<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

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

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

                                   FORM 10-Q

<TABLE>
<S>        <C>
   /X/       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
</TABLE>

                      FOR THE QUARTER ENDED MARCH 31, 2001

                                       OR

<TABLE>
<C>        <S>
   / /       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
</TABLE>

                           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                            01886-0033
         WESTFORD, MASSACHUSETTS                            (Zip Code)
 (Address of principal executive offices)
</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.

    28,544,401 shares of the Common Stock of GenRad, Inc., $1.00 par value, were
outstanding on May 9, 2001.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                                  GENRAD INC.
                         QUARTERLY REPORT ON FORM 10-Q
                       THREE MONTHS ENDED MARCH 31, 2001
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                          --------
<S>         <C>                                                           <C>
PART I. FINANCIAL INFORMATION
    Item    Consolidated Financial Statements
      1:
              Consolidated Statements of Operations for the three months
                ended March 31, 2001 and April 1, 2000..................      1
              Consolidated Balance Sheets as of March 31, 2001 and
                April 1, 2000...........................................      2
              Consolidated Statements of Cash Flows for the three months
                ended March 31, 2001 and April 1, 2000..................      3
              Notes to Consolidated Financial Statements................      4
    Item    Management's Discussion and Analysis of Financial Condition
      2:      and Results of Operations.................................      9

PART II. OTHER INFORMATION
    Item    Exhibits....................................................     18
      6:
            Signatures..................................................     19
</TABLE>
<PAGE>
                                     PART I
                   ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

                                  GENRAD, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED
                                                              --------------------
                                                              MARCH 31,   APRIL 1,
                                                                2001        2000
                                                              ---------   --------
<S>                                                           <C>         <C>
REVENUE:
  Products..................................................  $ 46,231    $49,570
  Services..................................................    16,201     16,803
                                                              --------    -------
      Total revenue.........................................    62,432     66,373
COST OF REVENUE:
  Products..................................................    32,611     27,256
  Services..................................................    11,728     10,946
                                                              --------    -------
      Total cost of revenue.................................    44,339     38,202
                                                              --------    -------
Gross margin................................................    18,093     28,171
OPERATING EXPENSES:
  Selling, general and administrative.......................    21,858     17,774
  Research and development..................................     7,896      5,754
  Amortization of acquisition-related intangible assets.....     2,248        791
  Acquired in-process research and development..............        --        500
  Restructuring and other charges (benefits)................     3,058     (2,479)
                                                              --------    -------
      Total operating expenses..............................    35,060     22,340
                                                              --------    -------
Operating income (loss).....................................   (16,967)     5,831
OTHER INCOME (EXPENSE):
  Interest income...........................................        46         65
  Interest expense..........................................    (2,609)      (409)
  Other.....................................................       206         42
                                                              --------    -------
      Total other expense...................................    (2,357)      (302)
                                                              --------    -------
Income (loss) before income taxes...........................   (19,324)     5,529
Income tax benefit..........................................     7,373     12,549
                                                              --------    -------
Net income (loss)...........................................  $(11,951)   $18,078
                                                              ========    =======
NET INCOME (LOSS) PER SHARE:
  Basic.....................................................  $  (0.42)   $  0.64
                                                              ========    =======
  Diluted...................................................  $  (0.42)   $  0.63
                                                              ========    =======
WEIGHTED AVERAGE SHARES OUTSTANDING:
  Basic.....................................................    28,511     28,138
                                                              ========    =======
  Diluted...................................................    28,511     28,704
                                                              ========    =======
</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>
                                                               MARCH 31,    DECEMBER 30,
                                                                 2001           2000
                                                              -----------   ------------
                                                              (UNAUDITED)
<S>                                                           <C>           <C>
                           ASSETS
CURRENT ASSETS:
Cash and cash equivalents...................................    $ 14,260      $  8,321
Accounts receivable, less allowance of $1,300 and $828......      83,549       114,355
Inventories.................................................      73,946        65,551
Deferred tax assets.........................................      12,765        12,781
Other current assets........................................      12,455         8,445
                                                                --------      --------
      Total current assets..................................     196,975       209,453

