item in the Statements of Operations | ||||||||||||||||||||||||||||||||
July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | October 2, 2022 | October 3, 2021 | October 2, 2022 | October 3, 2021 | |||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
Available-for-sale | ||||||||||||||||||||||||||||||||||||||
Unrealized (losses) gains, net of tax of $11, $65, $(48 ) , $186, respectively | $ | (177 | ) | $ | 229 | $ | (386 | ) | $ | 670 | Other (income) expense, net | |||||||||||||||||||||||||||
Defined benefit postretirement plan: | ||||||||||||||||||||||||||||||||||||||
Amortization of prior service credit, net of tax of $0, $0, $2, $2, respectively | 2 | 2 | 5 | 5 | (a) | |||||||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||||||||
Available-for-sale | ||||||||||||||||||||||||||||||||||||||
Unrealized (losses) gains, net of tax of $(77), $(2), $(59), $121, respectively | $ | (274 | ) | $ | (3 | ) | $ | (209 | ) | $ | 441 | Other (income) | ||||||||||||||||||||||||||
Defined benefit postretirement plan: | ||||||||||||||||||||||||||||||||||||||
Amortization of prior service credit, net of tax of $0, $0, $1, $1, respectively | 2 | 2 | 3 | 3 | (a) | |||||||||||||||||||||||||||||||||
Total reclassifications, net of tax of $11, $65, $46, $188, respectively | $ | (175 | ) | $ | 231 | $ | (381 | ) | $ | 675 | Net income | |||||||||||||||||||||||||||
Total reclassifications, net of tax of $(77), $(2), $(58), $122, respectively | $ | (272 | ) | $ | (1 | ) | $ | (206 | ) | $ | 444 | Net income | ||||||||||||||||||||||||||
(a) | The amortization of prior service credit is included in the computation of net periodic postretirement benefit cost. See Note P: “Retirement Plans.” |
Industrial Automation | Wireless Test | Semiconductor Test | System Test | Total | ||||||||||||||||||||||||||||||||||||
Industrial Automation | Wireless Test | Semiconductor Test | System Test | Total | ||||||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||
Goodwill | $ | 405,971 | $ | 361,819 | $ | 262,101 | $ | 158,699 | $ | 1,188,590 | $ | 405,971 | $ | 361,819 | $ | 262,101 | $ | 158,699 | $ | 1,188,590 | ||||||||||||||||||||
Accumulated impairment losses | — | (353,843 | ) | (260,540 | ) | (148,183 | ) | (762,566 | ) | — | (353,843 | ) | (260,540 | ) | (148,183 | ) | (762,566 | ) | ||||||||||||||||||||||
Total Goodwill | 405,971 | 7,976 | 1,561 | 10,516 | 426,024 | 405,971 | 7,976 | 1,561 | 10,516 | 426,024 | ||||||||||||||||||||||||||||||
Foreign currency translation adjustment | (28,225 | ) | — | (66 | ) | — | (28,291 | ) | (50,126 | ) | — | (99 | ) | — | (50,225 | ) | ||||||||||||||||||||||||
Balance at July 3, 2022 | ||||||||||||||||||||||||||||||||||||||||
Balance at October 2, 2022 | ||||||||||||||||||||||||||||||||||||||||
Goodwill | 377,746 | 361,819 | 262,035 | 158,699 | 1,160,299 | 355,845 | 361,819 | 262,002 | 158,699 | 1,138,365 | ||||||||||||||||||||||||||||||
Accumulated impairment losses | — | (353,843 | ) | (260,540 | ) | (148,183 | ) | (762,566 | ) | — | (353,843 | ) | (260,540 | ) | (148,183 | ) | (762,566 | ) | ||||||||||||||||||||||
Total Goodwill | $ | 377,746 | $ | 7,976 | $ | 1,495 | $ | 10,516 | $ | 397,733 | $ | 355,845 | $ | 7,976 | $ | 1,462 | $ | 10,516 | $ | 375,799 | ||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation Adjustment | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation Adjustment | Net Carrying Amount | |||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Balance at July 3, 2022 | (in thousands) | |||||||||||||||||||||||||||||||
Balance at October 2, 2022 | ||||||||||||||||||||||||||||||||
Developed technology | $ | 272,547 | $ | (229,766 | ) | $ | (6,182 | ) | $ | 36,599 | $ | 272,547 | $ | (232,802 | ) | $ | (7,620 | ) | $ | 32,125 | ||||||||||||
Customer relationships | 57,739 | (50,058 | ) | 149 | 7,830 | 57,739 | (50,623 | ) | 126 | 7,242 | ||||||||||||||||||||||
Tradenames and trademarks | 59,387 | (39,706 | ) | (1,601 | ) | 18,080 | 59,387 | (40,809 | ) | (2,365 | ) | 16,213 | ||||||||||||||||||||
Total intangible assets | $ | 389,673 | $ | (319,530 | ) | $ | (7,634 | ) | $ | 62,509 | $ | 389,673 | $ | (324,234 | ) | $ | (9,859 | ) | $ | 55,580 | ||||||||||||
Balance, December 31, 2021 | ||||||||||||||||||||||||||||||||
Developed technology | $ | 272,547 | $ | (223,413 | ) | $ | (4,093 | ) | $ | 45,041 | $ | 272,547 | $ | (223,413 | ) | $ | (4,093 | ) | $ | 45,041 | ||||||||||||
Customer relationships | 57,739 | (48,921 | ) | 209 | 9,027 | 57,739 | (48,921 | ) | 209 | 9,027 | ||||||||||||||||||||||
Tradenames and trademarks | 59,387 | (37,237 | ) | (583 | ) | 21,567 | 59,387 | (37,237 | ) | (583 | ) | 21,567 | ||||||||||||||||||||
Total intangible assets | $ | 389,673 | $ | (309,571 | ) | $ | (4,467 | ) | $ | 75,635 | $ | 389,673 | $ | (309,571 | ) | $ | (4,467 | ) | $ | 75,635 | ||||||||||||
Year | Amortization Expense | |||
(in thousands) | ||||
2022 | $ | 9,547 | ||
2023 | 18,642 | |||
2024 | 18,336 | |||
2025 | 11,154 | |||
2026 | 2,333 | |||
Thereafter | 2,497 |
Year | Amortization Expense | |||
(in thousands) | ||||
2022 | $ | 4,592 | ||
2023 | 17,922 | |||
2024 | 17,617 | |||
2025 | 10,855 | |||
2026 | 2,262 | |||
Thereafter | 2,332 |
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||
July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
October 2, 2022 | October 3, 2021 | October 2, 2022 | October 3, 2021 | |||||||||||||||||||||||||||||
(in thousands, except per share amounts) | (in thousands, except per share amounts) | |||||||||||||||||||||||||||||||
Net income for basic and diluted net income per share | $ | 197,787 | $ | 328,319 | $ | 359,715 | $ | 533,831 | $ | 183,485 | $ | 256,718 | $ | 543,200 | $ | 790,549 | ||||||||||||||||
Weighted average common shares-basic | 159,563 | 165,995 | 160,805 | 166,243 | 156,364 | 164,583 | 159,325 | 165,690 | ||||||||||||||||||||||||
Effect of dilutive potential common shares: | ||||||||||||||||||||||||||||||||
Convertible note hedge warrant shares (1) | 9,029 | 10,073 | 9,528 | 9,751 | 8,284 | 9,819 | 9,114 | 9,774 | ||||||||||||||||||||||||
Incremental shares from assumed conversion of convertible notes (2) | 1,900 | 9,578 | 2,220 | 9,944 | 1,453 | 6,464 | 1,965 | 8,784 | ||||||||||||||||||||||||
Restricted stock units | 581 | 1,015 | 730 | 1,205 | 564 | 1,035 | 673 | 1,147 | ||||||||||||||||||||||||
Stock options | 54 | 78 | 61 | 93 | 45 | 73 | 56 | 87 | ||||||||||||||||||||||||
Employee stock purchase plan | 32 | 11 | 23 | 9 | 23 | 13 | 23 | 10 | ||||||||||||||||||||||||
Dilutive potential common shares | 11,596 | 20,755 | 12,562 | 21,002 | 10,369 | 17,404 | 11,831 | 19,802 | ||||||||||||||||||||||||
Weighted average common shares-diluted | 171,159 | 186,750 | 173,367 | 187,245 | 166,733 | 181,987 | 171,156 | 185,492 | ||||||||||||||||||||||||
Net income per common share-basic | $ | 1.24 | $ | 1.98 | $ | 2.24 | $ | 3.21 | $ | 1.17 | $ | 1.56 | $ | 3.41 | $ | 4.77 | ||||||||||||||||
Net income per common share-diluted | $ | 1.16 | $ | 1.76 | $ | 2.07 | $ | 2.85 | $ | 1.10 | $ | 1.41 | $ | 3.17 | $ | 4.26 | ||||||||||||||||
(1) | Convertible notes hedge warrant shares were calculated using the difference between the average Teradyne stock price for the period and the warrant price, multiplied by the number of warrant shares. The result of this calculation, representing the total intrinsic value of the warrant, was divided by the average Teradyne stock price for the period. |
(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, multiplied by the number of convertible notes shares. The result of this calculation, representing the total intrinsic value of the convertible debt, was divided by the average Teradyne stock price for the period. |
For the Three Months Ended | ||||||||||||||||||||||||||||||||
July 3, 2022 | July 4, 2021 | For the Three Months Ended | ||||||||||||||||||||||||||||||
United States | Foreign | United States | Foreign | October 2, 2022 | October 3, 2021 | |||||||||||||||||||||||||||
