8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): October 27, 2015

TERADYNE, INC.

(Exact Name of Registrant as Specified in Charter)

Massachusetts	001-06462	04-2272148
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

600 Riverpark Drive, North Reading, MA	01864
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (978) 370-2700

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On October 27, 2015, Teradyne, Inc. (“Teradyne”) issued a press release regarding its financial results for the third quarter ended October 4, 2015. Teradyne’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit	Description
99.1	Press Release dated October 27, 2015.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TERADYNE, INC.
Dated: October 28, 2015	By:	/S/ GREGORY R. BEECHER
	Name:	Gregory R. Beecher
	Title:	V.P., Chief Financial Officer and Treasurer

Exhibit Index

Exhibit No.	Description
99.1	Press Release dated October 27, 2015.

EX-99.1

Exhibit 99.1

Teradyne Reports Third Quarter 2015 Results

• Total company orders up 15%, test orders up 9% compared with Q3’14

• Company revenue driven by strength in mobility, storage test and collaborative robots

• Record quarterly revenue at Universal Robots powered by growing customer base and new product success

	Q3’15		Q3’14		Q2’15
Orders (mil)	$	314	$	273	$	529
Revenue (mil)	$	466	$	478	$	513
Non-GAAP EPS	$	0.40	$	0.44	$	0.53
GAAP EPS	$	0.34	$	0.38	$	0.48

NORTH READING, Mass. – October 27, 2015 – Teradyne, Inc. (NYSE: TER) reported revenue of $466 million for the third quarter of 2015 of which $326 million was in Semiconductor Test, $69 million in System Test, $55 million in Wireless Test, and $16 million in Industrial Automation. Industrial Automation consists of Universal Robots’ results for the full quarter. On a non-GAAP basis, Teradyne’s net income in the third quarter was $84.9 million, or $0.40 per diluted share, which excluded acquired intangible assets amortization and discrete income tax adjustments, and included the related tax impact on non-GAAP adjustments. GAAP net income for the third quarter was $71.5 million or $0.34 per diluted share.

Orders in the third quarter of 2015 were $314 million of which $211 million were in Semiconductor Test, $47 million in System Test, $40 million in Wireless Test, and $16 million in Industrial Automation.

“We’re on track to deliver our 6th straight year of above model financial results driven by strong tester sales for mobile devices, improving storage test demand, and a growing contribution from industrial automation,” said CEO and President Mark Jagiela. “While our fourth quarter guidance reflects the normal seasonal slow down in tester deliveries, we are making selective inventory investments to capture the expected growth in 2016 customer demand.”

“Our strong financial results also support our ongoing capital return plan as we repurchased 5.4 million shares for $98.5 million and paid $12.6 million in dividends in the third quarter,” continued Jagiela.

Guidance for the fourth quarter of 2015 is revenue of $295 million to $320 million, with non-GAAP net income of $0.07 to $0.12 per diluted share and GAAP net (loss) income of ($0.01) to $0.04 per diluted share. Non-GAAP guidance excludes acquired intangible assets amortization and includes the related tax impact on non-GAAP adjustments.

Webcast

A conference call to discuss the third quarter results, along with management’s business outlook, will follow at 10 a.m. ET, Wednesday, October 28. 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, fair value inventory step-up related to Universal Robots, retired CEO equity charge, non-cash convertible debt interest, discrete income tax adjustments, restructuring and other, and a gain from the sale of an equity investment. 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 fair value inventory step-up related to Universal Robots. 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. Prior to September 29, 2014, non-GAAP diluted shares included the impact of Teradyne’s call option and warrant 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.

About Teradyne

Teradyne (NYSE:TER) is a leading supplier of automation solutions 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 solutions include Collaborative Robots used by global manufacturing and light industrial customers to improve quality and increase manufacturing efficiency. In 2014, Teradyne had revenue of $1.65 billion and currently employs approximately 4,000 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.

