false 0000021535 0000021535 2024-07-31 2024-07-31
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of Earliest Event Reported):
 
July 31, 2024
 
Cohu, Inc.
 

 
(Exact name of registrant as specified in its charter)
 
Delaware
001-04298
95-1934119
_____________________
(State or other jurisdiction
_____________
(Commission
______________
(I.R.S. Employer
of incorporation)
File Number)
Identification No.)
  
 
 
12367 Crosthwaite Circle, Poway, California
 
92064
_________________________________
(Address of principal executive offices)
 
___________
(Zip Code)
 
Registrant’s telephone number, including area code:
858-848-8100
 
Not Applicable
 

Former name or former address, if changed since last report
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of Each Class
Trading Symbol(s)
Name of exchange on which registered
Common Stock, $1.00 par value
COHU
The NASDAQ Stock Market LLC
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 

 
 
Item 2.02 Results of Operations and Financial Condition.
 
On July 31, 2024, the Company issued a press release regarding its financial results for the second fiscal quarter ended June 29, 2024. The Company’s press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.
 
The information in this Item 2.02 of this Current Report on Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.
 
Use of Non-GAAP Financial Information:
 
Included within this current report are non-GAAP financial measures, including non-GAAP Gross Margin/Profit, Income and Income (adjusted earnings) per share, Operating Income, Operating Expense, effective tax rate, free cash flow, net cash per share and Adjusted EBITDA that supplement the Company’s Condensed Consolidated Statements of Operations prepared under generally accepted accounting principles (GAAP). These non-GAAP financial measures adjust the Company’s actual results prepared under GAAP to exclude charges and the related income tax effect for: share-based compensation, the amortization of purchased intangible assets, manufacturing transition and severance costs, acquisition-related costs and associated professional fees, restructuring costs, impairments, inventory step-up, depreciation of purchase accounting adjustments to property, plant and equipment, amortization of cloud-based software implementation costs (Adjusted EBITDA only) and loss on extinguishment of debt (Adjusted EBITDA only). Reconciliations of GAAP to non-GAAP amounts for the periods presented herein are provided in schedules accompanying this release and should be considered together with the Condensed Consolidated Statements of Operations. With respect to any forward-looking non-GAAP figures, we are unable to provide without unreasonable efforts, at this time, a GAAP to non-GAAP reconciliation of any forward-looking figures due to their inherent uncertainty.
 
These non-GAAP measures are not meant as a substitute for GAAP, but are included solely for informational and comparative purposes. The Company’s management believes that this information can assist investors in evaluating the Company’s operational trends, financial performance, and cash generating capacity. Management uses non-GAAP measures for a variety of reasons, including to make operational decisions, to determine executive compensation in part, to forecast future operational results, and for comparison to our annual operating plan. However, the non-GAAP financial measures should not be regarded as a replacement for (or superior to) corresponding, similarly captioned, GAAP measures.
 
Forward Looking Statements:
 
Certain statements contained in this current report may be considered forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding new product introductions or customer adoptions and corresponding financial impacts; expectations related to our FY2024 outlook, including quarterly projections; effects of test cell utilization on future business; and any other statements that are predictive in nature and depend upon or refer to future events or conditions; and/or include words such as “may,” “will,” “should,” “would,” “expect,” “anticipate,” “plan,” “likely,” “believe,” “estimate,” “project,” “intend;” and/or other similar expressions among others. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Any third-party industry analyst forecasts quoted are for reference only and Cohu does not adopt or affirm any such forecasts.
 
 

