Teradyne Reports Second Quarter 2018 Results


  • Revenue of $527 million, above high end of guidance
  • Memory Test Q2’18 revenue of $67 million, up 34% from Q2’17 and 1H’18 revenue of $139 million, up 90% from 1H’17
  • Universal Robots revenue of $57 million, up 45% from Q2’17
 Q2’18Q1’18Q2’17
Revenue (mil)$527 $487 $697
GAAP EPS$0.52$0.43 $0.87
Non-GAAP EPS$0.59 $0.45 $0.90

NORTH READING, Mass., July 24, 2018 (GLOBE NEWSWIRE) --  Teradyne, Inc. (NYSE:TER) reported revenue of $527 million for the second quarter of 2018 of which $360 million was in Semiconductor Test, $70 million in System Test, $62 million in Industrial Automation, and $35 million in Wireless Test. GAAP net profit for the second quarter was $101.0 million or $0.52 per share.  On a non-GAAP basis, Teradyne’s net income in the second quarter was $112.8 million, or $0.59 per diluted share, which excluded acquired intangible asset amortization, restructuring and other charges, non-cash convertible debt interest, discrete income tax adjustments, and included the related tax impact on non-GAAP adjustments.

“Second quarter sales and earnings exceeded guidance as our test businesses strengthened through the quarter,” said CEO and President Mark Jagiela.  “Despite the slowdown in test demand for mobile devices, other test markets grew in the quarter led by memory in Semiconductor Test, connectivity in Wireless Test at LitePoint, and storage in System Test.  In Industrial Automation, Universal Robots continued its high growth with sales up 45% from Q2 of 2017.  At newly acquired Mobile Industrial Robots (MiR), full quarter sales grew over 85% from the year ago quarter on a standalone basis.”

"Reflecting a continued strong outlook in both our Test and Industrial Automation segments, Q3 company sales are expected to grow over 10% compared to Q3 2017 at the midpoint of our guidance." 

Guidance for the third quarter of 2018 is revenue of $540 million to $570 million, with GAAP net income of $0.51 to $0.59 per diluted share and non-GAAP net income of $0.59 to $0.66 per diluted share.  Non-GAAP guidance excludes acquired intangible asset amortization, non-cash convertible debt interest, restructuring and other charges and includes the related tax impact on non-GAAP adjustments.

Webcast
A conference call to discuss the second quarter results, along with management's business outlook, will follow at 10:00 a.m. ET, Wednesday, July 25. 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 10:00 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 acquired intangible assets amortization, non-cash convertible debt interest, pension actuarial gains and losses, discrete income tax adjustments, fair value inventory step-up related to Mobile Industrial Robots, 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 related to Mobile Industrial Robots. 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 “Investors” and then selecting 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.

About Teradyne
Teradyne (NYSE:TER) is a leading supplier of automation equipment for test and industrial applications. Teradyne Automatic Test Equipment (ATE) is used to test semiconductors, wireless products, data storage and complex electronic systems, which serve consumer, communications, industrial and government customers. Our Industrial Automation products include collaborative robots, autonomous mobile robots and sensing and simulation software, used by global manufacturing and light industrial customers to improve quality and increase manufacturing efficiency. In 2017, Teradyne had revenue of $2.14 billion and currently employs approximately 4,700 people worldwide. For more information, visit www.teradyne.com. Teradyne(R) is a registered trademark of Teradyne, Inc. in the U.S. and other countries.

Safe Harbor Statement
This release contains forward-looking statements regarding Teradyne’s future business prospects, results of operations, market conditions, earnings per share, the payment of a quarterly dividend, the repurchase of Teradyne common stock pursuant to a share repurchase program, use of proceeds and potential dilution from the senior convertible notes offering, potential borrowings under a senior secured credit facility, and the impact of the U.S. tax reform, export and tariff laws. Such statements are based on the current assumptions and expectations of Teradyne’s management and are neither promises nor guarantees of future performance, events, earnings per share, use of cash, payment of dividends, repurchases of common stock, payment of the senior convertible notes, availability of, or borrowing under, the credit facility, or the impact of the U.S. tax reform, export and tariff laws. There can be no assurance that management’s estimates of Teradyne’s future results or other forward-looking statements will be achieved. Additionally, the current dividend and share repurchase programs may be modified, suspended or discontinued at any time. Important factors that could cause actual results, earnings per share, use of cash, dividend payments, repurchases of common stock, payment of the senior convertible notes or borrowings under the credit facility to differ materially from those presently expected include: conditions affecting the markets in which Teradyne operates; decreased or delayed product demand from one or more significant customers; development, delivery and acceptance of new products; the ability to grow the Industrial Automation business; increased research and development spending; deterioration of Teradyne’s financial condition; the consummation and success of any mergers or acquisitions; unexpected cash needs; insufficient cash flow to make required payments and pay the principal amount on the senior convertible notes; the business judgment of the board of directors that a declaration of a dividend, the repurchase of common stock or borrowing under the credit facility is not in the company’s best interests; additional U.S. tax regulations or IRS guidance; the impact of any tariffs or export controls imposed in the U.S. or China; and other events, factors and risks disclosed in filings with the SEC, including, but not limited to, the “Risk Factors” section of Teradyne’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and the Quarterly Report on Form 10-Q for the period ended April 1, 2018. The forward-looking statements provided by Teradyne in this press release represent management’s views as of the date of this release. Teradyne anticipates that subsequent events and developments may cause management’s views to change. However, while Teradyne may elect to update these forward-looking statements at some point in the future, Teradyne specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Teradyne’s views as of any date subsequent to the date of this release.

