- Third quarter revenue $95.3 million, approximately 67%
recurring
- Gross margin of 46.8%; non-GAAP gross margin of 47.1%
- Sequential order growth with recurring improving 8%
quarter-over-quarter
Cohu, Inc. (NASDAQ: COHU), a global supplier of equipment and
services optimizing semiconductor manufacturing yield and
productivity, today reported fiscal 2024 third quarter net sales of
$95.3 million and GAAP loss of $18.1 million or $0.39 per share.
Net sales for the first nine months of 2024 were $307.7 million and
GAAP loss was $48.5 million or $1.03 per share.
Cohu also reported non-GAAP results, with third quarter 2024
loss of $3.8 million or $0.08 per share and loss of $3.8 million or
$0.08 per share for the first nine months of 2024.
GAAP Results
(in millions, except per share
amounts)
Q3 FY 2024
Q2 FY 2024
Q3 FY 2023
9 Months 2024
9 Months 2023
Net sales
$
95.3
$
104.7
$
150.8
$
307.7
$
499.1
Net income (loss)
$
(18.1
)
$
(15.8
)
$
3.9
$
(48.5
)
$
30.2
Net income (loss) per share
$
(0.39
)
$
(0.34
)
$
0.08
$
(1.03
)
$
0.63
Non-GAAP Results
(in millions, except per share
amounts)
Q3 FY 2024
Q2 FY 2024
Q3 FY 2023
9 Months 2024
9 Months 2023
Net income (loss)
$
(3.8
)
$
(0.6
)
$
16.9
$
(3.8
)
$
66.8
Net income (loss) share
$
(0.08
)
$
(0.01
)
$
0.35
$
(0.08
)
$
1.39
Total cash and investments at the end of third quarter 2024 were
$269.2 million. Cohu repurchased 315,000 shares of its common stock
in the third quarter for an aggregate amount of approximately $8.1
million.
“We continued to execute on our strategy to win customers on
Cohu’s Diamondx tester, capturing design-wins in mixed signal
applications, while also expanding our inspection metrology
business with Neon and the new Krypton system,” said Cohu President
and CEO Luis Müller. “We are focused on developing new products
that are aligned to higher near-term growth opportunities in data
centers and continuing to build our recurring software
revenue.”
Cohu expects fourth quarter 2024 sales to be in a range of $95
million +/- $7 million.
Conference Call Information:
The Company will host a live conference call and webcast with
slides to discuss third quarter 2024 results at 1:30 p.m. Pacific
Time/4:30 p.m. Eastern Time on October 31, 2024. Interested parties
may listen live via webcast on Cohu’s investor relations website at
https://edge.media-server.com/mmc/p/4pae8v3k.
To participate via telephone and join the call live, please
register in advance at
https://register.vevent.com/register/BI24f4649d559f4b5d9688d8da0a83a4e9
to receive the dial-in number along with a unique PIN number that
can be used to access the call.
About Cohu:
Cohu (NASDAQ: COHU) is a global technology leader supplying
test, automation, inspection and metrology products and services to
the semiconductor industry. Cohu’s differentiated and broad product
portfolio enables optimized yield and productivity, accelerating
customers’ manufacturing time-to-market. Additional information can
be found at www.cohu.com.
Use of Non-GAAP Financial Information:
Included within this press release and accompanying materials
are non-GAAP financial measures, including non-GAAP Gross
Margin/Profit, Income and Income (adjusted earnings) per share,
Operating Income, Operating Expense, effective tax rate, free cash
flow, net cash per share and Adjusted EBITDA that supplement the
Company’s Condensed Consolidated Statements of Operations prepared
under generally accepted accounting principles (GAAP). These
non-GAAP financial measures adjust the Company’s actual results
prepared under GAAP to exclude charges and the related income tax
effect for: share-based compensation, the amortization of purchased
intangible assets, restructuring costs, manufacturing transition
and severance costs, acquisition-related costs and associated
professional fees, impairments, inventory step-up, depreciation of
purchase accounting adjustments to property, plant and equipment,
amortization of cloud-based software implementation costs (Adjusted
EBITDA only) and loss on
extinguishment of debt (Adjusted EBITDA only). Reconciliations of GAAP to non-GAAP amounts
for the periods presented herein are provided in schedules
accompanying this release and should be considered together with
the Condensed Consolidated Statements of Operations. With respect
to any forward-looking non-GAAP figures, we are unable to provide
without unreasonable efforts, at this time, a GAAP to non-GAAP
reconciliation of any forward-looking figures due to their inherent
uncertainty.
