- Gross margin of 48.1%; non-GAAP gross margin of 48.2%
- Received large order for SiC device test automation &
inspection equipment
- Expanding Philippines factory to support interface business
growth plans
Cohu, Inc. (NASDAQ: COHU), a global leader in semiconductor
equipment and services, today reported fiscal 2023 first quarter
net sales of $179.4 million and GAAP income of $15.7 million or
$0.33 per share. Cohu also reported first quarter 2023 non-GAAP
income of $26.9 million or $0.56 per share.
GAAP Results
(in millions, except per share
amounts)
Q1 FY 2023
Q4 FY 2022
Q1 FY 2022
Net sales
$179.4
$191.1
$197.8
Net income
$15.7
$21.6
$21.6
Net income per share
$0.33
$0.45
$0.44
Non-GAAP Results
(in millions, except per share
amounts)
Q1 FY 2023
Q4 FY 2022
Q1 FY 2022
Net income
$26.9
$33.5
$32.6
Net income per share
$0.56
$0.70
$0.66
Total cash and investments at the end of first quarter 2023 were
$324.3 million and, after making a $35 million prepayment, our Term
Loan B principal amount was $32.0 million. Cohu repurchased 99,682
shares of its common stock in the first quarter for an aggregate
amount of approximately $3.5 million.
“First quarter profitability reflects our focus on continuing
improvements in operational performance and a recurring business
that delivered $334 million revenue over the last 12 months,” said
Cohu President and CEO Luis Müller. “Going forward, we are aligning
investments with major trends in industrial automation, autonomous
vehicles, increased processing and sensing power. We are expanding
our factory footprint in the Philippines to support future growth
in recurring business; building a new business in software to
optimize industrial productivity; developing new products to
support compound semiconductor manufacturing; and actively
targeting test and inspection design-wins in upstream processes at
wafer- and die-level. These actions are in support of Cohu’s
strategy to expand served addressable markets and deliver long-term
growth.”
Cohu expects second quarter 2023 sales to be between $161
million and $173 million.
Conference Call Information:
The Company will host a live conference call and webcast with
slides to discuss first quarter 2023 results at 1:30 p.m. Pacific
Time/4:30 p.m. Eastern Time on May 4, 2023. Interested parties may
listen live via webcast on Cohu’s investor relations website at
https://edge.media-server.com/mmc/p/f6cmpbex. To participate via
telephone and join the call live, please register in advance at
https://register.vevent.com/register/BI3667d1974b4b4694bd1bcef574d60195
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 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,
manufacturing transition and severance costs, acquisition-related
costs and associated professional fees, restructuring costs,
inventory step-up, depreciation of purchase accounting adjustments
to property, plant and equipment, employer payroll taxes related to
accelerated vesting share-based awards, 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 continuing improvements in
operational performance; aligning investments with major trends in
industrial automation, autonomous vehicles, increased processing
and sensing power; expanding our factory footprint in the
Philippines; future growth in recurring; building a new business in
software to optimize industrial productivity; developing new
products to support compound semiconductor (SiC) manufacturing;
targeting test and inspection design-wins in upstream processes at
wafer- and die-level; other design wins; NY32W and cGator
opportunities; strategy to expand served addressable markets and
deliver long-term growth; growth into adjacent areas; resiliency of
recurring business; expanding our software business including
DI-Core; estimated test cell utilization; Cohu’s FY2023 outlook; %
of incremental revenue expected to fall to operating income; Cohu’s
second quarter 2023 sales forecast, guidance, sales mix, non-GAAP
operating expenses, gross margin, operating income, adjusted
EBITDA, effective tax rate, free cash flow, cap ex, cash and/or
shares outstanding; estimated minimum cash needed; estimated EBITDA
breakeven point; Cohu’s Mid-Term Financial Targets; any future Term
Loan B principal reduction; the amount, timing or manner of any
share repurchases; 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:
cyclical COVID-19 pandemic impacts; new product investments and
product enhancements which may not be commercially successful;
inability to effectively manage multiple manufacturing sites in
Asia and secure reliable and cost-effective raw materials; failure
of sole source contract manufacturer; ongoing inflationary
pressures on material and operational costs coupled with rising
interest rates; economic recession; instability of financial
institutions where we maintain cash deposits and potential loss of
uninsured cash deposits; the semiconductor industry is seasonal,
cyclical, volatile and unpredictable; the semiconductor equipment
industry is intensely competitive; rapid technological changes and
product introductions and transitions; 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; loss of key personnel; reliance on foreign locations
and geopolitical instability in such locations critical to Cohu and
its customers; natural disasters, war and climate-related changes;
increasingly restrictive trade and export regulations impacting our
ability to sell products, specifically within China; significant
goodwill and other intangibles as percentage of our total assets;
risks associated with the MCT acquisition, such as integration and
synergies, and other risks associated with additional potential
acquisitions, investments and divestitures; levels of debt;
financial or operating results that are below forecast or credit
rating changes impacting our stock price or financing ability;
law/regulatory and including tax law changes; significant
volatility in our stock price; and the risk of cybersecurity
breaches.
