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Teradyne, Inc.$38.99($.06)(.15%)

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NORTH READING, Mass., Jan. 24, 2018 (GLOBE NEWSWIRE) -- Teradyne, Inc. (TER ) reported revenue of $479 million for the fourth quarter of 2017 of which $317 million was in Semiconductor Test, $80 million in System Test, $54 million in Industrial Automation, and $28 million in Wireless Test. GAAP net loss for the fourth quarter was ($105.9) million or ($0.54) per share. GAAP results include a $184 million discrete tax charge related to the impact of U.S. tax policy changes1. On a non-GAAP basis, Teradyne’s net income in the fourth quarter was $91.4 million, or $0.46 per diluted share, which excluded acquired intangible asset amortization, pension actuarial gains, restructuring and other charges, non-cash convertible debt interest, discrete income tax adjustments, and included the related tax impact on non-GAAP adjustments.

Orders in the fourth quarter of 2017 were $560 million of which $410 million were in Semiconductor Test, $69 million in System Test, $56 million in Industrial Automation, and $24 million in Wireless Test.

"The fourth quarter capped off a great 2017 at Teradyne. In Q4, Semi Test sales were up 17% compared to Q4 of 2016 and up 22% for the full year," said CEO and President Mark Jagiela. "Universal Robots Q4 sales grew 61% from Q4’16 and 72% for the full year driven by increased awareness of the economic advantages of our cobots for an expanded range of applications. Overall, the total company grew 22% in sales and 55% in non-GAAP EPS in 2017."

"Turning to 2018, at the mid-point of the Q1 revenue guidance, we see 4% growth over Q1 of 2017. Our view of the 2018 SemiTest market outlook has also strengthened slightly since our October estimate. On the capital allocation front, the combination of a strong business outlook and U.S. tax reform support our plan to raise our quarterly dividend by 29% to $0.09 cents per share and initiate a $1.5 billion share repurchase program with expected repurchases of $750 million in 2018."

Teradyne’s Board of Directors approved the share repurchase program authorizing the Company to repurchase up to $1.5 billion of its common stock through open market purchases or private transactions. The $1.5 billion authorization replaces the Company’s existing $500 million repurchase authorization announced in December 2016.

Teradyne’s Board of Directors declared a quarterly cash dividend of $0.09 per share, payable on March 23, 2018 to shareholders of record as of the close of business on February 23, 2018.

Guidance for the first quarter of 2018 is revenue of $460 million to $490 million, with GAAP net income of $0.32 to $0.39 per diluted share and non-GAAP net income of $0.38 to $0.45 per diluted share. Non-GAAP guidance excludes acquired intangible asset amortization, non-cash convertible debt interest, restructuring and other charges and includes the related tax impact on non-GAAP adjustments.

______________________

1 Amount represents the estimated impact of the Tax Cuts and Jobs Act, which may change as additional guidance and information become available.

Webcast
A conference call to discuss the fourth quarter results, along with management’s business outlook, will follow at 10 a.m. ET, Thursday, January 25. 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 starting at 10 a.m. ET. A replay will be available on the Teradyne website at www.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, goodwill impairment, acquired intangible assets impairment, and restructuring and other. 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 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 pension actuarial gains and losses. GAAP requires that these items 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. 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 (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 used by global manufacturing and light industrial customers to improve quality and increase manufacturing efficiency. In 2017, Teradyne had revenue of $2.14 billion and currently employs approximately 4,500 people worldwide. For more information, visit www.teradyne.com . Teradyne(R) 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 law. 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 law. 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 Universal Robots’ 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; 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, 2016 and the Quarterly Report on Form 10-Q for the period ended October 1, 2017. 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 Reports Fourth Quarter and Fiscal Year 2017 Results, Increases Capital Return Program
   Wednesday, January 24, 2018 5:03:12 PM ET