United States | Foreign | United States | Foreign | |||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
Service cost | $ | 397 | $ | 180 | $ | 452 | $ | 245 | $ | 397 | $ | 153 | $ | 452 | $ | 240 | ||||||||||||||||
Interest cost | 1,221 | 120 | 1,096 | 88 | 1,222 | 96 | 1,098 | 86 | ||||||||||||||||||||||||
Expected return on plan assets | (732 | ) | (18 | ) | (936 | ) | (17 | ) | (732 | ) | (16 | ) | (936 | ) | (17 | ) | ||||||||||||||||
Net actuarial gain | (45 | ) | — | (400 | ) | — | ||||||||||||||||||||||||||
Total net periodic pension cost | $ | 841 | $ | 282 | $ | 212 | $ | 316 | $ | 887 | $ | 233 | $ | 614 | $ | 309 | ||||||||||||||||
For the Six Months Ended | ||||||||||||||||||||||||||||||||
July 3, 2022 | July 4, 2021 | |||||||||||||||||||||||||||||||
United States | Foreign | United States | Foreign | |||||||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||||||
Service cost | $ | 794 | $ | 386 | $ | 905 | $ | 491 | ||||||||||||||||||||||||
Interest cost | 2,443 | 238 | 2,196 | 175 | ||||||||||||||||||||||||||||
Expected return on plan assets | (1,463 | ) | (38 | ) | (1,872 | ) | (33 | ) | ||||||||||||||||||||||||
Net actuarial gain | (45 | ) | — | (400 | ) | — | ||||||||||||||||||||||||||
Total net periodic pension cost | $ | 1,729 | $ | 586 | $ | 829 | $ | 633 | ||||||||||||||||||||||||
For the Nine Months Ended | ||||||||||||||||
October 2, 2022 | October 3, 2021 | |||||||||||||||
United States | Foreign | United States | Foreign | |||||||||||||
(in thousands) | ||||||||||||||||
Service cost | $ | 1,191 | $ | 539 | $ | 1,357 | $ | 720 | ||||||||
Interest cost | 3,665 | 333 | 3,295 | 257 | ||||||||||||
Expected return on plan assets | (2,195 | ) | (54 | ) | (2,809 | ) | (50 | ) | ||||||||
Net actuarial gain | (45 | ) | — | (400 | ) | — | ||||||||||
Total net periodic pension cost | $ | 2,616 | $ | 818 | $ | 1,443 | $ | 927 | ||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||
July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
October 2, 2022 | October 3, 2021 | October 2, 2022 | October 3, 2021 | |||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
Service cost | $ | 15 | $ | 17 | $ | 32 | $ | 33 | $ | 16 | $ | 16 | $ | 48 | $ | 48 | ||||||||||||||||
Interest cost | 45 | 41 | 88 | 85 | 44 | 43 | 132 | 128 | ||||||||||||||||||||||||
Amortization of prior service credit | (2 | ) | (2 | ) | (4 | ) | (4 | ) | (2 | ) | (2 | ) | (7 | ) | (7 | ) | ||||||||||||||||
Net actuarial loss (gain) | 54 | (228 | ) | 54 | (228 | ) | — | — | 54 | (228 | ) | |||||||||||||||||||||
Total net periodic postretirement benefit cost (credit) | $ | 112 | $ | (172 | ) | $ | 170 | $ | (114 | ) | $ | 58 | $ | 57 | $ | 227 | $ | (59 | ) | |||||||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||
For the Three Months Ended | For the Six Months Ended | October 2, 2022 | October 3, 2021 | October 2, 2022 | October 3, 2021 | |||||||||||||||||||||||||||
July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | |||||||||||||||||||||||||||||
U.S. statutory federal tax rate | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | 21.0 | % | ||||||||||||||||
Non-deductible officers’ compensation | 1.4 | 0.8 | 1.3 | 0.8 | 1.8 | 0.8 | 1.4 | 0.8 | ||||||||||||||||||||||||
Foreign taxes | (3.2 | ) | (4.3 | ) | (3.3 | ) | (4.5 | ) | (0.7 | ) | (4.4 | ) | (2.4 | ) | (4.4 | ) | ||||||||||||||||
Tax credits | (2.0 | ) | (1.2 | ) | (1.8 | ) | (1.2 | ) | (2.1 | ) | (1.9 | ) | (1.9 | ) | (1.4 | ) | ||||||||||||||||
International provisions of the U.S. Tax Cuts and Jobs Act of 2017 | (1.0 | ) | (1.7 | ) | (1.2 | ) | (1.6 | ) | (1.4 | ) | (1.5 | ) | (1.2 | ) | (1.6 | ) | ||||||||||||||||
Discrete benefit related to equity compensation | (0.2 | ) | (0.2 | ) | (2.9 | ) | (2.4 | ) | (0.1 | ) | (0.1 | ) | (1.9 | ) | (1.6 | ) | ||||||||||||||||
Other, net | 1.1 | 0.1 | 1.0 | 0.1 | 0.4 | (0.1 | ) | 0.8 | (0.1 | ) | ||||||||||||||||||||||
Effective tax rate | 17.1 | % | 14.5 | % | 14.1 | % | 12.2 | % | 18.9 | % | 13.8 | % | 15.8 | % | 12.7 | % | ||||||||||||||||
Semiconductor Test | System Test | Industrial Automation | Wireless Test | Corporate and Eliminations | Consolidated | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Three Months Ended July 3, 2022 | ||||||||||||||||||||||||
Revenues | $ | 541,348 | $ | 134,702 | $ | 101,055 | $ | 63,854 | $ | (193 | ) | $ | 840,766 | |||||||||||
Income (loss) before income taxes (1)(2) | 177,782 | 54,042 | (6,406 | ) | 25,393 | (12,219 | ) | 238,592 | ||||||||||||||||
Total assets (3) | 1,449,878 | 229,359 | 644,099 | 118,445 | 1,046,645 | 3,488,426 | ||||||||||||||||||
Three Months Ended July 4, 2021 | ||||||||||||||||||||||||
Revenues | $ | 833,976 | $ | 104,819 | $ | 92,186 | $ | 54,893 | $ | (146 | ) | $ | 1,085,728 | |||||||||||
Income (loss) before income taxes (1)(2) | 337,302 | 33,954 | (9,837 | ) | 21,472 | 1,135 | 384,026 | |||||||||||||||||
Total assets (3) | 1,518,941 | 146,296 | 687,022 | 117,702 | 1,530,961 | 4,000,922 | ||||||||||||||||||
Six Months Ended July 3, 2022 | ||||||||||||||||||||||||
Revenues | $ | 1,023,688 | $ | 253,371 | $ | 204,244 | $ | 115,372 | $ | (539 | ) | $ | 1,596,136 | |||||||||||
Income (loss) before income taxes (1)(2) | 327,487 | 95,365 | (11,504 | ) | 44,012 | (36,409 | ) | 418,951 | ||||||||||||||||
Total assets (3) | 1,449,878 | 229,359 | 644,099 | 118,445 | 1,046,645 | 3,488,426 | ||||||||||||||||||
Six Months Ended July 4, 2021 | ||||||||||||||||||||||||
Revenues | $ | 1,362,039 | $ | 237,656 | $ | 172,137 | $ | 95,791 | $ | (289 | ) | $ | 1,867,334 | |||||||||||
Income (loss) before income taxes (1)(2) | 513,670 | 85,015 | (22,804 | ) | 31,088 | 1,050 | 608,019 | |||||||||||||||||
Total assets (3) | 1,518,941 | 146,296 | 687,022 | 117,702 | 1,530,961 | 4,000,922 |
Semiconductor Test | System Test | Industrial Automation | Wireless Test | Corporate and Eliminations | Consolidated | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Three Months Ended October 2, 2022 | ||||||||||||||||||||||||
Revenues | $ | 575,704 | $ | 116,154 | $ | 89,067 | $ | 46,148 | $ | — | $ | 827,073 | ||||||||||||
Income (loss) before income taxes (1)(2) | 182,625 | 40,201 | (3,992 | ) | 12,647 | (5,284 | ) | 226,197 | ||||||||||||||||
Total assets (3) | 1,366,478 | 192,684 | 614,558 | 110,484 | 1,035,702 | 3,319,906 | ||||||||||||||||||
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 | ||||||||||||||||||
Nine Months Ended October 2, 2022 | ||||||||||||||||||||||||
Revenues | $ | 1,599,392 | $ | 369,525 | $ | 292,772 | $ | 161,520 | $ | — | $ | 2,423,209 | ||||||||||||
Income (loss) before income taxes (1)(2) | 510,112 | 135,566 | (15,496 | ) | 56,659 | (41,693 | ) | 645,148 | ||||||||||||||||
Total assets (3) | 1,366,478 | 192,684 | 614,558 | 110,484 | 1,035,702 | 3,319,906 | ||||||||||||||||||
Nine Months Ended October 3, 2021 | ||||||||||||||||||||||||
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 |
(1) | Included in Corporate and Eliminations are: legal and environmental fees, contingent consideration fair value adjustments, interest income, interest expense, severance charges, net foreign exchange gains (losses), acquisition related charges and compensation, pension, intercompany eliminations and for the three and |
(2) | Included in income (loss) before taxes are charges and credits related to restructuring and other, inventory charges and, for the three and |
(3) | Total assets are attributable to each segment. Corporate assets consist of cash and cash equivalents, marketable securities, and certain other assets. |
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Semiconductor Test: | ||||||||||||||||
Cost of revenues—inventory charge | $ | 2,071 | $ | — | $ | 2,315 | $ | 1,234 | ||||||||
Industrial Automation: | ||||||||||||||||
Cost of revenues—inventory charge | $ | 831 | $ | — | $ | 1,197 | $ | 1,285 | ||||||||
Restructuring and other—acquisition related expenses and compensation | — | — | — | 550 | ||||||||||||
Wireless: | ||||||||||||||||
