• Q2’19 GAAP earnings per share grew 6% and Non-GAAP earnings per share grew 12% from Q2’18
  • Semiconductor Test revenue up 4% from Q2’18 
  • Industrial Automation revenue up 20% from Q2’18
  Q2’19Q2’18Q1’19 
 Revenue (mil)$564$527 $494  
 GAAP EPS$0.55$0.52 $0.62 
 Non-GAAP EPS$0.66$0.59 $0.54  
      
========================================== 
      

NORTH READING, Mass., July 23, 2019 (GLOBE NEWSWIRE) -- Teradyne, Inc. (NASDAQ: TER) reported revenue of $564 million for the second quarter of 2019 of which $375 million was in Semiconductor Test, $75 million in Industrial Automation, $73 million in System Test, and $41 million in Wireless Test. GAAP net income for the second quarter was $97.4 million or $0.55 per share. On a non-GAAP basis, Teradyne’s net income in the second quarter was $113.2 million, or $0.66 per diluted share, which excluded acquired intangible asset amortization, restructuring and other, non-cash convertible debt interest, discrete income tax adjustments, and included the related tax impact on non-GAAP adjustments.

“We exceeded our revenue and profit guidance for the second quarter on stronger than expected results in semiconductor test as continued growth in 5G infrastructure, networking and memory test spending more than offset lower demand from automotive and industrial device makers,” said Teradyne President and CEO Mark Jagiela. “In Industrial Automation, our Universal Robots and MiR collaborative robots business grew 20% in the quarter, highlighting their compelling value even in a challenging global industrial investment environment.”

Guidance for the third quarter of 2019 is revenue of $540 million to $580 million, with GAAP net income of $0.53 to $0.63 per diluted share and non-GAAP net income of $0.64 to $0.74 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization, non-cash convertible debt interest, restructuring and other, 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 a.m. ET, Wednesday, July 24. 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 a.m. ET. A replay will be available on the Teradyne website at 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, and restructuring and other, and include 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. 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 (NASDAQ:TER) brings high-quality innovations such as smart devices, life-saving medical equipment and data storage systems to market, faster. Its advanced test solutions for semiconductors, electronic systems, wireless devices and more ensure that products perform as they were designed. Its Industrial Automation offerings include collaborative and mobile robots that help manufacturers of all sizes improve productivity and lower costs. In 2018, Teradyne had revenue of $2.1 billion and today employs 5,200 people worldwide. For more information, visit teradyne.com. Teradyne® 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, 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, 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. On May 16, 2019, Huawei and 68 of its affiliates, including HiSilicon, were added to the U.S. Department of Commerce Entity List under U.S. Export Administration Regulations (the “EAR”). This action by the U.S. Department of Commerce imposes new export licensing requirements on exports, re-exports, and in-country transfers of all U.S. - regulated products, software and technology to the designated Huawei entities. While most of our products are not subject to the EAR and therefore not affected by the Entity List restrictions, certain of our products are currently manufactured in the U.S. and thus subject to the Entity List restrictions. Compliance with the Entity List restrictions has not significantly impacted our sales, but could limit sales in the future. Important factors that could cause actual results, earnings per share, use of cash, dividend payments, repurchases of common stock, or payment of the senior convertible notes 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 or the repurchase of common stock 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; compliance with trade protection measures or export restrictions, including the addition of Huawei and HiSilicon to the U.S. Department of Commerce Entity List; 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, 2018 and the Quarterly Report on Form 10-Q for the period ended March 31, 2019. 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 2019         
           
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)        
           
  Quarter Ended Six Months Ended
  June 30, 2019 March 31, 2019 July 1, 2018 June 30, 2019 July 1, 2018
           
Net revenues$564,178  $494,099  $526,929  $1,058,277  $1,014,396 
           
 Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1) 240,260   206,464   219,595   446,724   437,230 
           
Gross profit 323,918   287,635   307,334   611,553   577,166 
           
Operating expenses:         
 Selling and administrative 108,811   102,013   99,410   210,824   189,916 
 Engineering and development 81,434   76,791   75,342   158,225   149,750 
 Acquired intangible assets amortization 10,083   10,634   9,793   20,717   17,491 
 Restructuring and other (2) (10,404)  5,112   2,389   (5,292)  2,076 
 Operating expenses 189,924   194,550   186,934   384,474   359,233 
           