 
Actual results and future business conditions could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: new product investments and product enhancements which may not be commercially successful; the semiconductor industry is seasonal, cyclical, volatile and unpredictable; recent erosion in mobile, automotive and industrial market sales; our ability to manage and deliver high quality products and services; failure of sole source contract manufacturer or our ability to manage third-party raw material, component and/or service providers; ongoing inflationary pressures on material and operational costs coupled with rising interest rates; economic recession; the semiconductor industry is intensely competitive, subject to rapid technological changes, and experiences consolidation of key customers for semiconductor test equipment; a limited number of customers account for a substantial percentage of net sales; significant exports to foreign countries with economic and political instability and competition from a number of Asia-based manufacturers; our relationships with customers may deteriorate; loss of key personnel; risks of using artificial intelligence within Cohu’s product developments and business; reliance on foreign locations and geopolitical instability in such locations critical to Cohu and its customers; natural disasters, war and climate-related changes, including related economic impacts; levels of debt; access to sufficient capital on reasonable or favorable terms; foreign operations and related currency fluctuations; required or desired accounting charges and the cost or effectiveness of accounting controls; instability of financial institutions where we maintain cash deposits and potential loss of uninsured cash deposits; significant goodwill and other intangibles as percentage of our total assets; increasingly restrictive trade and export regulations impacting our ability to sell products, specifically within China; risks associated with acquisitions, investments and divestitures such as integration and synergies; constraints related to corporate governance structures; share repurchases and related impacts; financial or operating results that are below forecast or credit rating changes impacting our stock price or financing ability; law/regulatory changes and including environmental or tax law changes; significant volatility in our stock price; the risk of cybersecurity breaches; enforcing or defending intellectual property claims or other litigation.
 
These and other risks and uncertainties are discussed more fully in Cohu’s filings with the SEC, including our most recent Form 10-K and Form 10-Q, and the other filings made by Cohu with the SEC from time to time, which are available via the SEC’s website at www.sec.gov. Except as required by applicable law, Cohu does not undertake any obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.
 
Item 9.01 Financial Statements and Exhibits.
 
The Exhibit listed below is being furnished with this Current Report on Form 8-K.
 
(d) Exhibits
 
Exhibit No. - 99.1
 
 
Exhibit No. - 104
 
Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 

 
 
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 by the undersigned hereunto duly authorized.
 
 
 
Cohu, Inc.
 
 
 
July 31, 2024
By:
/s/ Jeffrey D. Jones
 
 
 
 
 
Name: Jeffrey D. Jones
 
 
Title: Senior VP Finance and Chief Financial Officer
 
 
 

 
 
Exhibit Index
 
 
Exhibit No.
 
Description
 
 
 
99.1
 
Second Quarter 2024 Earnings Release, dated July 31, 2024, of Cohu, Inc.
     
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 
 

Exhibit 99.1

 

logo.jpg

 

Cohu Reports Second Quarter 2024 Results

 

 

Second quarter revenue $104.7 million, approximately 66% recurring

 

 

Gross margin of 44.8%; non-GAAP gross margin of 45.1%

 

 

Launched two new products: Krypton inspection metrology system and cStrider MEMS probe card

 

 

Announced multi-year estimated $100 million win for test automation and inspection systems

 

POWAY, Calif., July 31, 2024 – Cohu, Inc. (NASDAQ: COHU), a global supplier of equipment and services optimizing semiconductor manufacturing yield and productivity, today reported fiscal 2024 second quarter net sales of $104.7 million and GAAP loss of $15.8 million or $0.34 per share. Net sales for the first six months of 2024 were $212.3 million and GAAP loss was $30.4 million or $0.65 per share.

 

Cohu also reported non-GAAP results, with second quarter 2024 loss of $0.6 million or $0.01 per share and income of $0.0 million or $0.00 per share for the first six months of 2024.

 

GAAP Results

                                       

(in millions, except per share amounts)

 

Q2 FY

2024

   

Q1 FY

2024

   

Q2 FY

2023

   

6 Months

2024

   

6 Months

2023

 

Net sales

  $ 104.7     $ 107.6     $ 168.9     $ 212.3     $ 348.3  

Net income (loss)

  $ (15.8 )   $ (14.6 )   $ 10.6     $ (30.4 )   $ 26.3  

Net income (loss) per share

  $ (0.34 )   $ (0.31 )   $ 0.22     $ (0.65 )   $ 0.55  

 

Non-GAAP Results

                                       

(in millions, except per share amounts)

 

Q2 FY

2024

   

Q1 FY

2024

   

Q2 FY

2023

   

6 Months

2024

   

6 Months

2023

 

Net income (loss)

  $ (0.6 )   $ 0.6     $ 22.9     $ 0.0     $ 49.9  

Net income (loss) per share

  $ (0.01 )   $ 0.01     $ 0.48     $ 0.00     $ 1.04  

 

Total cash and investments at the end of second quarter 2024 were $262.4 million. Cohu repurchased 267,000 shares of its common stock in the second quarter for an aggregate amount of approximately $8.2 million.

