- First half 2019 sales of $297.8 million driven by the Xcerra
acquisition
- Second quarter GAAP gross margin of 41.6%; non-GAAP gross
margin of 41.3%
- Delivering complete test cell solution for next generation RF
devices
Cohu, Inc. (NASDAQ: COHU), a global leader in back-end
semiconductor equipment and services, today reported fiscal 2019
second quarter net sales of $150.0 million and GAAP loss of $19.4
million or $0.47 per share. Net sales for the first six months of
2019 were $297.8 million and GAAP loss was $42.2 million or $1.03
per share. (1)
Cohu also reported non-GAAP results, with second quarter 2019
income of $0.8 million or $0.02 per share and loss of $0.6 million
or $0.01 per share for the first six months of 2019. (1)
GAAP Results (1)
(in millions, except per share
amounts)
Q2 FY
2019
Q1 FY
2019
Q2 FY
2018
6 Months
2019
6 Months
2018
Net sales
$
150.0
$
147.8
$
99.8
$
297.8
$
195.0
Income (loss)
$
(19.4
)
$
(22.9
)
$
11.6
$
(42.2
)
$
19.8
Income (loss) per share
$
(0.47
)
$
(0.56
)
$
0.39
$
(1.03
)
$
0.67
Non-GAAP Results (1)
(in millions, except per share
amounts)
Q2 FY
2019
Q1 FY
2019
Q2 FY
2018
6 Months
2019
6 Months
2018
Income (loss)
$
0.8
$
(1.4
)
$
18.8
$
(0.6
)
$
29.3
Income (loss) per share
$
0.02
$
(0.03
)
$
0.64
$
(0.01
)
$
0.99
(1) All amounts presented are from
continuing operations. FY 2019 results include Xcerra Corporation
acquired on October 1, 2018.
Total cash and investments at the end of second quarter 2019
were $143.6 million.
“While gross margin was higher than expected in the second
quarter, revenue was at the low end of guidance due to the impact
of export restrictions to Huawei on our customers and continued
softness in mobility,” said Cohu President and CEO Luis Müller.
“Cohu is focused on delivering the targeted Xcerra acquisition
synergies by the end of this year, implementing additional actions
to reduce expenses and improve profitability, and securing customer
design-wins. We recently qualified a new vision inspection platform
at two large mobility customers and started shipping a complete
solution for testing next generation RF devices used in a new
global satellite network.”
Cohu expects third quarter 2019 sales to be approximately $143
million. Cohu's Board of Directors approved a quarterly cash
dividend of $0.06 per share payable on October 18, 2019 to
shareholders of record on August 23, 2019.
Conference Call Information:
The company will host a live conference call and webcast with
slides to discuss second quarter 2019 results at 1:30 p.m. Pacific
Time/4:30 p.m. Eastern Time on August 5, 2019. Interested investors
and analysts are invited to dial into the conference call by using
1-866-434-5330 (domestic) or +1-213-660-0873 (international) and
entering the pass code 1069198. Webcast access will be available on
the Investor Information section of the company’s website at
www.cohu.com. Replays of the call can be accessed at
www.cohu.com.
About Cohu:
Cohu (NASDAQ: COHU) is a global leader in back-end semiconductor
equipment and services, delivering leading-edge solutions for the
manufacturing of semiconductors and printed circuit boards.
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 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 acquired intangible assets including
favorable/unfavorable lease adjustments, restructuring costs,
manufacturing and sales transition and severance costs,
acquisition-related costs and associated professional fees, fair
value adjustment to contingent consideration, depreciation of
purchase accounting adjustments to property, plant and equipment
and purchase accounting inventory step-up included in cost of
sales. 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 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 integration and cost synergy
savings, timing and targets; additional cost savings and expense
reductions; design-wins; new products and solutions; solutions for
global satellite networks; 5G and automotive opportunities;
incremental sales opportunities; semiconductor market conditions in
2019; PCB test demand; business model for FY’20 and mid-term model;
Cohu’s third quarter 2019 sales forecast, guidance, non-GAAP
operating expenses, gross margin, adjusted EBITDA and effective tax
rate, and cash and shares outstanding; and any other statements
that are predictive in nature and depend upon or refer to future
events or conditions, and include words such as “may,” “will,”
“should,” “would,” “expect,” “anticipate,” “plan,” “likely,”
“believe,” “estimate,” “project,” “intend,” and 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.