Cost of revenues—inventory charge | $ | 2,099 | $ | — | $ | 2,976 | $ | 672 | ||||||||
Corporate and Eliminations: | ||||||||||||||||
Restructuring and other—other | $ | 1,500 | $ | 1,700 | $ | 2,000 | $ | 1,846 | ||||||||
Restructuring and other—legal settlement charge | — | — | 14,700 | — | ||||||||||||
Other (income) expense, net—loss on convertible debt conversions | — | 1,175 | — | 5,244 | ||||||||||||
Restructuring and other—AutoGuide contingent consideration adjustment | — | — | — | (7,227 | ) | |||||||||||
Restructuring and other—acquisition related expenses and compensation | — | — | — | (513 | ) |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
October 2, 2022 | October 3, 2021 | October 2, 2022 | October 3, 2021 | |||||||||||||
(in thousands) | ||||||||||||||||
Semiconductor Test: | ||||||||||||||||
Cost of revenues—inventory charge | $ | 10,829 | $ | 3,725 | $ | 13,144 | $ | 4,959 | ||||||||
Industrial Automation: | ||||||||||||||||
Restructuring and other—employee severance | $ | 1,074 | $ | — | $ | 1,616 | $ | 965 | ||||||||
Cost of revenues—inventory charge | — | 3,656 | 1,411 | 4,941 | ||||||||||||
Restructuring and other—acquisition related expenses and compensation | — | — | — | 825 | ||||||||||||
Wireless: | ||||||||||||||||
Cost of revenues—inventory charge | $ | 966 | $ | 679 | $ | 3,942 | $ | 1,351 | ||||||||
System Test: | ||||||||||||||||
Cost of revenues—inventory charge | $ | — | $ | — | $ | — | $ | 524 | ||||||||
Corporate and Eliminations: | ||||||||||||||||
Restructuring and other—other | $ | 700 | $ | — | $ | 2,700 | $ | 1,846 | ||||||||
Restructuring and other—legal settlement charge | — | — | 14,700 | — | ||||||||||||
Other (income) expense, net—loss on convertible debt conversions | — | 20,153 | — | 25,397 | ||||||||||||
Restructuring and other—AutoGuide contingent consideration adjustment | — | — | — | (7,227 | ) | |||||||||||
Restructuring and other—acquisition related expenses and compensation | — | — | — | (513 | ) |
Item 2: | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Statements in this Quarterly Report on Form
Overview
We are a leading global supplier of automation equipment for test and industrial applications. We design, develop, manufacture and sell automatic test systems used to test semiconductors, wireless products, data storage and complex electronics systems in many industries including the consumer electronics, wireless, automotive, industrial, computing, communications, and aerospace and defense industries. Our industrial automation products include collaborative robotic arms, autonomous mobile robots (“AMRs”) and advanced robotic control software used by global manufacturing, logistics and light industrial customers to improve quality, increase manufacturing and material handling efficiency and decrease manufacturing and logistics costs. Our automatic test equipment and industrial automation products and services include:
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.
The market for our test products is concentrated with a limited number of significant customers accounting for a substantial portion of the purchases of test equipment. A few customers drive significant demand for our test products both through direct sales and sales to the customers’ supply partners. We expect that sales of our test products will continue to be concentrated with a limited number of significant customers for the foreseeable future. In 2022, we expect lower demand in the mobility and compute segments of our Semiconductor Test business due to end market slowdown in these segments as well as slower technology transition in one of our largest
Our Industrial Automation segment consists of Universal Robots A/S (“UR”), a leading supplier of collaborative robotic arms and Mobile Industrial Robots A/S (“MiR”), a leading maker of AMRs for industrial automation and AutoGuide, LLC (“AutoGuide”), a maker of high payload AMRs.automation. The market for our Industrial Automation segment products is dependent on the adoption of new automation technologies by large manufacturers as well as small and medium enterprises (SMEs) throughout the world. We expect our UR and MiR businesses to continue to grow in 2022, while our AutoGuide business will focus on continuing to invest to scale and integrate high payload AMR solutions.
Both our test and industrial automation businesses may continue to be impacted by supply constraints, which will in turn impact our revenue and is expected to along with inflation, increase costs in 2022. Through the secondthird quarter of 2022, inflation has not had a material impact on our results. In the secondthird quarter 2022, we were unable to supply approximately $40$10 million of revenue in our test businesses for which we had customer demand. Our thirdfourth quarter 2022 forecast excludes approximately $50$15 million of revenue, primarily in our test businesses, due to these continued supply chain constraints.
Our financial statements are denominated in U.S. dollars. While the majority of our revenues are in U.S. dollars, approximately 70 percent of our Industrial Automation revenue is denominated in foreign currencies. In the third quarter of 2022, the strengthening of the U.S. dollar was a factor in lower than forecasted revenues in our Industrial Automation segment. Continued strengthening of the dollar may adversely impact revenue growth in the fourth quarter of 2022.
Our corporate strategy continues to focus on profitably gaining market share in our test businesses through the introduction of differentiated products that target expanding segments and accelerating growth through continued investment in our Industrial Automation businesses. We plan to execute on our strategy while balancing capital allocations between returning capital to our shareholders through stock repurchases and dividends and using capital for opportunistic acquisitions.
30
Impact of the
The novel coronavirus
Due to the
Health and Safety
In response to the
Operations
We believe the
Demand
The
Liquidity
Although there is continued uncertainty related to the impact of the
We are continuing to monitor the evolving situation regarding the
31
Supply Chain Constraints and Inflationary Pressures
The global supply shortage of electrical components, including semiconductor chips, continued to impact our supply chain in the secondthird quarter of 2022. As a result, we experienced, and expect to continue to experience, increases in our lead times and costs for certain components for certain of our products. In addition, while not material, inflationary pressures contributed to increased costs for product components and wage inflation, impacting our cost of products, gross margin and profit for the quarter. Our supply chain team, and our suppliers, continue to manage numerous supply, production, and logistics obstacles. While not material through the secondthird quarter of 2022, in an effort to mitigate these risks, in some cases, we have incurred higher costs due to investment in supply chain resiliency and to secure available inventory or have extended or placed
Impact of Russia’s invasion of Ukraine on our Business
Russia’s invasion of Ukraine, in February 2022, did not have a significant impact on our business as we have minimal business in Russia and Ukraine, both directly and indirectly. However, following the invasion, the U.S. and other countries imposed significant sanctions against the Russian government and many Russian companies and individuals. Although Teradyne doeswe do not have significant operations in Russia, the sanctions and Russia’s response to the sanctions, have impacted Teradyne’sour business in other countries and could have a negative impact on the Company’sour future revenue and supply chain, either of which could adversely affect Teradyne’sour business and financial results. In addition, the global economic uncertainty following the invasion, sanctions and Russia’s response to the sanctions could impact demand for our products.