           
           
TERADYNE, INC. REPORT FOR SECOND FISCAL QUARTER OF 2018          
              
CONDENSED  CONSOLIDATED  STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)        
              
     Quarter Ended Six Months Ended
     July 1, 2018 April 1, 2018 July 2, 2017 (1) July 1, 2018 July 2, 2017 (1)
              
Net revenues $526,929  $487,467  $696,901  $1,014,396  $1,153,814 
              
 Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (2)  219,595   217,635   306,263   437,230   498,159 
              
Gross profit  307,334   269,832   390,638   577,166   655,655 
              
Operating expenses:          
 Selling and administrative  99,410   90,505   90,111   189,916   174,903 
 Engineering and development  75,342   74,408   82,270   149,750   158,248 
 Acquired intangible assets amortization  9,793   7,698   8,166   17,491   16,118 
 Restructuring and other (3)  2,389   (313)  2,288   2,076   4,799 
   Operating expenses  186,934   172,298   182,835   359,233   354,068 
              
Income from operations  120,400   97,534   207,803   217,933   301,587 
              
 Interest and other (4)  (388)  (1,714)  (926)  (2,102)  (2,694)
              
Income before income taxes  120,012   95,820   206,877   215,831   298,893 
 Income tax provision  18,975   8,846   31,901   27,821   38,696 
Net income $101,037  $86,974  $174,976  $188,010  $260,197 
              
Net income per common share:          
Basic   $0.53  $0.45  $0.88  $0.97  $1.30 
Diluted   $0.52  $0.43  $0.87  $0.94  $1.29 
              
Weighted average common shares - basic  190,730   195,255   198,774   192,992   199,390 
              
Weighted average common shares - diluted (5)  194,909   203,484   201,529   199,197   201,732 
              
              
Cash dividend declared per common share $0.09  $0.09  $0.07  $0.18  $0.14 
              
              
(1)Certain prior period amounts were reclassified to conform with the first quarter 2018 adoption of new accounting guidance for the presentation of pension and post retirement costs.
              
(2)Cost of revenues includes: Quarter Ended Six Months Ended
     July 1, 2018 April 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017
   Provision for excess and obsolete inventory $2,653  $3,522  $2,569  $6,175  $5,295 
   Sale of previously written down inventory  (1,922)  (2,243)  (2,149)  (4,165)  (3,283)
     $731  $1,279  $420  $2,010  $2,012 
              
(3)Restructuring and other consists of: Quarter Ended Six Months Ended
     July 1, 2018 April 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017
   Employee severance $2,398  $3,881  $789  $6,279  $1,372 
   Acquisition related expenses  2,544   774   -   3,318   - 
   Other  947   -   -   947   1,294 
   Contingent consideration fair value adjustment  (3,500)  (4,968)  1,499   (8,468)  2,133 
     $2,389  $(313) $2,288  $2,076  $4,799 
              
              
(4)Interest and other includes: Quarter Ended Six Months Ended
     July 1, 2018 April 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017
   Non-cash convertible debt interest $3,245  $3,206  $3,088  $6,451  $6,138 
   Pension actuarial gains  (71)  -   (2,504)  (71)  (2,504)
     $3,174  $3,206  $584  $6,380  $3,634 
              
(5)Under GAAP, when calculating diluted earnings per share, convertible debt must be assumed to have converted if the effect on EPS would be dilutive. Diluted shares assume the conversion of the convertible debt as the effect would be dilutive. Accordingly, for the quarters ended July 1, 2018, April 1, 2018 and July 2, 2017, 2.6 million, 4.4 million and 0.7 million shares, respectively, have been included in diluted shares. For the six months ended July 1, 2018 and July 2, 2017, 3.5 million and 0.3 million shares, respectively, have been included in diluted shares.  For the quarter ended April 1, 2018 and the six months ended July 1, 2018, diluted shares also included 1.8 million and 0.9 million shares, respectively,  from the convertible note hedge transaction.
              
