<Page>
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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                            ------------------------
                                   FORM 10-Q

          /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                      FOR THE QUARTER ENDED JUNE 30, 2001

                                       OR

          / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                           COMMISSION FILE NO. 1-8045

                            ------------------------

                                  GENRAD, INC.
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                       <C>
             MASSACHUSETTS                              04-1360950
    (State or other jurisdiction of       (I.R.S. Employer Identification Number)
     incorporation or organization)

        7 TECHNOLOGY PARK DRIVE
        WESTFORD, MASSACHUSETTS                         01886-0033
(Address of principal executive offices)                (Zip Code)
</Table>

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (978) 589-7000

                            ------------------------

    Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /

    Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

    28,551,636 shares of the Common Stock of GenRad, Inc., $1.00 par value, were
outstanding on August 9, 2001.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<Page>
                                  GENRAD, INC.
                         QUARTERLY REPORT ON FORM 10-Q
                        THREE MONTHS ENDED JUNE 30, 2001
                               TABLE OF CONTENTS

<Table>
<Caption>
                                                                            PAGE
                                                                          --------
<S>         <C>                                                           <C>
PART I. FINANCIAL INFORMATION
    Item 1: Consolidated Financial Statements
              Consolidated Statements of Operations for the Three and
                Six months ended June 30, 2001 and July 1, 2000.........      1
              Consolidated Balance Sheets as of June 30, 2001 and
                December 30, 2000.......................................      2
              Consolidated Statements of Cash Flows for the Six months
                ended June 30, 2001 and July 1, 2000....................      3
              Notes to Consolidated Financial Statements................      4

    Item 2: Management's Discussion and Analysis of Financial Condition
            and Results of Operations...................................     12

PART II. OTHER INFORMATION
    Item 4: Submission of Matters to a Vote of Security Holders.........     23
    Item 6: Exhibits and Reports on Form 8-K............................     23
            Signatures..................................................     24
</Table>
<Page>
                   ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
                                  GENRAD, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)
                                  (Unaudited)

<Table>
<Caption>
                                                        THREE MONTHS ENDED     SIX MONTHS ENDED
                                                        -------------------   -------------------
                                                        JUNE 30,   JULY 1,    JUNE 30,   JULY 1,
                                                          2001       2000       2001       2000
                                                        --------   --------   --------   --------
<S>                                                     <C>        <C>        <C>        <C>
REVENUE:
Products..............................................  $ 39,852   $70,303    $ 86,083   $119,873
Services..............................................    14,646    17,021      30,847     33,824
                                                        --------   -------    --------   --------
    Total revenue.....................................    54,498    87,324     116,930    153,697
COST OF REVENUE:
Products..............................................    51,669    40,740      84,280     67,996
Services..............................................    10,640    12,245      22,368     23,191
                                                        --------   -------    --------   --------
    Total cost of revenue.............................    62,309    52,985     106,648     91,187
                                                        --------   -------    --------   --------
Gross margin..........................................    (7,811)   34,339      10,282     62,510
OPERATING EXPENSES:
Selling, general and administrative...................    18,309    20,329      40,167     38,103
Research and development..............................     8,249     7,237      16,145     12,991
Amortization of acquisition-related intangible
  assets..............................................     2,070     2,004       4,318      2,795
Restructuring and other charges.......................        --     4,124       3,058      1,645
Impairment of long-lived assets.......................    21,816        --      21,816         --
Acquired in-process research and development..........        --        --          --        500
                                                        --------   -------    --------   --------
    Total operating expenses..........................    50,444    33,694      85,504     56,034
                                                        --------   -------    --------   --------
Operating income (loss)...............................   (58,255)      645     (75,222)     6,476
OTHER INCOME (EXPENSE):
Interest income.......................................        42        59          88        124
Interest expense......................................    (3,181)   (2,326)     (5,790)    (2,735)
Other.................................................      (812)       10        (606)        52
                                                        --------   -------    --------   --------
    Total other expense...............................    (3,951)   (2,257)     (6,308)    (2,559)
                                                        --------   -------    --------   --------
Income (loss) before income taxes.....................   (62,206)   (1,612)    (81,530)     3,917
Income tax benefit....................................    23,608       581      30,981     13,130
                                                        --------   -------    --------   --------
Net income (loss).....................................  $(38,598)  $(1,031)   $(50,549)  $ 17,047
                                                        ========   =======    ========   ========

NET INCOME (LOSS) PER SHARE:
  Basic...............................................  $  (1.35)  $ (0.04)   $  (1.77)  $   0.61
                                                        ========   =======    ========   ========

  Diluted.............................................  $  (1.35)  $ (0.04)   $  (1.77)  $   0.60
                                                        ========   =======    ========   ========
WEIGHTED AVERAGE SHARES OUTSTANDING:
  Basic...............................................    28,549    28,073      28,530     28,105
                                                        ========   =======    ========   ========
  Diluted.............................................    28,549    28,073      28,530     28,551
                                                        ========   =======    ========   ========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       1
<Page>
                                  GENRAD, INC.
                          CONSOLIDATED BALANCE SHEETS
                    (In thousands, except per share amounts)

<Table>
<Caption>
                                                               JUNE 30,     DECEMBER 30,
                                                                 2001           2000
                                                              -----------   ------------
                                                              (Unaudited)
<S>                                                           <C>           <C>
                                         ASSETS
CURRENT ASSETS:
Cash and cash equivalents...................................    $  5,935      $  8,321
Accounts receivable, less allowance of $1,403 and $828......      66,522       114,355
Inventories.................................................      58,570        65,551
Deferred tax assets.........................................      10,649        12,781
Other current assets........................................      14,467         8,445
                                                                --------      --------
    Total current assets....................................     156,143       209,453

Property and equipment, net.................................      44,133        47,620
Deferred tax assets.........................................      48,891        18,410
Intangible assets, net......................................      53,104        91,497
Other assets................................................       2,200         2,625
                                                                --------      --------
Total assets................................................    $304,471      $369,605
                                                                ========      ========
                          LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt...........................    $ 85,519      $ 48,590
Trade accounts payable......................................      28,168        21,427
Accrued liabilities.........................................       9,804        14,766
Accrued compensation and employee benefits..................       8,001        10,645
Deferred revenue............................................      11,834        10,185
                                                                --------      --------
    Total current liabilities...............................     143,326       105,613
LONG-TERM LIABILITIES:
Long-term debt..............................................          45        45,050
Deferred revenue............................................         951         1,232
Deferred tax liabilities....................................          --         3,412
Other long-term liabilities.................................      13,273        13,541
                                                                --------      --------
    Total long-term liabilities.............................      14,269        63,235
                                                                --------      --------
Total liabilities...........................................    $157,595      $168,848
                                                                --------      --------
STOCKHOLDERS' EQUITY:
Common stock, $1.00 par value, 60,000 shares authorized;
  30,437 and 28,553 issued and outstanding, respectively at
  June 30, 2001 and 30,394 and 28,510 issued and
  outstanding, respectively at December 30, 2000............      30,437        30,394
Additional paid-in capital..................................     226,186       225,738
Treasury stock, 1,884 shares at June 30, 2001 and December
  30, 2000..................................................     (31,292)      (31,292)
Accumulated deficit.........................................     (72,968)      (22,419)
Accumulated other comprehensive loss........................      (5,487)       (1,664)
                                                                --------      --------
    Total stockholders' equity..............................     146,876       200,757
                                                                --------      --------
Total liabilities and stockholders' equity..................    $304,471      $369,605
                                                                ========      ========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       2
<Page>
                                  GENRAD, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                  (Unaudited)

<Table>
<Caption>
                                                               SIX MONTHS ENDED
                                                              -------------------
                                                              JUNE 30,   JULY 1,
                                                                2001       2000
                                                              --------   --------
<S>                                                           <C>        <C>
OPERATING ACTIVITIES:
Net income (loss)...........................................  $(50,549)  $17,047
  Adjustments to reconcile net income (loss) to net cash
    provided by (used in) operating activities:
Depreciation and amortization...............................    14,290    10,614
Deferred income tax benefit.................................   (31,436)       --
Impairment of long-lived assets.............................    28,190        --
All other non-cash adjustments..............................    17,840   (15,586)
  Changes in operating assets and liabilities, net of
    effects of acquisitions:
Accounts receivable.........................................    45,041    (6,581)
Inventories.................................................    (7,483)  (16,876)
All other operating assets and liabilities changes..........    (6,943)   (1,122)
                                                              --------   -------
Net cash provided by (used in) operating activities.........     8,950   (12,504)

