Teradyne Reports First Quarter 2019 Results

GAAP to Non-GAAP Earnings Reconciliation

(In millions, except per share amounts)
																	Quarter Ended
				March 31, 2019			% of Net Revenues										December 31, 2018			% of Net Revenues								April 1, 2018			% of Net Revenues

Net revenues				$	494.1												$	519.6										$	487.5

Gross profit GAAP and non-GAAP				$	287.6			58.2	%								$	309.5		59.6	%							$	269.8		55.3	%

Income from operations - GAAP				$	93.1			18.8	%								$	112.3		21.6	%							$	97.5		20.0	%
		Acquired intangible assets amortization			10.6			2.1	%									10.6		2.0	%								7.7		1.6	%
		Restructuring and other (1)			5.1			1.0	%									11.4		2.2	%								(0.3	)	-0.1	%
Income from operations - non-GAAP				$	108.8			22.0	%								$	134.3		25.8	%							$	104.9		21.5	%

											Net Income per Common Share											Net Income per Common Share											Net Income per Common Share
				March 31, 2019			% of Net Revenues				Basic			Diluted			December 31, 2018			% of Net Revenues		Basic			Diluted			April 1, 2018			% of Net Revenues		Basic			Diluted
Net income - GAAP				$	109.1			22.1	%		$	0.63		$	0.62		$	143.8		27.7	%	$	0.80		$	0.79		$	87.0		17.8	%	$	0.45		$	0.43
		Acquired intangible assets amortization			10.6			2.1	%			0.06			0.06			10.6		2.0	%		0.06			0.06			7.7		1.6	%		0.04			0.04
		Interest and other (2)			3.4			0.7	%			0.02			0.02			3.3		0.6	%		0.02			0.02			3.2		0.7	%		0.02			0.02
		Restructuring and other (1)			5.1			1.0	%			0.03			0.03			11.4		2.2	%		0.06			0.06			(0.3	)	-0.1	%		-			-
		Pension mark-to-market adjustment (2)			-			-				-			-			(3.5	)	-0.7	%		(0.02	)		(0.02	)		-		-			-			-
		Exclude discrete tax adjustments (3)			(30.1	)		-6.1	%			(0.17	)		(0.17	)		(52.9	)	-10.2	%		(0.30	)		(0.29	)		(6.3	)	-1.3	%		(0.03	)		(0.03	)
		Non-GAAP tax adjustments			(3.5	)		-0.7	%			(0.02	)		(0.02	)		0.3		0.1	%		0.00			0.00			(1.9	)	-0.4	%		(0.01	)		(0.01	)
		Convertible share adjustment			-			-				-			0.01			-		-			-			-			-		-			-			0.01
Net income - non-GAAP				$	94.6			19.1	%		$	0.55		$	0.54		$	113.0		21.7	%	$	0.63		$	0.63		$	89.4		18.3	%	$	0.46		$	0.45

GAAP and non-GAAP weighted average common shares - basic					173.5													179.0											195.3
GAAP weighted average common shares - diluted					177.0													181.5											203.5
		Exclude dilutive shares related to convertible note transaction			(2.2	)												(0.9	)										(6.2	)
Non-GAAP weighted average common shares - diluted					174.8													180.6											197.3


(1	)	Restructuring and other consists of:
				Quarter Ended
				March 31, 2019													December 31, 2018											April 1, 2018
			Contingent consideration fair value adjustment	$	3.0												$	10.2										$	(5.0	)
			Acquisition related expenses and compensation		1.3													0.8											0.8
			Employee severance		0.8													0.5											3.9
				$	5.1												$	11.4										$	(0.3	)

(2	)	For the quarters ended March 31, 2019, December 31, 2018, and April 1, 2018, adjustment to exclude non-cash convertible debt interest expense and adjustment to exclude actuarial gains recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting.

(3	)	For the quarters ended March 31, 2019, December 31, 2018, and April 1, 2018, adjustment to exclude discrete income tax items. For the quarter ended Mach 31, 2019, income tax (benefit) provision includes a $26 million tax benefit from the release of uncertain tax position reserves due to the IRS completion of its audit of Teradyne's 2015 Federal tax return. For the quarter ended December 31, 2018, adjustment to treat the $52 million tax benefit related to the finalization of our toll tax charge as a discrete item.


GAAP to Non-GAAP Reconciliation of Second Quarter 2019 guidance:

GAAP and non-GAAP second quarter revenue guidance:							$520 million			to	$550 million
GAAP net income per diluted share							$	0.48			$	0.56
		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						0.02				0.02
Non-GAAP net income per diluted share							$	0.56			$	0.65

For press releases and other information of interest to investors, please visit Teradyne's investor site at investors.teradyne.com.
		Contact: Teradyne, Inc.
			Andy Blanchard 978-370-2425
			Vice President of Corporate Relations

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