Teradyne Reports Fourth Quarter and Fiscal Year 2018 Results

• Revenue of $520 million in Q4’18, organic growth of 5% from Q4’17
  
• Record full year memory and analog test shipments
• Record 60% quarterly and 58% full year gross margin
• Expect to repurchase $500 million in shares in 2019
• Quarterly dividend of $0.09 declared

	Q4'18		Q4'17	Q3'18		FY 2018		FY 2017
Revenue (mil)	$520		$479	$567		$2,101		$2,137
GAAP EPS	$0.79		($0.54)	$0.63		$2.35		$1.28
Non-GAAP EPS	$0.63		$0.46	$0.71		$2.37		$2.34

NORTH READING, Mass., Jan. 23, 2019 (GLOBE NEWSWIRE) -- Teradyne, Inc. (NASDAQ: TER) reported revenue of $520 million for the fourth quarter of 2018 of which $342 million was in Semiconductor Test, $84 million in Industrial Automation (IA), $54 million in System Test and $40 million in Wireless Test. GAAP net income for the fourth quarter was $143.8 million or $0.79 per share. On a non-GAAP basis, Teradyne’s net income in the fourth quarter was $113.0 million, or $0.63 per diluted share, which excluded restructuring and other charges, acquired intangible asset amortization, pension actuarial gains, non-cash convertible debt interest, discrete income tax adjustments, and included the related tax impact on non-GAAP adjustments.

“We finished 2018 with strong fourth quarter sales above the high end of our guidance driven by upside demand in our Semiconductor and Wireless test businesses,” said CEO and President Mark Jagiela. “For the full year, our Semiconductor Test group delivered record memory and analog revenues, which lessened the impact of lower mobility test shipments. Gross margin for the year was at a record level due mainly to continued Universal Robots manufacturing cost reductions and a favorable product mix overall. In IA, Universal Robots’ full year growth of 38%, while strong, was below our target due mainly to slowing demand in China and the automotive sector. MiR sales for the year more than doubled on a pro-forma basis.”

As part of the $1.5 billion authorization established in January 2018, Teradyne purchased $823 million of its common shares in 2018 and expects to repurchase $500 million of its common shares in 2019.

Teradyne’s Board of Directors declared a quarterly cash dividend of $0.09 per share, payable on March 22, 2019 to shareholders of record as of the close of business on February 22, 2019. 

Guidance for the first quarter of 2019 is revenue of $460 million to $490 million, with GAAP net income of $0.31 to $0.39 per diluted share and non-GAAP net income of $0.39 to $0.47 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization, non-cash convertible debt interest and includes the related tax impact on non-GAAP adjustments.