INVESTING ACTIVITIES:
Purchases of property and equipment.........................    (4,523)  (12,782)
Proceeds from sale of property and equipment................       921        --
Purchase of subsidiaries, net of cash acquired..............        --   (69,185)
Development of intangible assets............................    (1,083)   (1,619)
                                                              --------   -------
Net cash used in investing activities.......................    (4,685)  (83,586)

FINANCING ACTIVITIES:
Proceeds from (repayments of) credit facility, net..........    (9,404)   99,224
Proceeds from employee stock plans..........................       268       818
Purchase of treasury stock..................................        --    (2,275)
                                                              --------   -------
Net cash (used in) provided by financing activities.........    (9,136)   97,767
Effect of exchange rates on cash and cash equivalents.......     2,485     3,011
                                                              --------   -------
(Decrease) increase in cash and cash equivalents............    (2,386)    4,688
Cash and cash equivalents at beginning of period............     8,321     6,951
                                                              --------   -------
Cash and cash equivalents at end of period..................  $  5,935   $11,639
                                                              ========   =======
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       3
<Page>
                                  GENRAD, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  (Unaudited)

NOTE 1: BASIS OF PRESENTATION

    The accompanying unaudited consolidated financial statements of
GenRad, Inc. ("GenRad" or "the Company") should be read in conjunction with the
Company's consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 30, 2000. In
the opinion of management, the accompanying unaudited consolidated financial
statements reflect all adjustments, consisting of normal recurring adjustments,
considered necessary to present fairly the consolidated financial position at
June 30, 2001 and December 30, 2000, the results of operations for the three and
six months ended June 30, 2001 and July 1, 2000, and cash flows for the six
months ended June 30, 2001 and July 1, 2000. Interim results are not necessarily
indicative of the results for the full fiscal year.

    The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. Certain prior period balances have been reclassified to conform to
the current presentation.

EARNINGS PER SHARE

    Basic earnings per share ("EPS") is calculated by dividing net income (loss)
by the weighted average number of shares outstanding during the period. Diluted
EPS is calculated by dividing net income (loss) by the weighted average number
of shares outstanding plus the dilutive effect, if any, of outstanding stock
options using the "treasury stock" method. The following table presents the
calculation for both basic and diluted EPS for the three and six months ended
June 30, 2001 and July 1, 2000 (in thousands, except per share amounts):

<Table>
<Caption>
                                                                         THREE MONTHS ENDED
                                                   ---------------------------------------------------------------
                                                           JUNE 30, 2001                     JULY 1, 2000
                                                   ------------------------------   ------------------------------
                                                                           PER                              PER
                                                                          SHARE                            SHARE
                                                     LOSS      SHARES     AMOUNT      LOSS      SHARES     AMOUNT
                                                   --------   --------   --------   --------   --------   --------
<S>                                                <C>        <C>        <C>        <C>        <C>        <C>
BASIC:
Net loss.........................................  $(38,598)   28,549     $(1.35)   $(1,031)    28,073     $(0.04)
Dilutive effect of stock options.................        --        --         --         --         --         --
                                                   --------    ------     ------    -------     ------     ------
DILUTED:
Net loss.........................................  $(38,598)   28,549     $(1.35)   $(1,031)    28,073     $(0.04)
                                                   ========    ======     ======    =======     ======     ======
</Table>

<Table>
<Caption>
                                                                          SIX MONTHS ENDED
                                                   ---------------------------------------------------------------
                                                           JUNE 30, 2001                     JULY 1, 2000
                                                   ------------------------------   ------------------------------
                                                                           PER                              PER
                                                                          SHARE                            SHARE
                                                     LOSS      SHARES     AMOUNT     INCOME     SHARES     AMOUNT
                                                   --------   --------   --------   --------   --------   --------
<S>                                                <C>        <C>        <C>        <C>        <C>        <C>
BASIC:
Net income (loss)................................  $(50,549)   28,530     $(1.77)   $17,047     28,105     $ 0.61
Dilutive effect of stock options.................        --        --         --         --        446     $(0.01)
                                                   --------    ------     ------    -------     ------     ------
DILUTED:
Net income (loss)................................  $(50,549)   28,530     $(1.77)   $17,047     28,551     $ 0.60
                                                   ========    ======     ======    =======     ======     ======
</Table>

                                       4
<Page>
                                  GENRAD, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (Unaudited)

    Options to purchase 4.6 million shares for the six months ended July 1, 2000
were outstanding but were not included in the computation of diluted EPS because
the price of the options was greater than the average market price of the common
stock for the period reported. There is no difference between basic and diluted
earnings per share in 2001 or the three months ended July 1, 2000 as the Company
is in a loss position and therefore potential common shares from the exercise of
stock options are anti-dilutive.

COMPREHENSIVE INCOME (LOSS)

    Comprehensive income (loss) consists of two components, net income (loss)
and other comprehensive income (loss). Other comprehensive income (loss) refers
to revenue, expenses, gains and losses that under generally accepted accounting
principles are recorded as an element of shareholders' equity but are excluded
from net income. The Company's other comprehensive income (loss) is comprised of
foreign currency translation adjustments from those subsidiaries not using the
U.S. dollar as their functional currency and changes in the fair value of
financial instruments designated as cash flow hedges. Comprehensive income
(loss) for the three and six months ended June 30, 2001 and July 1, 2000 are as
follows (in thousands):

<Table>
<Caption>
                                                                   THREE MONTHS ENDED
                                                              ----------------------------
                                                              JUNE 30, 2001   JULY 1, 2000
                                                              -------------   ------------
<S>                                                           <C>             <C>
Net loss....................................................    $(38,598)       $(1,031)
Other comprehensive income (loss):
  Foreign currency translation adjustments, net of tax of
    $213 and $(108).........................................        (347)           192
  Unrealized gain on derivatives, net of tax of $70.........         114             --
                                                                --------        -------
Total other comprehensive income (loss).....................        (233)           192
                                                                --------        -------
Comprehensive loss..........................................    $(38,831)       $  (839)
                                                                ========        =======
</Table>

<Table>
<Caption>
                                                                    SIX MONTHS ENDED
                                                              ----------------------------
                                                              JUNE 30, 2001   JULY 1, 2000
                                                              -------------   ------------
<S>                                                           <C>             <C>
Net income (loss)...........................................    $(50,549)       $17,047
Other comprehensive income (loss):
  Foreign currency translation adjustments, net of tax of
    $880 and $(178).........................................      (1,436)           316
  Unrealized loss on derivatives, net of tax of $572........        (934)            --
                                                                --------        -------
Total other comprehensive income (loss).....................      (2,370)           316
                                                                --------        -------
Comprehensive income (loss).................................    $(52,919)       $17,363
                                                                ========        =======
</Table>

NOTE 2: RESTRUCTURING AND OTHER CHARGES

2001 CHARGES

    In February 2001, the Company implemented a restructuring plan in an effort
to improve operating efficiencies. The plan involves outsourcing all printed
circuit board manufacturing, exiting certain unprofitable product lines and
consolidating certain manufacturing and administrative operations. The plan
included a workforce reduction of approximately 140 employees primarily in the
areas of manufacturing, engineering, service and administration. Total
anticipated annual savings from the plan will be approximately $10 million. In
accordance with EITF 94-3, "Liability Recognition for

                                       5
<Page>
                                  GENRAD, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (Unaudited)

Certain Employee Termination Benefits and Other Costs to Exit an Activity" the
Company recorded a restructuring charge during the first quarter of 2001 of
$3.1 million. The Company estimates that payments related to the restructuring
will be completed by the second quarter of 2002. A summary of these charges and
the activity through June 30, 2001 is as follows (in thousands):

<Table>
<Caption>
                                                             SEVERANCE   FACILITIES    OTHER      TOTAL
                                                             ---------   ----------   --------   --------
<S>                                                          <C>         <C>          <C>        <C>
Original reserve...........................................   $2,579         $80        $399      $3,058
Payments in the three months ended March 31, 2001..........     (488)         --        (399)       (887)
                                                              ------         ---        ----      ------
Remaining reserve as of March 31, 2001.....................    2,091          80          --       2,171
Payments in the three months ended June 30, 2001...........     (943)        (29)         --        (972)
                                                              ------         ---        ----      ------
Remaining reserve as of June 30, 2001......................   $1,148         $51          --      $1,199
                                                              ======         ===        ====      ======
</Table>

2000 CHARGES

    During the second quarter of 2000, the Company implemented a reorganization
plan in connection with the election of Robert M. Dutkowsky as Chairman,
President and Chief Executive Officer (collectively "CEO"). As a result, the
employment of certain members of management, including the then current CEO, was
terminated. A charge of $4.1 million for severance costs to be completed during
fiscal 2001 was recorded during the three months ended July 1, 2000. As of
July 1, 2000, payments of $3.1 million were made against the reserve. As of
June 30, 2001 the remaining balance was $0.1 million.

