Orders in the second quarter of 2016 were $471 million of which $391 million were in Semiconductor Test, $30 million in System Test, $26 million in Industrial Automation, and $23 million in Wireless Test.
“Strong customer demand for our semiconductor test products drove second quarter revenue to the highest level in 4 years and contributed to our highest first half revenue in 15 years,” said CEO and President Mark Jagiela. “On the bookings front, we saw continued solid System-on-a-Chip test demand in the mobile device market, record orders for our Magnum family of memory test systems, and another quarter of explosive growth in collaborative robot demand.
“At the same time, we’ve seen a significant decline in the projected size of the wireless production test market served by our Wireless Test segment. In light of this, we’ve written down the goodwill and intangible asset carrying values of this segment. While disappointing, we’re taking the actions necessary to put the business on a solid financial foundation for the future.
“Looking ahead, our guidance for the third quarter reflects continued strength in Industrial Automation, seasonal patterns in Semiconductor Test, and continued weakness in Wireless Test.”
Guidance for the third quarter of 2016 is revenue of $375 million to $405 million, with GAAP net income of $0.22 to $0.30 per diluted share and non-GAAP net income of $0.23 to $0.30 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization and includes non-GAAP tax adjustments.
Webcast
A conference call to discuss the second quarter results, along with management's business outlook, will follow at 10 a.m. ET, Thursday, July 28. Interested investors should access the webcast at www.teradyne.com and click on "Investors" at least five minutes before the call begins. Presentation materials will be available starting at 10 a.m. ET. A replay will be available on the Teradyne website at www.teradyne.com/investors.
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 goodwill and intangible asset impairment charges, acquired intangible asset amortization, pension actuarial gains and losses, fair value inventory step-up related to Universal Robots, discrete income tax adjustments, restructuring and other, and a gain from the sale of an equity investment. 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 and non-GAAP net income as a percentage of revenue, and non-GAAP net income per share are non-GAAP 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 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 pension actuarial gains and losses. GAAP requires that these items be included in determining gross margin. Non-GAAP gross margin dollar amount and percentage are non-GAAP 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. Management believes each of these non-GAAP 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 "Investors" and then selecting the "GAAP to Non-GAAP Reconciliation" link. The non-GAAP financial 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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