UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

 

Date of Report (Date of Earliest Event Reported):			July 31, 2013

 

Cohu, Inc.

 

 

(Exact name of registrant as specified in its charter)

 

 

Delaware		001-04298		95-1934119
(State or other jurisdiction		(Commission		(I.R.S. Employer
of incorporation)		File Number)		Identification No.)
12367 Crosthwaite Circle, Poway, California				92064
(Address of principal executive offices)				(Zip Code)

 

 

Registrant’s telephone number, including area code:			858-848-8100

Not Applicable

                                                                                                

Former name or former address, if changed since last report

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[   ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

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Item 2.02 Results of Operations and Financial Condition.

On July 31, 2013, Cohu, Inc. (the “Company”) issued a press release regarding its financial results for the second quarter ended June 29, 2013. The Company’s press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.

The information in this Item 2.02 of this Current Report on Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

In addition to financial results determined in accordance with generally accepted accounting principles (“GAAP”), the earnings press release also contains financial information determined by methods other than in accordance with GAAP. The Company’s management uses these non-GAAP measures in their analysis of the Company’s performance. 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, manufacturing transition costs, other acquisition costs and the purchase accounting inventory step-up included in cost of goods sold. 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 the Company’s financial performance using some of the same measures as management. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Item 9.01 Financial Statements and Exhibits.

The exhibit listed below is being furnished with this Current Report on Form 8-K.

(d) Exhibits

Exhibit No. - 99.1

Description – Second Quarter 2013 Earnings Release, dated July 31, 2013, of Cohu, Inc.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		Cohu, Inc.
August 1, 2013		By:		/s/ Jeffrey D. Jones
				Name: Jeffrey D. Jones
				Title: VP Finance and Chief Financial Officer

 

 

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Exhibit Index

 

Exhibit No.		Description
99.1		Second Quarter 2013 Earnings Release, dated July 31, 2013, of Cohu, Inc.

Exhibit 99.1

 

Cohu Reports Second Quarter 2013 Operating Results

POWAY, Calif., July 31, 2013 -- Cohu, Inc. (NASDAQ:COHU) today reported fiscal 2013 second quarter net sales of $66.7 million and GAAP net loss of $4.0 million or $0.16 per share. Net sales for the first six months of 2013 were $122.7 million and GAAP net loss was $16.1 million or $0.65 per share.

The Company also reported non-GAAP results, with second quarter 2013 net loss of $1.3 million or $0.05 per share and net loss of $9.3 million or $0.38 per share for the first six months of 2013.

 

 

 

(1)	Non-GAAP results for the three- and six-month periods ended June 30, 2012 were revised in the current period to exclude the impact of other acquisition costs incurred in connection with the acquisition of Ismeca.

Sales of semiconductor equipment accounted for 89% of fiscal 2013 second quarter sales. Microwave communications equipment and video cameras and related equipment contributed 4% and 7%, respectively, for the same period.

Orders were $83.1 million for the second quarter of 2013 and $60.3 million for the first quarter of 2013. Orders for semiconductor equipment were $75.4 million in the second quarter of 2013 compared to $52.5 million in the first quarter of 2013. Total consolidated backlog was $79.8 million at June 29, 2013 compared to $63.4 million at March 30, 2013. Cohu expects third quarter 2013 sales to be between $65 million and $70 million.

James A. Donahue, Chairman, President and Chief Executive Officer stated, “This was a strong quarter for our semiconductor equipment business as orders increased 44% sequentially driven by mobility, automotive, LEDs, MEMs and package inspection. Operationally, we are making solid progress in the transition of pick and place production to Asia and the consolidation of our handler manufacturing operations.”

Donahue concluded, “Equipment utilization on our customers’ test floors stabilized at the 80% level in recent months. We monitor this metric closely, as it is usually an early indicator of improving business conditions. We are benefitting from significant cross selling synergies following the Ismeca acquisition and the strength and breadth of our product line is unmatched.”

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Cohu’s Board of Directors approved a quarterly cash dividend of $0.06 per share payable on October 25, 2013 to shareholders of record on August 30, 2013. 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 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, manufacturing transition costs, other acquisition costs and the purchase accounting inventory step-up included in cost of goods sold. 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 matters discussed in this release, including statements concerning Cohu’s transition of production to Asia and consolidation of our handler manufacturing operations, 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, risks associated with acquisitions, 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, July 31, 2013 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. Contact: Jeffrey D. Jones - Investor Relations (858) 848-8106

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COHU, INC.

CONDENSED 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,
		2013 (2)				2012				2013 (2)				2012
Net sales		$	66,652			$	59,404			$	122,668			$	112,700
Cost and expenses:
Cost of sales			45,179				41,740				85,611				79,497
Research and development			11,718				8,688				25,178				17,058
Selling, general and administrative			14,200				11,041				29,253				21,917
			71,097				61,469				140,042				118,472
Loss from operations			(4,445)				(2,065)				(17,374)				(5,772)
Interest and other, net			16				89				26				181
Loss before income taxes			(4,429)				(1,976)				(17,348)				(5,591)
Income tax provision (benefit)			(384)				133				(1,200)				(258)
Net loss		$	(4,045)			$	(2,109)			$	(16,148)			$	(5,333)
Loss per share:
Basic		$	(0.16)			$	(0.09)			$	(0.65)			$	(0.22)
Diluted		$	(0.16)			$	(0.09)			$	(0.65)			$	(0.22)
Weighted average shares used in computing loss per share: (3)
Basic			24,817				24,432				24,737				24,392
Diluted			24,817				24,432				24,737				24,392

 

 

(1)

The three- and six-month periods ended June 29, 2013 and June 30, 2012 were comprised of 13 weeks and 26 weeks, respectively.

