- Annual sales up 25% year-over-year to
$352.7 million
- Full year GAAP earnings per share
$1.15; non-GAAP earnings per share $1.54 -- Non-GAAP earnings per
share increased 126% year-over-year
- Cash and investments increased to
approximately $156 million
- Record quarter and full year
orders
Cohu, Inc. (NASDAQ: COHU), a leading supplier of semiconductor
equipment, today reported fiscal 2017 fourth quarter net sales of
$84.1 million and GAAP income of $6.9 million or
$0.23 per share. Net sales for full year 2017 were $352.7
million and GAAP income was $33.1 million or $1.15 per
share. GAAP provision for income taxes for the fourth quarter and
full year 2017 includes the Company’s provisional estimate of the
impact of U.S. tax reform. (1) (2)
The Company also reported non-GAAP results, with fourth quarter
2017 income of $8.1 million or $0.28 per share and income
of $44.4 million or $1.54 per share for full year 2017.
(1)
GAAP
Results (1) (2) (in millions, except per share amounts)
Q4 FY2017
Q3 FY2017
Q4 FY2016
12Months2017
12Months2016
Net sales $ 84.1 $ 93.7 $ 70.7 $ 352.7 $ 282.1 Income
$ 6.9 $ 8.8 $ 2.3 $ 33.1 $ 3.3 Income per share $ 0.23 $ 0.30 $
0.08 $ 1.15 $ 0.12
Non-GAAP Results (1)
(in millions, except per share amounts)
Q4 FY2017
Q3 FY2017
Q4 FY2016
12Months2017
12Months2016
Income $ 8.1 $ 12.6 $ 6.6 $ 44.4 $ 18.8 Income per share $
0.28 $ 0.43 $ 0.24 $ 1.54 $ 0.68 (1) All amounts
presented are from continuing operations. (2) GAAP results include
the impact from the Tax Cuts and Jobs Act of 2017 (“U.S. Tax
Reform”). Due to the timing of the enactment and the complexity
involved in applying the provisions of U.S. Tax Reform, we have
made reasonable estimates of the effects and recorded provisional
amounts in our financial statements as of December 30, 2017. The
accounting for the tax effects of U.S. Tax Reform will be completed
in 2018.
Total cash and investments at the end of the year were
$155.6 million.
Luis Müller, President and Chief Executive Officer of Cohu,
stated, “We delivered another year of solid sales and profitability
growth in fiscal 2017, coupled with market share gains in test
handlers and accelerating growth in the test contactor market.
Orders were at record levels with the full year increasing 41% over
2016. We ended the year with repeat handler orders for an automated
factory in Korea and captured two new customers in China for power
management device test.”
Müller further commented, “We started 2018 with a strong
backlog, share gain momentum and customer traction, as evidenced by
our recently announced design win of a major European automotive
customer for the MATRiX handler combined with our multi-beam test
contactors. Additionally, we have been making excellent progress
with a major Korean customer, who continues to provide repeat
orders for a new handler model. As a result, we have been
increasing our investments to support the business prospects with
this customer, which is expected to be an important contributor to
meeting current growth projections for the first half of 2018 over
the same period last year.”
Cohu expects first quarter 2018 sales to be approximately
$89 million. Cohu's Board of Directors approved a quarterly
cash dividend of $0.06 per share payable on April 13, 2018 to
shareholders of record on February 27, 2018.
Use of Non-GAAP Financial Information:
Included within this press release are non-GAAP financial
measures, including non-GAAP gross margin, Income and Income
(earnings) per share, 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, fair value adjustment to contingent
consideration, purchase accounting inventory step-up included in
cost of sales, the reduction of an uncertain tax position liability
and related indemnification receivable and U.S. Tax Reform.