These non-GAAP measures are not meant as a substitute for GAAP,
but are included solely for informational and comparative purposes.
The Company’s management believes that this information can assist
investors in evaluating the Company’s operational trends, financial
performance, and cash generating capacity. Management uses non-GAAP
measures for a variety of reasons, including to make operational
decisions, to determine executive compensation in part, to forecast
future operational results, and for comparison to our annual
operating plan. However, the non-GAAP financial measures should not
be regarded as a replacement for (or superior to) corresponding,
similarly captioned, GAAP measures.
Forward Looking Statements:
Certain statements contained in this release and accompanying
materials may be considered forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of
1995, including statements regarding new product introductions or
customer adoptions and corresponding financial impacts;
expectations related to our FY2024 outlook, including quarterly
projections; effects of near-term growth opportunities and
recurring software revenue on future business; and any other
statements that are predictive in nature and depend upon or refer
to future events or conditions; and/or include words such as “may,”
“will,” “should,” “would,” “expect,” “anticipate,” “plan,”
“likely,” “believe,” “estimate,” “project,” “intend;” and/or other
similar expressions among others. Statements that are not
historical facts are forward-looking statements. Forward-looking
statements are based on current beliefs and assumptions that are
subject to risks and uncertainties and are not guarantees of future
performance. Any third-party industry analyst forecasts quoted are
for reference only and Cohu does not adopt or affirm any such
forecasts.
Actual results and future business conditions could differ
materially from those contained in any forward-looking statement as
a result of various factors, including, without limitation: new
product investments and product enhancements which may not be
commercially successful; the semiconductor industry is seasonal,
cyclical, volatile and unpredictable; recent erosion in mobile,
automotive and industrial market sales; our ability to manage and
deliver high quality products and services; failure of sole source
contract manufacturer or our ability to manage third-party raw
material, component and/or service providers; ongoing inflationary
pressures on material and operational costs coupled with rising
interest rates; economic recession; the semiconductor industry is
intensely competitive, subject to rapid technological changes, and
experiences consolidation of key customers for semiconductor test
equipment; a limited number of customers account for a substantial
percentage of net sales; significant exports to foreign countries
with economic and political instability and competition from a
number of Asia-based manufacturers; our relationships with
customers may deteriorate; loss of key personnel; risks of using
artificial intelligence within Cohu’s product developments and
business; reliance on foreign locations and geopolitical
instability in such locations critical to Cohu and its customers;
natural disasters, war and climate-related changes, including
related economic impacts; levels of debt; access to sufficient
capital on reasonable or favorable terms; foreign operations and
related currency fluctuations; required or desired accounting
charges and the cost or effectiveness of accounting controls;
instability of financial institutions where we maintain cash
deposits and potential loss of uninsured cash deposits; significant
goodwill and other intangibles as percentage of our total assets;
increasingly restrictive trade and export regulations impacting our
ability to sell products, specifically within China; risks
associated with acquisitions, investments and divestitures such as
integration and synergies; constraints related to corporate
governance structures; share repurchases and related impacts;
financial or operating results that are below forecast or credit
rating changes impacting our stock price or financing ability;
law/regulatory changes and including environmental or tax law
changes; significant volatility in our stock price; the risk of
cybersecurity breaches; enforcing or defending intellectual
property claims or other litigation.
These and other risks and uncertainties are discussed more fully
in Cohu’s filings with the SEC, including our most recent Form 10-K
and Form 10-Q, and the other filings made by Cohu with the SEC from
time to time, which are available via the SEC’s website at
www.sec.gov. Except as required by applicable law, Cohu does not
undertake any obligation to revise or update any forward-looking
statement, or to make any other forward-looking statements, whether
as a result of new information, future events or otherwise.
