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Cohu Reports Second Quarter 2023 Results

  • Second quarter revenue $168.9 million
  • Gross margin of 47.6%; non-GAAP gross margin of 47.8%
  • Improving thermal handler demand for hyperscaling

Cohu, Inc. (NASDAQ: COHU), a global supplier of equipment and services optimizing semiconductor manufacturing yield and productivity, today reported fiscal 2023 second quarter net sales of $168.9 million and GAAP income of $10.6 million or $0.22 per share. Net sales for the first six months of 2023 were $348.3 million and GAAP income was $26.3 million or $0.55 per share.

Cohu also reported non-GAAP results, with second quarter 2023 income of $22.8 million or $0.48 per share and income of $49.8 million or $1.04 per share for the first six months of 2023.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions, except per share amounts)

Q2 FY

2023

 

Q1 FY

2023

 

Q2 FY

2022

 

6 Months

2023

 

6 Months

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

168.9

 

$

179.4

 

$

217.2

 

$

348.3

 

$

415.0

 

 

 

Net income

 

$

10.6

 

$

15.7

 

$

28.8

 

$

26.3

 

$

50.3

 

 

 

Net income per share

 

$

0.22

 

$

0.33

 

$

0.59

 

$

0.55

 

$

1.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions, except per share amounts)

Q2 FY

2023

 

Q1 FY

2023

 

Q2 FY

2022

 

6 Months

2023

 

6 Months

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

22.8

 

$

26.9

 

$

39.7

 

$

49.8

 

$

72.3

 

 

 

Net income per share

 

$

0.48

 

$

0.56

 

$

0.81

 

$

1.04

 

$

1.47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash and investments at the end of second quarter 2023 were $372.3 million and our Term Loan B principal amount was $31.1 million. Cohu repurchased 77,203 shares of its common stock in the second quarter for an aggregate amount of approximately $2.7 million.

“Second quarter gross margin and profitability were strong driven by a resilient recurring business model which has achieved a 3-year compound revenue growth rate of 7%,” said Cohu President and CEO Luis Müller. “We are focused on expanding our product portfolio and winning new customer applications, positioning the company to deliver revenue growth when market conditions improve.”

Cohu expects third quarter 2023 sales to be approximately $150 million.

Conference Call Information:

The Company will host a live conference call and webcast with slides to discuss second quarter 2023 results at 5:30 a.m. Pacific Time/8:30 a.m. Eastern Time on August 3, 2023. Interested parties may listen live via webcast on Cohu’s investor relations website at https://edge.media-server.com/mmc/p/6n5z34zd.

To participate via telephone and join the call live, please register in advance at https://register.vevent.com/register/BIb169876ee747489baab528b612fd969e 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, mobility, increased processing and sensing power; expanding our factory footprint in the Philippines; future growth in recurring; test interface design wins with expanded manufacturing in Asia; other design wins within the handler group; expansion of the Diamondx platform for analog testing; strategy to expand served addressable markets and deliver long-term growth; growth into adjacent areas, including service; resiliency of recurring business; expanding our software business including DI-Core; expanding Cohu’s differentiated product portfolio; new customer application gains; estimated test cell utilization; thermal handler demand for hyperscaling; Cohu’s FY2023 and FY2024 outlook; revenue growth with expected market condition improvements; % of incremental revenue expected to fall to operating income; expense controls; Cohu’s third quarter 2023 sales forecast, orders, 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)

 

Six Months Ended (1)

 

 

 

 

July 1,

 

June 25,

 

July 1,

 

June 25,

 

 

 

 

2023 (2)

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

168,921

 

 

$

217,226

 

 

$

348,292

 

 

$

414,983

 

 

Cost and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales (excluding amortization)

 

88,576

 

 

 

116,273

 

 

 

181,729

 

 

 

222,874

 

 

 

Research and development

 

22,466

 

 

 

23,160

 

 

 

44,976

 

 

 

46,266

 

 

 

Selling, general and administrative

 

32,798

 

 

 

32,531

 

 

 

66,987

 

 

 

63,777

 

 

 

Amortization of purchased intangible assets

 

9,006

 

 

 

8,341

 

 

 

17,760

 

 

 

16,876

 

 

 

Restructuring charges

 

416

 

 

 

7

 

 

 

1,304

 

 

 

583

 

 

 

 

 

 

153,262

 

 

 

180,312

 

 

 

312,756

 

 

 

350,376

 

 

Income from operations

 

15,659

 

 

 

36,914

 

 

 

35,536

 

 

 

64,607

 

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(727

)

 

 

(919

)

 

 

(1,855

)

 

 

(1,900

)

 

 

Interest income

 

2,732

 

 

 

308

 

 

 

5,450

 