      
    Q4’17   Q4’16   Q3’17   FY 2017   FY 2016
Orders (mil)   $560   $628   $410    $2,026   $1,867
Revenue (mil)   $479   $380   $503    $2,137   $1,753
GAAP EPS   ($0.54)   $0.33   $0.52    $1.28   ($0.21)
Non-GAAP EPS   $0.46   $0.32   $0.54    $2.34   $1.51
                     


           
TERADYNE, INC. REPORT FOR FOURTH FISCAL QUARTER OF 2017          
            
CONDENSED  CONSOLIDATED  STATEMENTS OF OPERATIONS   
(In thousands, except per share amounts)        
            
   Quarter Ended Twelve Months Ended
   December 31, 2017 October 1, 2017 December 31, 2016 December 31, 2017 December 31, 2016
            
Net revenues
 $479,415  $503,378  $379,989  $2,136,606  $1,753,250 
 Cost of revenues (exclusive of acquired intangible assets amortization
shown separately below) (1) (2)
  206,480   208,592   160,983   912,734   793,683 
            
Gross profit   272,935   294,786   219,006   1,223,872   959,567 
            
Operating expenses:          
 Selling and administrative (1)  88,006   86,244   76,289   348,287   315,682 
 Engineering and development (1)  70,564   77,190   70,052   305,665   291,025 
 Acquired intangible assets amortization  7,384   7,028   7,923   30,530   52,648 
 Restructuring and other (3)  8,970   (4,407)  5,570   9,362   21,942 
 Goodwill impairment (4)  -   -   -   -   254,946 
 Acquired intangible assets impairment (4)  -   -   -   -   83,339 
 Operating expenses  174,924   166,055   159,834   693,844   1,019,582 
            
Income (loss) from operations  98,011   128,731   59,172   530,028   (60,015)
            
 Interest and other (5)  73   (1,294)  (288)  (5,616)  4,955 
            
Income (loss) before income taxes  98,084   127,437   58,884   524,412   (55,060)
 Income tax provision (benefit) (6)  204,007   24,017   (7,461)  266,720   (11,639)
Net (loss) income $(105,923) $103,420  $66,345  $257,692  $(43,421)
            
Net (loss) income per common share:          
Basic $(0.54) $0.52  $0.33  $1.30  $(0.21)
Diluted $(0.54) $0.52  $0.33  $1.28  $(0.21)
            
Weighted average common shares - basic  196,010   197,485   200,810   198,069   202,578 
            
Weighted average common shares - diluted (7)  196,010   200,775   202,947   201,641   202,578 
            
            
Cash dividend declared per common share $0.07  $0.07  $0.06  $0.28  $0.24 
            
            
Net orders  $559,869  $410,229  $628,284  $2,026,436  $1,867,146 
            
            
(1)Pension actuarial (gains) losses included in our operating results were as follows:          
   Quarter Ended Twelve Months Ended
   December 31, 2017 October 1, 2017 December 31, 2016 December 31, 2017 December 31, 2016
 Cost of revenues $(2,088) $-  $(774) $(2,752) $(1,025)
 Engineering and development  (1,710)  -   (725)  (2,456)  (1,234)
 Selling and administrative  12   -   (502)  (1,082)  (944)
   $(3,786) $-  $(2,001) $(6,290) $(3,203)
            
            
(2)Cost of revenues includes: Quarter Ended Twelve Months Ended
   December 31, 2017 October 1, 2017 December 31, 2016 December 31, 2017 December 31, 2016
 Provision for excess and obsolete inventory $1,690  $1,859  $2,345  $8,844  $17,493 
 Sale of previously written down inventory  (1,048)  (3,121)  (1,924)  (7,451)  (10,037)
   $642  $(1,262) $421  $1,393  $7,456 
            
            
(3)Restructuring and other consists of: Quarter Ended Twelve Months Ended
   December 31, 2017 October 1, 2017 December 31, 2016 December 31, 2017 December 31, 2016
 Contingent consideration fair value adjustment $5,973  $(286) $5,445  $7,820  $15,896 
 Employee severance  1,801   581   125   3,754   6,046 
 Impairment of fixed assets  1,124   -   -   1,124   - 
 Facility related  72   (393)  -   973   - 
 Property insurance recovery  -   (5,064)  -   (5,064)  (5,363)
 Expenses and impairment of fixed assets related to Japan earthquake  -   755   -   755   5,363 
   $8,970  $(4,407) $5,570  $9,362  $21,942 
            
            
(4)Goodwill and acquired intangible assets impairment related to Teradyne’s Wireless Test business segment.         
            