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
INCOME
(Unaudited)
(in thousands, except per share
amounts)
Three Months Ended (1)
April 1,
March 26,
2023 (2)
2022
Net sales
$
179,371
$
197,757
Cost and expenses:
Cost of sales (excluding amortization)
93,153
106,601
Research and development
22,510
23,106
Selling, general and administrative
34,189
31,246
Amortization of purchased intangible
assets
8,754
8,535
Restructuring charges
888
576
159,494
170,064
Income from operations
19,877
27,693
Other (expense) income:
Interest expense
(1,128
)
(981
)
Interest income
2,718
111
Foreign transaction gain (loss)
(440
)
1,144
Loss on extinguishment of debt
(369
)
(104
)
Income from operations before taxes
20,658
27,863
Income tax provision
4,973
6,294
Net income
$
15,685
$
21,569
Income per share:
Basic:
$
0.33
$
0.44
Diluted:
$
0.33
$
0.44
Weighted average shares used in
computing income per share:
Basic
47,343
48,778
Diluted
48,171
49,569
(1)
The three- month periods ended
April 1, 2023 and March 26, 2022 were both comprised of 13
weeks.
(2)
On January 30, 2023 the Company
completed the acquisition of MCT Worldwide, LLC (“MCT”) and the
results of its operations have been included since that date.
COHU, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(in thousands)
April 1,
December 31,
2023
2022
Assets:
Current assets:
Cash and investments (1)
$
324,295
$
385,576
Accounts receivable
176,257
176,148
Inventories
176,189
170,141
Other current assets
32,755
32,986
Total current assets
709,496
764,851
Property, plant & equipment, net
67,208
65,011
Goodwill
223,552
213,539
Intangible assets, net
143,946
140,104
Operating lease right of use assets
21,718
22,804
Other assets
21,679
21,105
Total assets
$
1,187,599
$
1,227,414
Liabilities & Stockholders’
Equity:
Current liabilities:
Short-term borrowings
$
1,883
$
1,907
Current installments of long-term debt
4,538
4,404
Deferred profit
5,738
8,022
Other current liabilities
132,869
146,539
Total current liabilities
145,028
160,872
Long-term debt
37,719
72,664
Non-current operating lease
liabilities
18,017
19,209
Other noncurrent liabilities
48,056
45,828
Cohu stockholders’ equity
938,779
928,841
Total liabilities & stockholders’
equity
$
1,187,599
$
1,227,414
(1)
The decrease in cash and
investments was driven by cash used to acquire MCT and prepay
amounts outstanding on the Term Loan B during the quarter ended
April 1, 2023.
COHU, INC.