For press releases and other information of interest to
investors, please visit Cohu’s website at www.cohu.com.
COHU, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(in thousands, except per share
amounts)
Three Months Ended (1) (2)
Nine Months Ended (1) (2)
September 28,
September 30,
September 28,
September 30,
2024
2023
2024
2023
Net sales
$
95,342
$
150,804
$
307,657
$
499,096
Cost and expenses:
Cost of sales (excluding amortization)
50,685
79,909
166,829
261,638
Research and development
20,324
21,478
64,002
66,454
Selling, general and administrative
30,297
32,416
97,497
99,403
Amortization of purchased intangible
assets
9,791
8,857
29,334
26,617
Restructuring charges
14
742
36
2,046
111,111
143,402
357,698
456,158
Income (loss) from operations
(15,769
)
7,402
(50,041
)
42,938
Other (expense) income:
Interest expense
(86
)
(773
)
(519
)
(2,628
)
Interest income
2,609
3,207
7,651
8,657
Foreign transaction loss
(1,579
)
(1,200
)
(2,493
)
(2,285
)
Loss on extinguishment of debt
-
-
(241
)
(369
)
Income (loss) from operations before
taxes
(14,825
)
8,636
(45,643
)
46,313
Income tax provision
3,231
4,721
2,817
16,129
Net income (loss)
$
(18,056
)
$
3,915
$
(48,460
)
$
30,184
Income (loss) per share:
Basic:
$
(0.39
)
$
0.08
$
(1.03
)
$
0.64
Diluted:
$
(0.39
)
$
0.08
$
(1.03
)
$
0.63
Weighted average shares used in computing
income (loss) per share: (3)
Basic
46,815
47,615
46,971
47,525
Diluted
46,815
48,107
46,971
48,102
(1)
The three- and nine-month periods
ended September 28, 2024 and September 30, 2023 were both comprised
of 13 weeks and 39 weeks, respectively.
(2)
On January 30, 2023 the Company
completed the acquisition of MCT Worldwide, LLC (“MCT”) and on
October 2, 2023 the Company completed the acquisition of Equiptest
Engineering Pte. Ltd. (“EQT”). The results of MCT’s and EQT’s
operations have been included since those dates.
(3)
For the three- and nine-month periods
ended September 28, 2024, potentially dilutive securities were
excluded from the per share computations due to their antidilutive
effect.
COHU, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(in thousands)
September 28,
December 30,
2024
2023
Assets:
Current assets:
Cash and investments (1)
$
269,238
$
335,698
Accounts receivable
91,937
124,624
Inventories
144,125
155,793
Other current assets
37,154
22,703
Total current assets
542,454
638,818
Property, plant & equipment, net
76,666
69,085
Goodwill
242,867
241,658
Intangible assets, net
122,624
151,770
Operating lease right of use assets
14,067
16,778
Other assets
33,668
32,243
Total assets
$
1,032,346
$
1,150,352
Liabilities & Stockholders’
Equity:
Current liabilities:
Short-term borrowings
$
1,407
$
1,773
Current installments of long-term debt
1,199
4,551
Deferred profit
4,053
3,586
Other current liabilities
78,316
93,511
Total current liabilities
84,975
103,421
Long-term debt (1)
7,914
34,303
Non-current operating lease
liabilities
10,429
13,175
Other noncurrent liabilities
44,490
49,283
Cohu stockholders’ equity
884,538
950,170
Total liabilities & stockholders’
equity
$
1,032,346
$
1,150,352
(1)
On February 9, 2024, the Company
made a cash payment of $29.3 million to repay the remaining
outstanding amounts owed under our Term Loan B.
COHU, INC.