(5)Interest and other includes: Quarter Ended Twelve Months Ended
   December 31, 2017 October 1, 2017 December 31, 2016 December 31, 2017 December 31, 2016
 Non-cash convertible debt interest expense $3,166  $3,127  $642  $12,431  $642 
            
(6)For the quarter and twelve months ended December 31, 2017, income tax provision includes an expense of $184 million related to the estimated impact of U.S. tax policy changes.
            
(7)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 quarter ended October 1, 2017 and the twelve months ended December 31, 2017, 1.1 million and 1.3 million shares, respectively, have been included in diluted shares.
            
            
CONDENSED  CONSOLIDATED  BALANCE  SHEETS  (In thousands)          
            
   December 31, 2017 December 31, 2016      
            
Assets          
 Cash and cash equivalents $429,843  $307,884       
 Marketable securities  1,347,979   871,024       
 Accounts receivable, net  272,783   192,444       
 Inventories, net  107,525   135,958       
 Prepayments and other current assets  112,151   116,493       
 Total current assets  2,270,281   1,623,803       
            
 Property, plant and equipment, net  268,447   253,821       
 Marketable securities  125,926   433,843       
 Deferred tax assets  84,026   107,405       
 Retirement plans assets  17,491   7,712       
 Other assets  12,275   12,165       
 Acquired intangible assets, net  79,088   100,401       
 Goodwill  252,011   223,343       
 Total assets $3,109,545  $2,762,493       
            
Liabilities          
 Accounts payable $86,393  $95,362       
 Accrued employees’ compensation and withholdings  141,694   109,944       
 Deferred revenue and customer advances  83,614   84,478       
 Other accrued liabilities  59,083   51,382       
 Contingent consideration  24,497   1,050       
 Income taxes payable  59,055   30,480       
 Total current liabilities  454,336   372,696       
            
 Retirement plans liabilities  119,776   106,938       
 Long-term deferred revenue and customer advances  30,127   23,463       
 Long-term contingent consideration  20,605   37,282       
 Deferred tax liabilities  6,720   12,144       
 Long-term other accrued liabilities  10,273   28,642       
 Long-term income taxes payable  148,075   -       
 Long-term debt  365,987   352,669       
 Total liabilities  1,155,899   933,834       
            
Shareholders’ equity  1,953,646   1,828,659       
            
 Total liabilities and shareholders’ equity $3,109,545  $2,762,493       
            
            
CONDENSED  CONSOLIDATED  STATEMENTS OF CASH FLOWS (In thousands)   
            
   Quarter Ended Twelve Months Ended  
   December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016  
Cash flows from operating activities:          
 Net (loss) income $(105,923) $66,345  $257,692  $(43,421)  
 Adjustments to reconcile net (loss) income to net cash provided by operating activities:          
 Depreciation  16,879   16,345   66,122   64,782   
 Amortization  9,640   8,952   41,953   55,227   
 Stock-based compensation  8,477   7,738   34,097   30,750   
 Contingent consideration fair value adjustment  5,973   5,445   7,820   15,896   
 Provision for excess and obsolete inventory  1,690   2,345   8,844   17,493   
 Retirement plans actuarial gains  (3,786)  (2,001)  (6,290)  (3,203)  
 Deferred taxes  37,784   (20,368)  37,105   (62,936)  
 Property insurance recovery  -   -   (4,309)  -   
 Tax benefit related to employee stock compensation awards  -   (2,799)  -   (6,198)  
 Goodwill impairment  -   -   -   254,946   
 Acquired intangible assets impairment  -   -   -   83,339   
 Other  (165)  (597)  266   (448)  
 Changes in operating assets and liabilities:          
 Accounts receivable  (4,961)  (27,955)  (80,584)  18,325   
 Inventories  21,190   (14,338)  44,960   34,263   
 Prepayments and other assets  (5,108)  (5,924)  2,254   (19,194)  
 Accounts payable and accrued expenses  42,350   46,404   47,648   6,820   
 Deferred revenue and customer advances  (29,551)  (57,014)  4,984   (3,634)  
 Retirement plans contributions  (1,044)  (173)  (5,902)  (6,044)  
 Income taxes  154,027   14,207   169,835   18,434   
Net cash provided by operating activities  147,472   36,612   626,495   455,197   
            