Property and equipment, net.................................      46,193        47,620
Deferred tax assets.........................................      25,855        18,410
Intangible assets, net......................................      85,622        91,497
Other assets................................................       2,434         2,625
                                                                --------      --------
Total assets................................................    $357,079      $369,605
                                                                ========      ========
            LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable......................................    $ 27,235      $ 21,427
Accrued liabilities.........................................      13,787        14,766
Deferred revenue............................................      11,817        10,185
Accrued compensation and employee benefits..................       6,765        10,645
Current portion of long-term debt...........................      94,135        48,590
                                                                --------      --------
      Total current liabilities.............................     153,739       105,613
LONG-TERM LIABILITIES:
Long-term debt..............................................          47        45,050
Deferred revenue............................................       1,042         1,232
Deferred tax liabilities....................................       3,167         3,412
Other long-term liabilities.................................      13,342        13,541
                                                                --------      --------
      Total long-term liabilities...........................      17,598        63,235
                                                                --------      --------
Total liabilities...........................................    $171,337      $168,848
                                                                --------      --------
STOCKHOLDERS' EQUITY:
Common stock, $1.00 par value, 60,000 shares authorized;
  30,429 and 28,545 issued and outstanding, respectively at
  March 31, 2001 and 30,394 and 28,510 issued and
  outstanding, respectively at December 30, 2000............      30,429        30,394
Additional paid-in capital..................................     226,086       225,738
Treasury stock, 1,884 shares at March 31, 2001 and December
  30, 2000..................................................     (31,292)      (31,292)
Accumulated deficit.........................................     (34,370)      (22,419)
Accumulated other comprehensive loss........................      (5,111)       (1,664)
                                                                --------      --------
      Total stockholders' equity............................     185,742       200,757
                                                                --------      --------
Total liabilities and stockholders' equity..................    $357,079      $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>
                                                               THREE MONTHS ENDED
                                                              --------------------
                                                              MARCH 31,   APRIL 1,
                                                                2001        2000
                                                              ---------   --------
<S>                                                           <C>         <C>
OPERATING ACTIVITIES:
Net income (loss)...........................................  $(11,951)   $ 18,078
Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities:
Depreciation and amortization...............................     7,424       4,338
Deferred income tax benefit.................................    (7,445)    (13,102)
All other non-cash adjustments..............................     5,354      (1,550)
Increase (decrease) in operating assets and liabilities, net
  of effects of acquisitions:
Accounts receivable.........................................    28,978       5,332
Inventories.................................................   (10,050)    (14,597)
All other operating assets and liabilities changes..........    (3,758)       (734)
                                                              --------    --------
Net cash provided by (used in) operating activities.........     8,552      (2,235)

INVESTING ACTIVITIES:
Purchases of property and equipment.........................    (2,715)     (8,799)
Purchase of subsidiaries, net of cash acquired..............        --     (42,021)
Development of intangible assets............................      (595)       (887)
                                                              --------    --------
Net cash used in investing activities.......................    (3,310)    (51,707)

FINANCING ACTIVITIES:
Proceeds from credit facility, net..........................      (957)     57,770
Proceeds from employee stock plans..........................       237         584
Purchase of treasury stock..................................        --      (2,275)
                                                              --------    --------
Net cash (used in) provided by financing activities.........      (720)     56,079
Effect of exchange rates on cash and cash equivalents.......     1,417         637
                                                              --------    --------
Increase in cash and cash equivalents.......................     5,939       2,774
Cash and cash equivalents at beginning of period............     8,321       6,951
                                                              --------    --------
Cash and cash equivalents at end of period..................  $ 14,260    $  9,725
                                                              ========    ========
</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 March 31,
2001 and December 30, 2000, and the results of operations and cash flows for the
three months ended March 31, 2001 and April 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 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 months ended March 31,
2001 and April 1, 2000 (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                                         THREE MONTHS ENDED
                                                   ---------------------------------------------------------------
                                                           MARCH 31, 2001                   APRIL 1, 2000
                                                   ------------------------------   ------------------------------
                                                                           PER                              PER
                                                                          SHARE                            SHARE
                                                     LOSS      SHARES     AMOUNT     INCOME     SHARES     AMOUNT
                                                   --------   --------   --------   --------   --------   --------
<S>                                                <C>        <C>        <C>        <C>        <C>        <C>
BASIC:
Income (loss) available to common stockholders...  $(11,951)   28,511     $(0.42)   $18,078     28,138     $0.64
Dilutive effect of stock options.................        --        --         --         --        566     (0.01)
                                                   --------    ------     ------    -------     ------     -----
DILUTED:
Income (loss) available to common stockholders...  $(11,951)   28,511     $(0.42)   $18,078     28,704     $0.63
                                                   ========    ======     ======    =======     ======     =====
</TABLE>