 

(2)

On December 31, 2012 Cohu completed the acquisition of Ismeca and its results have been included since that date.

 

(3)

Potentially dilutive securities were excluded from the per share computations for all period presented due to their antidilutive effect.

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COHU, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)    (Unaudited)

 

		June 29,				December 29,
		2013  (1)				2012
Assets:
Current assets:
Cash and investments		$	54,229			$	110,229
Accounts receivable			60,364				36,986
Inventories			67,666				62,332
Deferred taxes and other			12,810				11,536
Total current assets			195,069				221,083
Property, plant & equipment, net			35,601				35,464
Goodwill			76,853				58,756
Intangible assets, net			39,838				18,977
Other assets			876				593
Total assets		$	348,237			$	334,873
Liabilities & Stockholders’ Equity:
Current liabilities:
Deferred profit		$	6,949			$	2,139
Other current liabilities			51,477				34,241
Total current liabilities			58,426				36,380
Deferred taxes and other noncurrent liabilities			27,355				17,594
Stockholders’ equity			262,456				280,899
Total liabilities & stockholders’ equity		$	348,237			$	334,873

 

 

(1)

Includes Ismeca which was acquired on December 31, 2012 for $54.5 million funded out of Cohu’s existing cash reserves.

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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,
		2013				2013				2012
Loss from operations - GAAP basis (a)		$	(4,445)			$	(12,929)			$	(2,065)
Non-GAAP adjustments:
Share-based compensation included in (b):
Cost of goods sold			132				68				125
Research and development			366				515				337
Selling, general and administrative			857				838				789
			1,355				1,421				1,251
Amortization of intangible assets included in (c):
Cost of goods sold			1,410				1,453				832
Selling, general and administrative			263				271				154
			1,673				1,724				986
Manufacturing transition costs included in selling, general and administrative (d)			-				457				-
Other acquisition costs included in selling, general and administrative (e)			121				264				512
Inventory step-up included in cost of goods sold (f)			90				858				-
Income (loss) from operations - non-GAAP basis (g)		$	(1,206)			$	(8,205)			$	684
Net loss - GAAP basis		$	(4,045)			$	(12,103)			$	(2,109)
Non-GAAP adjustments (as scheduled above)			3,239				4,724				2,749
Tax effect of non-GAAP adjustments (h)			(474)				(599)				(291)
Net loss - non-GAAP basis		$	(1,280)			$	(7,978)			$	349
GAAP net loss per share - diluted		$	(0.16)			$	(0.49)			$	(0.09)
Non-GAAP income (loss) per share - diluted (i)		$	(0.05)			$	(0.32)			$	0.01

 

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. Manufacturing transition costs relate principally to employee severance related to moving certain manufacturing activities to Asia in order to 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. Other acquisition costs and inventory step-up 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 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)	(6.7)%, (23.1)% and (3.5)% 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 manufacturing transition costs.

 

(e)	To eliminate professional fees and other direct incremental expenses incurred related to the acquisition of Ismeca.

 

(f)	To eliminate the inventory step-up costs incurred related to the acquisition of Ismeca.

 

(g)	(1.8)%, (14.6)% and 1.2% of net sales, respectively.

 

(h)	To adjust the provision for income taxes related to the adjustments described above based on applicable tax rates.

 

(i)

For the three-month period ended June 30, 2012 was computed using 24,694 diluted shares outstanding. 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 the period.

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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,
		2013				2012
Loss from operations - GAAP basis (a)		$	(17,374)			$	(5,772)
Non-GAAP adjustments:
Share-based compensation included in (b):
Cost of goods sold			200				230
Research and development			881				660
Selling, general and administrative			1,695				1,405
			2,776				2,295
Amortization of intangible assets included in (c):
Cost of goods sold			2,863				1,679
Selling, general and administrative			534				310
			3,397				1,989
Manufacturing transition costs included in selling, general and administrative (d)			457				-
Other acquisition costs included in selling, general and administrative (e)			385				539
Inventory step-up included in costs of goods sold (f)			948				-
Loss from operations - non-GAAP basis (g)		$	(9,411)			$	(949)
Net loss - GAAP basis		$	(16,148)			$	(5,333)
Non-GAAP adjustments (as scheduled above)			7,963				4,823
Tax effect of non-GAAP adjustments (h)			(1,102)				(589)
Net loss - non-GAAP basis		$	(9,287)			$	(1,099)
GAAP net loss per share - diluted		$	(0.65)			$	(0.22)
Non-GAAP loss per share - diluted (i)		$	(0.38)			$	(0.05)

 

 

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. Manufacturing transition costs relate principally to employee severance related to moving certain manufacturing activities to Asia in order to 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. Other acquisition costs and inventory step-up 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 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)	(14.2)% and (5.1)% 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 manufacturing transition costs.

 

(e)	To eliminate professional fees and other direct incremental expenses incurred related to the acquisition of Ismeca Semiconductor.

 

(f)	To eliminate the inventory step-up costs incurred related to the acquisition of Ismeca.

 

(g)	(7.7)% and (0.8)% of net sales, respectively.

 

(h)	To adjust the provision for income taxes related to the adjustments described above based on applicable tax rates.

 

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