 

“Cohu continued to execute well on new product development initiatives and delivered several design-wins to expand customer and addressable markets. We secured two customer awards for the new Krypton inspection metrology system, two Taiwanese OSATs adopted the Diamondx tester, and we landed a leading silicon carbide customer with our new cStrider power probe card,” said Cohu President and CEO Luis Müller. “Estimated test cell utilization improved for the second quarter in a row to 74%, a 2 point sequential increase from the March quarter. It is encouraging to see utilization improvements, particularly in computing and mobile segments.”

 

Cohu expects third quarter 2024 sales to be in a range of $95 million +/- $5 million.

 

 

 

Conference Call Information:

 

The Company will host a live conference call and webcast with slides to discuss second quarter 2024 results at 1:30 p.m. Pacific Time/4:30 p.m. Eastern Time on July 31, 2024. Interested parties may listen live via webcast on Cohu’s investor relations website at https://edge.media-server.com/mmc/p/c4ojba35.

 

To participate via telephone and join the call live, please register in advance at https://register.vevent.com/register/BI7136d97fb78049e0a84cc55da2f543aa to receive the dial-in number along with a unique PIN number that can be used to access the call.

 

About Cohu:

 

Cohu (NASDAQ: COHU) is a global technology leader supplying test, automation, inspection and metrology products and services to the semiconductor industry. Cohu’s differentiated and broad product portfolio enables optimized yield and productivity, accelerating customers’ manufacturing time-to-market. Additional information can be found at www.cohu.com.

 

Use of Non-GAAP Financial Information:

 

Included within this press release and accompanying materials are non-GAAP financial measures, including non-GAAP Gross Margin/Profit, Income and Income (adjusted earnings) per share, Operating Income, Operating Expense, effective tax rate, free cash flow, net cash per share and Adjusted EBITDA that supplement the Company’s Condensed Consolidated Statements of Operations prepared under generally accepted accounting principles (GAAP). These non-GAAP financial measures adjust the Company’s actual results prepared under GAAP to exclude charges and the related income tax effect for: share-based compensation, the amortization of purchased intangible assets, manufacturing transition and severance costs, acquisition-related costs and associated professional fees, restructuring costs, impairments, inventory step-up, depreciation of purchase accounting adjustments to property, plant and equipment, amortization of cloud-based software implementation costs (Adjusted EBITDA only) and loss on extinguishment of debt (Adjusted EBITDA only). Reconciliations of GAAP to non-GAAP amounts for the periods presented herein are provided in schedules accompanying this release and should be considered together with the Condensed Consolidated Statements of Operations. With respect to any forward-looking non-GAAP figures, we are unable to provide without unreasonable efforts, at this time, a GAAP to non-GAAP reconciliation of any forward-looking figures due to their inherent uncertainty.

 

These non-GAAP measures are not meant as a substitute for GAAP, but are included solely for informational and comparative purposes. The Company’s management believes that this information can assist investors in evaluating the Company’s operational trends, financial performance, and cash generating capacity. Management uses non-GAAP measures for a variety of reasons, including to make operational decisions, to determine executive compensation in part, to forecast future operational results, and for comparison to our annual operating plan. However, the non-GAAP financial measures should not be regarded as a replacement for (or superior to) corresponding, similarly captioned, GAAP measures.

 

Forward Looking Statements:

 

Certain statements contained in this release and accompanying materials may be considered forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding new product introductions or customer adoptions and corresponding financial impacts; expectations related to our FY2024 outlook, including quarterly projections; effects of test cell utilization on future business; and any other statements that are predictive in nature and depend upon or refer to future events or conditions; and/or include words such as “may,” “will,” “should,” “would,” “expect,” “anticipate,” “plan,” “likely,” “believe,” “estimate,” “project,” “intend;” and/or other similar expressions among others. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Any third-party industry analyst forecasts quoted are for reference only and Cohu does not adopt or affirm any such forecasts.