Webcast
A conference call to discuss the fourth quarter results, along with management's business outlook, will follow at 10:00 a.m. ET, Thursday, January 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 10:00 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 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 (NASDAQ: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 industrial customers to improve quality and increase manufacturing efficiency. In 2018, Teradyne had revenue of $2.1 billion and currently employs approximately 4,900 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, 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 September 30, 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 FOURTH FISCAL QUARTER OF 2018
CONDENSED  CONSOLIDATED  STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
						Quarter Ended												Twelve Months Ended
						December 31, 2018				September 30, 2018				December 31, 2017 (1)				December 31, 2018				December 31, 2017 (1)
Net revenues						$	519,558			$	566,848			$	479,415			$	2,100,802			$	2,136,606
		Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (2)					210,022				233,155				208,485				880,408				915,153
Gross profit							309,536				333,693				270,930				1,220,394				1,221,453
Operating expenses:
		Selling and administrative					100,552				100,199				87,880				390,669				348,913
		Engineering and development					74,706				77,049				72,070				301,505				307,305
		Acquired intangible assets amortization					10,559				11,142				7,384				39,191				30,530
		Restructuring and other (3)					11,446				1,710				8,970				15,232				9,362
				Operating expenses			197,263				190,100				176,304				746,597				696,110
Income from operations							112,273				143,593				94,626				473,797				525,343
		Interest and other expense (income) (4)					1,144				2,749				(3,458	)			5,996				931
Income before income taxes							111,129				140,844				98,084				467,801				524,412
		Income tax (benefit) provision (5)					(32,662	)			20,863				204,007				16,022				266,720
Net income (loss)						$	143,791			$	119,981			$	(105,923	)		$	451,779			$	257,692
Net income (loss) per common share:
Basic						$	0.80			$	0.65			$	(0.54	)		$	2.41			$	1.30
Diluted						$	0.79			$	0.63			$	(0.54	)		$	2.35			$	1.28
Weighted average common shares - basic							178,958				185,744				196,010				187,672				198,069
Weighted average common shares - diluted (6)							181,520				190,505				196,010				192,605				201,641
Cash dividend declared per common share						$	0.09			$	0.09			$	0.07			$	0.36			$	0.28
(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												Twelve Months Ended
						December 31, 2018				September 30, 2018				December 31, 2017				December 31, 2018				December 31, 2017
				Provision for excess and obsolete inventory		$	1,720			$	3,347			$	1,690			$	11,242			$	8,844
				Sale of previously written down inventory			(1,501	)			(1,013	)			(1,048	)			(6,679	)			(7,451	)
						$	219			$	2,334			$	642			$	4,563			$	1,393
(3	)	Restructuring and other consists of:				Quarter Ended												Twelve Months Ended
						December 31, 2018				September 30, 2018				December 31, 2017				December 31, 2018				December 31, 2017
				Contingent consideration fair value adjustment		$	10,223			$	(768	)		$	5,973			$	987			$	7,820
				Employee severance			768				1,667				1,801				8,714				3,754
				Acquisition related expenses and compensation			455				811				-				4,584				-
				Impairment of fixed assets			-				-				1,124				-				1,124
				Other			-				-				72				947				973
				Property insurance recovery, net			-				-				-				-				(4,309	)
						$	11,446			$	1,710			$	8,970			$	15,232			$	9,362
(4	)	Interest and other (income) expense, includes:				Quarter Ended												Twelve Months Ended
						December 31, 2018				September 30, 2018				December 31, 2017				December 31, 2018				December 31, 2017
				Non-cash convertible debt interest		$	3,327			$	3,286			$	3,166			$	13,064			$	12,431
				Pension actuarial (gain) loss			(3,512	)			267				(3,786	)			(3,316	)			(6,624	)
						$	(185	)		$	3,553			$	(620	)		$	9,748			$	5,807
(5	)	For the quarter and twelve months ended December 31, 2018 income tax (benefit) provision includes a $52 million tax benefit related to the finalization of our U.S. toll tax liability. For the quarter and twelve months ended December 31, 2017, income tax provision included an expense of $186 million related to the estimated impact of the U.S. Tax Reform Act.
(6	)	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 December 31, 2018, September 30, 2018 and December 31, 2017, 0.9 million, 3.0 million and 3.3 million shares, respectively, have been included in diluted shares. For the twelve months ended December 31, 2018 and December 31, 2017, 2.7 million and 1.3 million shares, respectively, have been included in diluted shares.  For the twelve months ended December 31, 2018 and December 31, 2017, diluted shares also included 0.5 million shares and 0.1 million shares, respectively,  from the convertible note hedge transaction.
CONDENSED  CONSOLIDATED  BALANCE  SHEETS  (In thousands)
