Teradyne Announces First Quarter Results

    Business Editors

    BOSTON--(BUSINESS WIRE)--April 19, 2005--Teradyne, Inc. reported net orders of $340.7 million for the first quarter of 2005, an increase of 14% over the fourth quarter of 2004. Sales were $305.6 million for the quarter, a 19% decrease from the fourth quarter of 2004, and the company had a net loss of $52.6 million or $0.27 per share, compared to net income of $3.3 million or $0.02 per share in the previous quarter. The net loss for the first quarter of 2005 includes pre-tax restructuring and other charges of $10.6 million.
    "Orders increased in the first quarter over the fourth quarter in what continues to be a performance-driven versus capacity-driven environment," said Mike Bradley, Teradyne President and CEO. "The increase was fueled by our FLEX(TM) System-On-a-Chip family of testers, and improvements in our Connection Systems business."
    In the second quarter, the company's guidance is for sales to be between $290 million and $320 million, with a loss per share between $0.24 and $0.35. This guidance includes pre-tax restructuring and other charges of $17 million.

    Conference Call/Webcast

    Teradyne will be conducting its conference call tomorrow, April 20, 2005, at 10:00 a.m. E.D.T. The call will be webcast at www.teradyne.com (click on "Investors"). A replay will be available via phone starting at Noon E.D.T. and continuing through May 4, 2005. The replay may be accessed by calling 1-800-642-1687 in the US and Canada, or 706-645-9291 outside the US and Canada, and providing conference code 5307013, or by visiting www.teradyne.com and clicking on "Investors" for a link to the replay.

    About Teradyne

    Teradyne (NYSE:TER) is a leading supplier of Automatic Test Equipment and interconnection systems. The company's products deliver competitive advantage to the world's leading semiconductor, electronics, automotive and network systems companies. In 2004, Teradyne had sales of $1.8 billion, and currently employs about 5,900 people worldwide. For more information, visit www.teradyne.com. Teradyne(R) is a registered trademark of Teradyne, Inc. in the US and other countries. All product names are trademarks of Teradyne, Inc. (including its subsidiaries) or their respective owners.

    Safe Harbor Statement

    This release contains statements regarding expected future revenues and earnings and future market conditions which are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Such statements are based on the current assumptions and expectations of Teradyne's management and are neither promises nor guarantees but involve risks and uncertainties, both known and unknown, that could cause Teradyne's actual results to differ materially from those projected in the forward-looking statements. There can be no assurance that such estimates of future results will be achieved. Important factors that could cause actual results to differ materially from those presently expected include: adverse changes in general economic or market conditions, including market demand for electronics and the current downturn in the semiconductor industry; reductions or delays in capital investment by our customers; the decision by customers to cancel or defer orders that previously had been accepted; reduced bookings; the "hockey-stick" pattern of sales resulting in a disproportionately large percentage of total quarterly sales occurring in the last month and weeks of each quarter; the historically cyclical nature and volatility of the markets that Teradyne serves; war or the threat of terrorist attacks; disruptions or delays in Teradyne's supply chain; new product development introductions and transitions and any delays; uncertainty of customer acceptance of new product offerings including the timing, price and mix of new product acceptance; competitive pressures including new products, pricing and gross margin pressures; the effectiveness of our implementation of cost cutting and expense control measures, including facility consolidations, employee reductions, the centralization of certain shared services, seeking lower prices from suppliers and the outsourcing of selected manufacturing and engineering activities; insufficient, excess or obsolete inventory; disruptions, delays or shortages in an adequate supply of raw materials, components or internal and external manufacturing capability; incoming quality of components or raw materials; the impact of our ability to manage the effects of past or future acquisitions or divestitures; any material litigation against Teradyne; the increase in our debt service obligations and debt to capital ratio resulting from our issuance of $400 million aggregate principal amount of senior convertible notes in 2001; the availability of additional financing; Teradyne's obligations in the event of a change of control; the impact of being required to account for stock options as an expense; the ability to attract and retain key employees; the risks of potential environmental liability; the risks of operating internationally which include political and economic instability and unexpected changes in legal and regulatory requirements and in policy changes affecting international markets; and other events, factors and risks previously and from time to time disclosed in our filings with the Securities and Exchange Commission including, but not limited to, Teradyne's annual report on Form 10-K for the period ending December 31, 2004. The "forward-looking statements" included herein are made only as of the date of publication and Teradyne undertakes no obligation to update the information set forth in this release.