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 new customers; test handler and contactor share gains,
including on PANTHER and Solstice products; accelerating growth in
test contactors; business momentum and customer traction entering
2018; increasing investment, business prospects, growth and revenue
recognition with a major Korean customer; meeting first half 2018
year-over-year growth projections; Cohu500 mid-term model and
associated goals; specific share gain goals; and Cohu’s first
quarter 2018 sales forecast and guidance 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; revenue recognition impacts due to
ASC 606; 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;
impacts from the Tax Cuts and Jobs Act of 2017; 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 our conference call on Thursday,
February 15, 2018 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) Twelve
Months Ended (1)
December 30, December 31,
December
30, December 31,
2017 2016
2017 2016
Net sales
$ 84,090 $ 70,694
$ 352,704 $
282,084 Cost and expenses: Cost of sales
49,667 45,167
211,986 187,256 Research and development
11,886
10,143
40,737 34,841 Selling, general and administrative
17,871 12,332
65,233 54,322
79,424
67,642
317,956
276,419 Income from operations
4,666 3,052
34,748 5,665 Interest and other, net
200
169
617 342
Income from continuing operations before taxes
4,866 3,221
35,365 6,007 Income tax provision (benefit) (2)
(2,029 ) 915
2,244
2,747 Income from continuing operations
6,895 2,306
33,121
3,260 Discontinued operations: Loss from
discontinued operations before taxes(3)
- (217 )
(278
) (221 ) Income tax provision
-
-
- - Loss from
discontinued operations
- (217 )
(278 ) (221 ) Net income
$ 6,895
$ 2,089
$ 32,843 $ 3,039
Income (loss) per share: Basic: Income from
continuing operations
$ 0.24 $ 0.09
$
1.19 $ 0.12 Loss from discontinued operations
- (0.01 )
(0.01 )
(0.01 )
$ 0.24 $ 0.08
$
1.18 $ 0.11 Diluted: Income from
continuing operations
$ 0.23 $ 0.08
$
1.15 $ 0.12 Loss from discontinued operations
- -
(0.01 )
(0.01 )
$ 0.23 $ 0.08
$
1.14 $ 0.11 Weighted average shares
used in computing income (loss) per share: (4) Basic
28,503 26,848
27,836
26,659 Diluted
29,584
27,774
28,916 27,480
(1) The three- and twelve-month periods ended
December 30, 2017 were comprised of 13 weeks and 52 weeks,
respectively. The three- and twelve-month periods ended December
31, 2016 were comprised of 14 weeks and 53 weeks, respectively. (2)
Includes impact from US Tax Reform. (3) 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. (4) 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)
December 30, December 31,
2017
2016
Assets: Current assets: Cash and investments
$ 155,615 $ 128,035 Accounts receivable
71,125
63,019 Inventories
62,085 45,502 Other current assets
8,613 8,593 Total current assets
297,438
245,149 Property, plant & equipment, net
34,172 18,234
Goodwill
65,613 58,849 Intangible assets, net
16,748
17,835 Other assets
6,486 5,445 Total assets
$ 420,457 $ 345,512
Liabilities &
Stockholders’ Equity: Current liabilities: Deferred profit
$ 6,608 $ 6,886 Other current liabilities
78,659 61,803 Total current liabilities
85,267
68,689 Other noncurrent liabilities
46,099 41,354
Stockholders’ equity
289,091 235,469 Total
liabilities & stockholders’ equity
$ 420,457 $
345,512
COHU, INC. Supplemental
Reconciliation of GAAP Results to Non-GAAP Financial Measures
(Unaudited) (in thousands, except per share amounts)
Three Months Ended December 30, September 30, December 31,
2017 2017 2016 Income
from operations - GAAP basis (a) $ 4,666 $ 10,418 $ 3,052
Non-GAAP adjustments: Share-based compensation included in (b):
Cost of sales 96 123 89 Research and development 198 278 337
Selling, general and administrative (SG&A) 1,377
1,459 1,426 1,671 1,860 1,852
Amortization of intangible assets included in (c): Cost of sales
674 677 1,138 SG&A 370 403
400 1,044 1,080 1,538 Manufacturing transition and
severance costs included in SG&A (d) 50 7 496 Adjustment
to contingent consideration included in SG&A (e) 755 668 -
Acquisition costs included in SG&A (f) 42 85 896
Inventory step-up included in cost of sales (g) - 592 -
Reduction of indemnification receivable included in SG&A (h)
1,172 - 588 Income from
operations - non-GAAP basis (i) $ 9,400 $ 14,710 $
8,422 Income from continuing operations - GAAP basis
$ 6,895 8,755 $ 2,306 Non-GAAP adjustments (as scheduled above)
4,734 4,292 5,370 Tax effect of non-GAAP adjustments (j) (h) (1,460
) (452 )
(1,031 ) U.S. Tax Reform (k) (2,022 ) -
- Income from continuing operations - non-GAAP basis $ 8,147
$ 12,595 $ 6,645 GAAP income from
continuing operations per share - diluted $ 0.23 0.30 $ 0.08
Non-GAAP income from continuing operations per share - diluted (l)
$ 0.28 0.43 $ 0.24
Gross Profit Reconciliation Gross
profit - GAAP basis $ 34,423 $ 36,909 $ 25,527 Non-GAAP adjustments
to cost of sales (as scheduled above) 770
1,392 1,227 Gross profit - Non-GAAP basis $
35,193 $ 38,301 $ 26,754 Non-GAAP gross profit
as a percentage of net sales 41.9 % 40.9 % 37.8 %
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 costs, fair value
adjustment to contingent consideration 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. Management believes the reduction of an
uncertain tax position liability and related indemnification
receivable is better reflected within income tax expense rather
than a charge to SG&A and credit to the income tax provision.