Actual results could differ materially from those contained in any
forward-looking statement as a result of various factors,
including, without limitation: 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
and ongoing tax examinations; geopolitical issues, trade wars and
Huawei export restrictions; ERP system implementation issues; the
seasonal, volatile and unpredictable nature of capital expenditures
by semiconductor manufacturers and the late 2018 and 2019
significantly weakened demand in this market; ongoing weakness in
Greater China market; rapid technological change; and significant
risks associated with the Xcerra acquisition including but not
limited to (i) the ability of Cohu and Xcerra to integrate their
businesses successfully and to achieve anticipated synergies and
cost savings, (ii) the possibility that other anticipated benefits
of the acquisition will not be realized, (iii) litigation relating
to the acquisition that still could be instituted against Cohu
and/or Xcerra, (iv) the possibility that restructuring charges will
significantly exceed estimates, (v) the ability of Cohu or Xcerra
to retain, attract and hire key personnel, (vi) potential adverse
reactions or changes to relationships with customers, employees,
suppliers or other parties resulting from the acquisition, (vii)
potential disruptions, expenses and lost revenue associated with
the transition to direct sales in China and Taiwan; (viii) the
discovery of liabilities, product return issues or deficiencies
associated with Xcerra that were not identified in advance, (ix)
potential failures to maintain adequate internal controls over
financial reporting given the significant increase in size, number
of employees, global operations and complexity of Cohu’s business,
(x) mandatory ongoing impairment evaluation of goodwill and other
intangibles whereby Cohu could be required to write off some or all
of this goodwill and other intangibles, (xi) the adverse impact to
Cohu’s operating results and potential inability to pay cash
dividends due to interest expense on the financing debt, rising
interest rates, and any restrictions on operations related to such
debt, and (xii) continued availability of capital and financing and
rating agency actions, and limited market access given our high
debt levels. 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, 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.
COHU, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(in thousands, except per share
amounts)
Three Months Ended (1)
Six Months Ended (1)
June 29,
June 30,
June 29,
June 30,
2019
2018
2019
2018
Net sales
$
150,011
$
99,817
$
297,820
$
194,967
Cost and expenses:
Cost of sales (excludes amortization shown
below) (2)
87,605
57,677
180,999
112,600
Research and development
22,108
11,051
44,841
22,826
Selling, general and administrative
(3)
36,428
19,303
74,714
35,089
Amortization of purchased intangible
assets
9,987
1,019
20,006
2,093
Restructuring charges
8,545
-
9,906
-
164,673
89,050
330,466
172,608
Income (loss) from operations
(14,662
)
10,767
(32,646
)
22,359
Other (expense) income:
Interest expense
(5,282
)
(11
)
(10,789
)
(22
)
Interest income
191
329
413
576
Foreign transaction gain (loss) and
other
(546
)
3,031
(328
)
1,452
Income (loss) from continuing operations
before taxes
(20,299
)
14,116
(43,350
)
24,365
Income tax provision (benefit)
(916
)
2,468
(1,116
)
4,595
Income (loss) from continuing
operations
(19,383
)
11,648
(42,234
)
19,770
Discontinued operations: (4)
Income from discontinued operations before
taxes
38
-
227
-
Income tax provision
14
-
39
-
Income from discontinued operations
24
-
188
-
Net income (loss)
(19,359
)
$
11,648
$
(42,046
)
$
19,770
Net loss attributable to noncontrolling
interest
(36
)
-
(80
)
-
Net income (loss) attributable to Cohu
$
(19,323
)
$
11,648
$
(41,966
)
$
19,770
Income (loss) per share:
Basic:
Income (loss) from continuing operations
before noncontrolling interest
$
(0.47
)
$
0.40
$
(1.03
)
$
0.69
Income from discontinued operations
0.00
-
0.01
-
Net loss attributable to noncontrolling
interest
0.00
-
0.00
-
Net income (loss) attributable to Cohu
$
(0.47
)
$
0.40
$
(1.02
)
$
0.69
Diluted:
Income (loss) from continuing operations
before noncontrolling interest
$
(0.47
)
$
0.39
$
(1.03
)
$
0.67
Income from discontinued operations
0.00
-
0.01
-
Net loss attributable to noncontrolling
interest
0.00
-
0.00
-
Net income (loss) attributable to Cohu
$
(0.47
)
$
0.39
$
(1.02
)
$
0.67
Weighted average shares used in computing
income (loss) per share: (5)
Basic
41,125
28,893
40,999
28,747
Diluted
41,125
29,651
40,999
29,591
(1)
The three- and six-month periods
ended June 29, 2019 and June 30, 2018 were both comprised of 13
weeks and 26 weeks, respectively. The Company’s results for the
three- and six-month periods ended June 29, 2019, include the
results of Xcerra which was acquired on October 1, 2018.