Income from operations 133,994   93,085   120,400   227,079   217,933 
             
 Interest and other (income) expense (3) 2,817   (894)  388   1,923   2,102 
           
Income before income taxes 131,177   93,979   120,012   225,156   215,831 
 Income tax provision (benefit) (4) 33,780   (15,159)  18,975   18,621   27,821 
Net income$97,397  $109,138  $101,037  $206,535  $188,010 
           
Net income per common share:         
Basic$0.57  $0.63  $0.53  $1.20  $0.97 
Diluted$0.55  $0.62  $0.52  $1.16  $0.94 
           
Weighted average common shares - basic 171,241   173,532   190,730   172,387   192,992 
               
Weighted average common shares - diluted (5) 178,590   176,972   194,909   177,781   199,197 
           
Cash dividend declared per common share$0.09  $0.09  $0.09  $0.18  $0.18 
           
           
           
(1) Cost of revenues includes:Quarter Ended Six Months Ended
  June 30, 2019 March 31, 2019 July 1, 2018 June 30, 2019 July 1, 2018
 Provision for excess and obsolete inventory$3,402  $2,397  $2,653  $5,799  $6,175 
 Sale of previously written down inventory (363)  (778)  (1,922)  (1,141)  (4,165)
 Inventory step-up 383   -   372   383   372 
  $3,422  $1,619  $1,103  $5,041  $2,382 
           
           
(2) Restructuring and other consists of:Quarter Ended Six Months Ended
  June 30, 2019 March 31, 2019 July 1, 2018 June 30, 2019 July 1, 2018
 Contingent consideration fair value adjustment$(11,671) $2,970  $(3,500) $(8,701) $(8,468)
 Employee severance 803   799   2,398   1,602   6,279 
 Acquisition related expenses and compensation 464   1,343   2,544   1,807   3,318 
 Other -   -   947   -   947 
  $(10,404) $5,112  $2,389  $(5,292) $2,076 
           
           
(3) Interest and other includes:Quarter Ended Six Months Ended
  June 30, 2019 March 31, 2019 July 1, 2018 June 30, 2019 July 1, 2018
 Non-cash convertible debt interest$3,410  $3,368  $3,245  $6,778  $6,451 
 Pension actuarial loss (gain) 448   -   (71)  448   (71)
  $3,858  $3,368  $3,174  $7,226  $6,380 
           
(4) For the quarter ended June 30, 2019, income tax provision (benefit) includes a $15 million tax provision related to the finalization of our toll tax charge. For the quarter ended March 31, 2019, income tax provision (benefit) 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.
           
(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 June 30, 2019, March 31, 2019 and July 1, 2018, 4.4 million, 2.2 million and 2.6 million shares, respectively, have been included in diluted shares. For the six months ended June 30, 2019 and July 1, 2018, 3.3 million and 3.5 million shares, respectively, have been included in diluted shares. For the three months ended June 30, 2019, diluted shares also included 1.8 million shares from the convertible note hedge transaction. For the six months ended June 30, 2019 and July 1, 2018, diluted shares included 0.9 million shares from the convertible note hedge transaction.
           
           
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)         
           
  June 30, 2019 December 31, 2018      
           
Assets         
 Cash and cash equivalents$495,107  $926,752       
 Marketable securities 400,227   190,096       
 Accounts receivable, net 372,199   291,267       
 Inventories, net 164,461   153,541       
 Prepayments and other current assets 184,832   170,826       
 Total current assets 1,616,826   1,732,482       
           
 Property, plant and equipment, net 295,895   279,821       
 Operating lease right-of-use assets, net 56,315   -       
 Marketable securities 99,001   87,731       
 Deferred tax assets 67,886   70,848       
 Other assets 25,712   11,509       
 Retirement plans assets 16,449   16,883       
 Acquired intangible assets, net 109,494   125,482       
 Goodwill 383,936   381,850       
           