Cash flows from investing activities:          
 Purchases of property, plant and equipment  (32,128)  (19,020)  (105,375)  (85,272)  
 Purchases of available-for-sale marketable securities  (355,394)  (780,430)  (1,391,917)  (1,656,267)  
 Proceeds from sales of available-for-sale marketable securities  84,577   386,050   527,746   852,794   
 Proceeds from maturities of available-for-sale marketable securities  228,426   41,070   701,681   243,232   
 Proceeds from property insurance  -   -   5,064   5,051   
Net cash used for investing activities  (74,519)  (372,330)  (262,801)  (640,462)  
            
Cash flows from financing activities:          
 Issuance of common stock under stock purchase and stock option plans  31   388   24,493   20,473   
 Repurchase of common stock  (48,482)  (61,239)  (200,304)  (146,331)  
 Dividend payments  (13,717)  (12,071)  (55,447)  (48,619)  
 Payments related to net settlement of employee stock compensation awards  (297)  (169)  (12,881)  (9,398)  
 Proceeds from long-term debt, net  -   417,818   -   417,818   
 Tax benefit related to employee stock compensation awards  -   2,799   -   6,198   
 Payments of contingent consideration  -   -   (1,050)  (11,697)  
Net cash (used for) provided by financing activities  (62,465)  347,526   (245,189)  228,444   
            
Effects of exchange rate changes on cash and cash equivalents  678   (1,861)  3,454   -   
            
Increase in cash and cash equivalents  11,166   9,947   121,959   43,179   
Cash and cash equivalents at beginning of period  418,677   297,937   307,884   264,705   
Cash and cash equivalents at end of period $429,843  $307,884  $429,843  $307,884   
            


                        
GAAP to Non-GAAP Earnings Reconciliation 
(In millions, except per share amounts) 
          Quarter Ended            
  December 31,
2017
 % of Net
Revenues
     October 1,
2017
 % of Net
Revenues
     December 31,
2016
 % of Net
Revenues
    
                         
Net revenues$479.4        $503.4        $380.0       
                         
Gross profit - GAAP$272.9   56.9%     $294.8  58.6%     $219.0  57.6%    
 Pension mark-to-market adjustment (1) (2.1)  -0.4%      -    -         (0.8) -0.2%    
Gross profit - non-GAAP$270.8   56.5%     $294.8  58.6%     $218.2  57.4%    
                         
Income from operations - GAAP$98.0   20.4%     $128.7  25.6%     $59.2  15.6%    
 Acquired intangible assets amortization 7.4   1.5%      7.0  1.4%      7.9  2.1%    
 Restructuring and other (2) 9.0   1.9%      (4.4) -0.9%      5.6  1.5%    
 Pension mark-to-market adjustment (1) (3.8)  -0.8%      -  -       (2.0) -0.5%    
Income from operations - non-GAAP$110.6   23.1%     $131.3  26.1%     $70.7  18.6%    
                         