    Options to purchase 4.1 million shares for the three months ended April 1,
2000 were outstanding but were not included in the computations 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 since 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

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

                                  (Unaudited)

currency and changes in the fair value of financial instruments designated as
cash flow hedges. Comprehensive income (loss) for the three months ended March
31, 2001 and April 1, 2000 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED
                                                              ------------------------------
                                                              MARCH 31, 2001   APRIL 1, 2000
                                                              --------------   -------------
<S>                                                           <C>              <C>
Net income (loss)...........................................     $(11,951)        $18,078
Other comprehensive income (loss):
  Foreign currency translation adjustments, net of tax of
    $667 and $(70)..........................................       (1,089)            125
  Unrealized losses on derivatives, net of tax of $642......       (1,048)             --
                                                                 --------         -------
Total other comprehensive income (loss).....................       (2,137)            125
                                                                 --------         -------
Comprehensive income (loss).................................     $(14,088)        $18,203
                                                                 ========         =======
</TABLE>

NOTE 2: RESTRUCTURING AND OTHER CHARGES (BENEFITS)

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 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. A summary
of these charges and the activity through March 31, 2001 is as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                                     RESERVE AS
                                                              ORIGINAL     2001     OF MARCH 31,
                                                              RESERVE    ACTIVITY       2001
                                                              --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Severance...................................................   $2,579     ($488)       $2,091
Facilities..................................................       80        --            80
Other.......................................................      399      (399)           --
                                                               ------     -----        ------
Totals......................................................   $3,058     $(887)       $2,171
                                                               ======     =====        ======
</TABLE>

2000 CHARGES

    During the first quarter of 2000, the Company implemented a restructuring
plan involving closure of the Company's Portland, Oregon office and a management
restructuring of the Diagnostic Solutions segment in the Manchester, UK
facility. The plan resulted in a workforce reduction of approximately 25
employees, mainly consisting of engineering, marketing and training functions
and facility closure costs. For the three months ended April 1, 2000, the
Company recorded a restructuring charge of $1.0 million which included severance
costs of $0.7 million and facility closure costs of $0.3 million. As of March
31, 2001 the plan was substantially complete. Additionally during the first
quarter of 2000, the Company completed the extension of a sublease entered into
at a facility in Maidenhead, England to include the Company's remaining lease
obligation through 2013. As a result of this extension, the Company reversed a
charge recorded in a prior year for excess facility reserves. This restructuring
charge included accruals

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

                                  (Unaudited)

related to the lease costs of the facility. The sublet of the facility resulted
in the reversal of approximately $3.5 million of the restructuring accrual.

NOTE 3: INVENTORY

    Inventory consists of the following at March 31, 2001 and December 30, 2000,
respectively (in thousands):

<TABLE>
<CAPTION>
                                                        MARCH 31,   DECEMBER 30,
                                                          2001          2000
                                                        ---------   ------------
<S>                                                     <C>         <C>
Raw materials.........................................   $24,560       $22,704
Work in process.......................................    37,156        31,378
Finished goods........................................    12,230        11,469
                                                         -------       -------
                                                         $73,946       $65,551
                                                         =======       =======
</TABLE>

NOTE 4: 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 months ended March 31,
2001 and April 1, 2000. The amounts provided herein are those utilized by senior
management, in allocating resources and evaluating performance. GenRad's

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

                                  (Unaudited)

chief operating decision makers do not utilize, nor does GenRad 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 MARCH 31, 2001:
  Revenue:
    Products...................................  $24,239    $ 6,001    $13,825    $ 2,166    $46,231
    Services...................................       --         --         --     16,201     16,201
                                                 -------    -------    -------    -------    -------
      Total revenue............................  $24,239    $ 6,001    $13,825    $18,367    $62,432
                                                 =======    =======    =======    =======    =======
  Operating income (loss)......................  $(6,972)   $  (640)   $(2,227)   $ 4,707    $(5,132)
                                                 =======    =======    =======    =======    =======
THREE MONTHS ENDED APRIL 1, 2000:
  Revenue:
    Products...................................  $31,930    $ 3,031    $12,735    $ 1,874    $49,570
    Services...................................       --         --         --     16,803     16,803
                                                 -------    -------    -------    -------    -------
      Total revenue............................  $31,930    $ 3,031    $12,735    $18,677    $66,373
                                                 =======    =======    =======    =======    =======
  Operating income (loss)......................  $ 8,311    $(1,227)   $(2,134)   $ 5,969    $10,919
                                                 =======    =======    =======    =======    =======
</TABLE>