 Total assets$2,671,514  $2,706,606       
           
Liabilities         
 Accounts payable$103,449  $100,688       
 Accrued employees' compensation and withholdings 121,940   148,566       
 Deferred revenue and customer advances 89,837   77,711       
 Other accrued liabilities 77,053   78,272       
 Operating lease liabilities 18,041   -       
 Contingent consideration 11,753   34,865       
 Income taxes payable 44,927   36,185       
           
 Total current liabilities 467,000   476,287       
           
 Retirement plans liabilities 122,596   117,456       
 Long-term deferred revenue and customer advances 37,365   32,750       
 Deferred tax liabilities 17,800   20,662       
 Long-term other accrued liabilities 9,660   37,547       
 Long-term contingent consideration 15,094   35,678       
 Long-term operating lease liabilities 46,460   -       
 Long-term income taxes payable 88,884   83,891       
 Long-term debt 387,243   379,981       
           
 Total liabilities 1,192,102   1,184,252       
           
Shareholders' equity 1,479,412   1,522,354       
           
 Total liabilities and shareholders' equity$2,671,514  $2,706,606       
           
         
         
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)         
           
  Quarter Ended Six Months Ended  
  June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018  
Cash flows from operating activities:         
 Net income$97,397  $101,037  $206,535  $188,010   
                   
 Adjustments to reconcile net income to net cash provided by operating activities:         
 Depreciation 17,231   16,820   33,882   33,156   
 Amortization 12,034   10,973   24,976   20,177   
 Deferred taxes (691)  8,616   515   17,312   
 Stock-based compensation 8,635   8,081   18,109   17,625   
 Provision for excess and obsolete inventory 3,402   2,653   5,799   6,175   
 Contingent consideration fair value adjustment (11,671)  (3,500)  (8,701)  (8,468)  
 Retirement plan actuarial loss (gain) 448   (71)  448   (71)  
 (Gains) losses on marketable securities (913)  (479)  (3,741)  762   
 Other 210   254   429   406   
 Changes in operating assets and liabilities, net of businesses acquired:         
 Accounts receivable (37,772)  (40,332)  (79,478)  (179,403)  
 Inventories 470   (266)  (2,447)  (21,283)  
 Prepayments and other assets 1,581   2,320   (17,067)  1,641   
 Accounts payable and accrued expenses 38,887   38,551   (14,436)  (8,155)  
 Deferred revenue and customer advances 9,371   874   15,826   10,518   
 Retirement plans contributions (1,204)  (1,153)  (2,414)  (2,173)  
 Income taxes 7,831   (14,203)  (14,973)  (26,308)  
Net cash provided by operating activities 145,246   130,175   163,262   49,921   
           
Cash flows from investing activities:         
 Purchases of property, plant and equipment (33,245)  (27,866)  (58,956)  (62,663)  
 Purchases of marketable securities (108,997)  (156,747)  (484,181)  (647,071)  
 Proceeds from sales of marketable securities 37,014   28,382   42,454   829,053   
 Proceeds from maturities of marketable securities 91,992   257,164   233,193   469,862   
 Proceeds from life insurance -   -   273   -   
 Purchase of investments and acquisition of businesses, net of cash acquired (15,000)  (145,276)  (21,970)  (170,632)  
Net cash (used for) provided by investing activities (28,236)  (44,343)  (289,187)  418,549   
           
Cash flows from financing activities:         
 Issuance of common stock under stock purchase and stock option plans 833   27   15,101   10,681   
 Repurchase of common stock (90,754)  (226,519)  (247,222)  (360,795)  
 Dividend payments (15,392)  (17,094)  (31,019)  (34,682)  
 Payment related to net settlement of employee stock compensation awards (128)  (122)  (14,446)  (19,751)  
 Payment of contingent consideration -   -   (27,615)  (13,571)  
Net cash used for financing activities (105,441)  (243,708)  (305,201)  (418,118)  
           
Effects of exchange rate changes on cash and cash equivalents (190)  387   (519)  189   
           
Increase (decrease) in cash and cash equivalents 11,379   (157,489)  (431,645)  50,541   
Cash and cash equivalents at beginning of period 483,728   637,873   926,752   429,843   
Cash and cash equivalents at end of period$495,107  $480,384  $495,107  $480,384   
           


GAAP to Non-GAAP Earnings Reconciliation                       
                         
(In millions, except per share amounts)                       
          Quarter Ended            
  June 30,
2019
 % of Net
Revenues
     March 31,
2019
 % of Net
Revenues
     July 1,
2018
 % of Net
Revenues
    