						December 31, 2018				December 31, 2017
Assets
		Cash and cash equivalents				$	926,752			$	429,843
		Marketable securities					190,096				1,347,979
		Accounts receivable, net					291,267				272,783
		Inventories, net					153,541				107,525
		Prepayments and other current assets					170,817				112,151
				Total current assets			1,732,473				2,270,281
		Property, plant and equipment, net					279,821				268,447
		Marketable securities					87,731				125,926
		Deferred tax assets					70,858				84,026
		Other assets					11,508				12,275
		Retirement plans assets					16,883				17,491
		Acquired intangible assets, net					125,482				79,088
		Goodwill					381,850				252,011
				Total assets		$	2,706,606			$	3,109,545
Liabilities
		Accounts payable				$	100,688			$	86,393
		Accrued employees' compensation and withholdings					148,566				141,694
		Deferred revenue and customer advances					78,427				83,614
		Other accrued liabilities					78,272				59,083
		Contingent consideration					34,865				24,497
		Income taxes payable					36,185				59,055
				Total current liabilities			477,003				454,336
		Retirement plans liabilities					117,456				119,776
		Long-term deferred revenue and customer advances					32,033				30,127
		Deferred tax liabilities					20,662				6,720
		Long-term other accrued liabilities					37,548				10,273
		Long-term contingent consideration					35,678				20,605
		Long-term income taxes payable					83,891				148,075
		Long-term debt					379,981				365,987
				Total liabilities			1,184,252				1,155,899
Shareholders' equity							1,522,354				1,953,646
				Total liabilities and shareholders' equity		$	2,706,606			$	3,109,545
CONDENSED  CONSOLIDATED  STATEMENTS OF CASH FLOWS (In thousands)
						Quarter Ended								Twelve Months Ended
						December 31, 2018				December 31, 2017				December 31, 2018				December 31, 2017
Cash flows from operating activities:
		Net income (loss)				$	143,791			$	(105,923	)		$	451,779			$	257,692
		Adjustments to reconcile net income to net cash provided by operating activities:
			Depreciation				17,485				16,879				67,415				66,122
			Amortization				12,900				9,640				45,809				41,953
			Stock-based compensation				8,250				8,477				33,577				34,097
			Deferred taxes				3,898				37,784				28,340				37,105
			Provision for excess and obsolete inventory				1,720				1,690				11,242				8,844
			Contingent consideration fair value adjustment				10,223				5,973				987				7,820
			Losses (gains) on investments				3,914				(953	)			3,494				(878	)
			Retirement plan actuarial gains				(3,512	)			(3,786	)			(3,316	)			(6,624	)
			Property insurance recovery, net				-				-				-				(4,309	)
			Other				144				891				1,083				1,585
			Changes in operating assets and liabilities, net of businesses acquired:
				Accounts receivable			59,869				(4,961	)			(17,938	)			(80,584	)
				Inventories			4,619				21,190				(29,498	)			44,960
				Prepayments and other assets			(29,683	)			(5,108	)			(58,402	)			2,254
				Accounts payable and accrued expenses			(2,431	)			38,276				13,693				43,574
				Deferred revenue and customer advances			3,556				(29,551	)			13,379				4,984
				Retirement plans contributions			(1,090	)			(1,040	)			(4,334	)			(5,902	)
				Income taxes			(47,277	)			157,994				(80,429	)			173,802
Net cash provided by operating activities							186,376				147,472				476,881				626,495
Cash flows from investing activities:
		Purchases of property, plant and equipment					(26,110	)			(32,128	)			(114,379	)			(105,375	)
		Proceeds from government subsidy for property, plant and equipment					-				-				7,920				-
		Purchases of marketable securities					(109,223	)			(355,394	)			(918,744	)			(1,391,917	)
		Proceeds from sales of marketable securities					2,958				84,577				846,122				527,746
		Proceeds from maturities of marketable securities					336,339				228,426				1,270,439				701,681
		Proceeds from property insurance					-				-				-				5,064
		Proceeds from life insurance					-				-				1,126				-
		Acquisition of businesses, net of cash acquired					-				-				(169,474	)			-
Net cash provided by (used for) investing activities							203,964				(74,519	)			923,010				(262,801	)
Cash flows from financing activities:
		Issuance of common stock under stock purchase and stock option plans					14				31				20,973				24,493
		Repurchase of common stock					(261,215	)			(48,482	)			(823,478	)			(200,304	)
		Dividend payments					(16,002	)			(13,717	)			(67,322	)			(55,447	)
		Payment related to net settlement of employee stock compensation awards					(182	)			(297	)			(20,023	)			(12,881	)
		Payment of contingent consideration					-				-				(13,571	)			(1,050	)
Net cash used for financing activities							(277,385	)			(62,465	)			(903,421	)			(245,189	)
Effects of exchange rate changes on cash and cash equivalents							(222	)			678				439				3,454
Increase in cash and cash equivalents							112,733				11,166				496,909				121,959
Cash and cash equivalents at beginning of period							814,019				418,677				429,843				307,884
Cash and cash equivalents at end of period						$	926,752			$	429,843			$	926,752			$	429,843

