Cohu, Inc. (NASDAQ:COHU) today reported fiscal 2014 second
quarter net sales of $77.9 million and GAAP income of
$0.9 million or $0.04 per share. Net sales for the first
six months of 2014 were $142.7 million and GAAP loss was
$2.4 million or $0.10 per share. (1)
The Company also reported non-GAAP results, with second quarter
2014 income of $4.9 million or $0.19 per share and income
of $5.4 million or $0.21 per share for the first six
months of 2014. (1)
GAAP
Results (1) (in
millions, except per share amounts)
Q2 FY 2014
Q1 FY 2014
Q2 FY 2013
6 Months 2014
6 Months 2013
Net sales $ 77.9 $ 64.9 $ 62.2 $ 142.7 $ 114.5
Income (loss) $ 0.9 $ (3.4 ) $ (4.3 ) $ (2.4 ) $ (16.6 ) Income
(loss) per share $ 0.04 $ (0.13 ) $ (0.17 ) $ (0.10 ) $ (0.67 )
Non-GAAP Results (1) (in
millions, except per share amounts)
Q2 FY 2014
Q1 FY 2014
Q2 FY 2013
6 Months 2014
6 Months 2013
Income (loss) $ 4.9 $ 0.5 $ (1.6 ) $ 5.4 $ (9.8 ) Income
(loss) per share $ 0.19 $ 0.02 $ (0.06 ) $ 0.21 $ (0.40 )
(1) On June 6, 2014 the Company announced
the completion of the sale of substantially all the assets of its
video camera segment, Cohu Electronics and, as a result, the
operating results of Cohu Electronics have been presented as
discontinued operations and all prior period amounts have been
reclassified accordingly. All amounts presented are from continuing
operations.
Sales of semiconductor equipment accounted for 95% of fiscal
2014 second quarter sales and microwave communications equipment
contributed 5%.
Orders were $98.5 million for the second quarter of 2014
and $77.4 million for the first quarter of 2014. Orders for
semiconductor equipment were $95.4 million in the second
quarter of 2014 compared to $74.3 million in the first quarter
of 2014. Total consolidated backlog was $118.7 million at June
28, 2014 compared to $98.1 million at March 29, 2014. Cohu
expects third quarter 2014 sales of $84 million to
$91 million.
James A. Donahue, Chairman, President and Chief Executive
Officer stated, “Sales were at the top end of our guidance with
orders and backlog establishing new records for Cohu. Financial
results reflect continued progress in achieving our new operating
model as well as the benefits of higher volume.”
Donahue concluded, “Demand was strong across market segments for
our broad product line of IC test handlers and inspection equipment
and third quarter orders are off to a strong start. The
transition of our volume pick and place handler manufacturing to
our Malaysia factory is proceeding as planned and scheduled to be
completed by the end of this year.”
Cohu's Board of Directors approved a quarterly cash dividend of
$0.06 per share payable on October 24, 2014 to shareholders of
record on August 29, 2014. Cohu has paid consecutive quarterly cash
dividends since 1977.
Use of Non-GAAP Financial Information:
Included within this press release are non-GAAP financial
measures 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 acquired intangible assets,
manufacturing transition costs, employee severance costs, other
acquisition costs and the purchase accounting inventory step-up
included in cost of goods sold. 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.
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 believes
these non-GAAP measures allow investors to evaluate Cohu’s
financial performance using some of the same measures as
management. 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 matters discussed in this release, including statements
regarding the transition of manufacturing to Malaysia, expectations
of business and market conditions, orders, sales, revenues and
operating results are forward-looking statements that are subject
to risks and uncertainties that could cause actual results to
differ materially from those projected or forecasted. Such risks
and uncertainties include, but are not limited to, risks associated
with acquisitions, inventory, goodwill and other intangible asset
write-downs; our ability to convert new products under development
into production on a timely basis, support product development and
meet customer delivery and acceptance requirements for next
generation equipment; our reliance on third-party contract
manufacturers; failure to obtain customer acceptance resulting in
the inability to recognize revenue and accounts receivable
collection problems; customer orders may be canceled or delayed;
the concentration of our revenues from a limited number of
customers; intense competition in the semiconductor test handler
industry; our reliance on patents and intellectual property;
compliance with U.S. export regulations; and the cyclical and
unpredictable nature of capital expenditures by semiconductor
manufacturers. These and other risks and uncertainties are
discussed more fully in Cohu's filings with the Securities and
Exchange Commission, including the most recently filed Form 10-K
and Form 10-Q. Cohu assumes no obligation to update the information
in this release.
About Cohu:
Cohu is a supplier of test handling, burn-in, thermal subsystems
and MEMS test solutions used by the global semiconductor industry
and microwave communications equipment.
Cohu will be conducting their conference call on Wednesday, July
30, 2014 at 1:30 p.m. Pacific Time/4:30 p.m. Eastern Time. The call
will be webcast at www.cohu.com. Replays of the call can be
accessed at www.cohu.com.
For press releases and other information of interest to
investors, please visit Cohu’s website at www.cohu.com.
