Cohu Reports Fourth Quarter Operating Results

Cohu, Inc. (NASDAQ:COHU) today reported fiscal 2011 fourth quarter net sales of $66.6 million and GAAP net income of $0.7 million or $0.03 per share. Net sales for the twelve months ended 2011 were $309.0 million and GAAP net income was $15.7 million or $0.64 per share.

The Company also reported non-GAAP results, with fourth quarter 2011 net income of $2.8 million or $0.12 per share and net income of $23.4 million or $0.96 per share for the twelve months ended 2011.
GAAP Results      
  Q4 FY 2011 Q3 FY 2011 Q4 FY 2010
Net sales $ 66.6 million $ 71.8 million $ 96.9 million
Net income $ 0.7 million $ 3.4 million $ 9.4 million
Income per share $0.03 $0.14 $0.39
 
12 Months 2011 12 Months 2010
Net sales $ 309.0 million $ 322.7 million
Net income $ 15.7 million $ 24.6 million
  Income per share   $0.64   $1.02    
               
Non-GAAP Results
Q4 FY 2011 Q3 FY 2011 Q4 FY 2010
Non-GAAP net income $ 2.8 million $ 5.1 million $ 11.7 million
Non-GAAP income per share $0.12 $0.21 $0.48
 
12 Months 2011 12 Months 2010
Non-GAAP net income $ 23.4 million $ 33.2 million
  Non-GAAP income per share   $0.96   $1.38    
 

Sales of semiconductor equipment accounted for 78% of fiscal 2011 fourth quarter sales. Microwave communications equipment and video cameras and related equipment contributed 14% and 8%, respectively, for the same period.

Orders were $44.0 million for the fourth quarter of 2011 and $61.4 million for the third quarter of 2011. Orders for semiconductor equipment were $33.9 million in the fourth quarter of 2011 compared to $48.5 million in the third quarter of 2011. Total consolidated backlog was $51.9 million at December 31, 2011 compared to $74.5 million at September 24, 2011. Cohu expects first quarter 2012 sales to be approximately $50 million.

James A. Donahue, Chairman, President and Chief Executive Officer stated, “During the fourth quarter, we received the first order for our next-generation gravity-feed handler, from a global automotive IC company. Additional evaluations are planned or underway.”

Donahue concluded, “Though SEMI reported that orders for back-end semiconductor equipment were essentially flat during the four months ended December, 2011, recent comments from certain semiconductor equipment and IC companies suggest that a bottom has been reached and that business conditions are expected to improve as we move past the Lunar New Year holiday. Recently we are seeing increased customer activity, particularly for automotive and consumer applications.”

Cohu's Board of Directors approved a quarterly cash dividend of $0.06 per share payable on April 20, 2012 to shareholders of record on March 6, 2012. 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 and inventory step-up adjustments. 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 concerning Cohu's expectations of business conditions, orders, sales, revenues and operating results are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those projected or forecasted. Such risks and uncertainties include, but are not limited to, inventory, goodwill and other intangible asset write-downs; our ability to convert new products under development into production on a timely basis, support product development and meet customer delivery and acceptance requirements for next generation equipment; our reliance on third-party contract manufacturers; failure to obtain customer acceptance resulting in the inability to recognize revenue and accounts receivable collection problems; customer orders may be canceled or delayed; the concentration of our revenues from a limited number of customers; intense competition in the semiconductor test handler industry; our reliance on patents and intellectual property; compliance with U.S. export regulations; and the cyclical and unpredictable nature of capital expenditures by semiconductor manufacturers. These and other risks and uncertainties are discussed more fully in Cohu's filings with the Securities and Exchange Commission, including the most recently filed Form 10-K and Form 10-Q. Cohu assumes no obligation to update the information in this release.

About Cohu:

Cohu is a supplier of test handling, burn-in, thermal subsystems and MEMS test solutions used by the global semiconductor industry, microwave communications and video equipment.

Cohu will be conducting their conference call on Wednesday, February 1, 2012 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.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)
         
 
Three Months Ended (1) Twelve Months Ended (1)
December 31, December 25, December 31, December 25,
2011 2010 2011 2010
 
Net sales $ 66,559 $ 96,902 $ 308,968 $ 322,667
Cost and expenses:
Cost of sales 45,147 64,411 208,839 212,672
Research and development 9,039 9,741 36,230 36,201
Selling, general and administrative   11,168   12,252   46,563   44,117
  65,354   86,404   291,632   292,990
Income from operations 1,205 10,498 17,336 29,677
Interest and other, net   102   122   442   561
Income before income taxes 1,307 10,620 17,778 30,238
Income tax provision   588   1,192   2,059   5,594
Net income $ 719 $ 9,428 $ 15,719 $ 24,644
 
Income per share:
Basic $ 0.03 $ 0.39 $ 0.65 $ 1.04
Diluted $ 0.03 $ 0.39 $ 0.64 $ 1.02
 
 
Weighted average shares used in
computing income per share:
Basic   24,259   23,922   24,134   23,732
Diluted   24,559   24,323   24,501   24,097
 

(1) The three- and twelve-month periods ended December 31, 2011 and December 25, 2010 were comprised of 14 weeks and 13 weeks and 53 weeks and 52 weeks, respectively.
 