NOTE 3: IMPAIRMENT OF LONG-LIVED ASSETS

    In accordance with SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed Of," the Company records
impairment losses on long-lived assets to be held and used or to be disposed of
when indicators of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the asset's carrying
amount.

    In accordance with SFAS No. 86, "Accounting for Costs of Computer Software
to be Sold, Leased or Otherwise Marketed," the Company records impairment losses
on capitalized computer software costs when indicators of impairment are present
and the estimated value of the assets is less than the assets' carrying amount.

    During the second quarter of 2001, the Company performed a review of the
carrying value of goodwill and other long lived assets pertaining to the
Diagnostic Solutions ("DS") operating segment in accordance with SFAS No. 121
and SFAS No. 86. The goodwill and other long-lived assets involved in the review
related principally to the acquisitions of Autodiagnos in April 2000 and
Mastertech in December 1999. This review was performed as a result of several
indicators specific to the second quarter of 2001 that an impairment of such
assets had occurred. Such indicators included a continued deterioration of
market conditions, together with management's approval and subsequent execution
of a plan to discontinue the development of the GTE3200 automotive diagnostics
aftermarket product.

    Following this review management concluded that a significant impairment of
the goodwill and other long lived assets had occurred because the estimated fair
value (determined on a discounted cash flow basis using management's most recent
projections) was less than the carrying value of these assets. This difference
between the fair value and the carrying value of the assets resulted in a
$28.2 million

                                       6
<Page>
                                  GENRAD, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (Unaudited)

impairment charge, of which $16.1 million relates to acquired goodwill and
$12.1 million relates to other identifiable intangible assets.

    In the Company's consolidated statements of operations, $21.8 million of the
impairment charge relating to the write down of the carrying value of goodwill
and certain other intangibles has been recorded as a separate line item within
operating expenses; $6.4 million is included in cost of revenue as it relates to
the write down of $1.8 million of software costs previously capitalized under
SFAS 86; and $4.6 million of hardware and software technology purchased as part
of the Autodiagnos acquisition.

NOTE 4: INVENTORY

    Inventory consists of the following at June 30, 2001 and December 30, 2000,
respectively (in thousands):

<Table>
<Caption>
                                                         JUNE 30,   DECEMBER 30,
                                                           2001         2000
                                                         --------   ------------
<S>                                                      <C>        <C>
Raw materials..........................................  $14,653       $22,704
Work in process........................................   28,435        31,378
Finished goods.........................................   15,482        11,469
                                                         -------       -------
                                                         $58,570       $65,551
                                                         =======       =======
</Table>

    Part of the decrease in the inventory balance is a result of recording an
additional excess and obsolete inventory provision of $11.9 million in 2001. The
additional provision was a result of two main factors, being the Company's
decision to discontinue its GTE3200 automotive aftermarket product within the DS
line of business and the current and projected softness in the electronics
manufacturing market sector impacting all lines of business.

NOTE 5: OPERATING SEGMENTS

    The Company elected to change the reporting of its operating segments
effective the third quarter of 2000. Prior period operating results have been
restated to conform to current period presentation.

    The Company is comprised of the following four lines of business:

    - Process Solutions ("PS") focuses on in-circuit test, imaging and re-work
      solutions as well as plant and line management solutions for electronic
      product manufacturers.

    - Functional Solutions ("FS") focuses on functional test platforms for
      manufacturers of telecommunications, computer and automotive electronics.

    - Diagnostic Solutions ("DS") focuses on service bay and manufacturing
      solutions for transportation OEMs and independent service providers.

    - Support and Services ("SS") focuses on maintenance programs, on-site and
      remote support, programming services and training to help customers
      optimize their hardware and software solutions.

    The following table illustrates, (in thousands), each of the Company's
operating segments' operating income (loss) for the three and six months ended
June 30, 2001 and July 1, 2000. The amounts provided herein are those utilized
by senior management, in allocating resources and evaluating performance.
GenRad's chief operating decision makers do not utilize, nor does GenRad

                                       7
<Page>
                                  GENRAD, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (Unaudited)

maintain, asset information or capital expenditures by segment, accordingly,
such information is not presented herein.

<Table>
<Caption>
                                                  PS         FS         DS         SS       TOTAL
                                               --------   --------   --------   --------   --------
<S>                                            <C>        <C>        <C>        <C>        <C>
THREE MONTHS ENDED JUNE 30, 2001:
  Revenue:
    Products.................................  $ 20,857   $ 2,996    $ 14,915   $ 1,084    $ 39,852
    Services.................................        --        --          --    14,646      14,646
                                               --------   -------    --------   -------    --------
      Total revenue..........................  $ 20,857   $ 2,996    $ 14,915   $15,730    $ 54,498
                                               ========   =======    ========   =======    ========

Operating income (loss)......................  $(12,754)  $(4,474)   $(37,404)  $ 4,017    $(50,615)
                                               ========   =======    ========   =======    ========

THREE MONTHS ENDED JULY 1, 2000:
  Revenue:
    Products.................................  $ 46,953   $ 3,350    $ 17,771   $ 2,229    $ 70,303
    Services.................................        --        --          --   $17,021    $ 17,021
                                               --------   -------    --------   -------    --------
      Total revenue..........................  $ 46,953   $ 3,350    $ 17,771   $19,250    $ 87,324
                                               ========   =======    ========   =======    ========

Operating income (loss)......................  $ 10,366   $  (799)   $ (2,018)  $ 4,851    $ 12,400
</Table>

<Table>
<Caption>
                                                  PS         FS         DS         SS       TOTAL
                                               --------   --------   --------   --------   --------
<S>                                            <C>        <C>        <C>        <C>        <C>
SIX MONTHS ENDED JUNE 30, 2001:
  Revenue:
    Products.................................  $ 45,096   $ 8,997    $ 28,740   $ 3,250    $ 86,083
    Services.................................        --        --          --    30,847      30,847
                                               --------   -------    --------   -------    --------
      Total revenue..........................  $ 45,096   $ 8,997    $ 28,740   $34,097    $116,930
                                               ========   =======    ========   =======    ========

Operating income (loss)......................  $(19,726)  $(5,113)   $(39,631)  $ 8,723    $(55,747)
                                               ========   =======    ========   =======    ========
SIX MONTHS ENDED JULY 1, 2000:
  Revenue:
    Products.................................  $ 78,883   $ 6,381    $ 30,506   $ 4,103    $119,873
    Services.................................        --        --          --    33,824      33,824
                                               --------   -------    --------   -------    --------
      Total revenue..........................  $ 78,883   $ 6,381    $ 30,506   $37,927    $153,697
                                               ========   =======    ========   =======    ========

Operating income (loss)......................  $ 16,163   $(1,565)   $ (4,877)  $10,815    $ 20,536
                                               ========   =======    ========   =======    ========
</Table>

                                       8
<Page>
                                  GENRAD, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (Unaudited)

    A reconciliation of the totals reported for the operating segments to income
(loss) before income taxes in the condensed consolidated statements of
operations is as follows:

<Table>
<Caption>
                                                     THREE MONTHS ENDED              SIX MONTHS ENDED
                                                ----------------------------   ----------------------------
                                                JUNE 30, 2001   JULY 1, 2000   JUNE 30, 2001   JULY 1, 2000
                                                -------------   ------------   -------------   ------------
<S>                                             <C>             <C>            <C>             <C>
Operating income (loss):
    Total for reportable segments.............    $(50,615)       $12,400        $(55,747)       $ 20,536
    Corporate expenses (a)....................      (7,640)        (7,631)        (16,417)        (11,915)
    Acquired in-process research and
      development.............................          --             --              --            (500)
    Restructuring and other charges...........          --         (4,124)         (3,058)         (1,645)
                                                  --------        -------        --------        --------
    Operating income (loss)...................     (58,255)           645         (75,222)          6,476
    Other expense.............................      (3,951)        (2,257)         (6,308)         (2,559)
                                                  --------        -------        --------        --------
  Income (loss) before income taxes...........    $(62,206)       $(1,612)       $(81,530)       $  3,917
                                                  ========        =======        ========        ========
</Table>

------------------------

(a) Includes amortization of capitalized software, corporate research and
    development and other charges.