Supplemental Reconciliation of GAAP
Results to Non-GAAP Financial Measures (Unaudited)
(in thousands, except per share
amounts)
Three Months Ended
September 28,
June 29,
September 30,
2024
2024
2023
Income (loss) from operations - GAAP basis
(a)
$
(15,769
)
$
(16,299
)
$
7,402
Non-GAAP adjustments:
Share-based compensation included in
(b):
Cost of sales (COS)
270
262
223
Research and development (R&D)
765
1,001
849
Selling, general and administrative
(SG&A)
4,213
4,320
3,262
5,248
5,583
4,334
Amortization of purchased intangible
assets (c)
9,791
9,748
8,857
Restructuring charges related to inventory
adjustments in COS (d)
(20
)
(12
)
(18
)
Restructuring charges (d)
14
13
742
Manufacturing and sales transition costs
included in (e):
COS
-
2
-
R&D
62
44
-
SG&A
393
1,196
61
455
1,242
61
Impairment charge included in SG&A
(f)
(63
)
-
-
Acquisition costs included in SG&A
(g)
-
1
758
Depreciation of PP&E step-up included
in SG&A (h)
12
12
14
Income (loss) from operations - non-GAAP
basis (i)
$
(332
)
$
288
$
22,150
Net income (loss) - GAAP basis
$
(18,056
)
$
(15,769
)
$
3,915
Non-GAAP adjustments (as scheduled
above)
15,437
16,587
14,748
Tax effect of non-GAAP adjustments (j)
(1,178
)
(1,400
)
(1,754
)
Net income (loss) - non-GAAP basis
$
(3,797
)
$
(582
)
$
16,909
GAAP net income (loss) per share -
diluted
$
(0.39
)
$
(0.34
)
$
0.08
Non-GAAP net income (loss) per share -
diluted (k)
$
(0.08
)
$
(0.01
)
$
0.35
Management believes the presentation of these non-GAAP financial
measures, when taken together with the corresponding GAAP financial
measures, provides meaningful supplemental information regarding
the Company’s operating performance. Our management uses these
non-GAAP financial measures in assessing the Company's operating
results, as well as when planning, forecasting and analyzing future
periods and these non-GAAP measures allow investors to evaluate the
Company’s financial performance using some of the same measures as
management. Management views share-based compensation as an expense
that is unrelated to the Company’s operational performance as it
does not require cash payments and can vary in amount from period
to period and the elimination of amortization charges provides
better comparability of pre- and post-acquisition operating results
and to results of businesses utilizing internally developed
intangible assets. Management initiated certain restructuring and
manufacturing transition activities including employee headcount
reductions and other organizational changes to align our business
strategies in light of the acquisitions of MCT and EQT.
Restructuring and manufacturing transition costs have been excluded
because such expense is not used by Management to assess the core
profitability of Cohu’s business operations. Impairment charges
have been excluded as these amounts are infrequent and are
unrelated to the operational performance of Cohu. PP&E and
inventory step-up costs have been excluded by management as they
are unrelated to the core operating activities of the Company.
Acquisition costs have been excluded by management as they are
unrelated to the core operating activities of the Company and the
frequency and variability in the nature of the charges can vary
significantly from period to period. Excluding this data provides
investors with a basis to compare Cohu’s performance against the
performance of other companies without this variability. However,
the non-GAAP financial measures should not be regarded as a
replacement for (or superior to) corresponding, similarly
captioned, GAAP measures. The presentation of non-GAAP financial
measures above may not be comparable to similarly titled measures
reported by other companies and investors should be careful when
comparing our non-GAAP financial measures to those of other
companies.
(a)
(16.5)%, (15.6)% and 4.9% 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 restructuring costs incurred
related to the integration of MCT.
(e)
To eliminate the manufacturing transition
and severance costs.
(f)
To eliminate the impairment of the
Company’s investment in Fraes-und Technologiezentrum GmbH
Frasdorf.
(g)
To eliminate professional fees and other
direct incremental expenses incurred related to acquisitions.
(h)
To eliminate depreciation of PP&E step
up charges related to the acquisitions.
(i)
(0.3)%, 0.3% and 14.7% of net sales,
respectively.
(j)
To adjust the provision for income taxes
related to the adjustments described above based on applicable tax
rates.