Excluding the impact of U.S. Tax Reform provides better
comparability to our historical and future tax provisions.
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) 5.5%, 11.1% and 4.3% 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
manufacturing transition and employee severance costs. (e) To
eliminate fair value adjustment to contingent consideration related
to the acquisition of Kita. (f) To eliminate professional fees and
other direct incremental expenses incurred related to the
acquisition of Kita. (g) To eliminate the inventory step-up costs
incurred related to the acquisition of Kita. (h) To eliminate the
impact of the reduction of an uncertain tax position liability and
related indemnification receivable. (i) 11.2%, 15.7% and 11.9% of
net sales, respectively. (j) To adjust the provision for income
taxes related to the adjustments described above based on
applicable tax rates. (k) To eliminate impact from the Tax Cuts and
Jobs Act enacted on December 22, 2017 (U.S. Tax Reform), and
includes provisional estimates of (i) the one-time transition tax,
net of foreign tax credits and operating losses, on earnings of
foreign subsidiaries that were previously deferred from U.S. tax;
(ii) the impact of U.S. tax rate reduction and changes to net
operating loss rules on our net deferred taxes and (iii) the
accrual of foreign taxes in the event certain funds are repatriated
to the U.S. (l) 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) Twelve Months Ended December 30,
December 31, 2017 2016 Income
from operations - GAAP basis (a) $ 34,748 $ 5,665 Non-GAAP
adjustments: Share-based compensation included in (b): Cost of
sales 423 398 Research and development 1,054 1,292 Selling, general
and administrative (SG&A) 5,530 5,453
7,007 7,143 Amortization of intangible assets included in
(c): Cost of sales 2,689 5,170 SG&A 1,519
1,732 4,208 6,902 Manufacturing transition and
severance costs included in (d): Cost of sales - 75 SG&A
502 1,423 502 1,498 Adjustment to
contingent consideration included in SG&A (e) 1,423 -
Acquisition costs included in SG&A (f) 370 1,777
Inventory step-up included in cost of sales (g) 1,404 -
Reduction of indemnification receivable included in SG&A (h)
1,172 588 Income from operations -
non-GAAP basis (i) $ 50,834 $ 23,573 Income
from continuing operations - GAAP basis $ 33,121 $ 3,260 Non-GAAP
adjustments (as scheduled above) 16,086 17,908 Tax effect of
non-GAAP adjustments (j) (h) (2,776 ) (2,408 ) U.S. Tax Reform (k)
(2,022 ) - Income from continuing operations -
non-GAAP basis $ 44,409 $ 18,760 GAAP income
per share - diluted $ 1.15 $ 0.12 Non-GAAP income per share
- diluted (l) $ 1.54 $ 0.68
Gross Profit
Reconciliation Gross profit - GAAP basis $ 140,718 $ 94,828
Non-GAAP adjustments to cost of sales (as scheduled above)
4,516 5,643 Gross profit - Non-GAAP basis $
145,234 $ 100,471 Non-GAAP gross profit as a
percentage of net sales 41.2 % 35.6 %
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 costs, fair
value adjustment to contingent consideration 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. Management believes the reduction of an
uncertain tax position liability and related indemnification
receivable is better reflected within income tax expense rather
than a charge to SG&A and credit to the income tax provision.
Excluding the impact of U.S. Tax Reform provides better
comparability to our historical and future tax provisions.
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) 9.9% and 2.0% 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 fair value adjustment to contingent consideration related
to the acquisition of Kita. (f) To eliminate professional fees and
other direct incremental expenses incurred related to the
acquisition of Kita. (g) To eliminate the inventory step-up costs
incurred related to the acquisition of Kita. (h) To eliminate the
impact of the reduction of an uncertain tax position liability and
related indemnification receivable. (i) 14.4% and 8.4% of net
sales, respectively. (j) To adjust the provision for income taxes
related to the adjustments described above based on applicable tax
rates. (k) To eliminate impact from the Tax Cuts and Jobs Act
enacted on December 22, 2017 (U.S. Tax Reform), and includes
provisional estimates of (i) the one-time transition tax, net of
foreign tax credits and operating losses, on earnings of foreign
subsidiaries that were previously deferred from U.S. tax; (ii) the
impact of U.S. tax rate reduction and changes to net operating loss
rules on our net deferred taxes and (iii) the accrual of foreign
taxes in the event certain funds are repatriated to the U.S. (l)
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/20180215006405/en/
Cohu, Inc.Jeffrey D. Jones, 858-848-8106Investor Relations
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