COHU, INC. CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited) (in
thousands, except per share amounts) Three
Months Ended (1) Six Months Ended (1)
June 28, June 29,
June 28, June 29,
2014 2013
2014
2013 Net sales
$ 77,850 $
62,234
$ 142,714 $ 114,461 Cost and expenses: Cost of
sales
52,366 42,720
95,030 81,005 Research and
development
10,180 11,192
20,740 24,065 Selling,
general and administrative
14,259 13,218
29,323 27,423
76,805 67,130
145,093
132,493 Income (loss) from operations
1,045
(4,896 )
(2,379 ) (18,032 ) Interest and other, net
5 16
19 26
Income (loss) from continuing operations before taxes
1,050 (4,880 )
(2,360 ) (18,006 ) Income tax
provision (benefit)
119 (546 )
63 (1,437 ) Income (loss) from continuing
operations
931 (4,334 )
(2,423
) (16,569 ) Discontinued operations:
Income from operations of discontinued
video camera segment (including gain on sale of $4,248 for the
three months ended June 28, 2014) before income taxes
3,885 451
3,891 658 Income tax provision
653 162
653 237
Income from discontinued operations
3,232
289
3,238 421 Net
income (loss)
$ 4,163 $ (4,045 ) $
815
$ (16,148 ) Income (loss) per share: Basic: Income
(loss) from continuing operations
$ 0.04 $ (0.17 )
$ (0.10 ) $ (0.67 ) Income from discontinued
operations
0.12 0.01
0.13
0.02 Net income (loss)
$ 0.16 $
(0.16 )
$ 0.03 $ (0.65 ) Diluted:
Income (loss) from continuing operations
$ 0.04 $
(0.17 )
$ (0.10 ) $ (0.67 ) Income from
discontinued operations
0.12 0.01
0.13 0.02 Net income (loss)
$ 0.16 $ (0.16 )
$ 0.03 $ (0.65
)
Weighted average shares used in computing
income (loss) per share: (2)
Basic
25,324 24,817
25,223 24,737 Diluted
25,797 24,817
25,223
24,737
(1) The three- and six-month periods ended
June 28, 2014 and June 29, 2013 were comprised of 13 weeks and
26 weeks, respectively. On June 6, 2014 the Company announced the
completion of the sale of substantially all the assets of its video
camera segment, Cohu Electronics and, as a result, the operating
results of Cohu Electronics have been presented as discontinued
operations and all prior period amounts have been reclassified
accordingly.
(2) The Company has utilized the "control
number" concept in the computation of diluted earnings per share to
determine whether a potential common stock instrument is dilutive.
The control number used is income/loss from continuing operations.
The control number concept requires that the same number of
potentially dilutive securities applied in computing diluted
earnings per share from continuing operations be applied to all
other categories of income or loss, regardless of their
anti-dilutive effect on such categories. Therefore, no dilutive
effect is recognized in the calculation of income from discontinued
operations per share or net income per share for the six months
ended June 28, 2014 and of income from discontinued operations per
share for the three and six months ended June 29, 2013.
COHU, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (in thousands) (Unaudited)
June 28, December 28,
2014 (1)
2013 (1)
Assets: Current assets: Cash and investments
$
58,169 $ 52,868 Accounts receivable
69,561 58,164
Inventories
61,464 55,409 Other current assets
14,616
14,135 Current assets of discontinued operations
-
6,272 Total current assets
203,810
186,848 Property, plant & equipment, net
34,289 35,796
Goodwill
71,075 71,313 Intangible assets, net
41,101
45,315 Other assets
5,823 5,720 Noncurrent assets of
discontinued operations
- 431
Total assets
$ 356,098 $ 345,423
Liabilities & Stockholders’ Equity: Current liabilities:
Deferred profit
$ 8,858 $ 6,066 Other current
liabilities
62,250 53,198 Current liabilities of
discontinued operations
- 1,747
Total current liabilities
71,108 61,011 Other noncurrent
liabilities
30,722 31,252 Stockholders’ equity
254,268 253,160 Total liabilities &
stockholders’ equity
$ 356,098 $ 345,423
(1) On June 6, 2014 the Company announced
the completion of the sale of substantially all the assets of its
video camera segment, Cohu Electronics and, as a result, the assets
and liabilities of Cohu Electronics have been presented as
discontinued operations and all prior period amounts have been
reclassified accordingly.
