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Teradyne Reports Third Quarter 2012 Results

Teradyne, Inc. (NYSE: TER) reported revenue of $463 million for the third quarter of 2012 of which $310 million was in Semiconductor Test, $119 million in LitePoint Wireless Test and $34 million in Systems Test. On a non-GAAP basis, Teradyne’s income from continuing operations in the third quarter was $108.4 million, or $0.53 per diluted share, which excluded acquired intangible asset amortization, non-cash convertible debt interest, and included income taxes on a cash basis. GAAP income from continuing operations for the third quarter was $88.6 million, or $0.39 per diluted share.

“We delivered sales and earnings above our forecast in the third quarter driven by strong demand in the mobility market for both Semiconductor Test and LitePoint products,” said Mike Bradley, President and CEO. “While the seasonal slowdown in new orders was amplified by worldwide economic concerns, we are on track to deliver full year revenue growth of 15% or more in 2012.”

Bookings in the third quarter of 2012 were $231 million of which $154 million were in Semiconductor Test, $52 million in LitePoint Wireless Test and $25 million in Systems Test.

Guidance for the fourth quarter of 2012 is for revenue of $235 million to $260 million, with non-GAAP income (loss) from continuing operations per diluted share of ($0.04) to $0.05 and GAAP loss from continuing operations per diluted share of ($0.12) to ($0.05). Non-GAAP guidance excludes acquired intangible asset amortization, non-cash convertible debt interest, and includes income taxes on a cash basis.

Webcast

A conference call to discuss the third quarter of 2012 results, along with management's business outlook is scheduled at 10 a.m. EDT, Thursday, October 25, 2012. 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.

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 41127437. A replay will also be available on the Teradyne website www.teradyne.com. Click on "Investors" for a link to the replay. The replay will be available via phone and website through November 11, 2012.

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 income from continuing operations exclude acquired intangible asset amortization, non-cash convertible debt interest, fair value inventory step-up related to LitePoint, pension and post retirement actuarial gains and losses, and restructuring and other net, and include income taxes on a cash basis. GAAP requires that these items be included in determining income from operations and income from continuing operations. Non-GAAP income from operations, non-GAAP income from continuing operations, non-GAAP income from operations and non-GAAP income from continuing operations as a percentage of revenue, and non-GAAP income from continuing operations 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 charges related to the fair value inventory step-up recorded as part of acquisition purchase accounting and 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.

About Teradyne

Teradyne (NYSE:TER) is a leading supplier of Automatic Test Equipment used to test semiconductors, wireless products, data storage and complex electronic systems which serve consumer, communications, industrial and government customers. In 2011, Teradyne had sales of $1.4 billion and currently employs approximately 3,600 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 future business prospects, Teradyne’s results of operations and market conditions. Such statements are based on the current assumptions and expectations of Teradyne’s management and are neither promises nor guarantees of future performance. You can identify these forward-looking statements based on the context of the statements and by the fact that they use words such as “will,” “anticipate,” “expect,” “project,” “intend,” “plan,” “believe,” “target” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. There can be no assurance that management’s estimates of Teradyne’s future results or other forward looking statements will be achieved. Important factors that could cause actual results to differ materially from those presently expected include: conditions affecting the markets in which Teradyne operates; decreased or delayed product demand; increased research and development spending 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, 2011 and Quarterly Report on Form 10-Q for the period ended July 1, 2012. 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, INC. REPORT FOR THIRD FISCAL QUARTER OF 2012
                           
CONDENSED CONSOLIDATED OPERATING STATEMENTS
(In thousands, except per share amounts)
         
Quarter Ended Nine Months Ended
September 30, 2012 July 1, 2012 October 2, 2011 September 30, 2012 October 2, 2011
 
Net Revenues $ 463,394 $ 548,284 $ 344,389 $ 1,408,346 $ 1,132,069
 
Cost of Revenues (2)   203,194     238,778     174,015   (1 )   647,714     554,125   (1)
 
Gross Profit 260,200 309,506 170,374 760,632 577,944
 
Operating Expenses:
Engineering and Development 63,055 66,532 45,896 (1 ) 189,722 141,432 (1)
Selling and Administrative 69,921 73,366 54,775 (1 ) 211,064 170,386 (1)
Acquired Intangible Asset Amortization 18,429 18,429 6,754 55,287 21,336
Restructuring and Other, net (3)   683     (6,262 )   1,465     (7,404 )   3,157  
Operating Expenses 152,088 152,065 108,890 448,669 336,311
 
