Teradyne Extends Cost Cutting Programs, Confirms EPS Guidance

BOSTON--(BUSINESS WIRE)--Sept. 13, 2001--Teradyne (NYSE:TER) today announced that it is extending its previously announced cost reduction programs in response to the continuing worldwide economic downturn. Among the actions taken were a reduction of about 1000 employees through a combination of voluntary separation programs and a layoff, as well as a salary cut for employees, based on a sliding scale. Lower paid employees will receive no cuts, while those with higher salaries will receive cuts of up to 15% of salary. After the headcount reductions, Teradyne will employ approximately 8000 people, worldwide.

"Although there are some signs that the fall-off in our business is slowing", said George Chamillard, chairman and CEO of the company, "the reduced level of business requires that we further decrease expenses to better match the current demand for our products and services. We believe that our on-going expense reduction actions should result in an EPS for the September quarter around the low end of our previous guidance, which was for a loss of $0.32/share.

"The tragic events of September 11th are proof that we live in a very unpredictable world. One impact of this is that businesses will be forced to deal with an even greater level of uncertainty for the foreseeable future. Before the attacks of this week," Chamillard continued, "our customers were choosing, on the margin, to delay spending as long as possible. We were, however, beginning to see a little good news mixed in with the mostly bad news coming from customers and that's usually a sign that the bottom is near. Until those good signs turn into orders, however, we must continue to tighten our belts."

About Teradyne

Teradyne (NYSE: TER) is the world's largest supplier of automatic test equipment and is also a leading supplier of high performance interconnection products and total systems integration services. Teradyne's automatic test products are used by manufacturers of semiconductors, circuit assemblies and voice and broadband telephone networks. Teradyne's high-technology components and electronic manufacturing services are used by manufacturers of communications and computing systems central to building networking infrastructure. The company had sales of $3 billion in 2000. For more information visit www.Teradyne.com.

SAFE HARBOR STATEMENT

Statements in this release, other than historical performance, include forward-looking statements relating to future financial performance made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from expectations. In particular, our business is dependent on the current and anticipated market demand for electronics, which has been impacted by the economic slowdown that began in the latter portions of 2000. While in the past our diverse businesses have allowed us to perform better than some companies in periods of economic decline, there is no guarantee that this will be the case currently. In addition, the markets which Teradyne serves are highly cyclical and are in a period of oversupply. Further, our backlog has and may continue to be affected as customers may defer or cancel orders which previously had been accepted. Both of these factors could result in further decreased revenues. Our business is also affected by our ability to develop and ship new and sometimes more complex products to address changing customer needs, by new offerings by competitors and by intense competition throughout the world in each of our operating segments from competitors having substantial resources available for the engineering, manufacturing, marketing and distribution of their products. The economic decline and the resulting oversupply could increase the possibility of intensified price competition in certain markets and result in the need to lower our prices, which could result in decreased revenues. In addition, our recent acquisitions and divestiture could affect our ability to manage and maintain our business. Finally, our ongoing and recently announced expense control measures may not have the intended effect on our future financial results. These measures could have long-term effects on our business by reducing our pool of technical talent, decreasing improvements in our products and making it more difficult for us to respond to large customer orders if the economy does not recover. Teradyne undertakes no obligation to update the information contained in this release. For further information regarding risks and uncertainties associated with Teradyne's business, please refer to Teradyne's filings with the Securities and Exchange Commission, including, but not limited to, Teradyne's annual report on Form 10-K and quarterly reports on Form 10-Q. Any forward-looking statements should be considered in light of all these factors.

“Although there are some signs that the fall-off in our business is slowing”