 

 

 

Actual results and future business conditions could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: new product investments and product enhancements which may not be commercially successful; the semiconductor industry is seasonal, cyclical, volatile and unpredictable; recent erosion in mobile, automotive and industrial market sales; our ability to manage and deliver high quality products and services; failure of sole source contract manufacturer or our ability to manage third-party raw material, component and/or service providers; ongoing inflationary pressures on material and operational costs coupled with rising interest rates; economic recession; the semiconductor industry is intensely competitive, subject to rapid technological changes, and experiences consolidation of key customers for semiconductor test equipment; a limited number of customers account for a substantial percentage of net sales; significant exports to foreign countries with economic and political instability and competition from a number of Asia-based manufacturers; our relationships with customers may deteriorate; loss of key personnel; risks of using artificial intelligence within Cohu’s product developments and business; reliance on foreign locations and geopolitical instability in such locations critical to Cohu and its customers; natural disasters, war and climate-related changes, including related economic impacts; levels of debt; access to sufficient capital on reasonable or favorable terms; foreign operations and related currency fluctuations; required or desired accounting charges and the cost or effectiveness of accounting controls; instability of financial institutions where we maintain cash deposits and potential loss of uninsured cash deposits; significant goodwill and other intangibles as percentage of our total assets; increasingly restrictive trade and export regulations impacting our ability to sell products, specifically within China; risks associated with acquisitions, investments and divestitures such as integration and synergies; constraints related to corporate governance structures; share repurchases and related impacts; financial or operating results that are below forecast or credit rating changes impacting our stock price or financing ability; law/regulatory changes and including environmental or tax law changes; significant volatility in our stock price; the risk of cybersecurity breaches; enforcing or defending intellectual property claims or other litigation.

 

These and other risks and uncertainties are discussed more fully in Cohu’s filings with the SEC, including our most recent Form 10-K and Form 10-Q, and the other filings made by Cohu with the SEC from time to time, which are available via the SEC’s website at www.sec.gov. Except as required by applicable law, Cohu does not undertake any obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

 

For press releases and other information of interest to investors, please visit Cohu’s website at www.cohu.com.

 

Contact:

Cohu, Inc.
Jeffrey D. Jones - Investor Relations
858-848-8106

 

 

 

COHU, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share amounts)

 

   

Three Months Ended (1)

   

Six Months Ended (1)

 
   

June 29,

   

July 1,

   

June 29,

   

July 1,

 
   

2024 (2)

   

2023

   

2024

   

2023

 

Net sales

  $ 104,701     $ 168,921     $ 212,315     $ 348,292  

Cost and expenses:

                               

Cost of sales (excluding amortization)

    57,779       88,576       116,144       181,729  

Research and development

    21,342       22,466       43,678       44,976  

Selling, general and administrative

    32,118       32,798       67,200       66,987  

Amortization of purchased intangible assets

    9,748       9,006       19,543       17,760  

Restructuring charges

    13       416       22       1,304  
      121,000       153,262       246,587       312,756  

Income (loss) from operations

    (16,299 )     15,659       (34,272 )     35,536  

Other (expense) income:

                               

Interest expense

    (144 )     (727 )     (433 )     (1,855 )

Interest income

    2,333       2,732       5,042       5,450  

Foreign transaction loss

    (373 )     (645 )     (914 )     (1,085 )

Loss on extinguishment of debt

    -       -       (241 )     (369 )

Income (loss) from operations before taxes

    (14,483 )     17,019       (30,818 )     37,677  

Income tax provision (benefit)

    1,286       6,435       (414 )     11,408  

Net income (loss)

  $ (15,769 )   $ 10,584     $ (30,404 )   $ 26,269  
                                 

Income (loss) per share:

                               

Basic:

  $ (0.34 )   $ 0.22     $ (0.65 )   $ 0.55  

Diluted:

  $ (0.34 )   $ 0.22     $ (0.65 )   $ 0.55  
                                 

Weighted average shares used in computing income (loss) per share: (3)

                               

Basic

    46,965       47,618       47,049       47,481  

Diluted

    46,965       48,028       47,049       48,099  
                                 

 

 

(1)

The three- and six-month periods ended June 29, 2024 and July 1, 2023 were both comprised of 13 weeks and 26 weeks, respectively.