 

 

419

 

 

 

Foreign transaction gain (loss)

 

(645

)

 

 

1,491

 

 

 

(1,085

)

 

 

2,635

 

 

 

Loss on extinguishment of debt

 

-

 

 

 

(128

)

 

 

(369

)

 

 

(232

)

 

Income from operations before taxes

 

17,019

 

 

 

37,666

 

 

 

37,677

 

 

 

65,529

 

 

Income tax provision

 

6,435

 

 

 

8,898

 

 

 

11,408

 

 

 

15,192

 

 

Net income

$

10,584

 

 

$

28,768

 

 

$

26,269

 

 

$

50,337

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

$

0.22

 

 

$

0.59

 

 

$

0.55

 

 

$

1.04

 

 

 

Diluted:

$

0.22

 

 

$

0.59

 

 

$

0.55

 

 

$

1.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares used in

 

 

 

 

 

 

 

 

 

 

 

 

 

computing income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

47,618

 

 

 

48,475

 

 

 

47,481

 

 

 

48,626

 

 

 

Diluted

 

48,028

 

 

 

48,928

 

 

 

48,099

 

 

 

49,248

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

 

The three- and six-month periods ended July 1, 2023 and June 25, 2022 were both comprised of 13 weeks and 26 weeks, respectively.

(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)

 

 

 

 

 

 

 

 

 

July 1,

 

December 31,

 

 

 

 

2023

 

2022

 

Assets:

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and investments

$

372,317

 

$

385,576

 

 

Accounts receivable

 

144,137

 

 

176,148

 

 

Inventories

 

173,753

 

 

170,141

 

 

Other current assets

 

32,084

 

 

32,986

 

 

 

Total current assets

 

722,291

 

 

764,851

 

Property, plant & equipment, net

 

66,626

 

 

65,011

 

Goodwill

 

224,291

 

 

213,539

 

Intangible assets, net

 

135,300

 

 

140,104

 

Operating lease right of use assets

 

19,839

 

 

22,804

 

Other assets

 

19,718

 

 

21,105

 

 

 

Total assets

$

1,188,065

 

$

1,227,414

 

 

 

 

 

 

 

 

 

 

Liabilities & Stockholders’ Equity:

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Short-term borrowings

$

1,732

 

$

1,907

 

 

Current installments of long-term debt

 

4,529

 

 

4,404

 

 

Deferred profit

 

4,073

 

 

8,022

 

 

Other current liabilities

 

128,068

 

 

146,539

 

 

 

Total current liabilities

 

138,402

 

 

160,872

 

Long-term debt

 

36,457

 

 

72,664

 

Non-current operating lease liabilities

 

16,178

 

 

19,209

 

Other noncurrent liabilities

 

43,635

 

 

45,828

 

Cohu stockholders’ equity

 

953,393

 

 

928,841

 

 

 

Total liabilities & stockholders’ equity

$

1,188,065

 

$

1,227,414

 

COHU, INC.

 

 

 

 

 

 

 

 

 

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (Unaudited)

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

July 1,

 

April 1,

 

June 25,

 

 

 

 

2023

 

2023

 

2022

Income from operations - GAAP basis (a)

 

$

15,659

 

 

$

19,877

 

 

$

36,914

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

Share-based compensation included in (b):

 

 

 

 

 

 

 

 

 

 

 

Cost of sales (COS)

 

 

216

 

 

 

180

 

 

 

172

 

 

 

Research and development (R&D)

 

 

819

 

 

 

866

 

 

 

826

 

 

 

Selling, general and administrative (SG&A)

 

 

3,397

 

 

 

2,868

 

 

 

2,935

 

 

 

 

 

 

4,432

 

 

 

3,914

 

 

 

3,933

 

 

Amortization of purchased intangible assets (c)

 

 

9,006

 

 

 

8,754

 

 

 

8,341

 

 

Restructuring charges related to inventory adjustments in COS (d)

 

 

(13

)

 

 

(28

)

 

 

(186

)

 

Restructuring charges (d)

 

 

416

 

 

 

888

 

 

 

7

 

 

Manufacturing and sales transition costs included in (e):

 

 

 

 

 

 

 

 

 

 

 

COS

 

 

-

 

 

 

18

 

 

 

-

 

 

 

R&D

 

 

22

 

 

 

-

 

 

 

-

 

 

 

SG&A

 

 

166

 

 

 

253

 

 

 

-

 

 

 

 

 

 

188

 

 

 

271

 

 

 

-

 

 

Inventory step-up included in COS (f)

 

 

149

 

 

 

124

 

 

 

-

 

 

Acquisition costs included in SG&A (g)

 

 

60

 

 

 

385

 

 

 

-

 

 