Impact of October 7, 2022 U.S. Department of Commerce Regulations on our Business
On October 7, 2022, the U.S. Department of Commerce published new regulations restricting the export to China of advanced semiconductors, supercomputer technology, equipment for the manufacturing of advanced semiconductors and components and technology for the manufacturing in China of certain semiconductor manufacturing equipment. The new restrictions are lengthy and complex. We continue to assess the impact of these regulations on our business. We have determined that restrictions on the sale of semiconductor testers in China to test certain advanced semiconductors will impact our sales to certain companies in China. Several multinational companies manufacturing these advanced semiconductors in China have obtained one-year licenses allowing suppliers such as Teradyne to continue to provide testers to the facilities operated by these companies. We expect that other companies manufacturing advanced semiconductors in China will not receive licenses, thereby restricting our ability to provide testers to the facilities operated by these companies that do not receive a license. We also are assessing the filing of license requests to sell to and support certain customers in China for certain end uses that, if granted, may reduce the impact of these restrictions on our business. At this time, we do not know the impact these end user and end use restrictions will have on our business in China or on future revenues. In addition to the specific restrictions impacting our business, the regulations may have an adverse impact on certain actual or potential customers and on the global semiconductor industry. To the extent the regulations impact actual and potential customers or disrupt the global semiconductor industry, our business and revenues will be adversely impacted. We also have determined that the restrictions on the export of certain US origin components and technology for use in the development and production in China of certain semiconductor manufacturing equipment impact our manufacturing and development operations in China. We have received a temporary authorization from the U.S. Department of Commerce allowing us to continue our manufacturing and development operations in China until the U.S. Department of Commerce issues a license to replace this temporary authorization. We will file an application with the U.S. Department of Commerce for a license to replace the temporary authorization by November 17, 2022. We cannot assess the likelihood or timing of receiving this license. In addition to requesting a license, we are implementing procedures for minimizing the impact of these new regulations on our operations in China, but there is no assurance that these procedures will succeed.
See Part II—Item 1A, “Risk Factors,” included in our Annual Report on Form
Critical Accounting Policies and Estimates
We have identified the policies which are critical to understanding our business and our results of operations. There have been no significant changes during the sixnine months ended July 3,October 2, 2022 to the items disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form
32
Critical accounting estimates are complex and may require significant judgment by management. Changes to the underlying assumptions may have a material impact on our financial condition and results of operations. These estimates may change, as new events occur, and additional information is obtained. Actual results could differ significantly from these estimates under different assumptions or conditions.
Convertible Debt
We adopted Accounting Standards Update (“ASU”) ASU
Preparation of Financial Statements and Use of Estimates
The preparation of consolidated financial statements requires management to make estimates and judgments that affect the amounts reported in the financial statements. Actual results may differ significantly from these estimates under different assumptions or conditions.
33
SELECTED RELATIONSHIPS WITHIN THE CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
July 3, 2022 | July 4, 2021 | July 3, 2022 | July 4, 2021 | |||||||||||||
Percentage of revenues: | ||||||||||||||||
Revenues: | ||||||||||||||||
Products | 83 | % | 88 | % | 83 | % | 86 | % | ||||||||
Services | 17 | 12 | 17 | 14 | ||||||||||||
Total revenues | 100 | 100 | 100 | 100 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Cost of products | 33 | 36 | 32 | 35 | ||||||||||||
Cost of services | 7 | 5 | 7 | 5 | ||||||||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) | 40 | 40 | 40 | 41 | ||||||||||||
Gross profit | 60 | 60 | 60 | 59 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling and administrative | 17 | 13 | 18 | 14 | ||||||||||||
Engineering and development | 13 | 10 | 14 | 11 | ||||||||||||
Acquired intangible assets amortization | — | — | 1 | 1 | ||||||||||||
Restructuring and other | — | — | 1 | — | ||||||||||||
Total operating expenses | 31 | 24 | 33 | 26 | ||||||||||||
Income from operations | 29 | 36 | 27 | 33 | ||||||||||||
Non-operating (income) expense: | ||||||||||||||||
Interest income | — | — | — | — | ||||||||||||
Interest expense | — | 1 | — | 1 | ||||||||||||
Other (income) expense, net | 1 | — | 1 | — | ||||||||||||
Income before income taxes | 28 | 35 | 26 | 33 | ||||||||||||
Income tax provision | 5 | 5 | 4 | 4 | ||||||||||||
Net income | 24 | % | 30 | % | 23 | % | 29 | % | ||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
October 2, 2022 | October 3, 2021 | October 2, 2022 | October 3, 2021 | |||||||||||||
Percentage of revenues: | ||||||||||||||||
Revenues: | ||||||||||||||||
Products | 82 | % | 87 | % | 83 | % | 87 | % | ||||||||
Services | 18 | 13 | 17 | 13 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total revenues | 100 | 100 | 100 | 100 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Cost of products | 34 | 35 | 33 | 35 | ||||||||||||
Cost of services | 8 | 5 | 7 | 5 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total cost of revenues (exclusive of acquired intangible assets amortization shown separately below) | 41 | 40 | 40 | 40 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Gross profit | 59 | 60 | 60 | 60 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling and administrative | 16 | 14 | 17 | 14 | ||||||||||||
Engineering and development | 14 | 11 | 14 | 11 | ||||||||||||
Acquired intangible assets amortization | 1 | 1 | 1 | 1 | ||||||||||||
Restructuring and other | — | — | 1 | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total operating expenses | 31 | 26 | 32 | 26 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Income from operations | 28 | 34 | 27 | 34 | ||||||||||||
Non-operating (income) expense: | ||||||||||||||||
Interest income | — | — | — | — | ||||||||||||
Interest expense | — | — | — | 1 | ||||||||||||
Other (income) expense, net | 1 | 2 | 1 | 1 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Income before income taxes | 27 | 31 | 27 | 32 | ||||||||||||
Income tax provision | 5 | 4 | 4 | 4 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net income | 22 | % | 27 | % | 22 | % | 28 | % | ||||||||
|
|
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|
|
|
|
|
Results of Operations
Third Quarter 2022 Compared to SecondThird Quarter 2021
Revenues
Revenues by our reportable segments were as follows:
For the Three Months Ended | ||||||||||||
July 3, 2022 | July 4, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 541.3 | $ | 834.0 | $ | (292.7 | ) | |||||
System Test | 134.7 | 104.8 | 29.9 | |||||||||
Industrial Automation | 101.1 | 92.2 | 8.9 | |||||||||
Wireless Test | 63.9 | 54.9 | 9.0 | |||||||||
Corporate and Eliminations | (0.2 | ) | (0.1 | ) | (0.1 | ) | ||||||
$ | 840.8 | $ | 1,085.7 | $ | (244.9 | ) | ||||||
For the Three Months Ended | ||||||||||||
October 2, 2022 | October 3, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 575.7 | $ | 688.2 | $ | (112.5 | ) | |||||
System Test | 116.2 | 102.6 | 13.6 | |||||||||
Industrial Automation | 89.1 | 91.0 | (1.9 | ) | ||||||||
Wireless Test | 46.1 | 68.7 | (22.6 | ) | ||||||||
Corporate and Eliminations | — | (0.1 | ) | 0.1 | ||||||||
|
|
|
|
|
| |||||||
$ | 827.1 | $ | 950.5 | $ | (123.4 | ) | ||||||
|
|
|
|
|
|
The decrease in Semiconductor Test revenues of $292.7$112.5 million, or 35.1%16.3%, was driven primarily by lower tester sales in high performance compute processor and mobile applications, and lowerpartially offset by higher memory test sales of flash memory testers.sales. The increase in System Test revenues of $29.9$13.6 million, or 28.5%13.3%, was primarily due to higher sales in Storage Test of system level and hard disk drive testers. The increasedecrease in Industrial Automation revenues of $8.9$1.9 million, or 9.7%2.1%, was driven primarily by higher demand for UR’s collaborative robotic arms and MiR’s autonomous mobile robots.changes in foreign exchange rates. The risedecrease in Wireless Test revenues of $9.0$22.6 million, or 16.4%32.9%, was primarily due to increasea decrease in connectivity and cellular test products.product sales.