Income from Operations 108,112 157,441 61,484 311,963 241,633
 
Interest & Other (4)   (5,087 )   (5,449 )   (3,019 )   (15,702 )   (11,821 )
 
Income from Continuing Operations Before Income Taxes 103,025 151,992 58,465 296,261 229,812
Income Tax Provision   14,384     40,605     1,759     62,669     15,084  
Income from Continuing Operations 88,641 111,387 56,706 233,592 214,728
Income from Discontinued Operations Before Income Taxes (5) - - - - 1,436
Income Tax (Benefit)   -     -     -     -     (267 )
Income from Discontinued Operations - - - - 1,703
Gain on Disposal of Discontinued Operations (net of income tax provision of $4,578)   -     -     -     -     24,371  
Net Income $ 88,641   $ 111,387   $ 56,706   $ 233,592   $ 240,802  
 

Income per Common Share from Continuing Operations:

Basic $ 0.47   $ 0.60   $ 0.31   $ 1.25   $ 1.16  
Diluted $ 0.39   $ 0.49   $ 0.26   $ 1.02   $ 0.94  
 

Net Income per Common Share:

Basic $ 0.47   $ 0.60   $ 0.31   $ 1.25   $ 1.30  
Diluted $ 0.39   $ 0.49   $ 0.26   $ 1.02   $ 1.06  
 
 
Weighted Average Common Shares - Basic   187,364     186,573     185,102     186,592     185,063  
 
 
Weighted Average Common Shares - Diluted (6)   229,210     229,646     221,892     230,003     228,141  
 
Net Orders $ 230,794   $ 591,703   $ 239,500   $ 1,280,579   $ 1,007,747  
 
 
 

(1) In the first quarter of 2012, we elected to change our accounting method from delayed recognition of gains and losses for our defined benefit pension plans and other post retirement benefit plans to immediate recognition. We have applied these changes retrospectively, as required, and the adjusted amounts are shown above. Below are the amounts as originally reported:

 
Quarter Ended Nine Months Ended
October 2, 2011 October 2, 2011
Cost of Revenues $ 174,544 $ 554,729
Engineering and Development 46,799 142,169
Selling and Administrative 55,304 171,014
 
Income per Common Share from Continuing Operations:
Basic $ 0.30 $ 1.15
Diluted $ 0.25 $ 0.93
 

(2) Cost of Revenues includes:

Quarter Ended Nine Months Ended
September 30, 2012 July 1, 2012 October 2, 2011 September 30, 2012 October 2, 2011
Provision for Excess and Obsolete Inventory $ 5,481 $ 9,353 $ 4,413 $ 16,408 $ 10,756
Sale of Previously Written Down Inventory (651 ) - (1,455 ) (3,170 ) (5,241 )
Inventory Step-Up   -     1,218     -     6,089     -  
$ 4,830   $ 10,571   $ 2,958   $ 19,327   $ 5,515  
 
 

(3) Restructuring and Other, net consists of:

Quarter Ended Nine Months Ended
September 30, 2012 July 1, 2012 October 2, 2011 September 30, 2012 October 2, 2011
Employee Severance $ 683 $ 286 $ 137 $ 1,002 $ 1,325
Contingent Consideration Fair Value Adjustment - (6,548 ) - (8,406 ) -
Acquisition Costs - - 1,328 - 1,328
Non-U.S. Pension Settlement - - - - 935
Facility Related   -     -     -     -     (431 )
$ 683   $ (6,262 ) $ 1,465   $ (7,404 ) $ 3,157  
 
 
 

(4) Interest & Other includes:

Quarter Ended Nine Months Ended
September 30, 2012 July 1, 2012 October 2, 2011 September 30, 2012 October 2, 2011
Non-Cash Convertible Debt Interest $ 3,506 $ 3,389 $ 3,059 10,170 $ 8,874
 
 

(5) On March 21, 2011, Teradyne completed the sale of its Diagnostic Solutions business unit to SPX Corporation for a gain of $24.4 million. The results for the discontinued business unit have been included within discontinued operations for all periods presented.

 

(6) 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 quarters ended September 30, 2012, July 1, 2012 and October 2, 2011, and nine months ended September 30, 2012 and October 2, 2011, 21.9 million, 22.3 million, 19.5 million, 22.4 million and 21.9 million shares, respectively, have been included in diluted shares.