GAAP to Non-GAAP Earnings Reconciliation
(In millions, except per share amounts)
																					Quarter Ended
					December 31, 2018				% of Net Revenues												September 30, 2018				% of Net Revenues											December 31, 2017 (1)				% of Net Revenues
Net revenues					$	519.6															$	566.8														$	479.4
Gross profit GAAP and non-GAAP					$	309.5				59.6	%										$	333.7			58.9	%										$	270.9			56.5	%
Income from operations - GAAP					$	112.3				21.6	%										$	143.6			25.3	%										$	94.6			19.7	%
		Acquired intangible assets amortization				10.6				2.0	%											11.1			2.0	%											7.4			1.5	%
		Restructuring and other (2)				11.4				2.2	%											1.7			0.3	%											9.0			1.9	%
Income from operations - non-GAAP					$	134.3				25.8	%										$	156.4			27.6	%										$	111.0			23.2	%
													Net Income per Common Share															Net Income per Common Share															Net Income (Loss) per Common Share
					December 31, 2018				% of Net Revenues				Basic				Diluted				September 30, 2018				% of Net Revenues			Basic				Diluted				December 31, 2017				% of Net Revenues			Basic				Diluted
Net income (loss) – GAAP					$	143.8				27.7	%		$	0.80			$	0.79			$	120.0			21.2	%		$	0.65			$	0.63			$	(105.9	)		-22.1	%		$	(0.54	)		$	(0.54	)
		Acquired intangible assets amortization				10.6				2.0	%			0.06				0.06				11.1			2.0	%			0.06				0.06				7.4			1.5	%			0.04				0.04
		Interest and other (3)				3.3				0.6	%			0.02				0.02				3.3			0.6	%			0.02				0.02				3.2			0.7	%			0.02				0.02
		Restructuring and other (2)				11.4				2.2	%			0.06				0.06				1.7			0.3	%			0.01				0.01				9.0			1.9	%			0.05				0.05
		Pension mark-to-market adjustment (3)				(3.5	)			-0.7	%			(0.02	)			(0.02	)			0.3			0.1	%			0.00				0.00				(3.8	)		-0.8	%			(0.02	)			(0.02	)
		Exclude discrete tax adjustments (4)				(52.9	)			-10.2	%			(0.30	)			(0.29	)			0.3			0.1	%			0.00				0.00				184.4			38.5	%			0.94				0.94
		Non-GAAP tax adjustments				0.3				0.1	%			0.00				0.00				(3.4	)		-0.6	%			(0.02	)			(0.02	)			(2.9	)		-0.6	%			(0.01	)			(0.01	)
		Convertible share adjustment				-				-				-				-				-			-				-				0.01				-			-				-				-
Net income - non-GAAP					$	113.0				21.7	%		$	0.63			$	0.63			$	133.3			23.5	%		$	0.72			$	0.71			$	91.4			19.1	%		$	0.47			$	0.46
GAAP and non-GAAP weighted average common shares - basic						179.0																185.7															196.0
GAAP weighted average common shares - diluted						181.5																190.5															196.0
		Include dilutive shares				-																-															3.0
		Exclude dilutive shares related to convertible note transaction				(0.9	)															(3.1	)														-
Non-GAAP weighted average common shares - diluted						180.6																187.4															199.0
(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
					December 31, 2018																September 30, 2018															December 31, 2017
			Contingent consideration fair value adjustment		$	10.2															$	(0.8	)													$	6.0
			Employee severance			0.8																1.7															1.8
			Acquisition related expenses and compensation			0.5																0.8															-
			Impairment of fixed assets			-																-															1.1
			Other			-																-															0.1
					$	11.4															$	1.7														$	9.0
(3	)	For the quarters ended December 31, 2018, September 30, 2018 and December 31, 2017,  adjustment to exclude non-cash convertible debt interest expense and adjustment to exclude actuarial (gains)losses recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting.
(4	)	For the quarters ended December 31, 2018, September 30, 2018 and December 31, 2017, adjustment to exclude discrete income tax items. For the quarter ended December 31, 2018, adjustment to treat the $52 million tax benefit related to the finalization of our U.S. toll tax liability as a discrete item. For the quarter ended December 31, 2017, adjustment to treat the $186 million expense related to the estimated impact of the U.S. Tax Reform Act, as a discrete item.