34
Revenues by country as a percentage of total revenues were as follows (1):
For the Three Months Ended | ||||||||
July 3, 2022 | July 4, 2021 | |||||||
Taiwan | 25 | % | 44 | % | ||||
Korea | 17 | 9 | ||||||
United States | 14 | 9 | ||||||
China | 13 | 15 | ||||||
Europe | 8 | 5 | ||||||
Thailand | 6 | 3 | ||||||
Malaysia | 5 | 2 | ||||||
Japan | 5 | 5 | ||||||
Philippines | 3 | 6 | ||||||
Singapore | 2 | 1 | ||||||
Rest of World | 2 | 1 | ||||||
100 | % | 100 | % | |||||
For the Three Months Ended | ||||||||
October 2, 2022 | October 3, 2021 | |||||||
Taiwan | 23 | % | 27 | % | ||||
Korea | 18 | 8 | ||||||
China | 16 | 19 | ||||||
United States | 14 | 11 | ||||||
Europe | 7 | 8 | ||||||
Philippines | 5 | 5 | ||||||
Thailand | 4 | 3 | ||||||
Malaysia | 4 | 6 | ||||||
Japan | 4 | 5 | ||||||
Singapore | 3 | 5 | ||||||
Rest of World | 2 | 3 | ||||||
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100 | % | 100 | % | |||||
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(1) | Revenues attributable to a country are based on location of customer site. |
Gross Profit
Our gross profit was as follows:
For the Three Months Ended | ||||||||||||
July 3, 2022 | July 4, 2021 | Dollar/Point Change | ||||||||||
(in millions) | ||||||||||||
Gross profit | $ | 506.4 | $ | 647.0 | $ | (140.6 | ) | |||||
Percent of total revenues | 60.2 | % | 59.6 | % | 0.6 |
For the Three Months Ended | ||||||||||||
October 2, 2022 | October 3, 2021 | Dollar/Point Change | ||||||||||
(in millions) | ||||||||||||
Gross profit | $ | 485.4 | $ | 571.0 | $ | (85.6 | ) | |||||
Percent of total revenues | 58.7 | % | 60.1 | % | (1.4 | ) |
Gross profit as a percent of revenue increaseddecreased by 0.61.4 points, primarily due to favorablelower volume and product mix in Semiconductor Test partially offset byand higher material costs due to inflation.
Selling and Administrative
Selling and administrative expenses were as follows:
For the Three Months Ended | ||||||||||||
July 3, 2022 | July 4, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Selling and administrative | $ | 139.5 | $ | 140.2 | $ | (0.7 | ) | |||||
Percent of total revenues | 16.6 | % | 12.9 | % |
For the Three Months Ended | ||||||||||||
October 2, 2022 | October 3, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Selling and administrative | $ | 135.6 | $ | 134.8 | $ | 0.8 | ||||||
Percent of total revenues | 16.4 | % | 14.2 | % |
The decreaseincrease of $0.7$0.8 million in selling and administrative expenses was primarily due todriven by Semiconductor Test and Industrial Automation increase in headcount and greater spending, partially offset by lower variable compensation.
35
Engineering and Development
Engineering and development expenses were as follows:
For the Three Months Ended | ||||||||||||
July 3, 2022 | July 4, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Engineering and development | $ | 112.0 | $ | 110.0 | $ | 2.0 | ||||||
Percent of total revenues | 13.3 | % | 10.1 | % |
For the Three Months Ended | ||||||||||||
October 2, 2022 | October 3, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Engineering and development | $ | 111.7 | $ | 107.2 | $ | 4.5 | ||||||
Percent of total revenues | 13.5 | % | 11.3 | % |
The increase of $2.0$4.5 million in engineering and development expenses was primarily due to higher spending indriven by Semiconductor Test and Industrial Automation increase in headcount and greater spending, partially offset by lower variable compensation.
Restructuring and Other
During the three months ended July 3,October 2, 2022, and July 4, 2021, we recorded $1.2 million of severance charges primarily in Industrial Automation, and a charge of $1.5$0.7 million and $1.7 million, respectively, for an increase in environmental and legal liabilities.
During the three months ended October 3, 2021, we recorded $0.6 million of severance charges primarily in Industrial Automation.
Interest and Other
For the Three Months Ended | ||||||||||||
July 3, 2022 | July 4, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Interest income | $ | (1.0 | ) | $ | (0.6 | ) | $ | (0.4 | ) | |||
Interest expense | 0.9 | 5.6 | $ | (4.7 | ) | |||||||
Other (income) expense, net | 9.4 | (0.1 | ) | $ | 9.5 |
For the Three Months Ended | ||||||||||||
October 2, 2022 | October 3, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Interest income | $ | (1.3 | ) | $ | (0.6 | ) | $ | (0.7 | ) | |||
Interest expense | 0.8 | 3.8 | (3.0 | ) | ||||||||
Other (income) expense, net | 5.8 | 21.5 | (15.7 | ) |
Interest expense decreased by $4.7$3.0 million primarily due to the January 1, 2022 adoption of ASU
Income (Loss) Before Income Taxes
For the Three Months Ended | ||||||||||||
July 3, 2022 | July 4, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 177.8 | $ | 337.3 | $ | (159.5 | ) | |||||
System Test | 54.0 | 34.0 | 20.0 | |||||||||
Wireless Test | 25.4 | 21.5 | 3.9 | |||||||||
Industrial Automation | (6.4 | ) | (9.8 | ) | 3.4 | |||||||
Corporate and Eliminations (1) | (12.2 | ) | 1.1 | (13.3 | ) | |||||||
$ | 238.6 | $ | 384.0 | $ | (145.4 | ) | ||||||
For the Three Months Ended | ||||||||||||
October 2, 2022 | October 3, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 182.6 | $ | 265.0 | $ | (82.4 | ) | |||||
System Test | 40.2 | 31.8 | 8.4 | |||||||||
Wireless Test | 12.6 | 31.7 | (19.1 | ) | ||||||||
Industrial Automation | (4.0 | ) | (4.2 | ) | 0.2 | |||||||
Corporate and Eliminations (1) | (5.3 | ) | (26.5 | ) | 21.2 | |||||||
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$ | 226.2 | $ | 297.8 | $ | (71.6 | ) | ||||||
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(1) | Included in Corporate and Eliminations are legal and environmental fees, interest income, interest expense, net foreign exchange gains (losses), pension, intercompany eliminations, acquisition related charges and compensation and for the three months ended |
The decrease in income before income taxes in Semiconductor Test was driven primarily by lower revenues in compute processor and mobile applications, and lowerpartially offset by higher memory test sales of flash memory testers.sales. The increase in income before income taxes in System Test was primarily due to higher sales in Storage Test of system level and hard disk drive testers. The risedecrease in income before taxes in Wireless Test was driven primarily by an increasea decrease in sales of connectivity and cellular test products. The lower losses before taxes in Industrial Automation was driven primarily by higher demand for UR’s collaborative robotic arms and MiR’s autonomous mobile robots.product sales.
36
Income Taxes
The effective tax rate for the three months ended July 3,October 2, 2022 and July 4,October 3, 2021 was 17.1%18.9% and 14.5%13.8%, respectively. The increase in the effective tax rate from the three months ended July 4,October 3, 2021 to the three months ended July 3,October 2, 2022 was primarily attributable to a shift in the geographic distribution of income, which increases the income subject to taxation in higher tax rate jurisdictions relative to lower tax rate jurisdictions, an increase in non-deductible officers’ compensation and a reduction in the benefit related to the international provisions of the U.S. Tax Cuts and Jobs Act of 2017 and an increase in
Nine Months 2022 Compared to SixNine Months 2021
Revenues
Revenues by our reportable segments were as follows:
For the Six Months Ended | ||||||||||||
July 3, 2022 | July 4, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 1,023.7 | $ | 1,362.0 | $ | (338.3 | ) | |||||
System Test | 253.4 | 237.7 | 15.7 | |||||||||
Industrial Automation | 204.2 | 172.1 | 32.1 | |||||||||
Wireless Test | 115.4 | 95.8 | 19.6 | |||||||||
Corporate and Eliminations | (0.5 | ) | (0.3 | ) | (0.2 | ) | ||||||
$ | 1,596.1 | $ | 1,867.3 | $ | (271.1 | ) | ||||||
For the Nine Months Ended |
| |||||||||||
October 2, 2022 | October 3, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 1,599.4 | $ | 2,050.3 | $ | (450.9 | ) | |||||
System Test | 369.5 | 340.3 | 29.2 | |||||||||
Industrial Automation | 292.8 | 263.2 | 29.6 | |||||||||
Wireless Test | 161.5 | 164.5 | (3.0 | ) | ||||||||
Corporate and Eliminations | — | (0.4 | ) | 0.4 | ||||||||
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| |||||||
$ | 2,423.2 | $ | 2,817.8 | $ | (394.6 | ) | ||||||
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The decrease in Semiconductor Test revenues of $338.3$450.9 million, or 24.8%22.0%, was driven primarily by lower tester sales in high performance compute processor and mobile applications, and lower memory test sales of flash memory testers.applications. The increase in System Test revenues of $15.7$29.2 million, or 6.6%8.6%, was primarily due to higher sales in Storage Test of hard disk drive testers, and higher sales in Defense/Aerospace and in Production Board Test. The increaserise in Industrial Automation revenues of $32.1$29.6 million, or 18.7%11.2%, was driven primarily by higher demand for UR’s collaborative robotic arms and MiR’s autonomous mobile robots.robots, partially offset by changes in foreign exchange rates. The risedecrease in Wireless Test revenues of $19.6$3.0 million, or 20.5%1.8%, was primarily due to a decrease in cellular test product sales, partially offset by an increase in connectivity test.
