- Sales up 16% sequentially and 23%
year-over-year to $93.9 million
- Highest quarterly sales since 2014 and
new record orders
- GAAP gross margin of 39.6%, a 460 basis
point increase over Q2’16
- Q2 GAAP income per share of $0.37;
non-GAAP adjusted EPS of $0.48
Cohu, Inc. (NASDAQ: COHU), a leading supplier of semiconductor
equipment, today reported fiscal 2017 second quarter net sales of
$93.9 million and GAAP income of $10.7 million or
$0.37 per share. Net sales for the first six months of 2017
were $175.0 million and GAAP income was $17.5 million or
$0.61 per share.
Cohu also reported non-GAAP results, with second quarter 2017
income of $13.8 million or $0.48 per share and income of
$23.7 million or $0.83 per share for the first six months
of 2017. (1)
GAAP Results
(1) (in millions, except
per share amounts)
Q2 FY 2017 Q1 FY 2017 Q2 FY
2016 (2) 6 Months 2017 6 Months 2016
(2)
Net sales $ 93.9 $ 81.1 $ 76.4 $ 175.0 $ 142.1 Income
$ 10.7 $ 6.8 $ 2.5 $ 17.5 $ 0.8 Income per share $ 0.37 $ 0.24 $
0.09 $ 0.61 $ 0.03
Non-GAAP Results (1) (in
millions, except per share amounts)
Q2 FY 2017 Q1 FY
2017 Q2 FY 2016 (2) (3) 6 Months 2017 6
Months 2016 (2) (3) Income $ 13.8 $ 9.9 $ 6.2 $
23.7 $ 7.8 Income per share $ 0.48 $ 0.35 $ 0.23 $ 0.83 $ 0.29
(1) All amounts presented are
from continuing operations. (2) In the fourth quarter of
2016 the Company adopted ASU 2016-09, Improvements to Employee
Share-Based Payment Accounting, (ASU 2016-09). As a result of the
adoption of ASU 2016-09 certain amounts in the quarter and
year-to-date amounts ended June 25, 2016 have been restated as if
the new accounting guidance was adopted starting with the first day
of our 2016 fiscal year. The impact of these restatements was not
significant. (3) Non-GAAP results for the second quarter and
first six months of 2016 were revised in the current period to
exclude the impact of other acquisition costs incurred in
connection with the acquisition of Kita Manufacturing Ltd. (“Kita”)
on January 4, 2017.
Total cash and investments at the end of the second quarter were
$114.3 million.
Luis Müller, President and Chief Executive Officer of Cohu
stated, “We reported strong results, achieving the highest
quarterly sales since 2014, driven by continued momentum in the
automotive, mobility and IoT markets. Additionally, orders
increased for industrial and solid state lighting test
applications. Our contactor business increased to over 10% of
quarterly sales as a result of strong customer demand for our new
RF solution and digital contactors coupled with Kita spring probes,
and is a growing opportunity for Cohu.”
Müller concluded, “Looking forward, our anticipated continued
financial execution combined with the expanded addressable market
opportunities we are targeting in the inspection market has enabled
us to increase our mid-term annual sales target to
$500 million with a 45% non-GAAP gross margin and 20% non-GAAP
EBITDA margin, as presented at our Corporate Access Day on July 13,
2017.”
Cohu expects third quarter 2017 sales to be between
$88 million and $95 million. Cohu's Board of Directors
approved a quarterly cash dividend of $0.06 per share payable on
October 20, 2017 to shareholders of record on August 25, 2017. 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 Income 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, acquisition related
costs and 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 Income.