           
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
 
September 30, 2012 December 31, 2011
 
Assets
Cash and Cash Equivalents $ 485,692 $ 573,736
Marketable Securities 344,850 96,502
Accounts Receivable 205,464 129,330
Inventories (1) 134,757 160,063
Deferred Tax Assets 58,517 53,948
Prepayments and Other Current Assets   81,987   86,308
Total Current Assets 1,311,267 1,099,887
 
Net Property, Plant and Equipment 261,118 232,207
Long-Term Marketable Securities 178,281 84,407
Retirement Plan Assets 7,711 8,840
Intangible Assets 337,688 392,975
Goodwill 349,373 352,778
Other Assets   17,853   17,545
Total Assets $ 2,463,291 $ 2,188,639
 
Liabilities
Accounts Payable $ 74,187 $ 69,842
Accrued Employees' Compensation and Withholdings 78,929 90,427
Deferred Revenue and Customer Advances 70,968 78,670
Contingent Consideration 16,513 68,892
Other Accrued Liabilities 61,220 62,420
Income Taxes Payable 43,573 860
Current Debt   3,863   2,573
Total Current Liabilities 349,253 373,684
 
Long-Term Deferred Revenue and Customer Advances 30,592 33,541
Retirement Plan Liabilities 80,504 76,638
Deferred Tax Liabilities 30,932 16,049
Other Long-Term Liabilities 19,211 23,711
Long-Term Debt   167,556   159,956
Total Liabilities 678,048 683,579
 
Shareholders' Equity 1,785,243 1,505,060
   
Total Liabilities and Shareholders' Equity $ 2,463,291 $ 2,188,639
 
                 
 
(1) As of December 31, 2011, Inventories included approximately $6.1 million of LitePoint inventory step-up.
               
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
 
Quarter Ended Nine Months Ended
September 30, 2012 October 2, 2011 September 30, 2012 October 2, 2011
Cash flows from operating activities:
Net income $ 88,641 $ 56,706 $ 233,592 $ 240,802
Less: Income from discontinued operations - - - 1,703
Less: Gain on disposal of discontinued operations   -     -     -     24,371  
Income from continuing operations 88,641 56,706 233,592 214,728
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation 14,234 12,781 39,812 38,426
Amortization 22,046 10,022 65,790 30,838
Stock-based compensation 9,238 7,832 30,634 22,514
Deferred taxes (8,861 ) (412 ) 7,076 (412 )
Provision for excess and obsolete inventory 5,481 4,413 16,408 10,756
Retirement plans actuarial losses 1,937 - 4,991 4,203
Inventory step-up - - 6,089 -
Contingent consideration adjustment - - (8,406 ) -
Tax benefit related to stock options and restricted stock units - 3,717 (7,600 ) -
Other (312 ) 644 (750 ) 2,328
Changes in operating assets and liabilities, net of businesses acquired and sold:
Accounts receivable 140,660 64,300 (76,134 ) 25,233
Inventories 3,624 13,972 25,070 (1,034 )
Other assets 2,251 (3,209 ) 7,278 (13,553 )
Deferred revenue and customer advances (4,453 ) (29,965 ) (10,651 ) (58,304 )
Accounts payable and accrued expenses (44,740 ) (38,208 ) (17,600 ) (47,483 )
Retirement plan contributions (1,129 ) (1,148 ) (3,679 ) (6,393 )
Accrued income taxes   20,355     (8,470 )   50,313     (3,064 )
Net cash provided by continuing operations 248,972 92,975 362,233 218,783
Net cash used for discontinued operations   -     -     -     (4,225 )
Net cash provided by operating activities 248,972 92,975 362,233 214,558
 
Cash flows from investing activities:
Purchases of property, plant and equipment (33,328 ) (22,156 ) (91,132 ) (66,623 )
Purchases of available-for-sale marketable securities (356,286 ) (94,720 ) (513,057 ) (593,261 )
Proceeds from maturities of available-for-sale marketable securities 43,230 119,272 102,635 485,416
Proceeds from sales of available-for-sale marketable securities   31,222     573,106     70,937     627,439  
Net cash (used for) provided by continuing operations (315,162 ) 575,502 (430,617 ) 452,971
Net cash provided by discontinued operations   -     -     -     39,062  
Net cash (used for) provided by investing activities (315,162 ) 575,502 (430,617 ) 492,033
 
Cash flows from financing activities:
Issuance of common stock 975 164 17,959 17,216
Tax benefit related to stock options and restricted stock units - (3,717 ) 7,600 -
Payments of long-term debt - (1,296 ) (1,246 ) (2,518 )
Payments of contingent consideration (38,149 ) - (43,973 ) -
Repurchase of common stock   -     (23,863 )   -     (23,863 )
Net cash used for financing activities (37,174 ) (28,712 ) (19,660 ) (9,165 )
 