              
              
CONDENSED  CONSOLIDATED  BALANCE  SHEETS  (In thousands)          
              
     July 1, 2018 December 31, 2017      
              
Assets            
 Cash and cash equivalents $480,384  $429,843       
 Marketable securities  712,309   1,347,979       
 Accounts receivable, net  454,122   272,783       
 Inventories, net  135,550   107,525       
 Prepayments  and other current assets  111,820   112,151       
   Total current assets  1,894,185   2,270,281       
              
 Property, plant and equipment, net  285,302   268,447       
 Marketable securities  111,417   125,926       
 Deferred tax assets  73,574   84,026       
 Other assets  12,192   12,275       
 Retirement plans assets  18,252   17,491       
 Acquired intangible assets, net  148,173   79,088       
 Goodwill  388,625   252,011       
              
   Total assets $2,931,720  $3,109,545       
              
Liabilities           
 Accounts payable $102,737  $86,393       
 Accrued employees' compensation and withholdings  115,264   141,694       
 Deferred revenue and customer advances  82,491   83,614       
 Other accrued liabilities  83,681   59,083       
 Contingent consideration  35,911   24,497       
 Income taxes payable  32,226   59,055       
              
   Total current liabilities  452,310   454,336       
              
 Retirement plans liabilities  124,258   119,776       
 Long-term deferred revenue and customer advances  25,375   30,127       
 Deferred tax liabilities  22,281   6,720       
 Long-term other accrued liabilities  22,296   10,273       
 Long-term contingent consideration  25,003   20,605       
 Long-term income taxes payable  147,360   148,075       
 Long-term debt  372,897   365,987       
              
   Total liabilities  1,191,780   1,155,899       
              
Shareholders' equity  1,739,940   1,953,646       
              
   Total liabilities and shareholders' equity $2,931,720  $3,109,545       
            
            
            
CONDENSED  CONSOLIDATED  STATEMENTS OF CASH FLOWS (In thousands)          
              
     Quarter Ended Six Months Ended  
     July 1, 2018 July 2, 2017 July 1, 2018 July 2, 2017  
Cash flows from operating activities:          
 Net income $101,037  $174,976  $188,010  $260,197   
 Adjustments to reconcile net income to net cash provided by operating activities:          
  Depreciation  16,820   16,331   33,156   32,474   
  Amortization  10,973   11,342   20,177   22,412   
  Deferred taxes  8,616   (86)  17,312   (3,563)  
  Stock-based compensation  8,081   8,367   17,625   17,312   
  Provision for excess and obsolete inventory  2,653   2,569   6,175   5,295   
  Contingent consideration fair value adjustment  (3,500)  1,499   (8,468)  2,133   
  Retirement plan actuarial gains  (71)  (2,504)  (71)  (2,504)  
  Other  (225)  1,151   1,168   1,153   
  Changes in operating assets and liabilities, net of businesses acquired:         
   Accounts receivable  (40,332)  (90,397)  (179,403)  (214,189)  
   Inventories  (266)  54,003   (21,283)  (8,149)  
   Prepayments and other assets  2,320   3,321   1,641   4,425   
   Accounts payable and accrued expenses  38,551   22,002   (8,155)  34,504   
   Deferred revenue and customer advances  874   8,645   10,518   5,312   
   Retirement plans contributions  (1,153)  (1,036)  (2,173)  (1,983)  
   Income taxes  (14,203)  20,130   (26,308)  14,363   
Net cash provided by operating activities  130,175   230,313   49,921   169,192   
              
Cash flows from investing activities:          
 Purchases of property, plant and equipment  (27,866)  (23,901)  (62,663)  (45,967)  
 Purchases of marketable securities  (156,747)  (181,502)  (647,071)  (334,819)  
 Proceeds from sales of marketable securities  28,382   99,661   829,053   313,254   
 Proceeds from maturities of marketable securities  257,164   219,423   469,862   307,607   
 Acquisition of businesses, net of cash acquired  (145,276)  -   (170,632)  -   
Net cash (used for) provided by investing activities  (44,343)  113,681   418,549   240,075   
              
