Tuesday June 19, 6:31 pm Eastern Time
Press Release
Teradyne Lowers Guidance for Second Quarter
BOSTON--(BUSINESS WIRE)--June 19, 2001--Teradyne today announced that it is lowering its guidance for sales and earnings for the second quarter of 2001.
``Our previous guidance for the second quarter was for sales of between $425 to $450 million and we hoped to break even at that volume,'' commented George Chamillard, CEO and chairman of Teradyne. ``Business conditions this quarter, however, have continued to deteriorate in every segment. Both our customers and Teradyne are facing an unprecedented level of uncertainty and this has led to a lower than expected demand for our products and services. Our present plans are for revenue of $350 to $375 million. This quarter, that will translate into a loss of between $0.05 and $0.10/share, including a benefit from the pending sale of our military connections business, but not including special charges. We currently expect to incur special charges totaling $0.15 to $0.20/share.
``Our business is down more than 50% from the peak in the third quarter of 2000,'' continued Chamillard. ``Our expense reduction actions have lowered our labor costs by about 25%, including a 12% reduction in regular employee headcount since the end of 2000. This 12% includes approximately 180 people laid off this week. Although these reductions are not large enough for us to remain profitable, they allow us to strike a balance between managing expenses and driving against our other two priorities -- supporting customers and advancing our R&D programs -- so that we can improve our market position when growth resumes.
``Teradyne has not lost money since the first quarter of 1991, despite the fact that those 10 years included several downturns in business. This downturn is unprecedented in both breadth and depth, compared to any of those previous cycles. Although we are disappointed with our projected results this quarter, we are confident that our employees are capturing the maximum sales possible in the current environment and that we will be well positioned for the coming upturn,'' concluded Chamillard.
About Teradyne
Teradyne (NYSE:TER - news) is the world's largest supplier of automatic test equipment and is also a leading supplier of high performance interconnection systems. Teradyne's test products are used by manufacturers of semiconductors, circuit assemblies and voice and broadband telephone networks. Teradyne's backplane assemblies and high-density connectors are used by manufacturers of communications and computing systems central to building networking infrastructure. The company had sales of $3 billion in 2000 and currently employs about 9000 people, worldwide. For more information visit www.teradyne.com.
SAFE HARBOR STATEMENT
Statements in this release, other than historical performance, include forward-looking statements relating to future financial performance made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from expectations. In particular, our business is dependent on the current and anticipated market demand for electronics, which has been impacted by the economic slowdown that began in the latter portions of 2000. While in the past, our diverse businesses have allowed us to perform better than some companies in periods of economic decline, there is no guarantee that this will be the case currently. In addition, the markets which Teradyne serves are highly cyclical and are in a period of oversupply. Further, our backlog has and may continue to be affected as the customers may defer or cancel orders which previously had been accepted. Both of these factors could result in further decreased revenues. Our business also is affected by our ability to develop and ship new and sometimes more complex products to address changing customer needs, by new offerings by competitors and by intense competition throughout the world in each of our operating segments from competitors having substantial resources available for the engineering, manufacturing, marketing and distribution of their products. The economic decline and the resulting oversupply could increase the possibility of intensified price competition in certain markets and result in the need to lower our prices, which could result in decreased revenues. In addition, acquisitions or divestitures could affect our ability to manage and maintain our business. Finally, our expense control measures may not have the intended effect on our future financial results. These measures could have long-term effects on our business by reducing our pool of technical talent, decreasing improvements in our products and making it more difficult for us to respond to large customer orders if the economy does recover. Teradyne undertakes no obligation to update information contained in this release. For further information regarding risks and uncertainties associated with Teradyne's business, please refer to Teradyne's filings with the Securities and Exchange Commission, including, but not limited to, Teradyne's annual report on Form 10-K and quarterly reports on Form 10-Q. Any forward-looking statements should be considered in light of all of these factors. |