COHU, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) (Unaudited)
       
 
 
December 31, December 25,
2011 2010
Assets:
Current assets:
Cash and investments $ 105,002 $ 98,175
Accounts receivable 41,922 66,801
Inventories 82,689 63,224
Deferred taxes and other   14,203   12,017
Total current assets 243,816 240,217
Property, plant & equipment, net 36,981 39,804
Goodwill 58,060 58,498
Intangible assets, net 21,828 26,523
Other assets   923   1,001
Total assets $ 361,608 $ 366,043
 
Liabilities & Stockholders’ Equity:
Current liabilities:
Deferred profit $ 2,821 $ 14,834
Other current liabilities   49,050   56,700
Total current liabilities 51,871 71,534
Deferred taxes and other noncurrent liabilities 18,706 19,784
Stockholders’ equity   291,031   274,725
Total liabilities & stockholders’ equity $ 361,608 $ 366,043
 
     
COHU, INC.
Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (Unaudited)
(in thousands, except per share amounts)
   
 
Three Months Ended
December 31, September 24, December 25,
2011 2011 2010
 
Income from operations - GAAP basis (a) $ 1,205 $ 2,660 $ 10,498
 
Non-GAAP adjustments:
Share-based compensation included in (b):
Cost of goods sold 138 101 64
Research and development 491 262 334
Selling, general and administrative   749     560     602  
1,378 923 1,000
 
Amortization of intangible assets included in (c):
Cost of goods sold 875 919 1,325
Research and development - - -
Selling, general and administrative   162     170     210  
  1,037     1,089     1,535  
 
Income from operations - non-GAAP basis (d) $ 3,620   $ 4,672   $ 13,033  
 
Net income - GAAP basis $ 719 $ 3,376 $ 9,428
Non-GAAP adjustments (as scheduled above) 2,415 2,012 2,535
Tax effect of non-GAAP adjustments (e)   (303 )   (317 )   (285 )
Net income - non-GAAP basis $ 2,831   $ 5,071   $ 11,678  
 
 
GAAP net income per share - diluted $ 0.03 $ 0.14 $ 0.39
 
Non-GAAP net income per share - diluted (f) $ 0.12 $ 0.21 $ 0.48
 

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. However, the non-GAAP financial measures should not be regarded as a replacement for corresponding, similarly captioned, GAAP measures. The presentation of non-GAAP financial measures above may not be comparable to similarly titled measures reported by other companies and investors should be careful when comparing our non-GAAP financial measures to those of other companies.

(a) 1.8%, 3.7% and 10.8% of net sales, respectively.

(b) To eliminate compensation expense for employee stock options, restricted stock units and our employee stock purchase plan.

(c) To eliminate the amortization of intangible assets acquired in the fiscal 2008 acquisition of Rasco for the three months ended December 31, 2011 and September 24, 2011 and the amortization of intangible assets acquired in the fiscal 2008 acquisition of Rasco, the fiscal 2007 acquisition of Tandberg Television AVS GmbH and the fiscal 2006 acquisition of Unigen for the three months ended December 25, 2010.

(d) 5.4%, 6.5% and 13.4% of net sales, respectively.

(e) To adjust the provision for income taxes related to the adjustments described in notes (b) and (c) above based on applicable tax rates.

(f) Computed using number of GAAP diluted shares outstanding for each period presented.
 
COHU, INC.
Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (Unaudited)
(in thousands, except per share amounts)
       
 
 
Twelve Months Ended
December 31, December 25,
2011 2010
 
Income from operations - GAAP basis (a) $ 17,336 $ 29,677
 
Non-GAAP adjustments:
Share-based compensation included in (b):
Cost of goods sold 421 297
Research and development 1,355 1,121
Selling, general and administrative   2,511     2,125  
4,287 3,543
Amortization of intangible assets included in (c):
Cost of goods sold 3,946 5,229
Research and development - -
Selling, general and administrative   699     830  
4,645 6,059
 
Inventory step-up included in cost of goods sold (d)   -     180  
 
Income from operations - non-GAAP basis (e) $ 26,268   $ 39,459  
 
Net income - GAAP basis $ 15,719 $ 24,644
Non-GAAP adjustments (as scheduled above) 8,932 9,782
Tax effect of non-GAAP adjustments (f)   (1,221 )   (1,204 )
Net income - non-GAAP basis $ 23,430   $ 33,222  
 
 
GAAP net income per share - diluted $ 0.64 $ 1.02
 
Non-GAAP net income per share - diluted (g) $ 0.96 $ 1.38
 

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 has excluded inventory step-up costs associated with our acquisition of Rasco, primarily because it is not reflective of our ongoing operating results, and is not used by management to assess the core profitability of our business operations. However, the non-GAAP financial measures should not be regarded as a replacement for corresponding, similarly captioned, GAAP measures. The presentation of non-GAAP financial measures above may not be comparable to similarly titled measures reported by other companies and investors should be careful when comparing our non-GAAP financial measures to those of other companies.

(a) 5.6% and 9.2% of net sales, respectively.

(b) To eliminate compensation expense for employee stock options, restricted stock units and our employee stock purchase plan.

(c) To eliminate the amortization of intangible assets acquired in the fiscal 2008 acquisition of Rasco, the fiscal 2007 acquisition of Tandberg Television AVS GmbH and the fiscal 2006 acquisition of Unigen.

(d) To eliminate the inventory step-up associated with certain semiconductor test systems sold.

(e) 8.5% and 12.2% of net sales, respectively.

(f) To adjust the provision for income taxes related to the adjustments described in notes (b), (c) and (d) above based on applicable tax rates.

(g) Computed using number of GAAP diluted shares outstanding for each period presented.

Copyright Business Wire 2010

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