Revenues by country as a percentage of total revenues were as follows (1):
For the Six Months Ended | ||||||||
July 3, 2022 | July 4, 2021 | |||||||
Taiwan | 22 | % | 40 | % | ||||
China | 16 | 17 | ||||||
Korea | 15 | 9 | ||||||
United States | 15 | 9 | ||||||
Europe | 9 | 6 | ||||||
Thailand | 5 | 5 | ||||||
Japan | 5 | 4 | ||||||
Malaysia | 5 | 3 | ||||||
Philippines | 3 | 5 | ||||||
Singapore | 3 | 2 | ||||||
Rest of World | 2 | — | ||||||
100 | % | 100 | % | |||||
For the Nine Months Ended | ||||||||
October 2, 2022 | October 3, 2021 | |||||||
Taiwan | 22 | % | 36 | % | ||||
China | 16 | 18 | ||||||
Korea | 16 | 8 | ||||||
United States | 14 | 10 | ||||||
Europe | 8 | 7 | ||||||
Japan | 5 | 4 | ||||||
Thailand | 5 | 4 | ||||||
Malaysia | 5 | 4 | ||||||
Philippines | 3 | 5 | ||||||
Singapore | 3 | 3 | ||||||
Rest of World | 3 | 1 | ||||||
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100 | % | 100 | % | |||||
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(1) | Revenues attributable to a country are based on location of customer site. |
37
Gross Profit
Our gross profit was as follows:
For the Six Months Ended | ||||||||||||
July 3, | July 4, | Dollar/Point | ||||||||||
2022 | 2021 | Change | ||||||||||
(in millions) | ||||||||||||
Gross profit | $ | 961.3 | $ | 1,108.6 | $ | (147.3 | ) | |||||
Percent of total revenues | 60.2 | % | 59.4 | % | 0.8 |
For the Nine Months Ended | ||||||||||||
October 2, 2022 | October 3, 2021 | Dollar/Point Change | ||||||||||
(in millions) | ||||||||||||
Gross profit | $ | 1,446.7 | $ | 1,679.6 | $ | (232.9 | ) | |||||
Percent of total revenues | 59.7 | % | 59.6 | % | 0.1 |
Gross profit as a percent of revenue increased by 0.80.1 points, primarily due to favorable product mix in Semiconductor Test partially offset by higher material costs due to inflation.
Selling and Administrative
Selling and administrative expenses were as follows:
For the Six Months Ended | ||||||||||||
July 3, | July 4, | Dollar | ||||||||||
2022 | 2021 | Change | ||||||||||
(in millions) | ||||||||||||
Selling and administrative | $ | 279.7 | $ | 270.0 | $ | 9.7 | ||||||
Percent of total revenues | 17.5 | % | 14.5 | % |
For the Nine Months Ended | ||||||||||||
October 2, 2022 | October 3, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Selling and administrative | $ | 415.4 | $ | 404.8 | $ | 10.6 | ||||||
Percent of total revenues | 17.1 | % | 14.4 | % |
The increase of $9.7$10.6 million in selling and administrative expenses was primarily due to higher spending indriven by Semiconductor Test and Industrial Automation increase in headcount and Semiconductor Test,greater spending, partially offset by lower variable compensation.
Engineering and Development
Engineering and development expenses were as follows:
For the Six Months Ended | ||||||||||||
July 3, | July 4, | Dollar | ||||||||||
2022 | 2021 | Change | ||||||||||
(in millions) | ||||||||||||
Engineering and development | $ | 220.1 | $ | 210.4 | $ | 9.7 | ||||||
Percent of total revenues | 13.8 | % | 11.3 | % |
For the Nine Months Ended | ||||||||||||
October 2, 2022 | October 3, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Engineering and development | $ | 331.8 | $ | 317.6 | $ | 14.2 | ||||||
Percent of total revenues | 13.7 | % | 11.3 | % |
The increase of $9.7$14.2 million in engineering and development expenses was due to higher spending primarily indriven by Semiconductor Test and Industrial Automation increase in headcount and greater spending, partially offset by lower variable compensation.
Restructuring and Other
During the sixnine months ended July 3,October 2, 2022, we recorded a charge of $14.7 million related to the arbitration claim filed against Teradyne and AutoGuide related to an
During the sixnine months ended July 4,October 3, 2021, we recorded a gain of $7.2 million for the decrease in the fair value of the AutoGuide contingent consideration liability, partially offset by a charge of $1.7 million for an increase in environmental and legal liabilities.liabilities, and $1.2 million of severance charges primarily in Industrial Automation.
38
Interest and Other
For the Six Months Ended | ||||||||||||
July 3, | July 4, | Dollar | ||||||||||
2022 | 2021 | Change | ||||||||||
(in millions) | ||||||||||||
Interest income | $ | (1.7 | ) | $ | (1.4 | ) | $ | (0.3 | ) | |||
Interest expense | 1.9 | 11.6 | (9.7 | ) | ||||||||
Other (income) expense, net | 14.6 | 3.7 | 10.9 |
For the Nine Months Ended | ||||||||||||
October 2, 2022 | October 3, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Interest income | $ | (3.0 | ) | $ | (2.1 | ) | $ | (0.9 | ) | |||
Interest expense | 2.7 | 15.4 | (12.7 | ) | ||||||||
Other (income) expense, net | 20.5 | 25.2 | (4.7 | ) |
Interest expense decreased by $9.7$12.7 million primarily due to the January 1, 2022 adoption of ASU
Income (Loss) Before Income Taxes
For the Six Months Ended | ||||||||||||
July 3, | July 4, | Dollar | ||||||||||
2022 | 2021 | Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 327.5 | $ | 513.7 | $ | (186.2 | ) | |||||
System Test | 95.4 | 85.0 | 10.4 | |||||||||
Wireless Test | 44.0 | 31.1 | 12.9 | |||||||||
Industrial Automation | (11.5 | ) | (22.8 | ) | 11.3 | |||||||
Corporate and Eliminations (1) | (36.4 | ) | 1.1 | (37.5 | ) | |||||||
$ | 419.0 | $ | 608.0 | $ | (189.0 | ) | ||||||
For the Nine Months Ended | ||||||||||||
October 2, 2022 | October 3, 2021 | Dollar Change | ||||||||||
(in millions) | ||||||||||||
Semiconductor Test | $ | 510.1 | $ | 778.7 | $ | (268.6 | ) | |||||
System Test | 135.6 | 116.8 | 18.8 | |||||||||
Wireless Test | 56.7 | 63.8 | (7.1 | ) | ||||||||
Industrial Automation | (15.5 | ) | (14.6 | ) | (0.9 | ) | ||||||
Corporate and Eliminations (1) | (41.7 | ) | (38.9 | ) | (2.8 | ) | ||||||
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$ | 645.1 | $ | 905.8 | $ | (260.7 | ) | ||||||
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(1) | Included in Corporate and Eliminations are legal and environmental fees, contingent consideration adjustments, interest income, interest expense, net foreign exchange gains (losses), pension, intercompany eliminations, acquisition related charges and compensation and for the |
The decrease in income before income taxes in Semiconductor Test was driven primarily by lower revenues in high performance compute processor and mobile applications, and lower memory test sales of flash memory testers.applications. The increase in income before income taxes in System Test was primarily due to higher sales in Storage Test of system level and hard disk drive testers, and elevated sales in Defense/Aerospace and in Production Board Test. The risedecrease in income before taxes in Wireless Test was driven primarily by an increaselower sales in cellular test products partially offset by elevated sales in connectivity test products. The reduction in losses before taxes in Industrial Automation was driven primarily by higher demand for UR’s collaborative robotic arms and MiR’s autonomous mobile robots. The loss before income taxes in Corporate and Eliminations was primarily due to legal settlement charges related to litigation for the
Income Taxes
The effective tax rate for the sixnine months ended July 3,October 2, 2022 and July 4,October 3, 2021 was 14.1%15.8% and 12.2%12.7%, respectively. The increase in the effective tax rate from the sixnine months ended July 4,October 3, 2021 to the sixnine months ended July 3,October 2, 2022 was primarily attributable to a shift in the geographic distribution of income, which increases the income subject to taxation in higher tax rate jurisdictions relative to lower tax rate jurisdictions, an increase in non-deductible officers’ compensation and a reduction in the benefit related to the international provisions of the U.S. Tax Cuts and Jobs Act of 2017 and an increase in
Contractual Obligations
There have been no changes outside of the ordinary course of business to our contractual obligations as disclosed in our Annual Report on Form
39
Liquidity and Capital Resources
Our cash, cash equivalents, and marketable securities balances decreased by $606.4$613.2 million in the sixnine months ended July 3,October 2, 2022 to $893.9$887.1 million.
Operating activities during the sixnine months ended July 3,October 2, 2022 provided cash of $122.9$394.5 million. Changes in operating assets and liabilities used cash of $309.1$271.7 million. This was due to a $287.8$158.9 million increase in operating assets and a $21.3$112.8 million decrease in operating liabilities.