Supplemental Reconciliation of GAAP
Results to Non-GAAP Financial Measures (Unaudited)
(in thousands, except per share
amounts)
Three Months Ended
April 1,
December 31,
March 26,
2023
2022
2022
Income from operations - GAAP basis
(a)
$
19,877
$
27,243
$
27,693
Non-GAAP adjustments:
Share-based compensation included in
(b):
Cost of sales (COS)
180
168
145
Research and development (R&D)
866
767
752
Selling, general and administrative
(SG&A)
2,868
2,888
2,525
3,914
3,823
3,422
Amortization of purchased intangible
assets (c)
8,754
8,103
8,535
Restructuring charges related to inventory
adjustments in COS (d)
(28
)
(35
)
(175
)
Restructuring charges (d)
888
5
576
Manufacturing and sales transition costs
included in (e):
COS
18
(13
)
-
R&D
-
(7
)
-
SG&A
253
1,723
-
271
1,703
-
Inventory step-up included in COS (f)
124
-
-
Acquisition costs included in SG&A
(g)
385
72
-
Depreciation of PP&E Step-up included
in SG&A (h)
9
-
-
Payroll taxes related to accelerated
vesting of share-based
awards included in SG&A (i)
-
-
132
Income from operations - non-GAAP basis
(j)
$
34,194
$
40,914
$
40,183
Net income - GAAP basis
$
15,685
$
21,628
$
21,569
Non-GAAP adjustments (as scheduled
above)
14,317
13,671
12,490
Tax effect of non-GAAP adjustments (k)
(3,057
)
(1,761
)
(1,483
)
Net income - non-GAAP basis
$
26,945
$
33,538
$
32,576
GAAP net income per share - diluted
$
0.33
$
0.45
$
0.44
Non-GAAP net income per share - diluted
(l)
$
0.56
$
0.70
$
0.66
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 and the acquisition of MCT. Restructuring
costs have been excluded because such expense is not used by
Management to assess the core profitability of Cohu’s business
operations. 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. Employer payroll taxes
related to accelerated severance stock-based compensation are
dependent on the Company's stock price and the timing and size of
the vesting of their restricted stock, over which management has
limited to no control, and as such management does not believe it
correlates to the company's operation of the business. 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)
11.1%, 14.3% and 14.0% 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 restructuring costs incurred
related to the integration of MCT and Xcerra.
(e)
To eliminate the manufacturing transition
and severance costs.
(f)
To eliminate amortization of inventory
step up charges related to MCT acquisition.
(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 MCT acquisition.
(i)
To eliminate the impact of employer
payroll taxes associated with the acceleration of Pascal Rondé
share-based awards under the terms of his separation agreement.
(j)
19.1%, 21.4% and 20.3% 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
April 1,
December 31,
March 26,
2023
2022
2022
Gross Profit Reconciliation
Gross profit - GAAP basis (excluding
amortization) (1)
$
86,218
$
93,151
$
91,156
Non-GAAP adjustments to cost of sales (as
scheduled above)
294
120
(30
)
Gross profit - Non-GAAP basis
$
86,512
$
93,271
$
91,126
As a percentage of net sales:
GAAP gross profit
48.1
%
48.7
%
46.1
%
Non-GAAP gross profit
48.2
%
48.8
%
46.1
%
Adjusted EBITDA Reconciliation
Net income - GAAP Basis
$
15,685
$
21,628
$
21,569
Income tax provision
4,973
4,483
6,294
Interest expense
1,128
1,249
981
Interest income
(2,718
)
(2,461
)
(111
)
Amortization of purchased intangible
assets
8,754
8,103
8,535
Depreciation
3,337
3,268
3,132
Amortization of cloud-based software
implementation costs (2)
700
626
478
Loss on extinguishment of debt
369
-
104
Other non-GAAP adjustments (as scheduled
above)
5,554
5,568
3,955
Adjusted EBITDA
$
37,782
$
42,464
$
44,937
As a percentage of net sales:
Net income - GAAP Basis
8.7
%
11.3
%
10.9
%
Adjusted EBITDA
21.1
%
22.2
%
22.7
%
Operating Expense
Reconciliation
Operating Expense - GAAP basis
$
66,341
$
65,908
$
63,463
Non-GAAP adjustments to operating expenses
(as scheduled above)
(14,023
)
(13,551
)
(12,520
)
Operating Expenses - Non-GAAP basis
$
52,318
$
52,357
$
50,943
(1
)
Excludes amortization of $6,891, $6,350
and $6,696 for the three months ending April 01, 2023, December 31,
2022 and March 26, 2022, 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/20230504005385/en/
Cohu, Inc. Jeffrey D. Jones - Investor Relations
858-848-8106
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