(k)
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)
Nine Months Ended
September 28,
September 30,
2024
2023
Income (loss) from operations - GAAP basis
(a)
$
(50,041
)
$
42,938
Non-GAAP adjustments:
Share-based compensation included in
(b):
Cost of sales (COS)
759
619
Research and development (R&D)
2,600
2,534
Selling, general and administrative
(SG&A)
12,100
9,527
15,459
12,680
Amortization of purchased intangible
assets (c)
29,334
26,617
Restructuring charges related to inventory
adjustments in COS (d)
(36
)
(59
)
Restructuring charges (d)
36
2,046
Manufacturing and sales transition costs
included in (e):
COS
2
18
R&D
120
22
SG&A
3,229
480
3,351
520
Impairment charge included in SG&A
(f)
903
-
Inventory step-up included in COS (g)
-
273
Acquisition costs included in SG&A
(h)
175
1,283
Depreciation of PP&E step-up included
in SG&A (i)
36
37
Income (loss) from operations - non-GAAP
basis (j)
$
(783
)
$
86,335
Net income (loss) - GAAP basis
$
(48,460
)
$
30,184
Non-GAAP adjustments (as scheduled
above)
49,258
43,397
Tax effect of non-GAAP adjustments (k)
(4,577
)
(6,815
)
Net income (loss) - non-GAAP basis
$
(3,779
)
$
66,766
GAAP net income (loss) per share -
diluted
$
(1.03
)
$
0.63
Non-GAAP income (loss) per share - diluted
(l)
$
(0.08
)
$
1.39
Management believes the presentation of these non-GAAP financial
measures, when taken together with the corresponding GAAP financial
measures, provides meaningful supplemental information regarding
the Company’s operating performance. Our management uses these
non-GAAP financial measures in assessing the Company's operating
results, as well as when planning, forecasting and analyzing future
periods and these non-GAAP measures allow investors to evaluate the
Company’s financial performance using some of the same measures as
management. Management views share-based compensation as an expense
that is unrelated to the Company’s operational performance as it
does not require cash payments and can vary in amount from period
to period and the elimination of amortization charges provides
better comparability of pre- and post-acquisition operating results
and to results of businesses utilizing internally developed
intangible assets. Management initiated certain restructuring and
manufacturing transition activities including employee headcount
reductions and other organizational changes to align our business
strategies in light of the acquisitions of MCT and EQT.
Restructuring and manufacturing transition costs have been excluded
because such expense is not used by Management to assess the core
profitability of Cohu’s business operations. Impairment charges
have been excluded as these amounts are infrequent and are
unrelated to the operational performance of Cohu. PP&E and
inventory step-up costs have been excluded by management as they
are unrelated to the core operating activities of the Company.
Acquisition costs have been excluded by management as they are
unrelated to the core operating activities of the Company and the
frequency and variability in the nature of the charges can vary
significantly from period to period. Excluding this data provides
investors with a basis to compare Cohu’s performance against the
performance of other companies without this variability. However,
the non-GAAP financial measures should not be regarded as a
replacement for (or superior to) corresponding, similarly
captioned, GAAP measures. The presentation of non-GAAP financial
measures above may not be comparable to similarly titled measures
reported by other companies and investors should be careful when
comparing our non-GAAP financial measures to those of other
companies.
(a)
(16.3)% and 8.6% of net sales,
respectively.
(b)
To eliminate compensation expense for
employee stock options, stock units and our employee stock purchase
plan.
(c)
To eliminate the amortization of acquired
intangible assets.
(d)
To eliminate restructuring costs incurred
related to the integration of MCT.
(e)
To eliminate the manufacturing transition
and severance costs.
(f)
To eliminate the impairment of the
Company’s investment in Fraes-und Technologiezentrum GmbH
Frasdorf.
(g)
To eliminate amortization of inventory
step up charges related to acquisitions.
(h)
To eliminate professional fees and other
direct incremental expenses incurred related to acquisitions.
(i)
To eliminate the property, plant &
equipment step-up depreciation accelerated related to
acquisitions.