    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
                                                              ------------------------------
                                                              MARCH 31, 2001   APRIL 1, 2000
                                                              --------------   -------------
<S>                                                           <C>              <C>
Operating income (loss):
  Total for reportable segments.............................     $ (5,132)        $10,919
  Corporate expenses (a)....................................       (8,777)         (7,067)
  Acquired in-process research and development..............           --            (500)
  Restructuring and other (charges) benefits................       (3,058)          2,479
                                                                 --------         -------
  Operating income (loss)...................................      (16,967)          5,831
  Other expense.............................................       (2,357)           (302)
                                                                 --------         -------
Income (loss) before income taxes...........................     $(19,324)        $ 5,529
                                                                 ========         =======
</TABLE>

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

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

NOTE 5: 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 provides
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. If the Company is
not in compliance with its covenants and other obligations under the new line,
the lenders may refuse to allow the Company to draw down funds under the
revolving line of credit. 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

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

                                  (Unaudited)

while the remaining borrowings are payable on demand. The new line bears
interest at the lesser of the banks' prime rate plus 1.0% or LIBOR plus 2.0%, as
determined from time to time by the banks. The interest rates on the new line at
March 31, 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 March 31, 2001, borrowings outstanding under the line
totaled $92.3 million, of which $60.0 million was related to acquisitions and
$32.3 million related to general working capital.

    As of March 31, 2001, the Company was not in compliance with the financial
covenants of the new line, but subsequently obtained a waiver from the banks
through June 15, 2001. The waiver includes a reduction in the maximum
availability of the revolving line of credit to $38.0 million. The Company is
currently in discussion with its bankers to renegotiate the terms of the new
line. Additionally, the Company has begun to explore alternative financing
sources, however the outcome of this course of action is uncertain. The Company
has classified all amounts outstanding under the new line at March 31, 2001 as
due within one year in the financial statements.

NOTE 6: 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 (expense) 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 income (loss) to the income statement in other income
(expense).

    As of March 31, 2001, the Company recorded $1.7 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 $0.7 million, $0.4 million net of tax, to recognize a reduction in the fair
value of its swaps during the current quarter. The Company anticipates over the
next twelve months that $0.6 million will be reclassed to other expense.

NOTE 7: TREASURY STOCK

    The Company has a stock repurchase program whereby it will purchase in the
open market shares of its stock. The Company intends to buy back its stock at
times when the market price of the stock presents opportunities to do so, and
depending on the Company's other cash requirements. The Company's stock
repurchase plan is intended as a means to partially mitigate the dilutive impact
of stock options. Through March 31, 2001 and April 1, 2000, the Company had
utilized $36.0 million, cumulatively, to repurchase 2,195,600 shares of its
common stock. Through March 31, 2001 and April 1, 2000 the Company had reissued
312,000 shares of treasury stock repurchased.

                                       8
<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

    While first quarters are traditionally weak for the Company, this first
quarter has been especially difficult and is a direct reflection of weak global
demand and dramatic slowdown in our customers' businesses. Regardless of these
challenges, we are working through this extraordinary downturn by investing in
and enhancing our products and services solutions that help our customers gain
productivity, competitiveness and profitability. The Company began experiencing
the downturn late last year and implemented cost and expense reduction
initiatives including work force downsizing, out-sourcing printed circuit board
production and business consolidations to temper the impact of the broad
economic slowdown.

    While we cannot minimize the impact of this slowdown, the Company is a
global enterprise providing us with a degree of resiliency. The business is
equally distributed between our North America and Europe-Asia operations; our
customers are well balanced between original equipment and contract
manufacturers;

                                       9
<PAGE>
                                  GENRAD, INC.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

and in 2001 no one customer is expected to account for more than eight percent
of our business. This business diversity becomes an even greater strength in
times of economic uncertainty.