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 our momentum in automotive, mobility and IoT markets,
growth and demand in our contactor business, expansion of our
addressable market within the inspection market, mid-term annual
sales, non-GAAP gross margin and non-GAAP EBITDA margin targets,
third quarter 2017 sales forecast, and overall business
expectations 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 asset write-downs;
our ability to convert new products into production on a timely
basis and to support product development and meet customer delivery
and acceptance requirements for new products; our reliance on
third-party contract manufacturers and suppliers; failure to obtain
customer acceptance resulting in the inability to recognize revenue
and accounts receivable collection problems; market demand and
adoption of our new products; customer orders may be canceled or
delayed; the concentration of our revenues from a limited number of
customers; intense competition in the semiconductor equipment
industry; our reliance on patents and intellectual property;
compliance with U.S. export regulations; geopolitical issues; ERP
system implementation issues; the seasonal, volatile and
unpredictable nature of capital expenditures by semiconductor
manufacturers; and rapid technological change. 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. The forward-looking
statements included in this release are not assurances, and speak
only as of the date of this release, and Cohu does not undertake
any obligation to update these forward-looking statements to
reflect subsequent events or circumstances.
About Cohu:
Cohu is a leading supplier of semiconductor test and inspection
handlers, micro-electro mechanical system (MEMS) test modules, test
contactors and thermal sub-systems used by global semiconductor
manufacturers and test subcontractors.
Cohu will be conducting their conference call on Thursday, July
27, 2017 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 INCOME
(Unaudited) (in thousands, except per share amounts)
Three Months Ended (1) Six
Months Ended (1)
June 24,
June 25,
June 24,
June 25,
2017 2016
2017
2016 Net sales
$ 93,866 $ 76,353
$ 174,963 $ 142,131 Cost and expenses: Cost of sales
56,736 49,614
105,577 96,110 Research and development
9,466 8,345
19,242 16,025 Selling, general and
administrative
16,020 15,175
30,480 28,289
82,222 73,134
155,299
140,424 Income from operations
11,644
3,219
19,664 1,707 Interest and other, net
142
59
243 102
Income from continuing operations before taxes
11,786 3,278
19,907 1,809 Income tax provision
1,078
761
2,436 983
Income from continuing operations
10,708
2,517
17,471 826
Discontinued operations: Loss from discontinued operations
before taxes (2)
(278 ) (55 )
(278 )
(55 ) Income tax provision
- -
- - Loss from discontinued
operations
(278 ) (55 )
(278 ) (55 ) Net income
$ 10,430
$ 2,462
$ 17,193 $ 771
Income (loss) per share: Basic: Income from
continuing operations
$ 0.39 $ 0.09
$
0.64 $ 0.03 Loss from discontinued operations
(0.01 ) (0.00 )
(0.01 )
(0.00 )
$ 0.38 $ 0.09
$
0.63 $ 0.03 Diluted: Income from
continuing operations
$ 0.37 $ 0.09
$
0.61 $ 0.03 Loss from discontinued operations
(0.01 ) (0.00 )
(0.01 )
(0.00 )
$ 0.36 $ 0.09
$
0.60 $ 0.03 Weighted average shares
used in computing income (loss) per share: (3) Basic
27,708 26,711
27,343
26,514 Diluted
28,725
27,385
28,488 27,390
(1) The three- and six-month periods ended
June 24, 2017 were comprised of 13 weeks and 25 weeks,
respectively. The three- and six-month periods ended June 25, 2016
were comprised of 13 weeks and 26 weeks, respectively. (2)
All amounts presented result from an adjustment to the fair value
of a contingent consideration receivable recorded in conjunction
with the sale of BMS in 2015. (3) 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 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.