 

(2)

On January 30, 2023 the Company completed the acquisition of MCT Worldwide, LLC (“MCT”) and on October 2, 2023 the Company completed the acquisition of Equiptest Engineering Pte. Ltd. (“EQT”). The results of MCT’s and EQT’s operations have been included since those dates.

 

(3)

For the three- and six-month periods ended June 29, 2024, potentially dilutive securities were excluded from the per share computations due to their antidilutive effect.

 

 

 

COHU, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)

   

June 29,

   

December 30,

 
   

2024

   

2023

 

Assets:

               

Current assets:

               

Cash and investments (1)

  $ 262,397     $ 335,698  

Accounts receivable

    103,025       124,624  

Inventories

    146,074       155,793  

Other current assets

    34,629       22,703  

Total current assets

    546,125       638,818  

Property, plant & equipment, net

    74,907       69,085  

Goodwill

    237,476       241,658  

Intangible assets, net

    130,922       151,770  

Operating lease right of use assets

    14,896       16,778  

Other assets

    34,706       32,243  

Total assets

  $ 1,039,032     $ 1,150,352  
                 

Liabilities & Stockholders Equity:

               

Current liabilities:

               

Short-term borrowings

  $ 1,243     $ 1,773  

Current installments of long-term debt

    1,135       4,551  

Deferred profit

    3,327       3,586  

Other current liabilities

    72,858       93,511  

Total current liabilities

    78,563       103,421  

Long-term debt (1)

    7,592       34,303  

Non-current operating lease liabilities

    11,408       13,175  

Other noncurrent liabilities

    45,259       49,283  

Cohu stockholders’ equity

    896,210       950,170  

Total liabilities & stockholders’ equity

  $ 1,039,032     $ 1,150,352  
                 

 

 

(1)

On February 9, 2024, the Company made a cash payment of $29.3 million to repay the remaining outstanding amounts owed under our Term Loan B.

 

 

 

COHU, INC.

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (Unaudited)

(in thousands, except per share amounts)

   

Three Months Ended

 
   

June 29,

   

March 30,

   

July 1,

 
   

2024

   

2024

   

2023

 

Income (loss) from operations - GAAP basis (a)

  $ (16,299 )   $ (17,973 )   $ 15,659  

Non-GAAP adjustments:

                       

Share-based compensation included in (b):

                       

Cost of sales (COS)

    262       227       216  

Research and development (R&D)

    1,001       834       819  

Selling, general and administrative (SG&A)

    4,320       3,567       3,397  
      5,583       4,628       4,432  

Amortization of purchased intangible assets (c)

    9,748       9,795       9,006  

Restructuring charges related to inventory adjustments in COS (d)

    (12 )     (4 )     (13 )

Restructuring charges (d)

    13       9       416  

Manufacturing and sales transition costs included in (e):

                       

COS

    2       -       -  

R&D

    44       14       22  

SG&A

    1,196       1,640       166  
      1,242       1,654       188  

Impairment charge included in SG&A (f)

    -       966       -  

Inventory step-up included in COS (g)

    -       -       149  

Acquisition costs included in SG&A (h)

    1       174       140  

Depreciation of PP&E step-up included in SG&A (i)

    12       12       14  

Income (loss) from operations - non-GAAP basis (j)

  $ 288     $ (739 )   $ 29,991  
                         

Net income (loss) - GAAP basis

  $ (15,769 )   $ (14,635 )   $ 10,584  

Non-GAAP adjustments (as scheduled above)

    16,587       17,234       14,332  

Tax effect of non-GAAP adjustments (k)

    (1,400 )     (1,999 )     (2,004 )

Net income (loss) - non-GAAP basis

  $ (582 )   $ 600     $ 22,912  
                         

GAAP net income (loss) per share - diluted

  $ (0.34 )   $ (0.31 )   $ 0.22  
                         

Non-GAAP net income (loss) per share - diluted (l)

  $ (0.01 )   $ 0.01     $ 0.48  
                         

 