(Decrease) Increase in cash and cash equivalents (103,364 ) 639,765 (88,044 ) 697,426
Cash and cash equivalents at beginning of period   589,056     455,398     573,736     397,737  
Cash and cash equivalents at end of period $ 485,692   $ 1,095,163   $ 485,692   $ 1,095,163  
GAAP to Non-GAAP Earnings Reconciliation
                           
(In millions, except per share amounts)
Quarter Ended
September 30, 2012   % of Net Revenues         July 1, 2012   % of Net Revenues         October 2, 2011   % of Net Revenues        
 
Net Revenues $ 463.4 $ 548.3 $ 344.4
 
Gross Profit - GAAP $ 260.2 56.2 % $ 309.5 56.4 % $ 170.4 49.5 %
Inventory Step-Up - - 1.2 0.2 % - -
Pension Mark-to-Market adjustments (1)   0.4   0.1 %   0.8   0.1 %   -   -  
Gross Profit - Non-GAAP $ 260.6 56.2 % $ 311.5 56.8 % $ 170.4 49.5 %
 
Income from Operations - GAAP $ 108.1 23.3 % $ 157.4 28.7 % $ 61.5 17.9 %
Acquired intangible asset amortization 18.4 4.0 % 18.4 3.4 % 6.8 2.0 %
Pension Mark-to-Market adjustments (1) 1.9 0.4 % 3.1 0.6 % - -
Restructuring and other, net (2) 0.7 0.2 % (6.3 ) -1.1 % 1.5 0.4 %
Inventory Step-Up   -   -     1.2   0.2 %   -   -  
Income from Operations - non-GAAP $ 129.1   27.9 % $ 173.8   31.7 % $ 69.8   20.3 %
 

Income

per Common Share

from Continuing Operations

Income

per Common Share

from Continuing Operations

Income

per Common Share

from Continuing Operations

September 30, 2012   % of Net Revenues   Basic   Diluted July 1, 2012   % of Net Revenues   Basic   Diluted October 2, 2011   % of Net Revenues   Basic   Diluted
Income from Continuing Operations - GAAP $ 88.6 19.1 % $ 0.47 $ 0.39 $ 111.4 20.3 % $ 0.60 $ 0.49 $ 56.7 16.5 % $ 0.31 $ 0.26
Income Tax adjustment (3) (4.7 ) -1.0 % (0.03 ) (0.02 ) 25.1 4.6 % 0.13 0.12 - - - -
Acquired intangible asset amortization 18.4 4.0 % 0.10 0.09 18.4 3.4 % 0.10 0.09 6.8 2.0 % 0.04 0.03
Interest and other (4) 3.5 0.8 % 0.02 0.02 3.4 0.6 % 0.02 0.02 3.1 0.9 % 0.02 0.02
Pension Mark-to-Market adjustments (1) 1.9 0.4 % 0.01 0.01 3.1 0.6 % 0.02 0.01 - - - -
Restructuring and other, net (2) 0.7 0.2 % 0.00 0.00 (6.3 ) -1.1 % (0.03 ) (0.03 ) 1.5 0.4 % 0.01 0.01
Inventory Step-Up - - - - 1.2 0.2 % 0.01 0.01 - - - -
Convertible share adjustment (5)   -   -     -     0.04     -   -     -     0.06     -   -     -   0.03
Income from Continuing Operations - non-GAAP $ 108.4   23.4 % $ 0.58   $ 0.53   $ 156.3   28.5 % $ 0.84   $ 0.77   $ 68.1   19.8 % $ 0.37 $ 0.35
 
GAAP and Non-GAAP Weighted Average Common Shares - Basic 187.4 186.6 185.1
GAAP Weighted Average Common Shares - Diluted 229.2 229.6 221.9
Exclude dilutive shares from convertible note   (21.9 )   (22.3 )   (19.5 )
Non-GAAP Weighted Average Common Shares - Diluted (5)   207.3     207.3     202.4  
 
 
(1) Actuarial loss recognized under GAAP in accordance with the Company's mark-to-market pension accounting.
 
(2) Restructuring and other, net consists of (in millions):
Quarter Ended
September 30, 2012 July 1, 2012 October 2, 2011
Employee Severance $ 0.7 $ 0.3 $ 0.1
Contingent Consideration Fair Value Adjustment - (6.5 ) -
Acquisition Costs   -     -       1.3  
$ 0.7   $ (6.3 )   $ 1.5  
 
 
(3) For the quarters ended September 30, 2012 and July 1, 2012, adjustment to record income tax provision on a cash basis.
 