Page 2

Safe Harbor Statement

This release contains forward-looking statements regarding future business prospects, Teradyne’s results of operations, market conditions, the payment of a quarterly dividend, the repurchase of Teradyne common stock pursuant to a share repurchase program and a senior secured credit facility. Such statements are based on the current assumptions and expectations of Teradyne’s management and are neither promises nor guarantees of future performance, future events, future payment of dividends, future repurchases of common stock or future availability of, or borrowing under, a credit facility. 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, dividend payments, repurchases of common stock 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; market acceptance of new products; the ability to grow Universal Robots’ business; increased research and development spending; deterioration of Teradyne’s financial condition; the business judgment of the board of directors that a declaration of a dividend, the repurchase of common stock or debt under the credit facility is not in the company’s best interests; 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, 2014 and the Quarterly Report on Form 10-Q for the period ended July 5, 2015. 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.

Page 3

TERADYNE, INC. REPORT FOR THIRD FISCAL QUARTER OF 2015

CONDENSED CONSOLIDATED OPERATING STATEMENTS

(In thousands, except per share amounts)

	Quarter Ended								Nine Months Ended
	October 4, 2015		July 5, 2015			September 28, 2014			October 4, 2015			September 28, 2014
Net revenues	$	465,994	$	512,739		$	478,010		$	1,321,133		$	1,324,587
Cost of revenues (exclusive of acquired intangible assets amortization shown separately below) (1)		207,368		214,171			216,889			571,517			606,006
Gross profit		258,626		298,568			261,121			749,616			718,581
Operating expenses:
Engineering and development		74,027		75,832			71,953			221,309			212,452
Selling and administrative (2)		77,481		77,073			73,064			226,595			228,556
Acquired intangible assets amortization		20,053		15,258			18,271			49,119			54,813
Restructuring and other (3)		261		(385	)		(405	)		(124	)		167
Operating expenses		171,822		167,778			162,883			496,899			495,988
Income from operations		86,804		130,790			98,238			252,717			222,593
Interest and other (4)		604		1,346			2,432			9,264			(2,404	)
Income before income taxes		87,408		132,136			100,670			261,981			220,189
Income tax provision		15,955		29,257			17,721			54,863			35,106
Net income	$	71,453	$	102,879		$	82,949		$	207,118		$	185,083
Net income per common share:
Basic	$	0.34	$	0.48		$	0.40		$	0.97		$	0.93
Diluted	$	0.34	$	0.48		$	0.38		$	0.96		$	0.83
Weighted average common shares - basic		210,032		213,845			207,381			213,688			198,367
Weighted average common shares - diluted (5)		211,736		215,496			218,333			215,348			223,795
Cash dividend declared per common share	$	0.06	$	0.06		$	0.06		$	0.18		$	0.12
Net orders	$	314,222	$	528,693		$	273,043		$	1,333,272		$	1,349,957

(1) Cost of revenues includes:

	Quarter Ended									Nine Months Ended
	October 4, 2015			July 5, 2015			September 28, 2014			October 4, 2015			September 28, 2014
Provision for excess and obsolete inventory	$	3,011		$	14,441		$	6,434		$	18,892		$	21,505
Sale of previously written down inventory		(1,936	)		(2,745	)		(6,332	)		(6,612	)		(9,726	)
Inventory step-up		972			595			—			1,567			—
	$	2,047		$	12,291		$	102		$	13,847		$	11,779

(2) For the nine months ended September 28, 2014, selling and administrative expenses include an equity charge of $6,598 for the modification of Teradyne’s retired CEO’s outstanding equity awards to allow continued vesting and maintain the original term in connection with his January 31, 2014 retirement.

(3) Restructuring and other consists of:

	Quarter Ended									Nine Months Ended
	October 4, 2015			July 5, 2015			September 28, 2014			October 4, 2015			September 28, 2014
Employee severance	$	1,117		$	255		$	225		$	1,372		$	797
Acquisition costs (a)		144			960			—			1,104			—
Contingent consideration fair value adjustment		(1,000	)		(1,600	)		(630	)		(2,600	)		(630	)
	$	261		$	(385	)	$	(405	)		(124	)	$	167

(a) Costs related to Universal Robots acquisition. The results of Universal Robots are included in Teradyne’s results starting June 12, 2015.

(4) Interest and other includes:

	Quarter Ended							Nine Months Ended
	October 4, 2015		July 5, 2015			September 28, 2014		October 4, 2015			September 28, 2014
Gain from the sale of an equity investment	$	—	$	(624	)	$	—	$	(5,406	)	$	—
Non-cash convertible debt interest expense		—		—			—		—			4,290
	$	—	$	(624	)	$	—	$	(5,406	)	$	4,290

(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 nine months ended September 28, 2014, 6.7 million shares have been included in diluted shares.

CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

	October 4, 2015		December 31, 2014
Assets
Cash and cash equivalents	$	294,217	$	294,256
Marketable securities		525,381		533,787
Accounts receivable		245,233		151,034
Inventories, net		128,432		105,129
Deferred tax assets		58,480		57,239
Prepayments		80,779		95,819
Other current assets		4,135		6,582
Total current assets		1,336,657		1,243,846
Net property, plant and equipment		275,089		329,038
Marketable securities		257,560		470,789
Deferred tax assets		6,909		7,494
Other assets		13,096		10,419
Retirement plans assets		13,933		12,896
Intangible assets, net		260,294		190,600
Goodwill		498,346		273,438
Total assets	$	2,661,884	$	2,538,520
Liabilities
Accounts payable	$	81,642	$	47,763
Accrued employees’ compensation and withholdings		98,252		100,994
Deferred revenue and customer advances		74,318		71,603
Other accrued liabilities		83,823		50,247
Contingent consideration		14,447		895
Accrued income taxes		43,259		20,049
Total current liabilities		395,741		291,551
Long-term deferred revenue and customer advances		29,490		19,929
Retirement plans liabilities		107,102		108,460
Deferred tax liabilities		35,494		23,315
Long-term other accrued liabilities		28,304		13,830
Long-term contingent consideration		20,148		2,455
Total liabilities		616,279		459,540
Shareholders’ equity		2,045,605		2,078,980
Total liabilities and shareholders’ equity	$	2,661,884	$	2,538,520

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

	Quarter Ended						Nine Months Ended
	October 4, 2015			September 28, 2014			October 4, 2015			September 28, 2014
Cash flows from operating activities:
Net income	$	71,453		$	82,949		$	207,118		$	185,083
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		16,301			19,047			52,531			52,832
Amortization		20,764			19,132			52,159			62,122
Stock-based compensation		7,675			8,343			23,080			31,873
Provision for excess and obsolete inventory		3,011			6,434			18,892			21,505
Gain from the sale of an equity investment		—			—			(5,406	)		—
Deferred taxes		(3,602	)		(3,050	)		(13,973	)		(8,747	)
Non cash charge for the sale of inventories revalued at the date of acquisition		972			—			1,567			—
Contingent consideration adjustment		(1,000	)		(630	)		(2,600	)		(630	)
Tax benefit related to employee stock compensation awards		(2,321	)		(55	)		(3,213	)		(1,726	)
Other		1,368			183			2,523			2,110
Changes in operating assets and liabilities, net of business acquired:
Accounts receivable		51,376			(20,545	)		(91,117	)		(163,670	)
Inventories		9,923			19,798			33,423			38,267
Prepayments and other assets		1,475			20,784			15,529			47,784
Accounts payable and accrued expenses		(729	)		(23,687	)		52,663			29,109
Deferred revenue and customer advances		1,066			466			6,751			14,266
Retirement plans contributions		(999	)		(893	)		(2,998	)		(3,281	)
Accrued income taxes		2,416			4,713			25,677			10,208
Net cash provided by operating activities		179,149			132,989			372,606			317,105
Cash flows from investing activities:
Purchases of property, plant and equipment		(20,617	)		(54,963	)		(66,727	)		(146,352	)
Purchases of available-for-sale marketable securities		(367,356	)		(319,348	)		(957,606	)		(844,056	)
Proceeds from maturities of available-for-sale marketable securities		98,947			118,129			330,363			495,565
Proceeds from sales of available-for-sale marketable securities		212,334			82,602			843,734			236,060
Acquisition of business, net of cash acquired		(409	)		—			(282,741	)		—
Proceeds from the sale of an equity investment		—			—			5,406			—
Proceeds from life insurance		—			—			1,098			4,391
Net cash used for investing activities		(77,101	)		(173,580	)		(126,473	)		(254,392	)
Cash flows from financing activities:
Issuance of common stock under employee stock purchase and stock option plans		267			10,387			18,145			21,030
Repurchase of common stock		(98,527	)		—			(226,843	)		—
Tax benefit related to stock options and restricted stock units		2,321			55			3,213			1,726
Dividend payments		(12,577	)		(12,772	)		(38,434	)		(24,428	)
Payment of revolving credit facility costs		—			—			(2,253	)		—
Payments of long-term debt		—			—			—			(190,975	)
Net cash used for financing activities		(108,516	)		(2,330	)		(246,172	)		(192,647	)
Decrease in cash and cash equivalents		(6,468	)		(42,921	)		(39	)		(129,934	)
Cash and cash equivalents at beginning of period		300,685			254,625			294,256			341,638
Cash and cash equivalents at end of period	$	294,217		$	211,704		$	294,217		$	211,704