NOTE 6: INDEBTEDNESS

    In March 2000, the Company re-negotiated its existing $50.0 million credit
facility, increasing the total borrowings available to $125.0 million (the "new
line"). The new line is supported by a syndicated group of banks and in
March 2000 provided for a term loan of up to $75.0 million to be utilized for
acquisitions and a revolving line of credit of $50.0 million to be used for
general working capital purposes. The new line requires the Company to maintain
certain leverage, operating cash flow and operating income covenants as well as
non-financial operating covenants, as defined, and expires in March 2004. The
new line is collaterized by substantially all of the Company's assets. Certain
borrowings on the line, primarily related to acquisitions, are payable quarterly
while the remaining borrowings are payable on demand. The new line bears
interest at the lesser of the banks' prime rate plus 2.75% or LIBOR plus 3.75%,
as determined from time to time by the banks. The interest rates on the new line
at June 30, 2001 ranged from 8.44% to 9.50%. Under the terms of the new line,
the Company is required to pay a commitment fee on the unused portion of the
line of 0.75% of the total unused portion of the line dependent on the Company's
operating performance. At June 30, 2001, borrowings outstanding under the line
totaled $83.9 million, of which $53.7 million was related to acquisitions and
$30.2 million related to general working capital.

    As of March 31, 2001, the Company was not in compliance with certain
financial covenants under the new line, but subsequently obtained a waiver from
the banks through June 15, 2001. With effect from June 15, 2001, the Company
obtained an additional waiver from the banks. The additional waiver extends
through September 28, 2001 and carries certain conditions which the Company must
satisfy. These conditions included the achievement of certain revenue levels for
the second quarter, which the Company has satisfied at June 30, 2001. The waiver
also included a reduction in the maximum availability of the revolving line of
credit to $38.0 million through July 12, 2001, to $40.0 million from July 13,
2001 through August 5, 2001 and to $43.0 million after August 5, 2001, provided
that the Company had achieved certain benchmarks. With the execution of the
definitive merger agreement signed on August 1, 2001, as described in Note 9,
the Company has achieved those benchmarks.

                                       9
<Page>
                                  GENRAD, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (Unaudited)

    In connection with the waiver, the Company paid the banks fees of $483,000
in the second quarter and agreed to pay the banks an additional fee of $483,000
on September 20, 2001, plus an additional fee of $50,000 when the Company's
borrowings under the revolving line of credit exceed $38 million. Fees paid to
date have been included within interest expense in the profit and loss account.
As of June 30, 2001, the interest rates applicable to the new line increased two
percentage points.

    The Company likely will not be in compliance with financial covenants of the
new line when the existing waiver expires on September 28, 2001 and will need to
seek a further waiver at that date. In the past, the Company has obtained
waivers from its banks for similar covenant defaults, however, there can be no
assurance that the banks will grant any additional waivers in the future. If the
Company is in default with the financial covenants on September 28, 2001 and the
banks do not waive the default, the banks may demand immediate payment of the
full outstanding balance under the new line and prohibit new borrowings under
the revolving line of credit. If this were to occur, the Company would have no
ability to satisfy the demand for payment or fund continuing operations without
access to the revolving line of credit. The Company currently has no plans to
obtain additional financing. The Company has classified all amounts outstanding
under the new line at June 30, 2001 as due within one year in these financial
statements.

    On August 1, 2001, the Company entered into a merger agreement with
Teradyne, Inc. pursuant to which Teradyne will acquire the Company in a merger
(see Note 9). Following the completion of the merger, Teradyne has agreed to
repay the outstanding balance under the new line.

    The accompanying financial statements have been prepared on a going concern
basis which assumes that the Company will continue as a going concern and,
accordingly, the statements do not reflect any adjustments that would be
necessary should the Company not be able to continue as a going concern. The
Company's ability to continue as a going concern is uncertain.

NOTE 7: FINANCIAL INSTRUMENTS

    In 2000, the Company entered into three interest rate swaps to mitigate
fluctuations in the variable interest rates related to the credit facility. The
swaps were designated for the first $22.5 million, second $22.5 million and next
$15.0 million of the outstanding principal of the credit facility with fixed
interest rates of 6.99%, 7.0% and 6.93%, respectively. The maturity dates of the
agreements match that of the underlying credit facility which is March 2004. In
accordance with SFAS 133, "Accounting for Derivative Instruments and Hedging
Activities", which the Company implemented at the beginning of 2001, changes in
the fair value of the derivative are to be carried in accumulated other
comprehensive income (loss) over the life of the agreements. On maturity of the
agreements, the appropriate gain or loss of the swaps is to be reclassified from
accumulated other comprehensive income (loss) to the income statement in other
income (expense).

    As of June 30, 2001, the Company has recorded $1.5 million to accumulated
other comprehensive loss, which represents a cumulative-effect-type adjustment
of $1.0 million, $0.6 million net of tax, related to the unrealized loss on the
derivatives as of the beginning of the first quarter of 2001, and an adjustment
of $0.5 million, $0.3 million net of tax, to recognize a reduction in the fair
value of its swaps during the current year. The Company anticipates over the
next twelve months that $0.6 million will be reclassified to other expense.

                                       10
<Page>
                                  GENRAD, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (Unaudited)

NOTE 8: IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

GOODWILL AND OTHER INTANGIBLE ASSETS

    In July 2001, the FASB issued SFAS No. 141, "Business Combinations" and SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that all
business combinations be accounted for under the purchase method only and that
certain acquired intangible assets in a business combination be recognized as
assets apart from goodwill. SFAS No. 142 requires that ratable amortization of
goodwill be replaced with periodic tests of the goodwill's impairment and that
intangible assets other than goodwill be amortized over their useful lives. SFAS
No. 141 is effective for all business combinations initiated after June 30, 2001
and for all business combinations accounted for by the purchase method for which
the date of acquisition is after June 30, 2001. The provisions of SFAS No. 142
will be effective for fiscal years beginning after December 15, 2001, and will
thus be adopted by the Company, as required, in fiscal year 2002. The impact of
SFAS No. 141 and SFAS No. 142 on the Company's reported financial results of
operations and balance sheet has not yet been determined.

NOTE 9: SUBSEQUENT EVENTS

    On August 1, 2001, the Company announced the signing of a definitive merger
agreement to be acquired by Teradyne, Inc. ("Teradyne"). Under the terms of the
proposed acquisition, each outstanding share of the Company's common stock would
be converted into 0.1733 shares of Teradyne common stock. The acquisition is
subject to approval by the Company's shareholders, expiration of the
Hart-Scott-Rodino waiting period and other closing conditions.

    Additionally, on August 1, 2001, the Company announced it had received an
offer to purchase its Diagnostic Solutions business unit, headquartered in
Manchester, UK. The Company has received an offer from a British investment
consortium. The offer is under consideration by management and Board of
Directors. The potential sale transaction would be subject to the customary
process of due diligence and the negotiation of a definitive agreement.
Completion of the sale of the Diagnostics Solutions business unit is not a
condition to the Company's acquisition by Teradyne.

                                       11
<Page>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
  OF OPERATIONS

                                  GENRAD, INC.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    In addition to the historical information contained in this document, the
discussion in this Report on Form 10-Q contains forward-looking statements,
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, that involve
risks and uncertainties, such as statements of the Company's plans, objectives,
expectations and intentions. The cautionary statements made in this Report on
Form 10-Q should be read as being applicable to all related forward-looking
statements whenever they appear in this Report on Form 10-Q. The Company's
actual results could differ materially from those discussed herein. Factors that
could cause or contribute to such differences include those discussed in Item 1
"Business" of the Company's Annual Report on Form 10-K for the year ended
December 30, 2000 as well as those discussed in this section and elsewhere in
this Quarterly Report on Form 10-Q.

OVERVIEW

    GenRad develops, manufactures and markets advanced performance-assurance
technologies. GenRad's primary global markets for OEM and contract manufacturers
include computers, advanced telecommunications for e-commerce and Internet
services, and diagnostic systems for the transportation/automotive industry. The
Company operates primarily in the United States, Western Europe and Southeast
Asia.

    GenRad operates as four lines of business bringing to market integrated
hardware, software and service solutions that empower always-on services and
un-interruptable business applications. The Company considers each line of
business a reportable segment:

    - Process Solutions ("PS") focuses on in-circuit test, imaging and re-work
      solutions as well as plant and line management solutions for electronic
      product manufacturers.

    - Functional Solutions ("FS") focuses on functional test platforms for
      manufacturers of telecommunications, computers and automotive electronics.

    - Diagnostic Solutions ("DS") focuses on service bay and manufacturing
      solutions for transportation OEMs and independent service providers.