The increase in operating assets was due to a $146.4$94.3 million increase in accounts receivable, a $94.8 million prepayments and other assets due to prepayments to our contract manufacturers, and a $46.7$68.8 million increase in inventories.
The decrease in operating liabilities was due to a $61.7$82.9 million decrease in accrued employee compensation, a $6.9$31.4 million decrease in income taxes, a $7.5 million decrease in other accrued liabilities, a $5.9 million decrease in deferred revenue and $2.6customer advance payments and $3.9 million of retirement plan contributions, partially offset by a $25.0an $18.7 million increase in accounts payable, a $14.2 million increase in deferred revenue and customer advance payments, and a $10.8 million increase in income taxes.
Investing activities during the sixnine months ended July 3,October 2, 2022 usedprovided cash of $54.3$45.4 million due to $247.9$259.2 million and $182.1 million in proceeds from sales and maturities of marketable securities, respectively, partially offset by $267.2 million used for purchases of marketable securities, and $89.7$128.7 million used for purchases of property, plant and equipment, partially offset by $139.7 million and $143.6 million in proceeds from maturities and sales of marketable securities, respectively.
Financing activities during the sixnine months ended July 3,October 2, 2022 used cash of $626.8$858.8 million due to $532.8$750.0 million used for the repurchase of 5.07.2 million shares of common stock at an average price of $107.5$103.83 per share, $42.3$52.6 million used for dividend payments, $52.0 million used for payments of convertible debt principal, $35.4 million used for dividend payments, and $32.8$33.0 million used for payment related to net settlements of employee stock compensation awards, partially offset by $16.5$28.7 million from the issuance of common stock under employee stock purchase and stock option plans.
Operating activities during the sixnine months ended July 4,October 3, 2021 provided cash of $244.4$767.1 million. Changes in operating assets and liabilities used cash of $373.6$167.7 million. This was due to a $470.2$219.9 million increase in operating assets and a $96.6$52.2 million increase in operating liabilities.
The increase in operating assets was due to a $372.7 million increase in accounts receivable due to greater sales, a $117.4$138.6 million increase in prepayments and other assets due to prepayments to our contract manufacturers, as a result of higher forecasted revenues,$103.3 million increase in accounts receivable due to greater sales, partially offset by a $19.9$21.9 million decrease in inventories.
The change in operating liabilities was due to increases of $78.5$63.5 million in other accrued liabilities, $22.3$23.8 million in accounts payable, and $15.2$8.7 million in deferred revenue and customer advance payments, partially offset by a $14.0$17.4 million decrease in income taxes, a $22.3 million decrease in accrued employee compensation, $2.7and $4.1 million of retirement plan contributions, and a $2.6 million decrease in income taxes.
Investing activities during the sixnine months ended July 4,October 3, 2021 provided cash of $92.3$156.1 million due to $460.2$571.3 million and $116.1$209.4 million in proceeds from maturities and sales of marketable securities, respectively, partially offset by $398.1$509.5 million used for purchases of marketable securities, $74.0$103.2 million used for purchases of property, plant and equipment and $12.0 million used for an investment in MachineMetrics, Inc.
Financing activities during the sixnine months ended July 4,October 3, 2021 used cash of $295.9$757.3 million due to $66.8 million used for payments of convertible debt principal, $196.6$406.2 million used for the repurchase of 1.63.3 million shares of common stock at an average price of $125.69$123.53 per share, $31.8$302.0 million used for payments of convertible debt principal, $49.7 million used for dividend payments, and $32.0 million used for payments related to net settlements of employee stock compensation awards, and $33.3 million used for dividend payments, partially offset by $32.6 million from the issuance of common stock under employee stock purchase and stock option plans.
In January 2022, and May 2022 Teradyne’sand August 2022, our Board of Directors declared a quarterly cash dividend of $0.11 per share. Dividend payments for the three and sixnine months ended July 3,October 2, 2022 were $17.5$17.1 million and $35.4$52.6 million, respectively.
In January 2021, and May 2021 Teradyne’sand August 2021, our Board of Directors declared a quarterly cash dividend of $0.10 per share. Dividend payments for the three and sixnine months ended July 4, 2021 were $16.6October 3, 2021were $16.4 million and $33.3$49.7 million, respectively.
In January 2021, our Board of Directors approved a new repurchase program for up to $2.0 billion of common stock. Unless terminated by resolution of our Board of Directors, the repurchase program will expire when we have repurchased all shares authorized for repurchase under the share repurchase program. We intend to repurchase a minimum of $750.0 million in 2022.
40
During the sixnine months ended July 3,October 2, 2022, Teradynewe repurchased 5.07.2 million shares of common stock for $532.8$750.0 million at an average price of $107.5$103.83 per share. During the sixnine months ended July 4,October 3, 2021, Teradynewe repurchased 1.63.3 million shares of common stock for $196.6$406.2 million at an average price of $125.69$123.53 per share. The cumulative repurchases under the $2.0 billion common stock repurchase program as of July 3,October 2, 2022 were 9.712.0 million shares of common stock for $1,132.8$1,350.0 million at an average price per share of $116.45.
While we declared a quarterly cash dividend and authorized a share repurchase program, we may reduce or eliminate the cash dividend or share repurchase program in the future. Future cash dividends and stock repurchases are subject to the discretion of our Board of Directors, which will consider, among other things, our earnings, capital requirements and financial condition.
On May 1, 2020, we entered into a credit agreement providing a three-year, senior secured revolving credit facility of $400 million. On December 10, 2021, the credit agreement was amended to extend the senior secured revolving credit facility to December 10, 2026. On October 5, 2022, the credit agreement was amended to increase the amount of the credit facility to $750.0 million from $400.0 million. As of August 5,November 4, 2022, we have not borrowed any funds under the credit facility.
We believe our cash, cash equivalents and marketable securities balance will be sufficient to pay our quarterly dividend and meet our working capital and expenditure needs for at least the next twelve months. At this time, the
Equity Compensation Plans
As discussed in Note Q: “Stock-Based Compensation” in our 2021 Annual Report on Form
The purpose of the 1996 Employee Stock Purchase Plan is to encourage stock ownership by all eligible employees of Teradyne. The purpose of the 2006 Equity Plan is to provide equity ownership and compensation opportunities in Teradyne to our employees, officers, directors, consultants and/or advisors. Both plans were approved by our shareholders.
Recently Issued Accounting Pronouncements
For the sixnine months ended July 3,October 2, 2022, there were no recently issued accounting pronouncements that had, or are expected to have, a material impact to our consolidated financial statements.
Item 3: | Quantitative and Qualitative Disclosures about Market Risks |
For “Quantitative and Qualitative Disclosures about Market Risk” affecting Teradyne, see Part 2 Item 7A, “Quantitative and Qualitative Disclosures about Market Risks,” in our Annual Report on Form
In addition to market risks described in our Annual Report on Form
41
Hypothetical Change in Teradyne Stock Price | Fair Value | Estimated change in fair value | Hypothetical percentage increase (decrease) in fair value | |||||||||
10% Increase | $ | 253,683 | $ | 20,344 | 8.7 | % | ||||||
No Change | 233,339 | — | — | |||||||||
10% Decrease | 212,995 | (20,344 | ) | (8.7 | ) |
Hypothetical Change in Teradyne Stock Price | Fair Value | Estimated change in fair value | Hypothetical percentage increase (decrease) in fair value | |||||||||
10% Increase | $ | 170,003 | $ | 15,517 | 10.0 | % | ||||||
No Change | 154,486 | — | — | |||||||||
10% Decrease | 138,990 | (15,496 | ) | (10.0 | ) |
Item 4: | Controls and Procedures |
As of the end of the period covered by this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule
There have been no changes in our internal control over financial reporting (as defined in Rules
PART II. OTHER INFORMATION
Item 1: | Legal Proceedings |
We are subject to various legal proceedings and claims which have arisen in the ordinary course of business such as, but not limited to, patent, employment, commercial and environmental matters. Teradyne believes that it has meritorious defenses against all pending claims and intends to vigorously contest them. While it is not possible to predict or determine the outcomes of any pending claims or to provide possible ranges of losses that may arise, Teradyne believes the potential losses associated with all of these actions are unlikely to have a material adverse effect on its business, financial position or results of operations.
On March 8, 2021, Industrial Automation LLC submitted a demand for arbitration against Teradyne and AutoGuide in Wilmington, Delaware alleging that Teradyne and AutoGuide breached certain provisions of the Membership Interests Purchase Agreement (the “Purchase Agreement”), dated as of October 18, 2019, among Industrial Automation LLC, Teradyne and AutoGuide. The arbitration demand sought full acceleration of the maximum
Item 1A: | Risk Factors |
In addition to other information set forth in this Form
The risks described in our Annual Report on Form
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The global supply shortage of electrical components and inflationary cost increases has impacted our ability to meet customer demand and could adversely affect our business and financial results
During 2022, there has been a global supply shortage of electrical components, including semiconductor chips. As a result, we have experienced, and expect to continue to experience, increases in our lead times and costs for certain components for certain products and delays in the delivery of some orders placed by our customers. While not material, year to date 2022, in an effort to mitigate these risks, in some cases, we have incurred higher costs due to investment in supply chain resiliency and to secure available inventory or have extended or placed
Trade regulations and restrictions impact our ability to manufacture certain products and to sell products to and support certain customers, which may materially adversely affect our sales and results of operations.