Management believes the presentation of these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding the Company’s operating performance. Our management uses these non-GAAP financial measures in assessing the Company's operating results, as well as when planning, forecasting and analyzing future periods and these non-GAAP measures allow investors to evaluate the Company’s financial performance using some of the same measures as management. Management views share-based compensation as an expense that is unrelated to the Company’s operational performance as it does not require cash payments and can vary in amount from period to period and the elimination of amortization charges provides better comparability of pre- and post-acquisition operating results and to results of businesses utilizing internally developed intangible assets. Management initiated certain restructuring and manufacturing transition activities including employee headcount reductions and other organizational changes to align our business strategies in light of the acquisitions of MCT and EQT. Restructuring and manufacturing transition costs have been excluded because such expense is not used by Management to assess the core profitability of Cohu’s business operations. Impairment charges have been excluded as these amounts are infrequent and are unrelated to the operational performance of Cohu. PP&E and inventory step-up costs have been excluded by management as they are unrelated to the core operating activities of the Company. Acquisition costs have been excluded by management as they are unrelated to the core operating activities of the Company and the frequency and variability in the nature of the charges can vary significantly from period to period. Excluding this data provides investors with a basis to compare Cohu’s performance against the performance of other companies without this variability. However, the non-GAAP financial measures should not be regarded as a replacement for (or superior to) corresponding, similarly captioned, GAAP measures. The presentation of non-GAAP financial measures above may not be comparable to similarly titled measures reported by other companies and investors should be careful when comparing our non-GAAP financial measures to those of other companies.

 

 

(a)

(15.6)%, (16.7)% and 9.3% of net sales, respectively.

 

(b)

To eliminate compensation expense for employee stock options, stock units and our employee stock purchase plan.

 

(c)

To eliminate the amortization of acquired intangible assets.

 

(d)

To eliminate restructuring costs incurred related to the integration of MCT.

 

(e)

To eliminate the manufacturing transition and severance costs.

 

(f)

To eliminate the impairment of the Company’s investment in Fraes-und Technologiezentrum GmbH Frasdorf.

 

(g)

To eliminate amortization of inventory step up charges related to acquisitions.

 

(h)

To eliminate professional fees and other direct incremental expenses incurred related to acquisitions.

 

(i)

To eliminate depreciation of PP&E step up charges related to the acquisition of MCT and EQT.

 

(j)

0.3%, (0.7)% and 17.8% of net sales, respectively.

 

(k)

To adjust the provision for income taxes related to the adjustments described above based on applicable tax rates.

 

(l)

The three months ended March 30, 2024 was computed using 47,606 shares outstanding as the effect of dilutive securities was excluded from GAAP diluted common shares due to the reported net loss under GAAP, but are included for non-GAAP diluted common shares since the Company has non-GAAP net income. All other periods presented were calculated using the number of GAAP diluted shares outstanding.

 

 

 

COHU, INC.

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (Unaudited)

(in thousands, except per share amounts)

   

Six Months Ended

 
   

June 29,

   

July 1,

 
   

2024

   

2023

 

Income (loss) from operations - GAAP basis (a)

  $ (34,272 )   $ 35,536  

Non-GAAP adjustments:

               

Share-based compensation included in (b):

               

Cost of sales (COS)

    489       396  

Research and development (R&D)

    1,835       1,685  

Selling, general and administrative (SG&A)

    7,887       6,265  
      10,211       8,346  

Amortization of purchased intangible assets (c)

    19,543       17,760  

Restructuring charges related to inventory adjustments in COS (d)

    (16 )     (41 )

Restructuring charges (d)

    22       1,304  

Manufacturing and sales transition costs included in (e):

               

COS

    2       18  

R&D

    58       22  

SG&A

    2,836       419  
      2,896       459  
                 

Impairment charge included in SG&A (f)

    966       -  

Inventory step-up included in COS (g)

    -       273  

Acquisition costs included in SG&A (h)

    175       525  

Depreciation of PP&E step-up included in SG&A (i)

    24       23  

Income (loss) from operations - non-GAAP basis (j)

  $ (451 )   $ 64,185  
                 

Net income (loss) - GAAP basis

  $ (30,404 )   $ 26,269  

Non-GAAP adjustments (as scheduled above)