(2)
In conjunction with the
acquisition of Xcerra the Company assessed the need to realign its
historical financial statement presentation and certain statement
of operations classifications were reclassified to conform to
current period presentation. The changes made were as follows:
- Amortization of intangibles previously were presented in cost
of sales and SG&A. These amounts are now presented as a
separate line item “Amortization of purchased intangible assets”
within operating expenses. Amounts associated with purchased
intangible assets that previously would have been included in cost
of sales are $7.6 million and $15.3 million for the three- and
six-month periods ended June 29, 2019, respectively. Amounts
previously presented in cost of sales that have been reclassified
to conform with the Company’s revised presentation for the three-
and six-month periods ended June 30, 2018 are $0.6 million and $1.3
million, respectively.
- Historically, gains and losses associated with foreign currency
translation and remeasurement were included within SG&A which
resulted in fluctuations in expenses as foreign exchange rates
change. These amounts will now be presented within foreign
transaction gain (loss) and other as it will provide investors more
insight into the Company’s operating expenses.
(3)
SG&A expense for the three-
and six-month periods ended June 29, 2019 include Xcerra
transaction costs totaling $0.2 million and $0.4 million,
respectively. For the three- and six-month periods ended June 30,
2018 Xcerra transaction costs were $3.8 million and $4.1 million,
respectively.
(4)
On October 1, 2018, the Company
made the decision to sell the fixtures business acquired from
Xcerra, and, as a result, the operating results of the fixtures
business have been presented as discontinued operations.
(5)
For the three- and six-month
periods ended June 29, 2019, potentially dilutive securities were
excluded from the per share computations due to their antidilutive
effect. 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
(Unaudited)
(in thousands)
June 29,
December 29,
2019
2018
Assets:
Current assets:
Cash and investments
$
143,595
$
165,020
Accounts receivable
134,435
149,276
Inventories
137,229
139,314
Other current assets
23,448
27,888
Current assets of discontinued
operations
4,100
3,741
Total current assets
442,807
485,239
Property, plant & equipment, net
71,776
74,332
Goodwill
241,466
242,127
Intangible assets, net
297,211
318,961
Operating lease right of use assets
(1)
35,224
-
Other assets
14,955
13,264
Noncurrent assets of discontinued
operations
65
79
Total assets
$
1,103,504
$
1,134,002
Liabilities & Stockholders’
Equity:
Current liabilities:
Short-term borrowings
$
3,244
$
3,115
Current installments of long-term debt
3,243
3,672
Deferred profit
8,163
6,896
Other current liabilities
131,657
146,388
Current liabilities of discontinued
operations
624
518
Total current liabilities
146,931
160,589
Long-term debt
341,978
346,041
Non-current operating lease liabilities
(1)
32,773
-
Other noncurrent liabilities
67,373
81,428
Cohu stockholders’ equity
514,805
546,243
Noncontrolling Interest
(356
)
(299
)
Total liabilities & stockholders’
equity
$
1,103,504
$
1,134,002
(1)
Cohu adopted ASU 2016-02, Leases (Topic
842), as of December 30, 2018. Upon adoption, we recorded operating
lease assets and operating lease liabilities based on the present
value of future lease obligations. We applied the practical
expedient available in this guidance, which does not require the
restatement of prior year balances.