    The Company now believes there is a cyclical downturn in the industry. There
is uncertainty as to if and when the next cyclical growth phase will occur.
Until such time as we return to a growth period, we expect a continued weakness
in orders and therefore expect that the second quarter's revenue will not
improve from the levels experienced by the Company during the first quarter of
2001. In light of that belief, the Company has expanded the cost reduction
initiatives including the curtailment of all discretionary expenses.

    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
                                                              ----------------------
                                                              MARCH 31,    APRIL 1,
                                                                 2001        2000
                                                              ----------   ---------
<S>                                                           <C>          <C>
Total revenue...............................................  100.0%       100.0%
Cost of revenue.............................................   71.0%        57.5%
                                                                -------     -------
Gross margin................................................   29.0%        42.5%
Selling, general and administrative.........................   35.0%        26.8%
Research and development....................................   12.6%         8.7%
Amortization of acquisition-related intangible assets.......    3.6%         1.2%
Acquired in-process research and development................  --%            0.7%
Restructuring and other charges (benefits)..................    4.9%        (3.7)%
                                                                -------     -------
Total operating expenses....................................   56.2%        33.7%
                                                                -------     -------
Operating income (loss).....................................  (27.2)%        8.8%
Other expense...............................................   (3.8)%       (0.5)%
Income tax benefit..........................................   11.8%        18.9%
                                                                -------     -------
Net income (loss)...........................................  (19.1)%       27.2%
                                                                =======     =======
</TABLE>

ORDERS AND BACKLOG

    Orders for the Company's products and services decreased to $64.1 million
for the three months ended March 31, 2001 ("2001") from $80.1 million for the
three months ended April 1, 2000 ("2000"). Excluding orders from the
acquisitions of Nicolet Imaging Systems and Sierra Research Technology
(collectively "NIS") and Autodiagnos AB ("Autodiagnos"), which were completed on
March 24, 2000 and April 12, 2000, respectively, orders totaled $59.0 million
for 2001 compared to $78.8 million for 2000. PS orders totaled $20.1 million for
2001 compared to $31.8 million for 2000. Excluding NIS, PS orders totaled $16.0
for 2001 compared to $30.5 million for 2000. FS orders totaled $3.0 million for
2001 compared to $4.1 million for 2000. DS orders totaled $20.0 million for 2001
compared to $25.0 million for 2000. Excluding orders from the acquisition of
Autodiagnos, DS orders totaled $19.0 million for 2001. SS orders totaled $21.0
million for 2001 compared to $19.2 million for 2000.

    PS orders decreased $14.5 million for 2001 compared to 2000 when excluding
orders of NIS, driven by weakening contract manufacturing demand for the
segment's in-circuit test products where orders decreased $12.4 million. FS
orders decreased $1.1 million for 2001 compared to 2000 driven by decreased
demand for Geneva products. DS orders decreased $5.0 million for 2001 compared
to 2000. The decrease

                                       10
<PAGE>
                                  GENRAD, INC.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

is attributable to the decrease in orders of the Ford WDS 3500 product. In 2001,
$10.0 million of such orders were received compared to $16.3 million in 2000.
This was partially offset by an increase in orders of $1.9 million in the
Advanced Manufacturing Systems ("AMS") product line.

    North American orders totaled $26.8 million for 2001 compared to $35.0
million for 2000, a decrease of $8.2 million. Excluding orders of NIS, orders
decreased $10.4 million. PS orders totaled $10.3 million for 2001 compared to
$18.4 million for 2000 which is mainly attributable to a $8.3 million decrease
in the demand for the segment's in-circuit test products. DS orders decreased to
$1.2 million in 2001 compared to $3.4 million in 2000 principally due to the
reduction in WDS orders.

    European orders totaled $29.1 million for 2001 compared to $39.8 million for
2000, a decrease of $10.7 million. Excluding orders of NIS and Autodiagnos,
orders decreased $11.9 million. This decrease is primarily attributable to
reduced demand for in-circuit test products of $4.4 million in PS and a decrease
of $1.0 million in FS product orders. In addition, DS product orders included a
$5.4 million decrease in orders of the Ford WDS 3500 product, which was
partially offset by an increase in orders of $2.3 million of AMS products.