GAAP to Non-GAAP Earnings Reconciliation

(In millions, except per share amounts)

	Quarter Ended
	October 4, 2015			% of Net Revenues									July 5, 2015			% of Net Revenues									September 28, 2014			% of Net Revenues
Net revenues	$	466.0											$	512.7											$	478.0
Gross profit - GAAP	$	258.6			55.5	%							$	298.6			58.2	%							$	261.1			54.6	%
Inventory step-up		1.0			0.2	%								0.6			0.1	%								—			—
Gross profit - non-GAAP	$	259.6			55.7	%							$	299.2			58.4	%							$	261.1			54.6	%
Income from operations - GAAP	$	86.8			18.6	%							$	130.8			25.5	%							$	98.2			20.5	%
Acquired intangible assets amortization		20.1			4.3	%								15.3			3.0	%								18.3			3.8	%
Restructuring and other (1)		0.3			0.1	%								(0.4	)		-0.1	%								(0.4	)		-0.1	%
Inventory step-up		1.0			0.2	%								0.6			0.1	%								—			—
Income from operations - non-GAAP	$	108.2			23.2	%							$	146.3			28.5	%							$	116.1			24.3	%
							Net Income per Common Share												Net Income per Common Share												Net Income per Common Share
	October 4, 2015			% of Net Revenues			Basic			Diluted			July 5, 2015			% of Net Revenues			Basic			Diluted			September 28, 2014			% of Net Revenues			Basic			Diluted
Net income - GAAP	$	71.5			15.3	%	$	0.34		$	0.34		$	102.9			20.1	%	$	0.48		$	0.48		$	82.9			17.3	%	$	0.40		$	0.38
Acquired intangible assets amortization		20.1			4.3	%		0.10			0.09			15.3			3.0	%		0.07			0.07			18.3			3.8	%		0.09			0.08
Inventory step-up		1.0			0.2	%		0.00			0.00			0.6			0.1	%		0.00			0.00			—			—			—			—
Restructuring and other (1)		0.3			0.1	%		0.00			0.00			(0.4	)		-0.1	%		(0.00	)		(0.00	)		(0.4	)		-0.1	%		(0.00	)		(0.00	)
Interest and other (2)		—			—			—			—			(0.6	)		-0.1	%		(0.00	)		(0.00	)		—			—			—			—
Exclude discrete tax items (3)		(3.3	)		-0.7	%		(0.02	)		(0.02	)		0.2			0.0	%		0.00			0.00			(1.6	)		-0.3	%		(0.01	)		(0.01	)
Tax effect of non-GAAP adjustments		(4.7	)		-1.0	%		(0.02	)		(0.02	)		(3.4	)		-0.7	%		(0.02	)		(0.02	)		(3.4	)		-0.7	%		(0.02	)		(0.02	)
Net income - non-GAAP	$	84.9			18.2	%	$	0.40		$	0.40		$	114.6			22.4	%	$	0.54		$	0.53		$	95.8			20.0	%	$	0.46		$	0.44
GAAP and non-GAAP weighted average common shares - basic		210.0												213.8												207.4
GAAP and non-GAAP weighted average common shares - diluted		211.7												215.5												218.3
(1)    Restructuring and other consists of:
	Quarter Ended
	October 4, 2015												July 5, 2015												September 28, 2014
Employee severance	$	1.2											$	0.2											$	0.2
Acquisition costs		0.1												1.0												—
Contingent consideration fair value adjustment		(1.0	)											(1.6	)											(0.6	)
	$	0.3											$	(0.4	)										$	(0.4	)

(2) For the quarter ended July 5, 2015, Interest and other included a gain from the sale of an equity investment.

(3) For the quarters ended October 4, 2015, July 5, 2015 and September 28, 2014, adjustment to exclude discrete income tax items.