					Twelve Months Ended
					December 31, 2018				% of Net Revenues												December 31, 2017 (1)				% of Net Revenues
Net Revenues					$	2,100.8															$	2,136.6
Gross profit GAAP					$	1,220.4				58.1	%										$	1,221.5			57.2	%
		Inventory step-up				0.4				0.0	%											-			-
Gross profit non-GAAP					$	1,220.8				58.1	%										$	1,221.5			57.2	%
Income from operations - GAAP					$	473.8				22.6	%										$	525.3			24.6	%
		Acquired intangible assets amortization				39.2				1.9	%											30.5			1.4	%
		Restructuring and other (2)				15.2				0.7	%											9.4			0.4	%
		Inventory step-up				0.4				0.0	%											-			-
Income from operations - non-GAAP					$	528.6				25.2	%										$	565.2			26.5	%
													Net Income per Common Share															Net Income per Common Share
					December 31, 2018				% of Net Revenues				Basic				Diluted				December 31, 2017				% of Net Revenues			Basic				Diluted
Net income - GAAP					$	451.8				21.5	%		$	2.41			$	2.35			$	257.7			12.1	%		$	1.30			$	1.28
		Acquired intangible assets amortization				39.2				1.9	%			0.21				0.20				30.5			1.4	%			0.15				0.15
		Interest and other (3)				13.1				0.6	%			0.07				0.07				12.4			0.6	%			0.06				0.06
		Restructuring and other (2)				15.2				0.7	%			0.08				0.08				9.4			0.4	%			0.05				0.05
		Inventory step-up				0.4				0.0	%			0.00				0.00				-			-				-				-
		Pension mark-to-market adjustment (3)				(3.3	)			-0.2	%			(0.02	)			(0.02	)			(6.3	)		-0.3	%			(0.03	)			(0.03	)
		Exclude discrete tax adjustments (4)				(59.4	)			-2.8	%			(0.32	)			(0.31	)			178.3			8.3	%			0.90				0.88
		Non-GAAP tax adjustments				(8.4	)			-0.4	%			(0.04	)			(0.04	)			(12.8	)		-0.6	%			(0.06	)			(0.06	)
		Convertible share adjustment				-				-				-				0.04				-			-				-				0.01
Net income - non-GAAP					$	448.6				21.4	%		$	2.39			$	2.37			$	469.2			22.0	%		$	2.37			$	2.34
GAAP and non-GAAP weighted average common shares - basic						187.7																198.1
GAAP weighted average common shares - diluted						192.6																201.6
		Exclude dilutive shares from convertible note				(3.2	)															(1.3	)
Non-GAAP weighted average common shares - diluted						189.4																200.3
(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:
					Twelve Months Ended
					December 31, 2018																December 31, 2017
			Employee severance		$	8.7															$	3.8
			Acquisition related expenses and compensation			4.6																-
			Contingent consideration fair value adjustment			1.0																7.8
			Other			0.9																1.0															-
			Impairment of fixed assets			-																1.1
			Property insurance recovery, net			-																(4.3	)
					$	15.2															$	9.4
(3	)	For the twelve months ended December 31, 2018 and December 31, 2017, interest and other included non-cash convertible debt interest expense. For the twelve months ended December 31, 2018 and December 31, 2017, adjustments to exclude actuarial gains recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting.
(4	)	For the twelve months ended December 31, 2018 and December 31, 2017, adjustment to exclude discrete income tax items. For the twelve months ended December 31, 2018, adjustment to treat the $52 million tax benefit related to the finalization of our U.S. toll tax liability as a discrete item. For the twelve months ended December 31, 2017, adjustment to treat the $186 million expense related to the estimated impact of the U.S. Tax Reform Act, as a discrete item.
GAAP to Non-GAAP Reconciliation of First Quarter 2019 guidance:
GAAP and non-GAAP first quarter revenue guidance:								$460 million				to	$490 million
GAAP net income per diluted share									$	0.31			$	0.39
		Exclude acquired intangible assets amortization								0.06				0.06
		Exclude non-cash convertible debt interest								0.02				0.02
		Tax effect of non-GAAP adjustments								(0.02	)			(0.02	)
		Convertible share adjustment								0.01				0.01
Non-GAAP net income per diluted share									$	0.39			$	0.47

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