    Asian orders totaled $8.2 million for 2001 compared to $5.3 million for
2000, an increase of $2.9 million. Excluding orders of NIS, orders increased
$2.5 million. This increase is attributable to improved demand in all lines of
business in this region. Specifically, orders for products in PS increased $0.6
million, orders for products in FS increased $0.5 million and orders of the Ford
WDS 3500 product in DS increased $1.5 million.

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

REVENUE

    Total revenue decreased to $62.4 million for 2001 from $66.4 million for
2000. Excluding revenue of NIS and Autodiagnos, revenue totaled $57.4 million
for 2001 compared to $64.5 for 2000. PS revenue totaled $24.2 million for 2001
compared to $31.9 million for 2000. Excluding revenue of NIS, PS revenue totaled
$20.2 million in 2001 compared to $30.1 million for 2000. FS revenue totaled
$6.0 million for 2001 compared to $3.0 million for 2000. DS revenue totaled
$13.8 million for 2001 compared to $12.8 million for 2000. Excluding revenue of
Autodiagnos, DS revenue totaled $12.8 million for 2001. SS revenue totaled $18.4
million for 2001 compared to $18.7 million for 2000.

    PS revenue decreased $9.9 million for 2001 compared to 2000 when excluding
revenue of NIS. The decrease was due to $9.1 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 increased $3.0 million in 2001 compared to 2000 as a result of
higher Geneva product shipments of $3.0 million.

    DS revenue remained stable when excluding revenue of Autodiagnos. This is
attributable to a $1.7 million increase in ADS revenue and $1.1 million in AMS,
offset by a decrease in revenue related to the WDS 3500 product, which was $2.7
million lower during 2001. In 2001, the Company shipped 1,053 WDS units compared
with 1,396 units in 2000.

                                       11
<PAGE>
                                  GENRAD, INC.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    SS revenue decreased $0.3 million for 2001 compared to 2000. Service revenue
for PS totaled $7.6 million for 2001 compared to $7.9 million for 2000. Service
revenue for FS products totaled $0.8 million for 2001 compared to $0.7 million
for 2000. Service revenue for DS products totaled $5.5 million for 2001 compared
to $6.7 million for 2000, a $1.2 million decrease principally driven by reduced
demand for services related to ADS.

    Revenue from international markets was $37.7 million, or 60.5% of revenue
for 2001 compared to $39.3 million, or 59.2% of revenue for 2000. The
international mix of the Company's revenues remained consistent from year to
year with reduced international revenues following the worldwide revenue
decline. Revenues from international markets are subject to the risk of currency
fluctuations.

GROSS MARGINS

    Gross margin was $18.1 million, or 29.0%, for 2001 compared to $28.2
million, or 42.4%, for 2000. Product margin decreased $8.7 million and service
margin decreased $1.4 million. The decrease in product margin is mainly
attributable to a $10.2 million decrease in product margin related to the PS
line of business partially offset by an in increase of $1.2 million in product
margin related to the FS line of business and an increase of $1.3 million in
product margin related to the DS line of business. Specifically, the decrease in
gross margin dollars reflects weakened in-circuit test products margin of $7.0
million due to an unfavorable mix of product sales and under-absorption of
manufacturing facility costs. The service margin decrease is attributed to
strong lower-margin ICS revenues offset by reduced higher-margin application
revenues.

    Inventory turnover for 2001 increased to 1.9 times (annualized) as compared
to 1.8 times (annualized) for 2000. The Company's consolidated inventory balance
increased by $8.4 million, to $73.9 million during 2001 compared to a year ago.
The growth is attributed to the combination of the weak global product demand
and the establishment of a buffer stock of printed circuit boards due to the
production outsourcing plan. Inventory investment is slowing and the balances
are expected to decline over the remainder of the year.

OPERATING EXPENSES

    Selling, general and administrative expenses increased to $21.9 million, or
35.0% of total revenue for 2001 from $17.8 million, or 26.8% of total revenue
for 2000. Excluding expenses of NIS and Autodiagnos, selling, general and
administrative expenses totaled $19.0 million during 2001 and $17.4 million
during 2000. The increase in selling, general and administrative expenses in
dollars is primarily attributable to selling and corporate marketing expenses
and increased amortization expenses associated with the Company's enterprise
resource planning system SAP R/3-TM- ("SAP"), for which the second phase was
placed in service in the third quarter of 2000.