    - Support and Services ("SS") focuses on maintenance programs, on-site and
      remote support, and training to help customers optimize their hardware and
      software solutions.

RESULTS OF OPERATIONS

    The second quarter and year to date results are a direct reflection of weak
global demand and the dramatic slowdown in our customers' businesses. The
current cyclical downturn as first seen in the first quarter of this year
continues. There is uncertainty as to when the next cyclical growth phase will
occur. Until such time as the general economy returns to a period of growth, we
expect a continued weakness in orders and therefore expect that the third
quarter's revenue will not improve from the levels experienced by the Company
during the second quarter of 2001. In light of that belief, the Company
continues to expand the cost reduction strategies previously initiated.

                                       12
<Page>
    The following table sets forth, for the periods indicated, the percentage of
net sales represented by certain items in the Company's consolidated statements
of operations.

<Table>
<Caption>
                                                  THREE MONTHS ENDED                    SIX MONTHS ENDED
                                            -------------------------------      -------------------------------
                                            JUNE 30, 2001      JULY 1, 2000      JUNE 30, 2001      JULY 1, 2000
                                            -------------      ------------      -------------      ------------
<S>                                         <C>                <C>               <C>                <C>
Total revenue.............................       100.0%            100.0%              100.0%           100.00%
Cost of revenue...........................       114.3%             60.7%               91.2%             59.3%
                                              ---------          --------           ---------         ---------
Gross margin..............................      (14.3)%             39.3%                8.8%             40.7%
Selling, general and administrative.......        33.6%             23.3%               34.3%             24.8%
Research and development..................        15.1%              8.3%               13.8%              8.5%
Amortization of acquisition-related
  intangible assets.......................         3.8%              2.3%                3.7%              1.8%
Restructuring and other charges...........           --              4.7%                2.6%              1.1%
Impairment of long-lived assets...........        40.0%                --               18.7%                --
Acquired in-process research and
  development.............................           --                --                  --              0.3%
                                              ---------          --------           ---------         ---------
Total operating expenses..................        92.5%             38.6%               73.1%             36.5%
                                              ---------          --------           ---------         ---------
Operating income (loss)...................     (106.8)%              0.7%             (64.3)%              4.2%
Other expense.............................       (7.3)%            (2.6)%              (5.4)%            (1.6)%
                                              ---------          --------           ---------         ---------
Income tax benefit........................        43.3%              0.7%               26.5%              8.5%
                                              ---------          --------           ---------         ---------
Net income (loss).........................      (70.8)%            (1.2)%             (43.2)%             11.1%
                                              =========          ========           =========         =========
</Table>

THREE MONTHS ENDED JUNE 30, 2001 VS. THREE MONTHS ENDED JULY 1, 2000

ORDERS AND BACKLOG

    Orders for the Company's products and services decreased to $48.5 million
for the three months ended June 30, 2001 ("2001") from $78.8 million for the
three months ended July 1, 2000 ("2000"). PS orders totaled $21.3 million for
2001 compared to $45.3 million for 2000. FS orders totaled $1.8 million for 2001
compared to $5.3 million for 2000. DS orders totaled $10.7 million for 2001
compared to $8.6 million for 2000. SS orders totaled $14.7 million for 2001
compared to $19.6 million for 2000.

    The decrease in PS orders as compared to 2000 was driven by weakening
contract manufacturing demand for the segment's in-circuit test products where
orders decreased $20.9 million. FS orders decreased $3.5 million for 2001
compared to 2000 driven by decreased demand for Geneva products. DS orders
increased $2.1 million for 2001 compared to 2000. This was attributable to an
increase in orders of $3.9 million in the Advanced Diagnostic Systems ("ADS")
product line, partially offset by a decrease of $1.2 million in orders of the
Ford WDS 3500 product. SS orders decreased $4.9 million largely due to a
reduction in product orders.

    North American orders totaled $21.5 million for 2001 compared to
$44.4 million for 2000, a decrease of $22.9 million. PS orders totaled
$10.4 million for 2001 compared to $26.8 million for 2000, the decrease is
mainly attributable to a $14.6 million decrease in the demand for the segment's
in-circuit test products. FS orders decreased $2.6 million to $1.6 million in
2001 from $4.2 million in 2000 largely due to a decrease in demand for Geneva
products. DS orders decreased to $0.7 million in 2001 compared to $2.2 million
in 2000 from a weakening demand in all product areas.

    European orders totaled $18.1 million for 2001 compared to $24.8 million for
2000, a decrease of $6.7 million. This decrease was primarily attributable to
reduced demand for in-circuit test products of $6.3 million in PS. In addition,
DS included a $3.3 million increase in orders of the ADS product line, which was
offset by a corresponding decrease in service orders.

                                       13
<Page>
    Asian orders totaled $8.9 million for 2001 compared to $9.6 million for
2000, a decrease of $0.7 million. This decrease was attributable to reduced
demand for the Ford WDS 3500 and Geneva products, partially offset by an
increase in orders for services and the ADS product line.

    Backlog, represented by those orders received which are backed by a purchase
order, at June 30, 2001 was $38.0 million compared to $44.0 million and
$42.3 million at March 31, 2001 and December 30, 2000, respectively.
Historically, most orders have been fulfilled within three months of receipt.
Although orders are subject to cancellation or deferral, GenRad's experience
demonstrates that losses resulting from cancellations are not material, however,
refer to "Factors That May Affect Future Results".

REVENUE

    Total revenue decreased to $54.5 million for 2001 from $87.3 million for
2000. PS revenue totaled $20.9 million for 2001 compared to $47.0 million for
2000. FS revenue totaled $3.0 million for 2001 compared to $3.3 million for
2000. DS revenue totaled $14.9 million for 2001 compared to $17.8 million for
2000. SS revenue totaled $15.7 million for 2001 compared to $19.2 million for
2000.

    PS revenue decreased $26.1 million for 2001 compared to 2000. The decrease
was primarily due to $20.4 million in lower revenues related to in-circuit test
products, principally related to the global economic slowdown and a weakening
contract manufacturing demand. FS revenue decreased $0.3 million in 2001
compared to 2000 due to a reduction in demand for Geneva products. DS revenue
decreased $2.9 million for 2001 compared to 2000. This was primarily
attributable to a $3.3 million decrease in revenue related to the WDS 3500
product, as the Company shipped 1,190 WDS units in 2001 compared with 1,471
units in 2000. This decrease was partially offset by an increase in Advanced
Manufacturing Systems ("AMS") revenue. SS revenue decreased $3.5 million for
2001 compared to 2000. There was a $1.2 million decrease in service revenue for
DS products principally driven by reduced demand for services related to ADS.

    Revenue from international markets was $36.9 million, or 68% of revenue for
2001 compared to $46.2 million, or 53% of revenue for 2000. The decrease in
international revenue in dollars and the increase as a percentage of total
revenue reflects the overall worldwide decline in revenue, with the largest
impact being on U.S. in-circuit test revenue. Revenues from international
markets are subject to the risk of currency fluctuations.

GROSS MARGINS

    Gross margin was $(7.8) million, or (14.3)%, for 2001 compared to
$34.3 million, or 39.3%, for 2000. Product margin decreased $41.4 million and
service margin decreased $0.7 million. The decrease in product margin was mainly
attributable to a $24.9 million decrease in the PS line of business which
reflects weakened in-circuit test products margin of $19.5 million due to a
combination of adverse sales volume, mix and pricing factors. Another factor in
the lower gross margins was the recording of an additional excess and obsolete
inventory provision of $11.9 million in 2001 which reduced the product margins
of PS by $5.1 million, FS by $1.6 million and DS $5.2 million. The additional
provision was a result of two main factors, being the Company's decision to
discontinue its GTE3200 automotive aftermarket product within the DS line of
business and the current and projected softness in the electronics manufacturing
market sector impacting all lines of business. The Company also recorded a
$6.4 million charge in 2001, impacting cost of revenue for the write down of
certain capitalized software in the DS segment and hardware and software
technology purchased as part of the Autodiagnos acquisition.

    Inventory turnover on an annualized basis for 2001 was 3.1 times, 2.2 times
excluding the additional excess and obsolete inventory provision, as compared to
2.3 times for 2000.

                                       14
<Page>
OPERATING EXPENSES

    Selling, general and administrative expenses decreased to $18.3 million, or
33.6% of total revenue for 2001 from $20.3 million, or 23.3% of total revenue
for 2000. The decrease in selling, general and administrative expenses in
dollars was primarily attributable to the cost savings resulting from the
restructuring program implemented in the first quarter of 2001.