                         
      Net (Loss) Income
per Common Share
     Net Income
per Common Share
     Net Income
per Common Share
  December 31,
2017
 % of Net
Revenues
 Basic Diluted October 1,
2017
 % of Net
Revenues
 Basic Diluted December 31,
2016
 % of Net
Revenues
 Basic  Diluted
Net (loss) income- GAAP$(105.9)  -22.1% $(0.54) $(0.54) $103.4  20.5% $0.52  $0.52  $66.3  17.4% $0.33  $0.33 
 Acquired intangible assets amortization 7.4   1.5%  0.04   0.04   7.0  1.4%  0.04   0.04   7.9  2.1%  0.04   0.04 
 Interest and other (3) 3.2   0.7%  0.02   0.02   3.1  0.6%  0.02   0.02   0.6  0.2%  0.00   0.00 
 Restructuring and other (2) 9.0   1.9%  0.05   0.05   (4.4) -0.9%  (0.02)  (0.02)  5.6  1.5%  0.03   0.03 
 Pension mark-to-market adjustment (1) (3.8)  -0.8%  (0.02)  (0.02)  -  -   -   -   (2.0) -0.5%  (0.01)  (0.01)
 Exclude discrete tax adjustments (4) 184.4   38.5%  0.94   0.93   0.3  0.1%  0.00   0.00   (16.2) -4.3%  (0.08)  (0.08)
 Non-GAAP tax adjustments (5) (2.9)  -0.6%  (0.01)  (0.01)  (1.7) -0.3%  (0.01)  (0.01)  2.4  0.6%  0.01   0.01 
Net income - non-GAAP$91.4   19.1% $0.47  $0.46  $107.7  21.4% $0.55  $0.54  $64.6  17.0% $0.32  $0.32 
                         
GAAP and non-GAAP weighted average common shares - basic 196.0         197.5         200.8       
GAAP weighted average common shares - diluted 196.0         200.8         202.9       
 Include dilutive shares 3.0         -         -       
 Exclude dilutive shares from convertible note -         (1.1)        -       
Non-GAAP weighted average common shares - diluted 199.0         199.7         202.9       
                         
                         
(1)Actuarial gains recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting. 
                         
(2)Restructuring and other consists of: 
  Quarter Ended      
  December 31,
2017
       October 1,
2017
       December 31,
2016
      
 Contingent consideration fair value adjustment$6.0        $(0.3)       $5.4       
 Employee severance 1.8         0.6         0.1       
 Impairment of fixed assets 1.1         -         -       
 Facility related 0.1         (0.4)        -       
 Property insurance recovery -         (5.1)        -       
 Expenses and Impairment of fixed assets related to Japan earthquake -         0.8         -       
  $9.0        $(4.4)       $5.6       
                         
(3)For the quarters ended December 31, 2017, October 1, 2017 and December 31, 2016, interest and other included non-cash convertible debt interest expense. 
                         
(4)For the quarters ended December 31, 2017, October 1, 2017 and December 31, 2016, adjustment to exclude discrete income tax items. For the quarter December 31, 2017, adjustment to treat the $184 million expense related to the estimated impact of U.S. tax policy changes as a discrete item.  For the quarter ended December 31, 2016, adjustment to treat Wireless Test business segment goodwill and intangible assets impairments as discrete tax items. 
                         
(5)For periods after December 31, 2016, the non-GAAP annual effective tax rate is based on a with and without calculation with respect to non-GAAP reconciling items. 
                         
                         
  Twelve Months Ended        
  December 31,
2017
 % of Net
Revenues
     December 31,
2016
 % of Net
Revenues
            
                         
Net Revenues$2,136.6        $1,753.3               
                         
Gross profit - GAAP$1,223.9   57.3%     $959.6  54.7%            
 Pension mark-to-market adjustment (1) (2.8)  -0.1%      (1.0) -0.1%            
Gross profit - non-GAAP$1,221.1   57.2%     $958.6  54.7%            
                         
Income (loss) from operations - GAAP$530.0   24.8%     $(60.0) -3.4%            
 Acquired intangible assets amortization 30.5   1.4%      52.6  3.0%            
 Restructuring and other (2) 9.4   0.4%      21.9  1.2%            
 Pension mark-to-market adjustment (1) (6.3)  -0.3%      (3.2) -0.2%            
 Goodwill impairment (3) -     -         254.9  14.5%            
 Acquired intangible assets impairment (3) -     -         83.3  4.8%            
Income from operations - non-GAAP$563.6   26.4%     $349.5  19.9%            
                         