    Research and development expenses increased to $7.9 million, or 12.6% of
total revenue for 2001 from $5.8 million, or 8.7% of total revenue for 2000.
Excluding expenses of NIS and Autodiagnos, research and development expenses
totaled $6.6 million for 2001 and $5.6 million for 2000. The increase in
research and development expenses primarily reflects the Company's efforts to
enter the automotive aftermarket in DS and on-going new product development
efforts in the imaging product line of PS. The Company expects to continue to
invest in new product development and enhancements to its existing products.

    Amortization of acquisition-related intangible assets totaled $2.2 million,
or 3.6% of total revenue, for 2001, compared to $0.8 million, or 1.2% 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.

                                       12
<PAGE>
                                  GENRAD, INC.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OTHER EXPENSE

    Other expense was $2.4 million for 2001 compared to $0.3 million for 2000,
related to net interest charges, reflecting increased borrowings on its credit
facility, primarily due to acquisitions.

INCOME TAX BENEFIT

    The Company recorded a net tax benefit of $7.4 million for 2001 compared to
a net income tax benefit of $12.5 million for 2000. The recorded net tax benefit
in 2001 is the result of the pre-tax net loss of $19.3 million. The recorded net
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 $1.9
million for 2000.

ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT

    During the first quarter of 2000, the Company acquired the rights to certain
imaging technologies as part of its purchase of NIS for which technological
feasibility had not been established and no alternative future uses were
identified. Consequently, a portion of the purchase price relating to acquired
in-process research and development was expensed at the time of the acquisition.
The total of $0.5 million is included as acquired in-process research and
development in the accompanying consolidated statement of operations.

RESTRUCTURING AND OTHER CHARGES (BENEFITS)

2001 CHARGES

    In February 2001, the Company implemented a strategic 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 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 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. A summary of these charges and the
activity used through March 31, 2001 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                     RESERVE AS
                                                              ORIGINAL     2001     OF MARCH 31,
                                                              RESERVE    ACTIVITY       2001
                                                              --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Severance...................................................   $2,579     ($488)       $2,091
Facilities..................................................       80        --            80
Other.......................................................      399      (399)           --
                                                               ------     -----        ------
Totals......................................................   $3,058     ($887)       $2,171
                                                               ======     =====        ======
</TABLE>

2000 CHARGES

    During the first quarter of 2000, the Company implemented a restructuring
plan involving closure of the Company's Portland, Oregon office and a management
restructuring of the Diagnostic Solutions

                                       13
<PAGE>
                                  GENRAD, INC.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

segment in the Manchester, UK facility. The plan resulted in a workforce
reduction of approximately 25 employees, mainly consisting of engineering,
marketing and training functions and facility closure costs. For the three
months ended April 1, 2000, the Company recorded a restructuring charge of $1.0
million which included severance costs of $0.7 million and facility closure
costs of $0.3 million. As of March 31, 2001 the plan was substantially complete.
Additionally during the first quarter of 2000, the Company completed the
extension of a sublease entered into at a facility in Maidenhead, England to
include the Company's remaining lease obligation through 2013. As a result of
this extension, the Company reversed a charge recorded in a prior year for
excess facility reserves. This restructuring charge included accruals related to
the lease costs of the facility. The sublet of the facility resulted in the
reversal of approximately $3.5 million of the restructuring accrual.

LIQUIDITY AND SOURCES OF CAPITAL

    The Company's primary source of liquidity is internally generated funds and
utilization of its available credit facility.

    Cash at March 31, 2001 totaled $14.3 million compared to $8.3 million at
December 30, 2000. The Company's current ratio at March 31, 2001 decreased to
1.3 from 2.0 at December 30, 2000. Net cash provided by operating activities was
$8.6 million in 2001 compared to net cash used in operating activities, net of
effects of acquisitions, of $2.2 million in 2000.

    Net cash provided by operating activities during 2001 was primarily driven
by a decrease in accounts receivable of $29.0 million, the result of aggressive
collection efforts combined with the quarter's depressed sales volume,
depreciation and amortization of $7.4 million, and restructuring charges of $3.1
million. These inflows were primarily utilized to fund the $12.0 million net
loss, inventory investments of $10.1 million, and an increase in deferred tax
assets of $7.4 million, mainly from the tax benefit generated by the net loss.

