Q1’14 orders increased 55% from Q4’13

Q1’14 revenue of $321 million, up 13% from Q4’13 and up 14% from Q1’13

Q1’14 diluted non-GAAP net income of $0.11 per share, up from $0.07 per share in Q4’13 and $0.09 per share from Q1’13; Q1’14 diluted GAAP net income of $0.00 per share

Q2’14 guidance: Revenue of $460 million to $490 million; Diluted non-GAAP net income of $0.36 to $0.43 per share; Diluted GAAP net income of $0.29 to $0.36 per share

Initial quarterly cash dividend of $0.06 per share to be paid June 2, 2014

NORTH READING, Mass. — (BUSINESS WIRE) — April 23, 2014 — Teradyne, Inc. (NYSE: TER) reported revenue of $321 million for the first quarter of 2014 of which $262 million was in Semiconductor Test, $38 million in System Test and $21 million in Wireless Test. On a non-GAAP basis, Teradyne’s net income in the first quarter was $22.4 million, or $0.11 per diluted share, which excluded acquired intangible asset amortization, retired CEO equity charge, non-cash convertible debt interest and excluded discrete income tax adjustments. GAAP net income for the first quarter was $0.9 million or $0.00 per diluted share.

Bookings in the first quarter of 2014 were $450 million of which $366 million were in Semiconductor Test, $57 million in Wireless Test, and $27 million in System Test.

“First quarter Semiconductor Test orders were the highest in nearly four years driving a 55% increase in overall company orders,” said CEO and President Mark Jagiela. “UltraFLEX and J750 products recorded strong demand for applications processor and microcontroller test driven primarily by mobile end markets. Our flexible manufacturing capability is designed to respond to this type of order surge and we are ramping second quarter production to meet the increasing demand. Meanwhile, although Wireless Test orders more than tripled from the Q4 trough, near term visibility remains limited with a more cautious outlook from customers."

Guidance for the second quarter of 2014 is revenue of $460 million to $490 million, with diluted non-GAAP net income of $0.36 to $0.43 per share and diluted GAAP net income of $0.29 to $0.36 per share. Non-GAAP guidance excludes acquired intangible asset amortization and the related tax impact.

As previously announced in our press release dated January 22, 2014, our initial quarterly cash dividend is payable on June 2, 2014 to shareholders of record as of the close of business on May 9, 2014. Payment dates for future quarterly cash dividends, subject to Board of Director approval, are expected to be in March, June, September and December of each year.

Webcast

A conference call to discuss the first quarter 2014 results, along with management's business outlook, will follow at 10 a.m. EDT, Thursday, April 24. The call will be broadcast simultaneously over the Internet. Interested investors should access the webcast at www.teradyne.com and click on "Investors" at least five minutes before the call begins. Presentation materials will be available at www.teradyne.com at 10 a.m. EDT.

A replay will be available approximately two hours after the completion of the call. The replay number in the U.S. & Canada is 855-859-2056. The replay number outside the U.S. & Canada is 404-537-3406. The pass code for both numbers is 16506628. A replay will also be available on the Teradyne website at www.teradyne.com. Click on "Investors" for a link to the replay. The replay will be available via phone and website through May 11, 2014.

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 asset amortization, retired CEO equity charge, non-cash convertible debt interest, discrete income tax adjustments, pension and post retirement actuarial gains and losses, restructuring and other, and a gain from the sale of an equity investment, and, prior to January 1, 2014, included income taxes on a cash basis [cash taxes reflects the usage of prior year favorable tax attributes (e.g. NOLs and credits) against current year tax liability]. 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 and non-GAAP net income as a percentage of revenue, and non-GAAP net income per share are non-GAAP 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 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 pension and post retirement actuarial gains and losses. GAAP requires that this item be included in determining gross margin. Non-GAAP gross margin dollar amount and percentage are non-GAAP 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 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 financial 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.