    Research and development expenses increased to $8.2 million, or 15.1% of
total revenue for 2001 from $7.2 million, or 8.3% of total revenue for 2000. The
increase in research and development expenses primarily reflects the on-going
new product development efforts in the imaging and software product lines.

    Amortization of acquisition-related intangible assets totaled $2.1 million,
or 3.8% of total revenue, for 2001, compared to $2.0 million, or 2.3% of total
revenue, for 2000. For the remainder of 2001, the amount of acquisition-related
intangible assets to be amortized will decrease from the amortization amount in
the second quarter due to the impairment of goodwill and other long lived assets
in the second quarter of 2001 related to the acquisitions of Autodiagnos and
Mastertech. For further discussion refer to "Impairment of Long-Lived Assets."

OTHER EXPENSE

    Other expense was $4.0 million for 2001 compared to $2.3 million for 2000,
with the increase primarily related to fees incurred as part of the Company
amending its credit facility agreement.

INCOME TAX BENEFIT

    The Company recorded a net income tax benefit of $23.6 million for 2001
compared to a net income tax benefit of $0.6 million for 2000. The recorded net
income tax benefit in 2001 is the result of the pre-tax net loss of
$62.2 million. The recorded net income tax benefit in 2000 is the result of the
pre-tax net loss of $1.6 million.

SIX MONTHS ENDED JUNE 30, 2001 VS. SIX MONTHS ENDED JULY 1, 2000

ORDERS

    Orders for the Company's products and services decreased to $112.6 million
for the six months ended June 30, 2001 ("2001") from $158.9 million for the six
months ended July 1, 2000 ("2000"). PS orders totaled $41.4 million for 2001
compared to $77.2 million for 2000. FS orders totaled $4.8 million for 2001
compared to $9.4 million for 2000. DS orders totaled $30.7 million for 2001
compared to $33.5 million for 2000. SS orders totaled $35.7 million for 2001
compared to $38.8 million for 2000.

    PS orders decreased $35.8 million for 2001 compared to 2000 driven by
weakening contract manufacturing demand for the segment's in-circuit test
products where orders decreased $33.3 million. FS orders decreased $4.6 million
for 2001 compared to 2000 driven by decreased demand for Geneva products. DS
orders decreased $2.8 million for 2001 compared to 2000. This was attributable
to a decrease in the orders of the Ford WDS 3500 product, partially offset by an
increase in orders in the other product lines in the DS segment. In 2001,
$14.7 million of Ford WDS 3500 product orders were received compared to
$22.1 million in 2000. SS orders decreased $3.1 million largely due to a
reduction in product orders.

    North American orders totaled $48.2 million for 2001 compared to
$79.4 million for 2000, a decrease of $31.3 million. PS orders totaled
$20.7 million for 2001 compared to $45.2 million for 2000, which is mainly
attributable to a $22.8 million decrease in the demand for the segment's
in-circuit test products. FS orders decreased $3.3 million to $3.6 million in
2001 from $6.9 million in 2000, largely

                                       15
<Page>
due to a decrease in demand for Geneva products. DS orders decreased to
$1.9 million in 2001 compared to $5.6 million in 2000 principally due to the
reduction in WDS orders.

    European orders totaled $47.2 million for 2001 compared to $64.6 million for
2000, a decrease of $17.4 million. This decrease was primarily attributable to
reduced demand for in-circuit test products of $10.7 million in PS, a
$5.3 million decrease in orders of the Ford WDS 3500 product and decrease in
service orders of $4.6 million primarily in PS and DS. These decreases were
partially offset by increases in orders related to the other product lines in
the DS segment other than WDS.

    Asian orders totaled $17.2 million for 2001 compared to $14.9 million for
2000, an increase of $2.3 million. This was attributable to an increase in DS
orders of $1.7 million and SS orders of $1.0 million, partially offset by
reduced demand for Geneva products.

REVENUE

    Total revenue decreased to $116.9 million for 2001 from $153.7 million for
2000. PS revenue totaled $45.1 million for 2001 compared to $78.9 million for
2000. FS revenue totaled $9.0 million for 2001 compared to $6.4 million for
2000. DS revenue totaled $28.7 million for 2001 compared to $30.5 million for
2000. SS revenue totaled $34.1 million for 2001 compared to $37.9 million for
2000.

    PS revenue decreased $33.8 million for 2001 compared to 2000, primarily due
to $29.5 million in lower revenues related to in-circuit test products,
principally from the global economic slowdown and a weakening contract
manufacturing demand. FS revenue increased $2.6 million in 2001 compared to 2000
due to strong Geneva sales during the first quarter of 2001. Revenues for Geneva
were relatively flat in the second quarter of 2001 as compared to 2000,
reflecting the decrease in demand. DS revenue decreased $1.8 million for 2001
compared to 2000. This was primarily attributable to a $6.0 million decrease in
revenue related to the WDS 3500 product. In 2001, the Company shipped 2,243 WDS
units compared with 2,867 units in 2000. The decrease in WDS revenue was
partially offset by an increase in revenues for the other product lines in the
DS segment. SS revenue decreased $3.8 million for 2001 compared to 2000. This
was primarily attributable to a $2.4 million decrease in service revenue related
to DS products principally driven by reduced demand for services related to ADS.

    Revenue from international markets was $74.2 million, or 63% of revenue for
2001 compared to $85.6 million, or 56% of revenue for 2000. The decrease in
international revenue in dollars and the increase as a percentage of total
revenue, reflects the overall worldwide decline in revenue, with the largest
impact being on U.S. in-circuit test revenue. Revenues from international
markets are subject to the risk of currency fluctuations.

GROSS MARGINS

    Gross margin was $10.3 million, or 8.8%, for 2001 compared to
$62.5 million, or 40.7%, for 2000. Product margin decreased $50.1 million and
service margin decreased $2.1 million. The decrease in product margin was mainly
attributable to a $35.1 million decrease related to the PS line of business,
which reflects weakened in-circuit test products margin of $26.7 million due to
an unfavorable mix of product sales and under-absorption of manufacturing
facility costs. Another factor in the lower gross margins was the recording of
an additional excess and obsolete inventory provision of $11.9 million in 2001
which reduced the product margins of PS by $5.1 million, FS by $1.6 million and
DS $5.2 million. The additional provision was a result of two main factors,
being the Company's decision to discontinue its GTE3200 automotive aftermarket
product within the DS line of business and the current and projected softness in
the electronics manufacturing market sector impacting all lines of business. The
Company also recorded a $6.4 million charge in 2001, impacting cost of revenue
for the write down of certain capitalized software in the DS segment and
hardware and software technology purchased as part of the Autodiagnos
acquisition.

                                       16
<Page>
    Inventory turnover on an annualized basis for 2001 was 2.6 times, 2.1 times
excluding the additional excess and obsolete inventory provision, as compared to
2.1 times for 2000.

OPERATING EXPENSES

    Selling, general and administrative expenses increased to $40.2 million, or
34.4% of total revenue for 2001 from $38.1 million, or 24.8% of total revenue
for 2000. The increase in selling, general and administrative expenses in
dollars was primarily attributable to $2.7 million related to the incremental
expenses of the Nicolet Imaging Systems and Sierra Research Technology
(collectively "NIS") and Autodiagnos acquisitions, selling and corporate
marketing expenses, and increased amortization expenses associated with the
Company's enterprise resource planning system SAP R/3-TM- ("SAP"), the second
phase of which was placed in service in the third quarter of 2000. These
increases were partially offset by a cost savings resulting from the
restructuring program implemented in the first quarter of 2001.

    Research and development expenses increased to $16.1 million, or 13.8% of
total revenue for 2001 from $13.0 million, or 8.5% of total revenue for 2000.
The increase in research and development expenses primarily reflects the
Company's on-going new product development efforts in the imaging and software
product lines. The Company expects to continue to invest in new product
development and enhancements to its existing products.

    Amortization of acquisition-related intangible assets totaled $4.3 million,
or 3.7% of total revenue, for 2001, compared to $2.8 million, or 1.8% of total
revenue, for 2000. The increase in dollars, and as a percentage of revenue, is
attributable to the acquisitions of NIS and Autodiagnos in 2000. For the
remainder of 2001, the amount of acquisition-related intangible assets to be
amortized will decrease from the amortization in the first six months of the
year due to the impairment of intangible assets in the second quarter of 2001
related to the acquisitions of Autodiagnos and Mastertech. For further
discussion refer to "Impairment of Long-Lived Assets".

OTHER EXPENSE

    Other expense was $6.3 million for 2001 compared to $2.6 million for 2000.
This increase reflects two quarters of interest expense on the Company's credit
facility related to acquisitions in 2001 as compared to one quarter in 2000 as
well as fees incurred as part of amending its credit facility agreement in 2001.