Cash flows from financing activities:          
 Issuance of common stock under stock purchase and stock option plans  27   131   10,681   15,215   
 Repurchase of common stock  (226,519)  (56,598)  (360,795)  (94,328)  
 Dividend payments  (17,094)  (13,904)  (34,682)  (27,925)  
 Payment related to net settlement of employee stock compensation awards  (122)  (149)  (19,751)  (12,438)  
 Payment of contingent consideration  -   -   (13,571)  (1,050)  
Net cash used for financing activities  (243,708)  (70,520)  (418,118)  (120,526)  
              
Effects of exchange rate changes on cash and cash equivalents  387   129   189   1,724   
              
(Decrease) increase in cash and cash equivalents  (157,489)  273,603   50,541   290,465   
Cash and cash equivalents at beginning of period  637,873   324,746   429,843   307,884   
Cash and cash equivalents at end of period $480,384  $598,349  $480,384  $598,349   
              

 

GAAP to Non-GAAP Earnings Reconciliation                        
                            
(In millions, except per share amounts)                        
            Quarter Ended             
    July 1,
2018
 % of Net
Revenues
     April 1,
2018 
 % of Net
Revenues
     July 2,
2017 (1)
 % of Net Revenues     
                            
Net revenues $526.9        $487.5        $696.9        
                            
Gross profit GAAP$307.3   58.3%     $269.8  55.3%     $390.6  56.0%     
 Inventory step-up 0.4   0.1%      -    -         -    -        
Gross profit non-GAAP$307.7   58.4%     $269.8  55.3%     $390.6  56.0%     
                            
Income from operations - GAAP$120.4   22.9%     $97.5  20.0%     $207.8  29.8%     
 Acquired intangible assets amortization 9.8   1.9%      7.7  1.6%      8.2  1.2%     
 Restructuring and other (2) 2.4   0.5%      (0.3) -0.1%      2.3  0.3%     
 Inventory step-up 0.4   0.1%      -    -         -    -        
Income from operations - non-GAAP$133.0   25.2%     $104.9  21.5%     $218.3  31.3%     
                            
        Net Income
per Common Share
     Net Income
per Common Share
     Net Income
per Common Share
 
    July 1,
2018
 % of Net
Revenues
 Basic  Diluted April 1,
2018 
 % of Net
Revenues
 Basic  Diluted July 2,
2017
 % of Net Revenues Basic  Diluted 
Net income - GAAP$101.0   19.2% $0.53  $0.52  $87.0  17.8% $0.45  $0.43  $175.0  25.1% $0.88  $0.87  
 Acquired intangible assets amortization 9.8   1.9%  0.05   0.05   7.7  1.6%  0.04   0.04   8.2  1.2%  0.04   0.04  
 Interest and other (3) 3.2   0.6%  0.02   0.02   3.2  0.7%  0.02   0.02   3.1  0.4%  0.02   0.02  
 Restructuring and other (2) 2.4   0.5%  0.01   0.01   (0.3) -0.1%  (0.00)  (0.00)  2.3  0.3%  0.01   0.01  
 Inventory step-up 0.4   0.1%  0.00   0.00   -    -     -   -   -    -     -   -  
 Pension mark-to-market adjustment (3) (0.1)  0.0%  (0.00)  (0.00)  -    -     -   -   (2.5) -0.4%  (0.01)  (0.01) 
 Exclude discrete tax adjustments (4) (0.5)  -0.1%  (0.00)  (0.00)  (6.3) -1.3%  (0.03)  (0.03)  0.5  0.1%  0.00   0.00  
 Non-GAAP tax adjustments (3.4)  -0.6%  (0.02)  (0.02)  (1.9) -0.4%  (0.01)  (0.01)  (5.1) -0.7%  (0.03)  (0.03) 
 Convertible share adjustment -     -     -   0.01   -    -     -   0.01   -    -     -   -  
Net income - non-GAAP$112.8   21.4% $0.59  $0.59  $89.4  18.3% $0.46  $0.45  $181.5  26.0% $0.91  $0.90  
                            
GAAP and non-GAAP weighted average common shares - basic 190.7         195.3         198.8        
GAAP weighted average common shares - diluted 194.9         203.5         201.5        
 Exclude dilutive shares related to convertible note transaction (2.6)        (6.2)        (0.7)       
Non-GAAP weighted average common shares - diluted 192.3         197.3         200.8        
                            
                            
(1) Certain prior period amounts were reclassified to conform with the first quarter 2018 adoption of new accounting guidance for the presentation of pension and post retirement costs.           
                            
(2) Restructuring and other consists of:                        
    Quarter Ended       
    July 1,
2018
       April 1,
2018 
       July 2,
2017
       
  Employee severance$2.4        $3.9        $0.8        
  Acquisition related expenses 2.5         0.8         -        
  Other  0.9         -         -        
  Contingent consideration fair value adjustment (3.5)        (5.0)        1.5        
    $2.4        $(0.3)       $2.3        
                            
(3) For the quarters ended July 1, 2018, April 1, 2018 and July 2, 2017,  adjustment to exclude non-cash convertible debt interest expense. For the quarters ended July 1, 2018 and July 2, 2017, adjustments to exclude actuarial gains recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting.      
                            