Depreciation of PP&E step-up included in SG&A (h)

 

 

14

 

 

 

9

 

 

 

-

 

Income from operations - non-GAAP basis (i)

 

$

29,911

 

 

$

34,194

 

 

$

49,009

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income - GAAP basis

 

$

10,584

 

 

$

15,685

 

 

$

28,768

 

 

Non-GAAP adjustments (as scheduled above)

 

 

14,252

 

 

 

14,317

 

 

 

12,095

 

 

Tax effect of non-GAAP adjustments (j)

 

 

(1,996

)

 

 

(3,057

)

 

 

(1,134

)

Net income - non-GAAP basis

 

$

22,840

 

 

$

26,945

 

 

$

39,729

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income per share - diluted

 

$

0.22

 

 

$

0.33

 

 

$

0.59

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share - diluted (k)

$

0.48

 

 

$

0.56

 

 

$

0.81

 

 

 

 

 

 

 

 

 

 

 

 

 

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. 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) 

 

9.3%, 11.1% and 17.0% 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) 

 

17.7%, 19.1% and 22.6% 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)

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

July 1,

 

June 25,

 

 

 

2023

 

2022

Income from operations - GAAP basis (a)

$

35,536

 

 

$

64,607

 

Non-GAAP adjustments:

 

 

 

 

 

 

Share-based compensation included in (b):

 

 

 

 

 

 

 

Cost of sales (COS)

 

396

 

 

 

317

 

 

 

Research and development (R&D)

 

1,685

 

 

 

1,578

 

 

 

Selling, general and administrative (SG&A)

 

6,265

 

 

 

5,460

 

 

 

 

 

8,346

 

 

 

7,355

 

 

Amortization of purchased intangible assets (c)

 

17,760

 

 

 

16,876

 

 

Restructuring charges related to inventory adjustments in COS (d)

 

(41

)

 

 

(361

)

 

Restructuring charges (d)

 

1,304

 

 

 

583

 

 

Manufacturing and sales transition costs included in (e):

 

 

 

 

 

 

 

COS

 

18

 

 

 

-

 

 

 

R&D

 

22

 

 

 

-

 

 

 

SG&A

 

419

 

 

 

-

 

 

 

 

 

459

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Inventory step-up included in COS (f)

 

273

 

 

 

-

 

 

Acquisition costs included in SG&A (g)

 

445

 

 

 

-

 

 

Depreciation of PP&E step-up included in SG&A (h)

 

23

 

 

 

-

 

 

Payroll taxes related to accelerated vesting of share-based

 

 

 

 

 

 

 

awards included in SG&A (i)

 

-

 

 

 

132

 

 

 

 

 

 

 

 

Income from operations - non-GAAP basis (j)

$

64,105

 

 

$

89,192

 

 

 

 

 

 

 

 

 

Net income - GAAP basis

$

26,269

 

 

$

50,337

 

 

Non-GAAP adjustments (as scheduled above)

 

28,569

 

 

 

24,585

 

 

Tax effect of non-GAAP adjustments (k)

 

(5,053

)

 

 

(2,617

)

Net income - non-GAAP basis

$

49,785

 

 

$

72,305

 

 

 

 

 

 

 

 

 

GAAP net income per share - diluted

$

0.55

 

 

$

1.02

 

 

 

 

 

 

 

 

 

Non-GAAP income per share - diluted (l)

$

1.04

 

 

$

1.47

 

 

 

 

 

 

 

 

 

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. PP&E 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. 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) 

 

10.2% and 15.6% 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 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 the property, plant & equipment step-up depreciation accelerated related to the acquisition of MCT.

(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) 

 

18.4% and 21.5% 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

 

 

 

July 1,

 

April 1,

 

June 25,

 

 

 

2023

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

 

Gross Profit Reconciliation

 

 

 

 

 

 

 

 

 

Gross profit - GAAP basis (excluding amortization) (1)

$

80,345

 

 

$

86,218

 

 

$

100,953

 

 

 

Non-GAAP adjustments to cost of sales (as scheduled above)

 

352

 

 

 

294

 

 

 

(14

)

 

Gross profit - Non-GAAP basis

$

80,697

 

 

$

86,512

 

 

$

100,939

 

 

 

 

 

 

 

 

 

 

 

 

 

As a percentage of net sales:

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

47.6

%

 

 

48.1

%

 

 

46.5

%

 

 

Non-GAAP gross profit

 

47.8

%

 

 

48.2

%

 

 

46.5

%

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Reconciliation

 

 

 

 

 

 

 

 

 

Net income - GAAP Basis

$

10,584

 

 

$

15,685

 

 

$

28,768

 

 

 

Income tax provision

 

6,435

 

 

 

4,973

 

 