We are subject to U.S. laws and regulations that limit and restrict the export of some of our products and services and may restrict our transactions with certain customers, business partners and other persons. In certain circumstances, export control and economic sanctions regulations prohibit the export of certain products, services and technologies, and in other circumstances are required to obtain an export license before exporting the controlled item. We must also comply with export restrictions and laws imposed by other countries affecting trade and investments. We maintain an export compliance program but there are risks that the compliance controls could be circumvented, exposing us to legal liabilities. Compliance with these laws has not significantly limited our sales but could significantly limit them in the future. Changes in, and responses to, U.S. trade policy could reduce the competitiveness of our products and cause our sales to drop, which could have a material adverse effect on our business, financial condition or results of operations.
The U.S. government from time to time has issued export restrictions that prohibit U.S. companies from exporting U.S. manufactured products, foreign manufactured products with more than 25% controlled U.S. content, as well as U.S. origin technology. For example, the U.S. Department of Commerce has restricted the access of U.S. origin technologies to certain Chinese companies by adding those companies to the Entity List under U.S. Export Administration Regulations (“EAR”).
On May 16, 2019, Huawei and 68 of its affiliates, including HiSilicon, were added to the U.S. Department of Commerce Entity List under the EAR. This action by the U.S. Department of Commerce imposed new export licensing requirements on exports, re-exports, and in-country transfers of all U.S. regulated products, software and technology to the designated Huawei entities. On August 17, 2020, the U.S. Department of Commerce published final regulations expanding the scope of the U.S. EAR to include additional products that would become subject to export restrictions relating to Huawei entities including HiSilicon. These new regulations restrict the sale to Huawei and the designated Huawei entities of certain non-U.S. made items, such as semiconductor devices, manufactured for or sold to Huawei entities including HiSilicon under specific, detailed conditions set forth in the new regulations. These new regulations have impacted our sales to Huawei, HiSilicon and their suppliers. We are taking appropriate actions, including filing license applications and obtaining licenses from the U.S. Department of Commerce. However, we do not expect these actions will mitigate the impact of the regulations on our sales to Huawei, HiSilicon and other suppliers. As a result, the regulations will continue to have an adverse impact on our business and financial results. It is uncertain the extent these new regulations and any additional regulations that may be implemented by the U.S. Department of Commerce or other government agency may have on our business with other customers or potential customers. Also, our controls related to Entity List compliance could be circumvented, exposing us to legal liabilities.
On April 28, 2020, the U.S. Department of Commerce published new export control regulations for certain U.S. products and technology sold to military end users or for military end-use in China, Russia and Venezuela. The definition of military end user is broad. The regulations went into effect on June 29, 2020. In December 2020, the U.S. Department of Commerce issued a list of companies in China and other countries that it considered to be military end users. Compliance with the new export controls has impacted our ability to sell products to certain customers in China. In addition, while we maintain an export compliance program, our compliance controls could be circumvented, exposing us to legal liabilities. We will continue to assess the impact of the new export controls on our business and operations and take appropriate actions, including filing for licenses with the U.S. Department of Commerce, to minimize any disruption. However, we cannot be certain that the actions we take will mitigate all the risks associated with the export controls that may impact our business.
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On October 7, 2022, the U.S. Department of Commerce published new regulations restricting the export to China of advanced semiconductors, supercomputer technology, equipment for the manufacturing of advanced semiconductors and components and technology for the manufacturing in China of certain semiconductor manufacturing equipment. The new restrictions are lengthy and complex. We continue to assess the impact of these regulations on our business. We have determined that restrictions on the sale of semiconductor testers in China to test certain advanced semiconductors will impact our sales to certain companies in China. Several multinational companies manufacturing these advanced semiconductors in China have obtained one-year licenses allowing suppliers such as Teradyne to continue to provide testers to the facilities operated by these companies. We expect that other companies manufacturing advanced semiconductors in China will not receive licenses, thereby restricting our ability to provide testers to the facilities operated by these companies that do not receive a license. We also are assessing the filing of license requests to sell to and support certain customers in China for certain end uses that, if granted, may reduce the impact of these restrictions on our business. At this time, we do not know the impact these end user and end use restrictions will have on our business in China or on future revenues. In addition to the specific restrictions impacting our business, the regulations may have an adverse impact on certain actual or potential customers and on the global semiconductor industry. To the extent the regulations impact actual and potential customers or disrupt the global semiconductor industry, our business and revenues will be adversely impacted. We also have determined that the restrictions on the export of certain US origin components and technology for use in the development and production in China of certain semiconductor manufacturing equipment impact our manufacturing and development operations in China. We have received a temporary authorization from the U.S. Department of Commerce allowing us to continue our manufacturing and development operations in China until the U.S. Department of Commerce issues a license to replace this temporary authorization. We will file an application with the U.S. Department of Commerce for a license to replace the temporary authorization by November 17, 2022. We cannot assess the likelihood or timing of receiving this license. In addition to requesting a license, we are implementing procedures for minimizing the impact of these new regulations on our operations in China, but there is no assurance that these procedures will succeed.
In response to the regulations issued by the U.S. Department of Commerce, the Chinese government has passed new laws, including blocking legislation, which may impact our business activities in China. The Company is assessing the potential impact of these new Chinese laws and monitoring relevant laws and regulations issued by the Chinese government. The impact of these new Chinese laws on our business activities in China remains uncertain at this time.
Foreign currency exchange rates and fluctuations in those rates may affect the Company’s ability to realize projected growth rates in its sales and earnings.
Our financial statements are denominated in U.S. dollars. While the majority of our revenues are in U.S. dollars, approximately 70 percent of our Industrial Automation revenue is denominated in foreign currencies. Correspondingly, our results of operations and our ability to realize projected growth rates in sales and earnings could be adversely affected if the U.S. dollar strengthens significantly against foreign currencies.
Item 2: | Unregistered Sales of Equity Securities and Use of Proceeds |
In January 2021, Teradyne’s Board of Directors approved a new repurchase program for up to $2.0 billion of common stock. During the sixnine months ended July 3,October 2, 2022, Teradynewe repurchased 5.07.2 million shares of common stock for $532.8$750.0 million at an average price of $107.5$103.83 per share. During the sixnine months ended July 4,October 3, 2021, Teradynewe repurchased 1.63.3 million shares of common stock for $196.6$406.2 million at an average price of $125.69$123.53 per share. The cumulative repurchases under the $2.0 billion common stock repurchase program as of July 3,October 2, 2022 were 9.712.0 million shares of common stock for $1,132.8$1,350.0 million at an average price per share of $116.45.$112.55.
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The following table includes information with respect to repurchases we made of our common stock during the three months ended July 3,October 2, 2022 (in thousands except per share price):
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 | ||||||||||||
April 4, 2022 - May 1, 2022 | 853 | $ | 111.53 | 852 | $ | 1,103,537 | ||||||||||
May 2, 2022 - May 29, 2022 | 989 | $ | 104.60 | 974 | $ | 1,001,700 | ||||||||||
May 30, 2022 - July 3, 2022 | 1,381 | $ | 97.45 | 1,380 | $ | 867,202 | ||||||||||
3,223 | (1) | $ | 103.37 | (1) | 3,206 | |||||||||||
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 4, 2022 - July 31, 2022 | 1,296 | $ | 93.00 | 1,296 | $ | 746,702,775 | ||||||||||
August 1, 2022 – August 28, 2022 | 972 | $ | 99.56 | 971 | $ | 650,000,254 | ||||||||||
August 29, 2022 – October 2, 2022 | 1 | $ | 82.86 | — | $ | 650,000,254 | ||||||||||
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2,269 | (1) | $ | 95.81 | (1) | 2,267 | |||||||||||
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(1) | Includes approximately |
We satisfy U.S. federal and state minimum withholding tax obligations due upon the vesting and the conversion of restricted stock units into shares of our common stock, by automatically withholding from the shares being issued, a number of shares with an aggregate fair market value on the date of such vesting and conversion that would satisfy the minimum withholding amount due.
Item 4: | Mine Safety Disclosures |
Not Applicable
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Item 6: | Exhibits |
32.1 | Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) | |
32.2 | Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) | |
101.INS | Inline XBRL Instance Document | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL, and contained in Exhibit 101) |
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SIGNATURES
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 |
/s/ S ANJAY MEHTA |
Sanjay Mehta Vice President, Chief Financial Officer and Treasurer (Duly Authorized Officer and Principal Financial Officer) November 4, 2022 |
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