                         
Net revenues$564.2        $494.1        $526.9       
                         
Gross profit GAAP$323.9   57.4%     $287.6  58.2%     $307.3  58.3%    
 Inventory step-up 0.4   0.1%      -  -         0.4  0.1%    
Gross profit non-GAAP$324.3   57.5%     $287.6  58.2%     $307.7  58.4%    
                         
Income from operations - GAAP$134.0   23.8%     $93.1  18.8%     $120.4  22.9%    
 Acquired intangible assets amortization 10.1   1.8%      10.6  2.1%      9.8  1.9%    
 Restructuring and other (1) (10.4)  -1.8%      5.1  1.0%      2.4  0.5%    
 Inventory step-up 0.4   0.1%      -  -         0.4  0.1%    
Income from operations - non-GAAP$134.1   23.8%     $108.8  22.0%     $133.0  25.2%    
                         
                         
      Net Income
per Common Share
     Net Income
per Common Share
     Net Income
per Common Share
  June 30,
2019
 % of Net
Revenues
 Basic  Diluted March 31,
2019
 % of Net
Revenues
 Basic  Diluted July 1,
2018
 % of Net
Revenues
 Basic  Diluted
Net income - GAAP$97.4   17.3% $0.57  $0.55  $109.1  22.1% $0.63  $0.62  $101.0  19.2% $0.53  $0.52 
 Acquired intangible assets amortization 10.1   1.8%  0.06   0.06   10.6  2.1%  0.06   0.06   9.8  1.9%  0.05   0.05 
 Interest and other (2) 3.4   0.6%  0.02   0.02   3.4  0.7%  0.02   0.02   3.2  0.6%  0.02   0.02 
 Restructuring and other (1) (10.4)  -1.8%  (0.06)  (0.06)  5.1  1.0%  0.03   0.03   2.4  0.5%  0.01   0.01 
 Pension mark-to-market adjustment (2) 0.4   0.1%  0.00   0.00   -  -     -   -   (0.1) 0.0%  (0.00)  (0.00)
 Inventory step-up 0.4   0.1%  0.00   0.00   -  -     -   -   0.4  0.1%  0.00   0.00 
 Exclude discrete tax adjustments (3) 13.9   2.5%  0.08   0.08   (30.1) -6.1%  (0.17)  (0.17)  (0.5) -0.1%  (0.00)  (0.00)
 Non-GAAP tax adjustments (2.0)  -0.4%  (0.01)  (0.01)  (3.5) -0.7%  (0.02)  (0.02)  (3.4) -0.6%  (0.02)  (0.02)
 Convertible share adjustment -   -     -   0.02   -  -     -   -   -  -     -   0.01 
Net income - non-GAAP$113.2   20.1% $0.66  $0.66  $94.6  19.1% $0.55  $0.54  $112.8  21.4% $0.59  $0.59 
                         
GAAP and non-GAAP weighted average common shares - basic 171.2         173.5         190.7       
GAAP weighted average common shares - diluted 178.6         177.0         194.9       
 Exclude dilutive shares related to convertible note transaction (6.2)        (2.2)        (2.6)      
Non-GAAP weighted average common shares - diluted 172.4         174.8         192.3       
                         
                         
(1)Restructuring and other consists of:                       
  Quarter Ended      
  June 30,
2019
       March 31,
2019
       July 1,
2018
      
 Contingent consideration fair value adjustment$(11.7)       $3.0        $(3.5)      
 Acquisition related expenses and compensation 0.5         1.3         2.5       
 Employee severance 0.8         0.8         2.4       
 Other -         -         0.9       
  $(10.4)       $5.1        $2.4       
                         
(2)For the quarters ended June 30, 2019, March 31, 2019, and July 1, 2018, adjustment to exclude non-cash convertible debt interest expense. For the quarters ended June 30, 2019 and July 1, 2018, adjustment to exclude actuarial loss (gain) recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting.
                         
(3)For the quarters ended June 30, 2019, March 31, 2019, and July 1, 2018, adjustment to exclude discrete income tax items. For the quarter ended June 30, 2019, income tax (benefit) provision includes a $15 million tax provision related to the finalization of our toll tax charge. For the quarter ended March 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.
        