    33,821       28,649  

Tax effect of non-GAAP adjustments (k)

    (3,399 )     (5,061 )

Net income - non-GAAP basis

  $ 18     $ 49,857  
                 

GAAP net income (loss) per share - diluted

  $ (0.65 )   $ 0.55  
                 

Non-GAAP income per share - diluted (l)

  $ 0.00     $ 1.04  
                 

 

Management believes the presentation of these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding the Company’s operating performance. Our management uses these non-GAAP financial measures in assessing the Company's operating results, as well as when planning, forecasting and analyzing future periods and these non-GAAP measures allow investors to evaluate the Company’s financial performance using some of the same measures as management. Management views share-based compensation as an expense that is unrelated to the Company’s operational performance as it does not require cash payments and can vary in amount from period to period and the elimination of amortization charges provides better comparability of pre- and post-acquisition operating results and to results of businesses utilizing internally developed intangible assets. Management initiated certain restructuring and manufacturing transition activities including employee headcount reductions and other organizational changes to align our business strategies in light of the acquisitions of MCT and EQT. Restructuring and manufacturing transition costs have been excluded because such expense is not used by Management to assess the core profitability of Cohu’s business operations. Impairment charges have been excluded as these amounts are infrequent and are unrelated to the operational performance of Cohu. PP&E and inventory step-up costs have been excluded by management as they are unrelated to the core operating activities of the Company. Acquisition costs have been excluded by management as they are unrelated to the core operating activities of the Company and the frequency and variability in the nature of the charges can vary significantly from period to period. Excluding this data provides investors with a basis to compare Cohu’s performance against the performance of other companies without this variability. However, the non-GAAP financial measures should not be regarded as a replacement for (or superior to) corresponding, similarly captioned, GAAP measures. The presentation of non-GAAP financial measures above may not be comparable to similarly titled measures reported by other companies and investors should be careful when comparing our non-GAAP financial measures to those of other companies.

 

 

(a)

(16.1)% and 10.2% of net sales, respectively.

 

(b)

To eliminate compensation expense for employee stock options, stock units and our employee stock purchase plan.

 

(c)

To eliminate the amortization of acquired intangible assets.

 

(d)

To eliminate restructuring costs incurred related to the integration of MCT.

 

(e)

To eliminate the manufacturing transition and severance costs.

 

(f)

To eliminate the impairment of the Company’s investment in Fraes-und Technologiezentrum GmbH Frasdorf.

 

(g)

To eliminate amortization of inventory step up charges related to acquisitions.

 

(h)

To eliminate professional fees and other direct incremental expenses incurred related to acquisitions.

 

(i)

To eliminate the property, plant & equipment step-up depreciation accelerated related to the acquisition of MCT and EQT.

 

(j)

 (0.2)% and 18.4% of net sales, respectively.

 

(k)

To adjust the provision for income taxes related to the adjustments described above based on applicable tax rates.

 

(l)

The six months ended June 29, 2024 was computed using 47,390 shares outstanding as the effect of dilutive securities was excluded from GAAP diluted common shares due to the reported net loss under GAAP, but are included for non-GAAP diluted common shares since the Company has non-GAAP net income. The six months ended July 1, 2023 was calculated using the number of GAAP diluted shares outstanding.

 

 

COHU, INC.

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (Unaudited)

(in thousands)

   

Three Months Ended

 
   

June 29,

   

March 30,

   

July 1,

 
   

2024

   

2024

   

2023

 

Gross Profit Reconciliation

                       

Gross profit - GAAP basis (excluding amortization) (1)

  $ 46,922     $ 49,249     $ 80,345  
Non-GAAP adjustments to cost of sales (as scheduled above)     252       223       352  

Gross profit - Non-GAAP basis

  $ 47,174     $ 49,472     $ 80,697  
                         

As a percentage of net sales:

                       
GAAP gross profit     44.8 %     45.8 %     47.6 %
Non-GAAP gross profit     45.1 %     46.0 %     47.8 %
                         

Adjusted EBITDA Reconciliation

                       