      Net Income
per Common Share
     Net (Loss) Income
per Common Share
        
  December 31,
2017
 % of Net
Revenues
 Basic Diluted December 31,
2016
 % of Net
Revenues
 Basic Diluted        
Net income (loss) - GAAP$257.7   12.1% $1.30  $1.28  $(43.4) -2.5% $(0.21) $(0.21)        
 Acquired intangible assets amortization 30.5   1.4%  0.15   0.15   52.6  3.0%  0.26   0.26         
 Interest and other (4) 12.4   0.6%  0.06   0.06   0.6  0.0%  0.00   0.00         
 Restructuring and other (2) 9.4   0.4%  0.05   0.05   21.9  1.2%  0.11   0.11         
 Pension mark-to-market adjustment (1) (6.3)  -0.3%  (0.03)  (0.03)  (3.2) -0.2%  (0.02)  (0.02)        
 Goodwill impairment (3) -   -   -   -   254.9  14.5%  1.26   1.25         
 Acquired intangible assets impairment (3) -   -   -   -   83.3  4.8%  0.41   0.41         
 Exclude discrete tax adjustments (5) 178.3   8.3%  0.90   0.89   (4.5) -0.3%  (0.02)  (0.02)        
 Non-GAAP tax adjustments (6) (12.8)  -0.6%  (0.06)  (0.06)  (53.3) -3.0%  (0.26)  (0.26)        
Net income - non-GAAP$469.2   22.0% $2.37  $2.34  $308.9  17.6% $1.52  $1.51         
                         
GAAP and non-GAAP weighted average common shares - basic 198.1         202.6               
GAAP weighted average common shares - diluted 201.6         202.6               
 Exclude dilutive shares from convertible note (1.3)        -               
 Include dilutive shares -         1.8               
Non-GAAP weighted average common shares - diluted 200.3         204.4               
                         
(1)Actuarial gains recognized under GAAP in accordance with Teradyne’s mark-to-market pension accounting. 
                         
(2)Restructuring and other consists of: 
  Twelve Months Ended              
  December 31,
2017
       December 31,
2016
              
 Contingent consideration fair value adjustment$7.8        $15.9               
 Employee severance 3.8         6.0               
 Impairment of fixed assets 1.1         -               
 Facility related 1.0         -               
 Expenses and impairment of fixed assets related to Japan earthquake 0.8         5.4               
 Property insurance recovery (5.1)        (5.4)              
  $9.4        $21.9               
                         
(3)Goodwill and acquired intangible assets impairment related to Teradyne’s Wireless Test business segment. 
                         
(4)For the twelve months ended December 31, 2017 and December 31, 2016, interest and other included non-cash convertible debt interest expense. 
                         
(5)For the twelve months ended December 31, 2017 and December 31, 2016, adjustment to exclude discrete income tax items. For the twelve months ended December 31, 2017, adjustment to treat the $184 million expense related to the estimated impact of U.S. tax policy changes as a discrete item.  For the twelve months ended December 31, 2016, adjustment to treat Wireless Test business segment goodwill and intangible assets impairments as discrete tax items. 
                         
(6)For periods after December 31, 2016, the non-GAAP annual effective tax rate is based on a with and without calculation with respect to non-GAAP reconciling items. 
                         
                         
                         
GAAP to Non-GAAP Reconciliation of First Quarter 2018 guidance:

 
                         
GAAP and non-GAAP first quarter revenue guidance:  $460 millionto$490 million                 
GAAP net income per diluted share  $0.32  $0.39                   
 Exclude acquired intangible assets amortization   0.04   0.04                   
 Exclude non-cash convertible debt interest   0.02   0.02                   
 Exclude restructuring and other charges   0.02   0.02                   
 Non-GAAP tax adjustment     (0.01)    (0.01)                  
Non-GAAP net income per diluted share  $0.38  $0.45                   
                         

For press releases and other information of interest to investors, please visit Teradyne’s homepage at http://www.teradyne.com .

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

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