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,
June 30,
2019 (1)
2019 (1)
2018
Income (loss) from operations - GAAP basis
(a)
$
(14,662
)
$
(17,984
)
$
10,767
Non-GAAP adjustments:
Share-based compensation included in
(b):
Cost of sales (COS)
208
125
162
Research and development (R&D)
776
638
395
Selling, general and administrative
(SG&A)
2,678
2,930
1,391
3,662
3,693
1,948
Amortization of purchased intangible
assets (c)
9,987
10,019
1,019
Restructuring charges related to inventory
adjustments in COS (d)
(1,259
)
466
-
Restructuring charges included in
operating expenses (d)
8,545
1,361
-
Manufacturing and sales transition costs
included in (e):
Cost of sales (COS)
560
235
-
Selling, general and administrative
588
526
100
1,148
761
100
Adjustment to contingent consideration
included in SG&A (f)
-
-
577
Acquisition costs included in SG&A
(g)
180
224
3,848
Inventory step-up included in COS (h)
-
6,038
-
PP&E step-up included in SG&A
(i)
1,257
1,257
-
Income from operations - non-GAAP basis
(j)
$
8,858
$
5,835
$
18,259
Income (loss) from continuing operations -
GAAP basis
$
(19,383
)
$
(22,851
)
$
11,648
Non-GAAP adjustments (as scheduled
above)
23,520
23,819
7,492
Tax effect of non-GAAP adjustments (k)
(3,348
)
(2,358
)
(305
)
Income (loss) from continuing operations -
non-GAAP basis
$
789
$
(1,390
)
$
18,835
GAAP income (loss) from continuing
operations per share - diluted
$
(0.47
)
$
(0.56
)
$
0.39
Non-GAAP income (loss) from continuing
operations per share - diluted (l)
$
0.02
$
(0.03
)
$
0.64
(1) Includes operating results from Xcerra
acquired on October 1, 2018
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
activities including employee headcount reductions and other
organizational changes to align our business strategies in light of
the merger with Xcerra. Restructuring costs have been excluded
because such expense is not used by Management to assess the core
profitability of Cohu’s business operations. Manufacturing and
sales transition costs relate principally to expenses incurred as a
result of moving certain manufacturing activities to Asia and
incremental costs incurred related to the buildup of a direct sales
force for certain equipment sales in Asia. 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, adjustments for 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)
(9.8)%, (12.2)% and 10.8% 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 restructuring costs incurred
related to the integration of Xcerra.
(e)
To eliminate manufacturing and sales
transition and severance costs.
(f)
To eliminate fair value adjustment to
contingent consideration related to the acquisition of Kita.
(g)
To eliminate professional fees and other
direct incremental expenses incurred related to acquisitions.
(h)
To eliminate the inventory step-up costs
incurred related to the acquisition of Xcerra.
(i)
To eliminate the accelerated depreciation
from the property, plant & equipment step-up related to the
acquisition of Xcerra.
(j)
5.9%, 3.9% and 18.3% 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 June 29, 2019 was
computed using 41,534 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 29,
June 30,
2019 (1)
2018
Income (loss) from operations - GAAP basis
(a)
$
(32,646
)
$
22,359
Non-GAAP adjustments:
Share-based compensation included in
(b):
Cost of sales (COS)
333
283
Research and development (R&D)
1,414
744
Selling, general and administrative
(SG&A)
5,608
2,590
7,355
3,617
Amortization of purchased intangible
assets (c)
20,006
2,093
Restructuring charges related to inventory
adjustments in COS (d)
(793
)
-
Restructuring charges included in
operating expenses (d)
9,906
-
Manufacturing and sales transition costs
included in (e):
Cost of sales (COS)
795
-
SG&A
1,114
87
1,909
87
Adjustment to contingent consideration
included in SG&A (f)
-
430
Acquisition costs included in SG&A
(g)
404
4,144
Inventory step-up included in COS (h)
6,038
-
PP&E step-up included in SG&A
(i)
2,514
-
Income from operations - non-GAAP basis
(j)
$
14,693
$
32,730
Income (loss) from continuing operations -
GAAP basis
$
(42,234
)
$
19,770
Non-GAAP adjustments (as scheduled
above)
47,339
10,371
Tax effect of non-GAAP adjustments (k)
(5,706
)
(806
)
Income (loss) from continuing operations -
non-GAAP basis
$
(601
)
$
29,335
GAAP income (loss) per share from
continuing operations - diluted
$
(1.03
)
$
0.67
Non-GAAP income (loss) per share - diluted
(l)
$
(0.01
)
$
0.99
(1) Includes operating results from Xcerra
acquired on October 1, 2018
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
activities including employee headcount reductions and other
organizational changes to align our business strategies in light of
the merger with Xcerra. Restructuring costs have been excluded
because such expense is not used by Management to assess the core
profitability of Cohu’s business operations. Manufacturing and
sales transition costs relate principally to expenses incurred as a
result of moving certain manufacturing activities to Asia and
incremental costs incurred related to the buildup of a direct sales
force for certain equipment sales in Asia. 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, adjustments for 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)
(11.0)% and 11.5% 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 Xcerra.