INCOME TAX BENEFIT

    The Company recorded a net income tax benefit of $31.0 million for 2001
compared to a net income tax benefit of $13.1 million for 2000. The recorded net
income tax benefit in 2001 is the result of the pre-tax net loss of
$81.5 million. The recorded net income tax benefit in 2000 results primarily
from a reversal of a portion of the deferred tax asset valuation allowance
totaling $14.5 million, which was recorded during the three months ended
April 1, 2000 due to management's expectations of future income and expected
utilization of domestic and foreign net operating loss carryforwards. Excluding
the reversal of a portion of the deferred tax asset valuation allowance, the
income tax provision totaled $1.4 million for 2000.

IMPAIRMENT OF LONG-LIVED ASSETS

    In accordance with SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed Of", the Company records
impairment losses on long-lived assets to be held and used or to be disposed of
when indicators of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the asset's carrying
amount.

                                       17
<Page>
    In accordance with SFAS No. 86, "Accounting for Costs of Computer Software
to be Sold, Leased or Otherwise Marketed" the Company records impairment losses
on capitalized computer software costs when indicators of impairment are present
and the estimated value of the assets is less than the assets' carrying amount.

    During the second quarter of 2001, the Company performed a review of the
carrying value of goodwill and other long lived assets pertaining to the
Diagnostic Solutions ("DS") operating segment in accordance with SFAS No. 121
and SFAS No. 86. The goodwill and other long-lived assets involved in the review
related principally to the acquisitions of AutoDiagnos in April 2000 and
Mastertech in December 1999. This review was performed as a result of several
indicators specific to the second quarter of 2001 that an impairment of such
assets had occurred. Such indicators included a continued deterioration of
market conditions, together with management's approval and subsequent execution
of a plan to discontinue the development of the GTE3200 automotive diagnostics
aftermarket product.

    Following this review management concluded that a significant impairment of
the goodwill and other long lived assets had occurred because the estimated fair
value (determined on a discounted cash flow basis using management's most recent
projections) was less than the carrying value of these assets. This difference
between the fair value and the carrying value of the assets resulted in a
$28.2 million impairment charge, of which $16.1 million relates to acquired
goodwill and $12.1 million relates to other identifiable intangible assets.

    In the Company's consolidated statements of operations, $21.8 million of the
impairment charge relating to the write down of the carrying value of goodwill
and other intangibles has been recorded as a separate line item within operating
expenses; $6.4 million is included in cost of revenue as it relates to the write
down of $1.8 million of software costs previously capitalized under SFAS 86 and
$4.6 million of hardware and software technology purchased as part of the
Autodiagnos acquisition.

LIQUIDITY AND SOURCES OF CAPITAL

    Cash at June 30, 2001 totaled $5.9 million compared to $8.3 million at
December 30, 2000. The Company's current ratio at June 30, 2001 decreased to 1.1
from 2.0 at December 30, 2000. For the six months ended, net cash provided by
operating activities was $9.0 million in 2001 compared to net cash used in
operating activities, net of effects of acquisitions, of $12.5 million in 2000.

    Net cash provided by operating activities during 2001 was primarily driven
by a decrease in accounts receivable of $45.0 million, the result of aggressive
collection efforts combined with depressed sales volume, and an increase in
trade accounts payable of $6.9 million. Significant non-cash items affecting net
loss were a $28.2 million charge for the impairment of goodwill and other
long-lived assets, depreciation and amortization of $14.3 million and increased
excess and obsolete inventory provisions of $13.3 million. These inflows were
primarily utilized to fund the $50.6 million net loss, inventory investments of
$7.5 million.

    Accounts receivable turnover on an annualized basis in 2001 was 2.7 compared
to 3.6 in 2000. The deterioration is reflective of the current year's depressed
sales volumes.

    During 2001, net cash used in investing activities was $4.7 million,
compared to $83.6 million for 2000, mainly due to the acquisitions of NIS and
Autodiagnos in 2000. Capital expenditures totaled $4.5 million for 2001 and
$12.8 million for 2000. The significant decrease in capital expenditure for 2001
compared to 2000 was mainly attributable to two items: the investment of
$2.3 million in 2000 required in bringing production of the Ford WDS 3500
product in-house and a decrease in 2001 of $3.3 million related to implementing
SAP.

    Net cash used in financing activities was $9.1 million for 2001 compared to
net cash provided by financing activities of $97.8 million for 2000. This is
primarily attributable to the Company's net payment of debt during 2001 compared
with the significant borrowings during 2000 for the purpose of

                                       18
<Page>
funding acquisitions. Net borrowings in 2000 totaled $99.2 million of which
$71.3 million was related to acquisitions and $27.9 million was related to
general working capital requirements, primarily inventory investment.

INDEBTEDNESS

    In March 2000, the Company re-negotiated its existing $50.0 million credit
facility, increasing the total borrowings available to $125.0 million (the "new
line"). The new line is supported by a syndicated group of banks and in
March 2000 provide for a term loan of up to $75.0 million to be utilized for
acquisitions and a revolving line of credit of $50.0 million to be used for
general working capital purposes. The new line requires the Company to maintain
certain leverage, operating cash flow and operating income covenants as well as
non-financial operating covenants, as defined, and expires in March 2004. The
new line is collaterized by substantially all of the Company's assets. Certain
borrowings on the line, primarily related to acquisitions, are payable quarterly
while the remaining borrowings are payable on demand. The new line bears
interest at the lesser of the banks' prime rate plus 2.75% or LIBOR plus 3.75%,
as determined from time to time by the banks. The interest rates on the new line
at June 30, 2001 ranged from 8.44% to 9.50%. Under the terms of the new line,
the Company is required to pay a commitment fee on the unused portion of the
line of 0.75% of the total unused portion of the line dependent on the Company's
operating performance. At June 30, 2001, borrowings outstanding under the line
totaled $83.9 million, of which $53.7 million was related to acquisitions and
$30.2 million related to general working capital.

    As of March 31, 2001, the Company was not in compliance with certain
financial covenants under the new line, but subsequently obtained a waiver from
the banks through June 15, 2001. With effect from June 15, 2001, the Company
obtained an additional waiver from the banks. The additional waiver extends
through September 28, 2001 and carries certain conditions which the Company must
satisfy. These conditions included the achievement of certain revenue levels for
the second quarter, which the Company has satisfied at June 30, 2001. The waiver
also included a reduction in the maximum availability of the revolving line of
credit to $38.0 million through July 12, 2001, to $40.0 million from July 13,
2001 through August 5, 2001 and to $43.0 million after August 5, 2001, provided
that the Company had achieved certain benchmarks. With the execution of the
definitive merger agreement announced on August 1, 2001, and as described in
Note 9, the Company has achieved those benchmarks.

    In connection with the waiver, the Company paid the banks fees of $483,000
in the second quarter and agreed to pay the banks an additional fee of $483,000
on September 20, 2001, plus an additional fee of $50,000 when the Company's
borrowings under the revolving line of credit exceed $38 million. Fees paid to
date have been included within interest expense in the profit and loss account.
As of June 30, 2001, the interest rates applicable to the new line increased two
percentage points.

    The Company likely will not be in compliance with financial covenants of the
new line when the existing waiver expires on September 28, 2001 and will need to
seek a further waiver at that date. In the past, the Company has obtained
waivers from its banks for similar covenant defaults, however, there can be no
assurance that the banks will grant any additional waivers in the future. If the
Company is in default with the financial covenants on September 28, 2001 and the
banks do not waive the default, the banks may demand immediate payment of the
full outstanding balance under the new line and prohibit new borrowings under
the revolving line of credit. If this were to occur, the Company would have no
ability to satisfy the demand for payment or fund continuing operations without
access to the revolving line of credit. The Company currently has no plans to
obtain additional financing. The Company has classified all amounts outstanding
under the new line at June 30, 2001 as due within one year in these financial
statements.

                                       19
<Page>
    On August 1, 2001, the Company entered into a merger agreement with
Teradyne, Inc. pursuant to which Teradyne will acquire the Company in a merger
(See Note 9). Following the completion of the merger, Teradyne has agreed to
repay the outstanding balance under the new line.

    The accompanying financial statements have been prepared on a going concern
basis which assures that the Company will continue as a going concern and,
accordingly, the statements do not reflect any adjustments that would be
necessary should the Company not be able to continue as a going concern. The
Company's ability to continue as a going concern is uncertain.

