Teradyne Reports Fourth Quarter and Fiscal Year 2020 Results

  • Revenue of $759 million in Q4’20, growth of 16% from Q4’19
  • Full year 2020 revenue grew 36%, GAAP EPS 65%, Non-GAAP EPS 62%
  • Test Revenue growth of 18% in Q4’20 from Q4’19
  • Higher than expected Industrial Automation shipments drove Q4 revenue above the high end of guidance
  • Industrial Automation revenue growth of 4% in Q4’20 from Q4’19, 34% from Q3’20
  • Quarterly dividend of $0.10 announced
  • Board authorized a $2 billion share repurchase program, expect to repurchase a minimum of $600 million in shares in 2021
  Q4'20 Q4'19  Q3'20 FY 2020 FY 2019
Revenue (mil) $ 759 $ 655   $ 819 $ 3,121 $ 2,295
GAAP EPS $ 1.05 $ 0.69  $ 1.21 $ 4.28 $ 2.60
Non-GAAP EPS $ 1.10 $ 0.88  $ 1.18 $ 4.62 $ 2.86

NORTH READING, Mass., Jan. 27, 2021 (GLOBE NEWSWIRE) -- Teradyne, Inc. (NASDAQ: TER) reported revenue of $759 million for the fourth quarter of 2020 of which $524 million was in Semiconductor Test, $104 million in System Test, $40 million in Wireless Test and $92 million in Industrial Automation (IA). GAAP net income for the fourth quarter was $196.3 million or $1.05 per diluted share. On a non-GAAP basis, Teradyne’s net income in the fourth quarter was $193.2 million, or $1.10 per diluted share, which excluded pension actuarial losses, acquired intangible asset amortization, restructuring and other charges, non-cash convertible debt interest, and included the related tax impact on non-GAAP adjustments.

“Stronger than expected growth at Universal Robots drove Q4 sales and profits above guidance and capped an extraordinary year for Teradyne,” said CEO and President Mark Jagiela. “For the full year, company sales grew 36% and non-GAAP earnings per share 62%, the seventh consecutive year of earnings growth. The annual results were driven by increased revenue in all our test businesses, highlighted by Semiconductor Test’s 46% and System Test’s 43% growth. While the global slowdown in industrial activity compressed the automation market for much of 2020, we are encouraged by the improving global industrial outlook and the sooner-than-expected return to year-over-year growth at Universal Robots.

“After an exceptionally strong Q4, we enter 2021 expecting record Q1 level sales and profits driven by continued strong test demand, including a notable recovery in automotive related semiconductor test shipments.”

Teradyne’s Board of Directors declared a quarterly cash dividend of $0.10 per share, payable on March 19, 2021 to shareholders of record as of the close of business on February 19, 2021. The Board also authorized a $2 billion share repurchase program and the company expects to repurchase a minimum of $600 million of its common stock in 2021.

Guidance for the first quarter of 2021 is revenue of $720 million to $780 million, with GAAP net income of $0.86 to $1.00 per diluted share and non-GAAP net income of $0.95 to $1.11 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization, non-cash convertible debt interest and includes the related tax impact on non-GAAP adjustments.

A conference call to discuss the fourth quarter results, along with management's business outlook, will follow at 8:30 a.m. ET, Thursday, January 28. Interested investors should access the webcast at investors.teradyne.com/events-presentations at least five minutes before the call begins. Presentation materials will be available starting at 8:30 a.m. ET. A replay will be available on Teradyne’s Investor Relations site at investors.teradyne.com.

Non-GAAP Results
In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses non-GAAP results of operations that exclude certain income items and charges. These results are provided as a complement to results provided in accordance with GAAP. Non-GAAP income from operations and non-GAAP net income exclude acquired intangible assets amortization, non-cash convertible debt interest, pension actuarial gains and losses, discrete income tax adjustments, fair value inventory step-up, and restructuring and other, and includes the related tax impact on non-GAAP adjustments. GAAP requires that these items be included in determining income from operations and net income. Non-GAAP income from operations, non-GAAP net income, non-GAAP income from operations as a percentage of revenue, non-GAAP net income as a percentage of revenue, and non-GAAP net income per share are non-GAAP performance measures presented to provide meaningful supplemental information regarding Teradyne’s baseline performance before gains, losses or other charges that may not be indicative of Teradyne’s current core business or future outlook. These non-GAAP performance measures are used to make operational decisions, to determine employee compensation, to forecast future operational results, and for comparison with Teradyne’s business plan, historical operating results and the operating results of Teradyne’s competitors. Non-GAAP gross margin excludes fair value inventory step-up. GAAP requires that this item be included in determining gross margin. Non-GAAP gross margin dollar amount and percentage are non-GAAP performance measures that management believes provide useful supplemental information for management and the investor. Management uses non-GAAP gross margin as a performance measure for Teradyne’s current core business and future outlook and for comparison with Teradyne’s business plan, historical gross margin results and the gross margin results of Teradyne’s competitors. Non-GAAP diluted shares include the impact of Teradyne’s call option on its shares. Management believes each of these non-GAAP performance measures provides useful supplemental information for investors, allowing greater transparency to the information used by management in its operational decision making and in the review of Teradyne’s financial and operational performance, as well as facilitating meaningful comparisons of Teradyne’s results in the current period compared with those in prior and future periods. A reconciliation of each available GAAP to non-GAAP financial measure discussed in this press release is contained in the attached exhibits and on the Teradyne website at www.teradyne.com by clicking on “Investor Relations” and then selecting “Financials” and the “GAAP to Non-GAAP Reconciliation” link. The non-GAAP performance measures discussed in this press release may not be comparable to similarly titled measures used by other companies. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.

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