	Nine Months Ended
	October 4, 2015			% of Net Revenues									September 28, 2014			% of Net Revenues
Net Revenues	$	1,321.1											$	1,324.6
Gross profit - GAAP	$	749.6			56.7	%							$	718.6			54.3	%
Inventory step-up		1.6			0.1	%								—			—
Gross profit - non-GAAP	$	751.2			56.9	%							$	718.6			54.3	%
Income from operations - GAAP	$	252.7			19.1	%							$	222.6			16.8	%
Acquired intangible assets amortization		49.1			3.7	%								54.8			4.1	%
Restructuring and other (1)		(0.1	)		0.0	%								0.2			0.0	%
Inventory step-up		1.6			0.1	%								—			—
Equity modification charge (2)		—			—									6.6			0.5	%
Income from operations - non-GAAP	$	303.3			23.0	%							$	284.2			21.5	%
							Net Income per Common Share												Net Income per Common Share
	October 4, 2015			% of Net Revenues			Basic			Diluted			September 28, 2014			% of Net Revenues			Basic			Diluted
Net income - GAAP	$	207.1			15.7	%	$	0.97		$	0.96		$	185.1			14.0	%	$	0.93		$	0.83
Acquired intangible assets amortization		49.1			3.7	%		0.23			0.23			54.8			4.1	%		0.28			0.24
Interest and other (3)		(5.4	)		-0.4	%		(0.03	)		(0.03	)		4.3			0.3	%		0.02			0.02
Restructuring and other (1)		(0.1	)		0.0	%		(0.00	)		(0.00	)		0.2			0.0	%		0.00			0.00
Inventory step-up		1.6			0.1	%		0.01			0.01			—			—			—			—
Equity modification charge (2)		—			—			—			—			6.6			0.5	%		0.03			0.03
Exclude discrete tax items (4)		(4.9	)		-0.4	%		(0.02	)		(0.02	)		(4.5	)		-0.3	%		(0.02	)		(0.02	)
Tax effect of non-GAAP adjustments		(10.5	)		-0.8	%		(0.05	)		(0.05	)		(11.9	)		-0.9	%		(0.06	)		(0.05	)
Convertible share adjustment (5)		—			—			—			—			—			—			—			0.04
Net income - non-GAAP	$	236.9			17.9	%	$	1.11		$	1.10		$	234.6			17.7	%	$	1.18		$	1.09
GAAP and non-GAAP weighted average common shares - basic		213.7												198.4
GAAP weighted average common shares - diluted		215.3												223.8
Exclude dilutive shares from convertible note		—												(6.7	)
Non-GAAP weighted average common shares - diluted (5)		215.3												217.1
(1)    Restructuring and other consists of:
	Nine Months Ended
	October 4, 2015												September 28, 2014
Employee severance	$	1.4											$	0.8
Acquisition costs		1.1												—
Contingent consideration fair value adjustment		(2.6	)											(0.6	)
	$	(0.1	)										$	0.2

(2) For the nine months ended September 28, 2014, selling and administrative expenses include an equity charge for the modification of Teradyne’s retired CEO’s outstanding equity awards to allow continued vesting and maintain the original term in connection with his January 31, 2014 retirement.

(3) For the nine months ended October 4, 2015, Interest and other included a gain from the sale of an equity investment. For the nine months ended September 28, 2014, Interest and other included non-cash convertible debt interest expense.

(4) For the nine months ended October 4, 2015 and September 28, 2014, adjustment to exclude discrete income tax items.

(5) For the nine months ended September 28, 2014. the calculation of non-GAAP diluted earnings per share gives benefit to the Company’s call option on its stock for 34.7 million shares at $5.48. As a result, 6.7 million shares have been included in non-GAAP diluted shares and net interest expense of $2.0 million has been added back to non-GAAP net income for the non-GAAP diluted earnings per share calculation.

GAAP to Non-GAAP Reconciliation of Fourth Quarter 2015 guidance:

GAAP and non-GAAP fourth quarter revenue guidance:	$	295 million		to	$	320 million
GAAP net (loss) income per diluted share	$	(0.01	)		$	0.04
Exclude acquired intangible assets amortization		0.10				0.10
Tax effect of non-GAAP adjustment		(0.02	)			(0.02	)
Non-GAAP net income per diluted share	$	0.07			$	0.12

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