COHU,
INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in
thousands) (Unaudited)
June 24,
December 31,
2017 2016
Assets: Current assets: Cash
and investments
$ 114,282 $ 128,035 Accounts
receivable
90,478 63,019 Inventories
60,347 45,502
Other current assets
11,344 8,593 Total
current assets
276,451 245,149 Property, plant &
equipment, net
32,843 18,234 Goodwill
66,038 58,849
Intangible assets, net
18,742 17,835 Other assets
7,270 5,445 Total assets
$ 401,344 $
345,512
Liabilities & Stockholders’ Equity:
Current liabilities: Deferred profit
$ 6,347 $ 6,886
Other current liabilities
79,274 61,803 Total
current liabilities
85,621 68,689 Other noncurrent
liabilities
51,175 41,354 Stockholders’ equity
264,548 235,469 Total liabilities & stockholders’
equity
$ 401,344 $ 345,512
COHU,
INC. Supplemental Reconciliation of GAAP Results to Non-GAAP
Financial Measures (Unaudited) (in thousands, except per share
amounts) Three Months Ended
June 24,
March 25,
June 25, 2017 2017 2016 Income
from operations - GAAP basis (a) $ 11,644 $ 8,020 $ 3,219
Non-GAAP adjustments: Share-based compensation included in (b):
Cost of goods sold 121 83 115 Research and development 262 316 334
Selling, general and administrative (SG&A) 1,376
1,318 1,347 1,759 1,717 1,796
Amortization of intangible assets included in (c): Cost of goods
sold 570 768 1,348 SG&A 404 342
443 974 1,110 1,791 Manufacturing transition
and severance costs included in SG&A (d) 341 104 276
Acquisition costs included in SG&A (e) 56 187 337
Inventory step-up included in cost of goods sold (f) 465
347 - Income from
operations - non-GAAP basis (g) $ 15,239 $ 11,485 $
7,419 Income from continuing operations - GAAP basis
$ 10,708 $ 6,763 $ 2,517 Non-GAAP adjustments (as scheduled above)
3,595 3,465 4,200 Tax effect of non-GAAP adjustments (h)
(488 ) (376 ) (477 ) Income from continuing
operations - non-GAAP basis $ 13,815 $ 9,852 $ 6,240
GAAP income from continuing operations per share -
diluted $ 0.37 $ 0.24 $ 0.09 Non-GAAP income from continuing
operations per share - diluted (i) $ 0.48 $ 0.35 $ 0.23
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. Acquisition and
inventory step-up 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) 12.4%, 9.9% and 4.2% 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
manufacturing transition and employee severance costs. (e) To
eliminate professional fees and other direct incremental expenses
incurred related to the acquisition of Kita. (f) To eliminate the
inventory step-up costs incurred related to the acquisition of
Kita. (g) 16.2%, 14.2% and 9.7% of net sales, respectively. (h) To
adjust the provision for income taxes related to the adjustments
described above based on applicable tax rates. (i) All periods
presented were computed 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 24,
June 25, 2017 2016 Income from
operations - GAAP basis (a) $ 19,664 $ 1,707 Non-GAAP
adjustments: Share-based compensation included in (b): Cost of
goods sold 204 208 Research and development 578 628 Selling,
general and administrative (SG&A) 2,694
2,697 3,476 3,533 Amortization of intangible assets included
in (c): Cost of goods sold 1,338 2,677 SG&A 746
882 2,084 3,559 Manufacturing transition and
severance costs included in (d): Cost of goods sold - 75 SG&A
445 341 445 416 Acquisition
costs included in SG&A (e) 243 408 Inventory step-up
included in cost of goods sold (f) 812 -
Income from operations - non-GAAP basis (g) $ 26,724
$ 9,623 Income from continuing operations - GAAP
basis $ 17,471 $ 826 Non-GAAP adjustments (as scheduled above)
7,060 7,916 Tax effect of non-GAAP adjustments (h) (864 )
(914 ) Income from continuing operations - non-GAAP basis $
23,667 $ 7,828 GAAP income per share - diluted
$ 0.61 $ 0.03 Non-GAAP income per share - diluted (i) $ 0.83
$ 0.29
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. Acquisition and
inventory step-up 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) 11.2% and 1.2% 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 manufacturing
transition and employee severance costs. (e) To eliminate
professional fees and other direct incremental expenses incurred
related to the acquisition of Kita. (f) To eliminate the inventory
step-up costs incurred related to the acquisition of Kita. (g)
15.3% and 6.8% of net sales, respectively. (h) To adjust the
provision for income taxes related to the adjustments described
above based on applicable tax rates. (i) All periods presented were
computed using the number of GAAP diluted shares outstanding.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170727006476/en/
Cohu, Inc.Jeffrey D. Jones - Investor Relations(858)
848-8106
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