EFFECTS OF INFLATION

    Although the Company cannot accurately determine the precise effect of
inflation on its operations, it does not believe inflation has had a material
effect on its revenues or its results of operations. The Company attempts to
mitigate inflationary cost increases by continuously improving manufacturing
methods and technologies. Management does not expect inflation to have a
significant impact on operations in the foreseeable future.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    The Company maintains development, sales and support facilities in several
locations worldwide, including, the United Kingdom, France, Germany,
Switzerland, Sweden, Singapore and Mexico among others. A significant amount of
the Company's business is conducted with companies located in these and other
countries and certain transactions may be denominated in currencies other than
the US dollar. As a result, the Company may experience transaction gains and
losses as a result of currency fluctuations. In order to minimize its exposure
to loss from changes in foreign currency exchange rates, the Company mitigates
its risk using foreign currency forward exchange contracts. The Company's
currency risk mitigation strategies are designed to reduce the Company's
vulnerability to certain foreign currency exchange exposures. In executing its
strategies, the Company actively monitors foreign currency exchange rates and
executes foreign currency forward exchange contracts, primarily with financial
institutions. These contracts serve to offset the impact of actual foreign
currency changes, e.g., if currency rates changed with respect to a certain
transaction resulting in a loss to the Company, the forward contract would be
structured to result in a gain, thereby minimizing the actual loss incurred, if
any.

    The Company may be subject to losses resulting from unanticipated changes in
foreign currency exchange rates. The market factors that expose the Company in
this regard include economic conditions in which the Company conducts business
as well as the Company's ability to effectively and efficiently engage in
foreign currency forward exchange contracts at competitive rates with financial
institutions or others. The Company expects to continue these or similar
practices in the future to the extent appropriate. Historically, actual results
of the Company's foreign currency risk management procedures have been in line
with management's expectations and have not resulted in significant gains or
losses, however, there can be no assurance that these results will continue in
the future.

FACTORS THAT MAY AFFECT FUTURE RESULTS

    This Quarterly Report may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. The Company's actual results of operations and
future financial conditions may differ materially from those expressed in any
such forward-looking statements as a result of many factors that may be beyond
the Company's control. Factors that might cause such differences include, but
are not limited to, those discussed below.

    The Company is severely capital constrained. Unless it can obtain additional
financing, the Company's ability to operate and its viability as a business
enterprise are in jeopardy. The Company will likely not be in compliance with
financial covenants of the new line when the existing waiver

                                       20
<Page>
expires on September 28, 2001 and will need to seek a further waiver at that
date. In the past, the Company has obtained waivers from its banks for similar
covenant defaults, however, there can be no assurance that the banks will grant
any additional waivers in the future. If the Company is in default with the
financial covenants on September 28, 2001 and the banks do not waive the
default, the banks may demand immediate payment of the full outstanding balance
under the new line and prohibit new borrowings under the revolving line of
credit. If this were to occur, the Company currently would have no ability to
satisfy the demand for payment or fund continuing operations without access to
the revolving line of credit. The Company currently has no plans to obtain
additional financing.

    On August 1, 2001, the Company entered into a merger agreement with Teradyne
pursuant to which Teradyne will acquire the Company in a merger. Upon completion
of the merger, each outstanding share of the Company's common stock will be
converted into 0.1733 share of common stock of Teradyne. Completion of the
merger is subject to numerous but customary conditions, including approval of
the transaction by the Company's stockholders and expiration of the Hart-Scott-
Rodino waiting period. There is no guarantee that the conditions to the merger
will be satisfied or that the merger will be completed.

    The recent economic downturn has had an impact on consumer and capital
spending in many of the markets that the Company serves worldwide. It also has
created an imbalance of supply and demand in both the OEM and contract
manufacturing industries. These forces are currently adversely impacting the
Company's order and revenue performance. Management is uncertain as to how long
and how deep the current downturn may be in these markets.

    The Company has experienced and expects to continue to experience
fluctuations in its results of operations, particularly on a quarterly basis.
The Company's expense levels are based, in part, on expectations of future
revenues. If revenue levels in a particular period do not meet expectations, due
to the timing of the receipt of orders from customers, customer cancellations or
delays of shipments, then operating results could be adversely impacted. The
Company's principal markets are affected by the cyclical economic patterns of
OEM and contract manufacturers' capital investment requirements.

    The market for the Company's products is characterized by rapid
technological change, an increased demand for specific feature requests by
customers, evolving industry standards, and frequent new product introductions.
The introduction of products embodying new technology or the emergence of new
industry standards or practices could render the Company's existing products
obsolete or otherwise unmarketable. Future operating results are dependent upon
the Company's ability to develop, design, manufacture and market technologically
innovative products that meet customer needs.

    Competition in the markets where the Company operates is intense. The
Company continues to invest in manufacturing productivity to try to minimize the
impact of competitive pricing pressures, fluctuations within the Company's
product mix, potential inventory obsolescence exposure and start-up
manufacturing costs for new product introductions.

    The Company is dependent upon a number of suppliers for several key
components of its products. The loss of certain of the Company's suppliers,
supply shortages or increases in the costs of key raw materials could have a
material adverse effect on the Company.

OTHER FACTORS

    Other factors which could impact future results are past and future
acquisitions, strategic alliances, patent or product liability claims in excess
of available insurance coverage, changes in the Company's effective tax rates,
new regulatory requirements, political and economic changes, tariffs, trade
restrictions, transportation delays, foreign currency fluctuations and
inflation.

                                       21
<Page>
    The Company disclaims any intent or obligation to update any forward-looking
statements that may be included in this report. Additionally, there can be no
assurance that other factors, not included above, could impact future results.

IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

GOODWILL AND OTHER INTANGIBLE ASSETS

    In July 2001, the FASB issued SFAS No. 141, "Business Combinations" and SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that all
business combinations be accounted for under the purchase method only and that
certain acquired intangible assets in a business combination be recognized as
assets apart from goodwill. SFAS No. 142 requires that ratable amortization of
goodwill be replaced with periodic tests of the goodwill's impairment and that
intangible assets other than goodwill be amortized over their useful lives. SFAS
No. 141 is effective for all business combinations initiated after June 30, 2001
and for all business combinations accounted for by the purchase method for which
the date of acquisition is after June 30, 2001. The provisions of SFAS No. 142
will be effective for fiscal years beginning after December 15, 2001, and will
thus be adopted by the Company, as required, in fiscal year 2002. The impact of
SFAS No. 141 and SFAS No. 142 on the Company's reported financial results of
operations and balance sheet has not yet been determined.

                                       22
<Page>
                           PART II. OTHER INFORMATION

ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

    (a) The Annual Meeting of Shareholders of GenRad, Inc. was held on May 9,
       2001 (the "Annual Meeting").

    (b) Not required pursuant to instructions No. 3.

    (c) Votes were cast or withheld in connection with the election of directors
       at the Annual Meeting as follows:

<Table>
<Caption>
NAME OF DIRECTOR                                                 FOR       WITHHELD
----------------                                              ----------   ---------
<S>                                                           <C>          <C>
William S. Antle III........................................  23,378,205   1,253,755
Ed Zschau...................................................  23,379,592   1,252,368
</Table>

    Votes were cast or withheld in connection with the following proposals, more
fully described in the Company's Proxy Statement dated May 9, 2001 at the Annual
Meeting.

<Table>
<Caption>
                                                          AFFIRMATIVE VOTES   NEGATIVE VOTES   ABSTAINED
                                                          -----------------   --------------   ---------
<S>                                                       <C>                 <C>              <C>
1) To adopt the Company's 2001 Equity Incentive Plan....      9,110,830         10,184,059      964,188
2) To adopt the Company's 2001 Director Stock Option
Plan....................................................     10,658,845          8,639,949      960,285
</Table>

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

<Table>
<C>    <S>
  (a)  The following exhibits are filed as part of this report:

10.23  Amendment to revolving credit and term loan agreement
       between the Company and Fleet National Bank and the other
       banks party thereto effective as of May 15, 2001, filed
       herewith.

10.24  Amendment to revolving credit and term loan agreement
       between the Company and Fleet National Bank and the other
       banks party thereto effective as of June 15, 2001, filed
       herewith.

10.25  Agreement and Plan of Merger dated August 1, 2001 among the
       Company, Teradyne, Inc. and Radio Acquisition Corp.,
       incorporated by reference from the Company's Current Report
       on Form 8-K filed August 2, 2001.

  (b)  The following Current Report on Form 8-K was filed during
       the quarter ended June 30, 2001:

   1.  The Company filed a Current Report on Form 8-K dated June
       19, 2001 reporting certain information under Item 9 with
       respect to its credit facility.
</Table>

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