TERADYNE, INC. REPORT FOR FIRST FISCAL QUARTER OF 2005 ---------------------------------------------------------------------- CONDENSED CONSOLIDATED OPERATING STATEMENTS (In thousands, except per share amounts) ---------------------------------------------------------------------- Quarter Ended: --------------------------------- 4/3/05 4/4/04 12/31/04 --------- ----------- -----------

Net Revenues $305,581 430,603 $377,014

Cost of Revenues 216,441 254,628 244,200 --------- ----------- -----------

Gross Profit 89,140 175,975 132,814

Operating Expenses: Engineering and Development 64,240 64,694 63,149 Selling and Administrative 65,315 66,242 62,073 Restructuring and Other Charges (1) 10,628 130 5,123 --------- ----------- ----------- Operating Expenses 140,183 131,066 130,345

(Loss)/Income From Operations (51,043) 44,909 2,469

Interest Income 4,405 3,591 4,542 Interest Expense (4,434) (4,632) (4,529) Other Income and Expense, Net 851 1,259 --------- ----------- -----------

(Loss)/Income Before Income Taxes (51,072) 44,719 3,741 Income Tax Expense 1,500 4,472 393 --------- ----------- -----------

Net (Loss)/Income $(52,572) $40,247 $3,348 ========= =========== ===========

(Loss)/Income per Common Share - Basic and Diluted: ------------------------------------

Net (Loss)/Income per Common Share - Basic $(0.27) $0.21 $0.02 ========= =========== ===========

Shares used in calculation of Net (Loss)/Income per Common Share - Basic 195,619 193,852 194,199 ========= =========== ===========

Net (Loss)/Income per Common Share - Diluted $(0.27) $0.20 $0.02 ========= =========== ===========

Shares used in calculation of Net (Loss)/Income per Common Share - Diluted 195,619 199,893 195,982 ========= =========== ===========

Gross Orders $341,986 $551,457 $297,730 ========= =========== =========== Net Orders $340,670 $551,240 $297,633 ========= =========== ===========

(1) Restructuring and Other Charges consists of: 4/3/05 4/4/04 12/31/04 --------- ----------- ----------- Severance 7,083 (302) 3,558 Facility Related 2,536 935 1,052 Long-Lived Asset Impairment 595 (503) 851 Other 414 - (338) --------- ----------- ----------- 10,628 130 5,123

CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) ---------------------------------------------------------------------- 4/3/05 12/31/04 ----------- -----------

Assets Cash and Cash Equivalents $190,012 $209,147 Marketable Securities 47,455 75,431 Accounts Receivable 218,635 223,491 Inventories 256,578 262,996 Other Current Assets 40,412 34,761 ----------- ----------- 753,092 805,826

Net Property, Plant and Equipment 552,494 547,075 Long-term Marketable Securities 349,485 406,615 Goodwill 116,176 116,176 Intangible and Other Assets 44,368 46,870 ----------- ----------- $1,815,615 $1,922,562 =========== ===========

Liabilities Notes Payable - Banks $2,800 $4,826 Current Portion of Long-term Debt 310 321 Accounts Payable 72,297 62,006 Accrued Employees' Compensation and Withholdings 59,382 106,298 Deferred Revenue and Customer Advances 29,671 30,399 Other Accrued Liabilities 63,056 60,970 Income Taxes Payable 6,456 11,738 ----------- ----------- 233,972 276,558

Pension Liability 60,341 69,187 Other Long-term Liabilities 46,732 44,321 Convertible Senior Notes 371,500 391,500 Other Long-term Debt 7,310 7,432 ----------- ----------- 719,855 788,998

Shareholders' Equity 1,095,760 1,133,564 ----------- -----------

$1,815,615 $1,922,562 =========== ===========

---------------------------------------------------------------------- For press releases and other information of interest to investors, please visit Teradyne's homepage on the World Wide Web at http://www.teradyne.com.

--30--SP/bo*

CONTACT: Teradyne, Inc. Tom Newman, 617-422-2425

KEYWORD: MASSACHUSETTS INDUSTRY KEYWORD: HARDWARE AUTOMOTIVE EARNINGS CONFERENCE CALLS SOURCE: Teradyne, Inc.

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