Teradyne Reports First Quarter 2020 Results


GAAP to Non-GAAP Earnings Reconciliation

(In millions, except per share amounts)
																Quarter Ended
			March 29, 2020			% of Net Revenues										December 31, 2019			% of Net Revenues								March 31, 2019			% of Net Revenues

Net revenues			$	704.4												$	654.7										$	494.1

Gross profit GAAP and non-GAAP			$	405.6			57.6	%								$	383.2		58.5	%							$	287.6		58.2	%
		Inventory step-up		0.1			0.0	%									0.1		0.0	%								-		-
Gross profit non-GAAP			$	405.7			57.6	%								$	383.3		58.5	%							$	287.6		58.2	%

Income from operations - GAAP			$	206.7			29.3	%								$	171.7		26.2	%							$	93.1		18.8	%
		Acquired intangible assets amortization		9.9			1.4	%									9.8		1.5	%								10.6		2.1	%
		Restructuring and other (1)		(7.6	)		-1.1	%									(2.1	)	-0.3	%								5.1		1.0	%
		Inventory step-up		0.1			0.0	%									0.1		0.0	%								-		-
Income from operations - non-GAAP			$	209.1			29.7	%								$	179.5		27.4	%							$	108.8		22.0	%

										Net Income per Common Share											Net Income per Common Share											Net Income per Common Share
			March 29, 2020			% of Net Revenues				Basic			Diluted			December 31, 2019			% of Net Revenues		Basic			Diluted			March 31, 2019			% of Net Revenues		Basic			Diluted
Net income - GAAP			$	176.2			25.0	%		$	1.06		$	0.97		$	125.1		19.1	%	$	0.75		$	0.69		$	109.1		22.1	%	$	0.63		$	0.62
		Acquired intangible assets amortization		9.9			1.4	%			0.06			0.05			9.8		1.5	%		0.06			0.05			10.6		2.1	%		0.06			0.06
		Interest and other (2)		3.5			0.5	%			0.02			0.02			18.5		2.8	%		0.11			0.10			3.4		0.7	%		0.02			0.02
		Restructuring and other (1)		(7.6	)		-1.1	%			(0.05	)		(0.04	)		(2.1	)	-0.3	%		(0.01	)		(0.01	)		5.1		1.0	%		0.03			0.03
		Pension mark-to-market adjustment (2)		-			-				-			-			7.7		1.2	%		0.05			0.04			-		-			-			-
		Inventory step-up		0.1			0.0	%			0.00			0.00			0.1		0.0	%		0.00			0.00			-		-			-			-
		Exclude discrete tax adjustments (3)		(7.7	)		-1.1	%			(0.05	)		(0.04	)		1.4		0.2	%		0.01			0.01			(30.1	)	-6.1	%		(0.17	)		(0.17	)
		Non-GAAP tax adjustments		(1.9	)		-0.3	%			(0.01	)		(0.01	)		(7.8	)	-1.2	%		(0.05	)		(0.04	)		(3.5	)	-0.7	%		(0.02	)		(0.02	)
		Convertible share adjustment (4)		-			-				-			0.04			-		-			-			0.03			-		-			-			0.01
Net income - non-GAAP (4)			$	172.5			24.5	%		$	1.04		$	1.00		$	152.7		23.3	%	$	0.91		$	0.88		$	94.6		19.1	%	$	0.55		$	0.54

GAAP and non-GAAP weighted average common shares - basic				166.6													167.3											173.5
GAAP weighted average common shares - diluted				180.7													181.8											177.0
		Exclude dilutive shares related to convertible note transaction		(7.3	)												(7.3	)										(2.2	)
Non-GAAP weighted average common shares - diluted				173.4													174.5											174.8


(1	)	Restructuring and other consists of:
			Quarter Ended
			March 29, 2020													December 31, 2019											March 31, 2019
		Contingent consideration fair value adjustment	$	(10.0	)											$	(2.8	)									$	3.0
		Acquisition related expenses and compensation		1.4													0.2											1.3
		Employee severance		0.7													0.5											0.8
		Other		0.3													-											-
			$	(7.6	)											$	(2.1	)									$	5.1

(2	)	For the quarters ended March 29, 2020, December 31, 2019, and March 31, 2019, adjustment to exclude non-cash convertible debt interest expense. For the quarter ended December 31, 2019, adjustment to exclude actuarial loss recognized under GAAP in accordance with Teradyne's mark-to-market pension accounting and adjustment to exclude RealWear $15.0 million investment impairment.

(3	)	For the quarters ended March 29, 2020, December 31, 2019, and March 31, 2019, adjustment to exclude discrete income tax items. 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.

(4	)	For the quarters ended March 29, 2020 and December 31, 2019, the non-GAAP diluted EPS calculation adds back $1.3 million of convertible debt interest expense to non-GAAP net income and non-GAAP weighted average diluted common shares include 5.5 million and 5.4 million shares, respectively, related to the convertible debt hedge transaction.

GAAP to Non-GAAP Reconciliation of Second Quarter 2020 guidance:

GAAP and non-GAAP second quarter revenue guidance:						$690 million			to	$800 million
GAAP net income per diluted share						$	0.76			$	1.05
		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					0.04				0.05
Non-GAAP net income per diluted share						$	0.86			$	1.16

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

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