(e)
To eliminate manufacturing and sales
transition and severance costs.
(f)
To eliminate fair value adjustment to
contingent consideration related to the acquisition of Kita.
(g)
To eliminate professional fees and other
direct incremental expenses incurred related to the
acquisitions.
(h)
To eliminate the inventory step-up costs
incurred related to acquisitions.
(i)
To eliminate the property, plant &
equipment step-up depreciation accelerated related to the
acquisition of Xcerra.
(j)
4.9% and 16.8% of net sales,
respectively.
(k)
To adjust the provision for income taxes
related to the adjustments described above based on applicable tax
rates.
(l)
All periods presented were computed using
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,
June 30,
2019 (1)
2019 (1)
2018
Gross Profit Reconciliation
Gross profit - GAAP basis (excluding
amortization)(2)
$
62,406
$
54,415
$
42,140
Non-GAAP adjustments to cost of sales (as
scheduled above)
(491
)
6,864
162
Gross profit - Non-GAAP basis
$
61,915
$
61,279
$
42,302
Non-GAAP gross profit as a percentage of
net sales
41.3
%
41.5
%
42.4
%
Adjusted EBITDA Reconciliation
Net income (loss) attributable to Cohu -
GAAP Basis
$
(19,323
)
$
(22,643
)
$
11,648
Income from discontinued operations
(24
)
(164
)
-
Income tax provision
(916
)
(200
)
2,468
Interest expense
5,282
5,507
11
Interest income
(191
)
(222
)
(329
)
Amortization
9,987
10,019
1,019
Depreciation
5,102
5,020
1,398
Other non-GAAP adjustments (as scheduled
above)
11,866
12,406
6,473
Adjusted EBITDA
$
11,783
$
9,723
$
22,688
Adjusted EBITDA as a percentage of net
sales
7.9
%
6.6
%
22.7
%
Operating Expense
Reconciliation
Operating Expense - GAAP basis
$
77,068
$
72,399
$
31,373
Non-GAAP adjustments to operating expenses
(as scheduled above)
(24,011
)
(16,955
)
(7,330
)
Operating Expenses - Non-GAAP basis
$
53,057
$
55,444
$
24,043
(1)
Includes operating results from Xcerra
acquired on October 1, 2018
(2)
Excludes amortization of $7,625 for the
three months ending June 29, 2019, $7,641 for the three months
ending March 30, 2019 and $639 for the three months ended June 30,
2018.
Six Months Ended
June 29,
June 30,
2019 (1)
2018
Gross Profit Reconciliation
Gross profit - GAAP basis (excluding
amortization)(2)
$
116,821
$
82,367
Non-GAAP adjustments to cost of sales (as
scheduled above)
6,373
283
Gross profit - Non-GAAP basis
$
123,194
$
82,650
Non-GAAP profit as a percentage of net
sales
41.4
%
42.4
%
Adjusted EBITDA Reconciliation
Net income (loss) attributable to Cohu -
GAAP Basis
$
(41,966
)
$
19,770
Income from discontinued operations
(188
)
-
Income tax provision
(1,116
)
4,595
Interest expense
10,789
22
Interest income
(413
)
(576
)
Amortization
20,006
2,093
Depreciation
10,122
2,781
Other non-GAAP adjustments (as scheduled
above)
24,272
8,278
Adjusted EBITDA
$
21,506
$
36,963
Adjusted EBITDA as a percentage of net
sales
7.2
%
19.0
%
Operating Expense
Reconciliation
Operating Expense - GAAP basis
$
149,467
$
60,008
Non-GAAP adjustments to operating expenses
(as scheduled above)
(40,966
)
(10,088
)
Operating Expenses - Non-GAAP basis
$
108,501
$
49,920
(1)
Includes operating results from Xcerra
acquired on October 1, 2018
(2)
Excludes amortization of $15,266 for the
six months ending June 29, 2019 and $1,315 for the six months ended
June 30, 2018.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190805005573/en/
Cohu, Inc. Jeffrey D. Jones - Investor Relations
858-848-8106
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