        
  Six Months Ended        
  June 30,
2019
 % of Net
Revenues
     July 1,
2018
 % of Net
Revenues
            
                         
Net Revenues$1,058.3        $1,014.4               
                      
Gross profit GAAP$611.6   57.8%     $577.2  56.9%         
 Inventory step-up 0.4   0.0%      0.4  0.0%         
Gross profit non-GAAP$612.0   57.8%     $577.6  56.9%         
                      
Income from operations - GAAP$227.1   21.5%     $217.9  21.5%         
 Acquired intangible assets amortization 20.7   2.0%      17.5  1.7%         
 Restructuring and other (1) (5.3)  -0.5%      2.1  0.2%         
 Inventory step-up 0.4   0.0%      0.4  0.0%         
Income from operations - non-GAAP$242.9   23.0%     $237.9  23.5%         
                      
                      
      Net Income
per Common Share
     Net Income
per Common Share
     
  June 30,
2019
 % of Net
Revenues
 Basic  Diluted July 1,
2018
 % of Net
Revenues
 Basic  Diluted     
Net income - GAAP$206.5   19.5% $1.20  $1.16  $188.0  18.5% $0.97  $0.94      
 Acquired intangible assets amortization 20.7   2.0%  0.12   0.12   17.5  1.7%  0.09   0.09      
 Interest and other (2) 6.8   0.6%  0.04   0.04   6.5  0.6%  0.03   0.03      
 Restructuring and other (1) (5.3)  -0.5%  (0.03)  (0.03)  2.1  0.2%  0.01   0.01      
 Inventory step-up 0.4   0.0%  0.00   0.00   0.4  0.0%  0.00   0.00      
 Pension mark-to-market adjustment (2) 0.4   0.0%  0.00   0.00   (0.1) 0.0%  (0.00)  (0.00)     
 Exclude discrete tax adjustments (3) (16.2)  -1.5%  (0.09)  (0.09)  (6.8) -0.7%  (0.04)  (0.03)     
 Non-GAAP tax adjustments (5.5)  -0.5%  (0.03)  (0.03)  (5.3) -0.5%  (0.03)  (0.03)     
 Convertible share adjustment -   -     -   0.03   -  -     -   0.02      
Net income - non-GAAP$207.8   19.6% $1.21  $1.20  $202.3  19.9% $1.05  $1.04      
                      
GAAP and non-GAAP weighted average common shares - basic 172.4         193.0            
GAAP weighted average common shares - diluted 177.8         199.2            
 Exclude dilutive shares from convertible note (4.2)        (4.4)           
Non-GAAP weighted average common shares - diluted 173.6         194.8            
                      
(1)Restructuring and other consists of:                    
  Six Months Ended           
  June 30,
2019
       July 1,
2018
           
 Contingent consideration fair value adjustment$(8.7)       $(8.5)           
 Acquisition related expenses and compensation 1.8         3.3            
 Employee severance 1.6         6.3            
 Other -         0.9                 
  $(5.3)       $2.1            
                      
(2)For the six months ended June 30, 2019 and July 1, 2018, interest and other included non-cash convertible debt interest expense. For the six months ended June 30, 2019 and July 1, 2018, adjustments to exclude actuarial loss (gain) recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting.
                      
(3)For the six months ended June 30, 2019 and July 1, 2018, adjustment to exclude discrete income tax items. For the six months ended June 30, 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 and includes a $15 million tax provision related to the finalization of our toll tax charge.
                      
                      
                      
GAAP to Non-GAAP Reconciliation of Third Quarter 2019 guidance:
                         
GAAP and non-GAAP third quarter revenue guidance:
 $540 million
 to$580 million
                   
GAAP net income per diluted share  $0.53  $0.63                   
 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   (0.01)  (0.01)                  
 Convertible share adjustment   0.02   0.02                   
Non-GAAP net income per diluted share  $0.64  $0.74                   
                         
For press releases and other information of interest to investors, please visit teradyne.com.
 Contact: Teradyne, Inc. 
 Andy Blanchard, 978-370-2425 
 Vice President of Corporate Relations