 

8,898

 

 

 

Interest expense

 

727

 

 

 

1,128

 

 

 

919

 

 

 

Interest income

 

(2,732

)

 

 

(2,718

)

 

 

(308

)

 

 

Amortization of purchased intangible assets

 

9,006

 

 

 

8,754

 

 

 

8,341

 

 

 

Depreciation

 

3,361

 

 

 

3,337

 

 

 

3,191

 

 

 

Amortization of cloud-based software implementation costs (2)

 

700

 

 

 

700

 

 

 

478

 

 

 

Loss on extinguishment of debt

 

-

 

 

 

369

 

 

 

128

 

 

 

Other non-GAAP adjustments (as scheduled above)

 

5,232

 

 

 

5,554

 

 

 

3,754

 

 

Adjusted EBITDA

$

33,313

 

 

$

37,782

 

 

$

54,169

 

 

 

 

 

 

 

 

 

 

 

 

 

As a percentage of net sales:

 

 

 

 

 

 

 

 

 

 

Net income - GAAP Basis

 

6.3

%

 

 

8.7

%

 

 

13.2

%

 

 

Adjusted EBITDA

 

19.7

%

 

 

21.1

%

 

 

24.9

%

 

 

 

 

 

 

 

 

 

 

 

Operating Expense Reconciliation

 

 

 

 

 

 

 

 

 

Operating Expense - GAAP basis

$

64,686

 

 

$

66,341

 

 

$

64,039

 

 

 

Non-GAAP adjustments to operating expenses (as scheduled above)

 

(13,900

)

 

 

(14,023

)

 

 

(12,109

)

 

Operating Expenses - Non-GAAP basis

$

50,786

 

 

$

52,318

 

 

$

51,930

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Excludes amortization of $7,102, $6,891 and $6,544 for the three months ending July 01, 2023, April 01, 2023 and June 25, 2022, respectively.

(2)

Represents amortization of capitalized implementation costs related to cloud-based software arrangements that are included within SG&A.

 

 

 

Six Months Ended

 

 

 

July 1,

 

June 25,

 

 

 

2023

 

2022

Gross Profit Reconciliation

 

 

 

 

 

 

Gross profit - GAAP basis (excluding amortization) (1)

$

166,563

 

 

$

192,109

 

 

 

Non-GAAP adjustments to cost of sales (as scheduled above)

 

646

 

 

 

(44

)

 

Gross profit - Non-GAAP basis

$

167,209

 

 

$

192,065

 

 

 

 

 

 

 

 

 

 

As a percentage of net sales:

 

 

 

 

 

 

 

GAAP gross profit

 

47.8

%

 

 

46.3

%

 

 

Non-GAAP gross profit

 

48.0

%

 

 

46.3

%

 

 

 

 

 

 

 

 

Adjusted EBITDA Reconciliation

 

 

 

 

 

 

Net income - GAAP Basis

$

26,269

 

 

$

50,337

 

 

 

Income tax provision

 

11,408

 

 

 

15,192

 

 

 

Interest expense

 

1,855

 

 

 

1,900

 

 

 

Interest income

 

(5,450

)

 

 

(419

)

 

 

Amortization of purchased intangible assets

 

17,760

 

 

 

16,876

 

 

 

Depreciation

 

6,698

 

 

 

6,323

 

 

 

Amortization of cloud-based software implementation costs (2)

 

1,400

 

 

 

956

 

 

 

Loss on extinguishment of debt

 

369

 

 

 

232

 

 

 

Other non-GAAP adjustments (as scheduled above)

 

10,786

 

 

 

7,709

 

 

Adjusted EBITDA

$

71,095

 

 

$

99,106

 

 

 

 

 

 

 

 

 

 

As a percentage of net sales:

 

 

 

 

 

 

 

Net income - GAAP Basis

 

7.5

%

 

 

12.1

%

 

 

Adjusted EBITDA

 

20.4

%

 

 

23.9

%

 

 

 

 

 

 

 

 

Operating Expense Reconciliation

 

 

 

 

 

 

Operating Expense - GAAP basis

$

131,027

 

 

$

127,502

 

 

 

Non-GAAP adjustments to operating expenses (as scheduled above)

 

(27,923

)

 

 

(24,629

)

 

Operating Expenses - Non-GAAP basis

$

103,104

 

 

$

102,873

 

 

 

 

 

 

 

 

 

(1)

Excludes amortization of $13,993 and $13,240 for the six months ending July 01, 2023 and June 25, 2022, respectively.

(2)

Represents amortization of capitalized implementation costs related to cloud-based software arrangements that are included within SG&A.

 

Contacts

Cohu, Inc.

Jeffrey D. Jones - Investor Relations

858-848-8106

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