(4) For the quarters ended September 30, 2012, July 1, 2012 and October 2, 2011, Interest and Other included non-cash convertible debt interest.
 
(5) For the quarters ended September 30, 2012, July 1, 2012 and October 2, 2011, 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, 16.8 million, 17.3 million and 13.5 million shares, respectively, have been included in non-GAAP diluted shares and net interest expense of $2.3 million has been added back to non-GAAP net income for the non-GAAP diluted earnings per share calculation.
      Nine Months Ended
September 30, 2012   % of Net Revenues     October 2, 2011 % of Net Revenues  
   
Net Revenues $ 1,408.4 $ 1,132.1
 
Gross Profit - GAAP $ 760.6 54.0 % $ 577.9 51.0 %
Inventory Step-Up 6.1 0.4 % - -
Pension Mark-to-Market adjustments (1)   1.2   0.1 %   1.1   0.1 %
Gross Profit - Non-GAAP $ 767.9 54.5 % $ 579.0 51.1 %
 
Income from Operations - GAAP $ 312.0 22.2 % $ 241.6 21.3 %
Acquired intangible asset amortization 55.3 3.9 % 21.3 1.9 %
Inventory Step-Up 6.1 0.4 % - -
Pension Mark-to-Market adjustments (1) 5.0 0.4 % 4.2 0.4 %
Restructuring and other, net (2)   (7.4 ) -0.5 %   3.2   0.3 %
Income from Operations - non-GAAP $ 371.0   26.3 % $ 270.3   23.9 %
 
Income

per Common Share

from Continuing Operations

Income

per Common Share

from Continuing Operations

September 30, 2012 % of Net Revenues Basic   Diluted October 2, 2011 % of Net Revenues Basic Diluted
Income from Continuing Operations - GAAP $ 233.6 16.6 % $ 1.25 $ 1.02 $ 214.7 19.0 % $ 1.16 $ 0.94
Acquired intangible asset amortization 55.3 3.9 % 0.30 0.27 21.3 1.9 % 0.12 0.10
Income Tax adjustment (3) 22.2 1.6 % 0.12 0.11 - - - -
Interest and other (4) 10.2 0.7 % 0.05 0.05 8.9 0.8 % 0.05 0.04
Inventory Step-Up 6.1 0.4 % 0.03 0.03 - - - -
Pension Mark-to-Market adjustments (1) 5.0 0.4 % 0.03 0.02 4.2 0.4 % 0.02 0.02
Restructuring and other, net (2) (7.4 ) -0.5 % (0.04 ) (0.04 ) 3.2 0.3 % 0.02 0.02
Convertible share adjustment (5)   -   -     -     0.14     -   -     -   0.14
Income from Continuing Operations - non-GAAP $ 325.0   23.1 % $ 1.74   $ 1.60   $ 252.3   22.3 % $ 1.36 $ 1.26
 
GAAP and Non-GAAP Weighted Average Common Shares - Basic 186.6 185.1
GAAP Weighted Average Common Shares - Diluted 230.0 228.1
Exclude dilutive shares from convertible note   (22.4 )   (21.9 )
Non-GAAP Weighted Average Common Shares - Diluted (5)   207.6     206.2  
 
 
(1) Actuarial loss recognized under GAAP in accordance with the Company's mark-to-market pension accounting.
 
(2) Restructuring and other, net consists of:
Nine Months Ended
September 30, 2012 October 2, 2011  
Contingent Consideration Fair Value Adjustment $ (8.4 ) $ -
Employee Severance 1.0 1.3
Acquisition Costs - 1.3
Non-U.S. Pension Settlement - 0.9
Facility Related   -     (0.4 )  
$ (7.4 ) $ 3.2    
 
(3) For the nine months ended September 30, 2012 adjustment to record income tax provision on a cash basis.
 
(4)

For the nine months ended September 30, 2012 and October 2, 2011, Interest and Other included non-cash convertible debt interest.

 
(5) For the nine months ended September 30, 2012 and October 2, 2011, 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, 17.5 million and 16.7 million shares, respectively, have been included in non-GAAP diluted shares and net interest expense of approximately $7.0 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 2012 guidance:
 
GAAP and Non-GAAP fourth quarter revenue guidance: $235 million to $260 million
GAAP loss from continuing operations per diluted share

$(0.12

)

$

(0.05 )
Exclude acquired intangible asset amortization 0.10 0.10
Exclude non-cash convertible debt interest 0.02 0.02
Exclude non-cash income tax benefit (0.04 )   (0.02 )

 

Non-GAAP income from continuing operations per diluted share

$(0.04

) $ 0.05

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



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