Net income - GAAP Basis

  $ (15,769 )   $ (14,635 )   $ 10,584  
Income tax provision (benefit)     1,286       (1,700 )     6,435  
Interest expense     144       289       727  
Interest income     (2,333 )     (2,709 )     (2,732 )
Amortization of purchased intangible assets     9,748       9,795       9,006  
Depreciation     3,413       3,429       3,361  
Amortization of cloud-based software implementation costs (2)     709       709       700  
Loss on extinguishment of debt     -       241       -  
Other non-GAAP adjustments (as scheduled above)     6,827       7,427       5,312  

Adjusted EBITDA

  $ 4,025     $ 2,846     $ 33,393  
                         

As a percentage of net sales:

                       
Net income - GAAP Basis     (15.1 )%     (13.6 )%     6.3 %
Adjusted EBITDA     3.8 %     2.6 %     19.8 %
                         

Operating Expense Reconciliation

                       

Operating Expense - GAAP basis

  $ 63,221     $ 67,222     $ 64,686  
Non-GAAP adjustments to operating expenses (as scheduled above)     (16,335 )     (17,011 )     (13,980 )

Operating Expenses - Non-GAAP basis

  $ 46,886     $ 50,211     $ 50,706  
                         

(1)

Excludes amortization of $7,486, $7,522 and $7,102 for the three months ending June 29, 2024, March 30, 2024 and July 01, 2023, respectively.

(2)

Represents amortization of capitalized implementation costs related to cloud-based software arrangements that are included within SG&A.

 

   

Six Months Ended

 
   

June 29,

   

July 1,

 
   

2024

   

2023

 

Gross Profit Reconciliation

               

Gross profit - GAAP basis (excluding amortization) (1)

  $ 96,171     $ 166,563  

Non-GAAP adjustments to cost of sales (as scheduled above)

    475       646  

Gross profit - Non-GAAP basis

  $ 96,646     $ 167,209  
                 

As a percentage of net sales:

               

GAAP gross profit

    45.3 %     47.8 %

Non-GAAP gross profit

    45.5 %     48.0 %
                 

Adjusted EBITDA Reconciliation

               

Net income (loss) - GAAP Basis

  $ (30,404 )   $ 26,269  

Income tax provision

    (414 )     11,408  

Interest expense

    433       1,855  

Interest income

    (5,042 )     (5,450 )

Amortization of purchased intangible assets

    19,543       17,760  

Depreciation

    6,842       6,698  

Amortization of cloud-based software implementation costs (2)

    1,418       1,400  

Loss on extinguishment of debt

    241       369  

Other non-GAAP adjustments (as scheduled above)

    14,254       10,866  

Adjusted EBITDA

  $ 6,871     $ 71,175  
                 

As a percentage of net sales:

               

Net income (loss) - GAAP Basis

    -14.3 %     7.5 %

Adjusted EBITDA

    3.2 %     20.4 %
                 

Operating Expense Reconciliation

               

Operating Expense - GAAP basis

  $ 130,443     $ 131,027  

Non-GAAP adjustments to operating expenses (as scheduled above)

    (33,346 )     (28,003 )

Operating Expenses - Non-GAAP basis

  $ 97,097     $ 103,024  
                 

(1)

Excludes amortization of $15,008 and $13,993 for the six months ending June 29, 2024 and July 01, 2023, respectively.

(2)

Represents amortization of capitalized implementation costs related to cloud-based software arrangements that are included within SG&A.

 
v3.24.2
Document And Entity Information
Jul. 31, 2024
Document Information [Line Items]  
Entity, Registrant Name Cohu, Inc.
Document, Type 8-K
Document, Period End Date Jul. 31, 2024
Entity, Incorporation, State or Country Code DE
Entity, File Number 001-04298
Entity, Tax Identification Number 95-1934119
Entity, Address, Address Line One 12367 Crosthwaite Circle
Entity, Address, City or Town Poway
Entity, Address, State or Province CA
Entity, Address, Postal Zip Code 92064
City Area Code 858
Local Phone Number 848-8100
Title of 12(b) Security Common Stock
Trading Symbol COHU
Security Exchange Name NASDAQ
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity, Emerging Growth Company false
Amendment Flag false
Entity, Central Index Key 0000021535

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