COHU, INC. Supplemental Reconciliation of GAAP
Results to Non-GAAP Financial Measures (Unaudited) (in
thousands, except per share amounts) Three
Months Ended June 28, March 29, June 29, 2014
2014 2013 Income (loss) from operations - GAAP
basis (a) $ 1,045 $ (3,424 ) $ (4,896 ) Non-GAAP adjustments:
Share-based compensation included in (b): Cost of goods sold 190 75
132 Research and development 455 490 361 Selling, general and
administrative 1,042 916 831
1,687 1,481 1,324 Amortization of intangible assets included
in (c): Cost of goods sold 1,642 1,645 1,410 Selling, general and
administrative 432 430 263
2,074 2,075 1,673 Manufacturing transition and severance
costs included in (d): Cost of goods sold 194 - - Research and
development 206 - - Selling, general and administrative 449
846 - 849 846 -
Other acquisition costs included in
selling, general and administrative (e)
- - 121 Inventory step-up included in cost of goods sold (f)
- - 90 Income (loss) from
operations - non-GAAP basis (g) $ 5,655 $ 978 $
(1,688 ) Income (loss) from continuing operations - GAAP
basis $ 931 $ (3,351 ) $ (4,334 ) Non-GAAP adjustments (as
scheduled above) 4,610 4,402 3,208 Tax effect of non-GAAP
adjustments (h) (683 ) (554 ) (474 ) Income
(loss) from continuing operations - non-GAAP basis $ 4,858 $
497 $ (1,600 ) GAAP income (loss) from continuing
operations per share - diluted $ 0.04 $ (0.13 ) $ (0.17 )
Non-GAAP income (loss) from continuing operations per share -
diluted (i) $ 0.19 $ 0.02 $ (0.06 )
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. Manufacturing transition costs relate
principally to employee severance expenses incurred as a
result of moving certain manufacturing activities to
Asia as part of our cost reduction efforts and employee
severance are costs incurred in conjunction with the termination of
certain employees to streamline our operations and reduce costs.
Management has excluded these costs primarily because they are not
reflective of the ongoing operating results and they are not used
to assess ongoing operational performance. Other acquisition costs
and inventory step-up 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 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) 1.3%, (5.3)% and (7.9)% 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
manufacturing transition and employee severance costs. (e) To
eliminate professional fees and other direct incremental expenses
incurred related to the acquisition of Ismeca. (f) To eliminate the
inventory step-up costs incurred related to the acquisition of
Ismeca. (g) 7.3%, 1.5% and (2.7)% of net sales, respectively. (h)
To adjust the provision for income taxes related to the adjustments
described above based on applicable tax rates.
(i) The three months ended March
29, 2014 was computed using 25,715 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 computed using number
of GAAP diluted shares outstanding for each period.
COHU, INC. Supplemental Reconciliation of GAAP
Results to Non-GAAP Financial Measures (Unaudited) (in
thousands, except per share amounts) Six Months Ended
June 28, June 29, 2014 2013 Loss from
operations - GAAP basis (a) $ (2,379 ) $ (18,032 ) Non-GAAP
adjustments: Share-based compensation included in (b): Cost of
goods sold 265 200 Research and development 945 870 Selling,
general and administrative 1,958 1,641
3,168 2,711 Amortization of intangible assets included in (c): Cost
of goods sold 3,287 2,863 Selling, general and administrative
862 534 4,149 3,397
Manufacturing transition and severance costs included in (d): Cost
of goods sold 194 - Research and development 206 - Selling, general
and administrative 1,295 457 1,695 457
Other acquisition costs included in
selling, general and administrative (e)
- 385 Inventory step-up included in costs of goods sold (f)
- 948 Income (loss) from operations -
non-GAAP basis (g) $ 6,633 $ (10,134 ) Loss from
continuing operations - GAAP basis $ (2,423 ) $ (16,569 ) Non-GAAP
adjustments (as scheduled above) 9,012 7,898 Tax effect of non-GAAP
adjustments (h) (1,237 ) (1,102 ) Income (loss) from
continuing operations - non-GAAP basis $ 5,352 $ (9,773 )
GAAP loss from continuing operations per share - diluted $
(0.10 ) $ (0.67 ) Non-GAAP income (loss) from continuing
operations per share - diluted (i) $ 0.21 $ (0.40 )
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. Manufacturing transition costs relate
principally to employee severance expenses incurred as a
result of moving certain manufacturing activities to
Asia as part of our cost reduction efforts and employee
severance are costs incurred in conjunction with the termination of
certain employees to streamline our operations and reduce costs.
Management has excluded these costs primarily because they are not
reflective of the ongoing operating results and they are not used
to assess ongoing operational performance. Other acquisition costs
and inventory step-up 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 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) (1.7)% and (15.8)% 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 manufacturing
transition and employee severance costs. (e) To eliminate
professional fees and other direct incremental expenses incurred
related to the acquisition of Ismeca. (f) To eliminate the
inventory step-up costs incurred related to the acquisition of
Ismeca. (g) 4.6% and (8.9)% of net sales, respectively. (h) To
adjust the provision for income taxes related to the adjustments
described above based on applicable tax rates.
(i) The six months ended June
28, 2014 was computed using 25,460 shares outstanding as the
effect of dilutive securities was excluded from GAAP diluted common
shares due to the reported net loss from continuing operations
under GAAP, but are included for non-GAAP diluted common shares
since the Company has non-GAAP income from continuing. All other
periods presented were computed using number of GAAP diluted shares
outstanding for each period.
Cohu, Inc.Jeffrey D. Jones - Investor Relations(858)
848-8106
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