(j)
(0.3)% and 17.3% of net sales,
respectively.
(k)
To adjust the provision for income taxes
related to the adjustments described above based on applicable tax
rates.
(l)
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)
Three Months Ended
September 28,
June 29,
September 30,
2024
2024
2023
Gross Profit Reconciliation
Gross profit - GAAP basis (excluding
amortization) (1)
$
44,657
$
46,922
$
70,895
Non-GAAP adjustments to cost of sales (as
scheduled above)
250
252
205
Gross profit - Non-GAAP basis
$
44,907
$
47,174
$
71,100
As a percentage of net sales:
GAAP gross profit
46.8
%
44.8
%
47.0
%
Non-GAAP gross profit
47.1
%
45.1
%
47.1
%
Adjusted EBITDA Reconciliation
Net income - GAAP Basis
$
(18,056
)
$
(15,769
)
$
3,915
Income tax provision
3,231
1,286
4,721
Interest expense
86
144
773
Interest income
(2,609
)
(2,333
)
(3,207
)
Amortization of purchased intangible
assets
9,791
9,748
8,857
Depreciation
3,362
3,413
3,319
Amortization of cloud-based software
implementation costs (2)
709
709
700
Other non-GAAP adjustments (as scheduled
above)
5,634
6,827
5,877
Adjusted EBITDA
$
2,148
$
4,025
$
24,955
As a percentage of net sales:
Net income - GAAP Basis
(18.9
)%
(15.1
)%
2.6
%
Adjusted EBITDA
2.3
%
3.8
%
16.5
%
Operating Expense
Reconciliation
Operating Expense - GAAP basis
$
60,426
$
63,221
$
63,493
Non-GAAP adjustments to operating expenses
(as scheduled above)
(15,187
)
(16,335
)
(14,543
)
Operating Expenses - Non-GAAP basis
$
45,239
$
46,886
$
48,950
(1)
Excludes amortization of $7,518, $7,486
and $6,948 for the three months ending September 28, 2024, June 29,
2024 and September 30, 2023, respectively.
(2)
Represents amortization of capitalized
implementation costs related to cloud-based software arrangements
that are included within SG&A.
Nine Months Ended
September 28,
September 30,
2024
2023
Gross Profit Reconciliation
Gross profit - GAAP basis (excluding
amortization) (1)
$
140,828
$
237,458
Non-GAAP adjustments to cost of sales (as
scheduled above)
725
851
Gross profit - Non-GAAP basis
$
141,553
$
238,309
As a percentage of net sales:
GAAP gross profit
45.8
%
47.6
%
Non-GAAP gross profit
46.0
%
47.7
%
Adjusted EBITDA Reconciliation
Net income (loss) - GAAP Basis
$
(48,460
)
$
30,184
Income tax provision
2,817
16,129
Interest expense
519
2,628
Interest income
(7,651
)
(8,657
)
Amortization of purchased intangible
assets
29,334
26,617
Depreciation
10,204
10,017
Amortization of cloud-based software
implementation costs (2)
2,127
2,100
Loss on extinguishment of debt
241
369
Other non-GAAP adjustments (as scheduled
above)
19,888
16,743
Adjusted EBITDA
$
9,019
$
96,130
As a percentage of net sales:
Net income (loss) - GAAP Basis
(15.8
)%
6.0
%
Adjusted EBITDA
2.9
%
19.3
%
Operating Expense
Reconciliation
Operating Expense - GAAP basis
$
190,869
$
194,520
Non-GAAP adjustments to operating expenses
(as scheduled above)
(48,533
)
(42,546
)
Operating Expenses - Non-GAAP basis
$
142,336
$
151,974
(1)
Excludes amortization of $22,526 and
$20,941 for the nine months ending September 28, 2024 and September
30, 2023, respectively.
(2)
Represents amortization of capitalized
implementation costs related to cloud-based software arrangements
that are included within SG&A.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241031933443/en/
Cohu, Inc. Jeffrey D. Jones - Investor Relations
858-848-8106
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