(4) For the quarters ended July 1, 2018, April 1, 2018 and July 2, 2017, adjustment to exclude discrete income tax items.      
    Six Months Ended         
    July 1,
2018
 % of Net
Revenues
     July 2,
2017 (1)
 % of Net
Revenues
             
                            
Net Revenues $1,014.4        $1,153.8                
                        
Gross profit GAAP$577.2   56.9%     $655.7  56.8%         
 Inventory step-up 0.4   0.0%      -    -            
Gross profit non-GAAP$577.6   56.9%     $655.7  56.8%         
                        
Income from operations - GAAP$217.9   21.5%     $301.6  26.1%         
 Acquired intangible assets amortization 17.5   1.7%      16.1  1.4%         
 Restructuring and other (2) 2.1   0.2%      4.8  0.4%         
 Inventory step-up 0.4   0.0%      -    -            
Income from operations - non-GAAP$237.9   23.5%     $322.5  28.0%         
                        
        Net Income
per Common Share
     Net Income
per Common Share
     
    July 1,
2018
 % of Net
Revenues
 Basic  Diluted July 2,
2017
 % of Net
Revenues
 Basic  Diluted     
Net income - GAAP$188.0   18.5% $0.97  $0.94  $260.2  22.6% $1.30  $1.29      
 Acquired intangible assets amortization 17.5   1.7%  0.09   0.09   16.1  1.4%  0.08   0.08      
 Interest and other (3) 6.5   0.6%  0.03   0.03   6.1  0.5%  0.03   0.03      
 Restructuring and other (2) 2.1   0.2%  0.01   0.01   4.8  0.4%  0.02   0.02      
 Inventory step-up 0.4   0.0%  0.00   0.00   -    -     -   -      
 Pension mark-to-market adjustment (3) (0.1)  0.0%  (0.00)  (0.00)  (2.5) -0.2%  (0.01)  (0.01)     
 Exclude discrete tax adjustments (4) (6.8)  -0.7%  (0.04)  (0.03)  (6.5) -0.6%  (0.03)  (0.03)     
 Non-GAAP tax adjustments (5.3)  -0.5%  (0.03)  (0.03)  (8.2) -0.7%  (0.04)  (0.04)     
 Convertible share adjustment -     -     -   0.02   -    -     -   -      
Net income - non-GAAP$202.3   19.9% $1.05  $1.04  $270.0  23.4% $1.35  $1.34      
                        
GAAP and non-GAAP weighted average common shares - basic 193.0         199.4            
GAAP weighted average common shares - diluted 199.2         201.7            
 Exclude dilutive shares from convertible note (4.4)        (0.3)           
Non-GAAP weighted average common shares - diluted 194.8         201.4            
                        
(1) Certain prior period amounts were reclassified to conform with the first quarter 2018 adoption of new accounting guidance for the presentation of pension and post retirement costs.         
                        
(2) Restructuring and other consists of:                    
    Six Months Ended           
    July 1,
2018
       July 2,
2017
           
  Employee severance$6.3        $1.4            
  Acquisition related expenses 3.3         -            
  Other  0.9         1.3         -        
  Contingent consideration fair value adjustment (8.5)        2.1            
    $2.1        $4.8            
                        
(3) For the six months ended July 1, 2018 and July 2, 2017, Interest and other included non-cash convertible debt interest expense. For the six months ended July 1, 2018 and July 2, 2017, adjustments to exclude actuarial gains recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting.       
                        
(4) For the six months ended July 1, 2018 and July 2, 2017, adjustment to exclude discrete income tax items.     
                        
GAAP to Non-GAAP Reconciliation of Third Quarter 2018 guidance:                
                    
GAAP and non-GAAP third quarter revenue guidance:  $540 million to$570 million            
GAAP net income per diluted share  $0.51  $0.59            
 Exclude acquired intangible assets amortization   0.06   0.06            
 Exclude non-cash convertible debt interest   0.02   0.02            
 Exclude restructuring and other   0.01   0.01            
 Tax effect of non-GAAP adjustments   (0.02)  (0.02)           
 Convertible share adjustment   0.01   0.01            
Non-GAAP net income per diluted share  $0.59  $0.66            
                    

Contact: Teradyne, Inc.
Andy Blanchard 978-370-2425
Vice President of Corporate Relations