    During 2001, net cash used in investing activities was $3.3 million,
compared to $51.7 million for 2000, mainly due to the acquisition of NIS.
Capital expenditures totaled $2.7 million for 2001 and $8.8 million for 2000.
The significant decrease in capital expenditures for 2001 compared to 2000 is
attributable to two significant items in 2000: the investment of $2.3 million in
2000 required in bringing production of the Ford WDS 3500 product in-house, and
an incremental decrease of $1.3 million related to implementing the second phase
of SAP.

    Net cash used in financing activities was $0.7 million for 2001 compared to
net cash provided by financing activities of $56.1 million for 2000. This is
primarily attributable to the Company's significant additional borrowings during
2000 for the purpose of funding acquisitions. Net borrowings in 2000 totaled
$63.7 million of which $45.0 million were related to acquisitions and $18.7
million was related to general working capital requirements, primarily inventory
investment.

TREASURY STOCK

    The Company has a stock repurchase program whereby it will purchase in the
open market shares of its stock. The Company intends to buy back its stock at
times when the market price of the stock presents opportunities to do so, and
depending on the Company's other cash requirements. The Company's stock
repurchase plan is intended as a means to partially mitigate the dilutive impact
of stock options. During the first quarter of 2000, the Company utilized $2.3
million to repurchase 151,000 shares of its common stock.

                                       14
<PAGE>
                                  GENRAD, INC.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 provides
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. If the Company is
not in compliance with its covenants and other obligations under the new line,
the lenders may refuse to allow the Company to draw down funds under the
revolving line of credit. 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 1.0% or LIBOR plus 2.0%, as determined from time to time by the banks. The
interest rates on the new line at March 31, 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 March 31, 2001,
borrowings outstanding under the line totaled $92.3 million, of which $60.0
million was related to acquisitions and $32.3 million related to general working
capital.

    As of March 31, 2001, the Company was not in compliance with the financial
covenants of the new line, but subsequently obtained a waiver from the banks
through June 15, 2001. The waiver includes a reduction in the maximum
availability of the revolving line of credit to $38.0 million. The Company is
currently in discussion with its bankers to renegotiate the terms of the new
line. The Company has timely made all payments of principal and interest due
under the new line and anticipates that it will continue to be able to make
payments of principal and interest under the new line as they become due in the
ordinary course. Additionally, the Company has begun to explore alternative
financing sources, however the outcome of this course of action is uncertain.
The Company has classified all amounts outstanding under the new line at
March 31, 2001 as due within one year in the financial statements.

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

                                       15
<PAGE>
                                  GENRAD, INC.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 recent economic downturn has had an impact on consumer and capital
spending in many of the markets that we serve 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.

                                       16
<PAGE>
                                  GENRAD, INC.
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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.

    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.

                                       17
<PAGE>
                           PART II. OTHER INFORMATION

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

    (a) The following exhibits are filed as part of this report:

<TABLE>
<CAPTION>

<C>     <S>
10.17   Revolving credit and term loan agreement between GenRad,
        Inc., GenRad Holdings Limited, GenRad Europe Limited and
        GenRad Limited ("GenRad") and Fleet National Bank effective
        as of March 24, 2000, filed herewith.
10.18   Amended revolving credit and term loan agreement between
        GenRad and Fleet National Bank effective as of June 29,
        2000, filed herewith.
10.19   Amended revolving credit and term loan agreement between
        GenRad and Fleet National Bank effective as of
        September 30, 2000, filed herewith.
10.20   Amended revolving credit and term loan agreement between
        GenRad and Fleet National Bank effective as of December 30,
        2000, filed herewith.
10.21   Amended revolving credit and term loan agreement between
        GenRad and Fleet National Bank effective as of April 18,
        2001, filed herewith.
10.22   Severance agreement between GenRad, Inc. and Peter Miles
        effective as of September 1, 2000, filed herewith.
</TABLE>

    (b) There were no reports on Form 8-K filed during the three months ended
March 31, 2001.

                                       18
<PAGE>
                                   SIGNATURES

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

<TABLE>
<S>                                                    <C>  <C>
                                                       GENRAD, INC.

                                                       By:  /s/ WALTER A. SHEPHARD
                                                            -----------------------------------------
                                                            Walter A. Shephard
                                                            CHIEF FINANCIAL OFFICER, VICE PRESIDENT,
                                                            GLOBAL BUSINESS OPERATIONS, TREASURER, AND
                                                            CLERK
</TABLE>

Date: May 17, 2001

                                       19