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Q4 2012 Earnings Call
January 24, 2013 10:00 am ET
Andrew J. Blanchard - Vice President of Corporate Relations
Michael A. Bradley - Chief Executive Officer and Executive Director
Gregory R. Beecher - Chief Financial Officer, Principal Accounting Officer, Vice President and Treasurer
Mark E. Jagiela - President
Vernon P. Essi - Needham & Company, LLC, Research Division
Mark Delaney - Goldman Sachs Group Inc., Research Division
Vishal Shah - Deutsche Bank AG, Research Division
Mahavir Sanghavi - UBS Investment Bank, Research Division
Mehdi Hosseini - Susquehanna Financial Group, LLLP, Research Division
Krish Sankar - BofA Merrill Lynch, Research Division
Satya Kumar - Crédit Suisse AG, Research Division
Christopher J. Muse - Barclays Capital, Research Division
Patrick J. Ho - Stifel, Nicolaus & Co., Inc., Research Division
Jagadish K. Iyer - Piper Jaffray Companies, Research Division
Terence R. Whalen - Citigroup Inc, Research Division
Previous Statements by TER
» Teradyne Management Discusses Q3 2012 Results - Earnings Call Transcript
» Teradyne Management Discusses Q2 2012 Results - Earnings Call Transcript
» Teradyne's CEO Discusses Q1 2012 Results - Earnings Call Transcript
Andrew J. Blanchard
Thank you, Sally. Good morning, everyone, and welcome to our discussion of Teradyne's most recent financial results. I'm joined this morning by our Chief Executive Officer, Mike Bradley; our Chief Financial Officer, Greg Beecher. And I'd like to welcome our new President, Mark Jagiela. Mark stepped up from his role as leader of the Semiconductor Test Group on the 1st of January. Following our opening remarks, we'll provide details of our performance for the fourth quarter and full year 2012, as well as our outlook for the first quarter of this year. First, I'd like to address several administrative issues. The press release containing our fourth quarter and full year results was sent out via Business Wire last evening. Copies are available at teradyne.com, where this call is also being simulcast. Note that during this call, we're providing slides on the website that may be helpful to you in following the discussion. To view them, simply access the Investor page of the site, and click on the Live Webcast icon. In addition, replays of this call will be available via the same page about 24 hours after the call ends. The replays will be available along with the slides through February 9.
The matters that we discuss today will include forward-looking statements that involve risk factors that could cause Teradyne's results to differ materially from management's current expectations. We encourage you to review the Safe Harbor statement contained in the earnings release, as well as our most recent SEC filings, for a complete description. Additionally, those forward-looking statements are made as of today, and we take no obligation to update them as a result of developments occurring after this call.
During today's call, we'll make reference to non-GAAP financial measures. We've posted additional information concerning these non-GAAP financial measures, including reconciliation to the most directly comparable GAAP financial measure where available on our website. To view them, go to the Investor Page and click on the GAAP to Non-GAAP link.
Also, between now and our next earnings call, Teradyne will be participating in investor conferences hosted by Stifel Nicolaus, Goldman Sachs, Piper Jaffray and Susquehanna.
Now let's get on with the rest of the agenda. First, our CEO, Mike Bradley, will review the state of the company and the industry for the fourth quarter and full year 2012, and provide our outlook for the first quarter of 2013. Then, our CFO, Greg Beecher, will provide more details on our quarterly performance along with our guidance for the first quarter. We'll then answer your questions. You should note that we intend to end this call after 1 hour. Mike?
Michael A. Bradley
Good morning, everyone. Thanks for being with us today. I'll start today with a brief recap of 2012 and give you both a view of how we -- how the start to this year is shaping up, plus an outline of what we think would make for a successful 2013 when we're talking with you 12 months from now. As usual, Greg will give you the financial perspective, not just for the near term but more importantly, an overview of how our market and financial strategies will continue to be prosecuted going forward. As Andy mentioned, Mark Jagiela will join in on the Q&A portion of the discussion today. So let me start with a quick recap of the year just finished.
The overall numbers continue to be very good. We grew revenues and total profit rate to $1.66 billion and 23%, respectively. I recently noted to our employees that we eclipsed our records from what many considered the golden era of the semi-cap industry. That was the 1998 to 2000 dot-com boom. The shorthand is that while our cumulative top line revenues were 26% lower in the last 3 years than they were in that explosive era, our profit rate was 8 percentage points higher and our cash generation $500 million higher this time around. And we accomplished this with an average annual workforce that was 55% lower than that of the 1998 to 2000 period.
Now all of this is to say that the resilience of our business model has been proving itself out now over multiple cycles at the same time that we've latched into some new markets and new growth engines. Greg will spend some time on how the strategy that produced these results will be employed going forward.