CapEx in Q1 was $3.3 million with approximately $2 million related to our factories in the Philippines and Malaysia, supporting operations for our interface and automation businesses. Overall, Cohu continues to maintain a strong balance sheet to support investment opportunities to expand our served markets and technology portfolio in line with our growth strategy and return capital to shareholders through our share repurchase program. As a result, we are now modeling operating expenses to average approximat ...

Cohu Reports First Quarter 2024 Results ● Gross margin of 45.8%; non-GAAP gross margin of 46.0% POWAY, Calif., May 2, 2024 – Cohu, Inc. (NASDAQ: COHU), a global supplier of equipment and services optimizing semiconductor manufacturing yield and productivity, today reported fiscal 2024 first quarter net sales of $107.6 million and GAAP loss of $14.6 million or $0.31 per share. Cohu also reported first quarter 2024 non-GAAP income of $0.6 million or $0.01 per share. "Recurring revenue continued to deliver sta ...

Financial Data and Key Metrics Changes - In Q4 2023, Cohu reported revenue of $137.2 million, exceeding the midpoint of guidance, with full year 2023 revenue at $636.3 million [32] - Non-GAAP gross margin for Q4 was 48.5%, approximately 250 basis points higher than guidance, while full year 2023 gross margin was 47.9%, a record high [11][33] - Non-GAAP EPS for Q4 was $0.23, and full year 2023 EPS was $1.62 [11][18] - Adjusted EBITDA for Q4 was 13% of revenue, while full year adjusted EBITDA was 17.9% [33] Business Line Data and Key Metrics Changes - Recurring revenue represented 54% of total revenue in Q4 and 49% for full year 2023, with a three-year compound growth rate of 5% [12][32] - Test cell utilization dropped to 71% at the end of Q4, with specific segments showing low utilization: computing at 68%, consumer at 69%, and mobile at 76% [5][13] Market Data and Key Metrics Changes - The automotive and industrial semiconductor markets are experiencing softer demand, impacting test and inspection systems [5] - Cohu's Diamondx inhalers were qualified for new customers in China, supporting local automotive and display driver IC manufacturing [6] Company Strategy and Development Direction - Cohu aims to expand its recurring business and has introduced new solutions under the DI-Core analytics platform, including AI inspection software [12] - The company is focusing on new product development and customer qualifications to position itself for recovery in semiconductor cycles [13] - Cohu is pursuing strategic alignment with computing customers, particularly hyperscalers expanding data center infrastructure [6] Management's Comments on Operating Environment and Future Outlook - Management expects a semiconductor recovery in the second half of 2024, with lead times returning to normal [15] - Despite near-term demand being subdued, the company is well-positioned to respond to customer needs as test cell utilization improves [15] - Management noted that utilization rates around 80% typically indicate capacity buys, and they are monitoring trends towards that threshold [52] Other Important Information - Cohu's total CapEx for 2023 was approximately $16 million, with $3.9 million in Q4, including $2 million for the new Philippines facility [19][34] - The company repaid a Term Loan B balance of $29.3 million, which will increase net interest income by approximately $200,000 per quarter [19] Q&A Session Summary Question: What are the expectations for the back half of the year regarding equipment spend and performance between systems and recurring revenue? - Management indicated reliance on customer information suggesting a recovery in the automotive and industrial sectors, with some signs of order patterns returning in the mobile device market [24] Question: Can you provide insights on utilization rates across segments? - Utilization rates were stable at 71% throughout Q4, with mobile at 76%, consumer at 69%, and automotive/industrial at 81% [26] Question: How do you see the mix of recurring and system revenue affecting margins in Q1? - The mix is expected to skew more towards recurring revenue in Q1, which supports margins despite some degradation in system revenue due to fixed costs [48]

Q4'23 FINANCIAL RESULTS Cautionary Statement Regarding Forward-Looking Statements Certain statements contained in this presentation may be considered forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding the introduction of AI inspection software and expansion of recurring business; the successful integration of EQT; being aligned to high growth semiconductor market applications; resiliency of our recurring business model a ...

POWAY, Calif.--(BUSINESS WIRE)--Cohu, Inc. (NASDAQ: COHU), a global supplier of equipment and services optimizing semiconductor manufacturing yield and productivity, today announced that a leading U.S. fabless semiconductor manufacturer has selected Sense+ system with µ-sense for testing their next generation high-fidelity microphones. The µ-sense microphone tester is Cohu’s latest product in our MEMS test solution portfolio, and when combined with the Sense+ automation platform, it delivers state-of-the ...

Research and Development Research and development activities are carried on in our various subsidiaries and are directed toward development of new products and equipment, as well as enhancements to existing products and equipment. Our total research and development expense was $88.6 million in 2023, $92.6 million in 2022 and $92.0 million in 2021. We work closely with our customers to make improvements to our existing products and in the development of new products. We expect to continue to make significant ...

POWAY, Calif.--(BUSINESS WIRE)--Cohu, Inc. (NASDAQ: COHU), a global supplier of equipment and services optimizing semiconductor manufacturing yield and productivity, today provided a business update: Cohu expects fourth quarter 2023 revenue in-line with guidance at approximately $137 million Demand for test and inspection equipment remained soft through fourth quarter 2023 and has continued in first quarter 2024 Cohu expects first quarter 2024 revenue to be approximately 20% lower than fourth quarter ...

Cohu, Inc. (NASDAQ:COHU) Q3 2023 Earnings Conference Call November 2, 2023 4:30 PM ET Company Participants Jeffrey Jones - Chief Financial Officer Luis Müller - Chief Executive Officer Conference Call Participants Charles Shi - Needham & Company Brian Chin - Stifel, Nicolaus & Company Robert Mertens - TD Cowen Christian Schwab - Craig-Hallum Capital Group LLC Craig Ellis - B. Riley Securities Operator Good day, and thank you for standing by. Welcome to Cohu’s Third Quarter 2023 Financial Results Conference ...

November 2, 2023 Page 1 Forward Looking Statements: 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 COVID19 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 c ...

Part I Financial Information [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents Cohu, Inc.'s unaudited condensed consolidated financial statements for Q3 2023, covering key financial positions and performance Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Data (in thousands) | Account | Sep 30, 2023 (Unaudited) | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $718,567 | $764,851 | | **Total Assets** | **$1,167,518** | **$1,227,414** | | **Total Current Liabilities** | $128,444 | $160,872 | | **Total Liabilities** | $221,282 | $298,573 | | **Total Stockholders' Equity** | $946,236 | $928,841 | | **Total Liabilities and Stockholders' Equity** | **$1,167,518** | **$1,227,414** | Condensed Consolidated Statements of Income Income Statement Highlights (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $150,804 | $206,687 | $499,096 | $621,670 | | **Income from Operations** | $7,402 | $33,707 | $42,938 | $98,314 | | **Net Income** | $3,915 | $24,882 | $30,184 | $75,219 | | **Diluted EPS** | $0.08 | $0.51 | $0.63 | $1.53 | Condensed Consolidated Statements of Comprehensive Income (Loss) Comprehensive Income (Loss) (in thousands) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $3,915 | $24,882 | $30,184 | $75,219 | | **Other Comprehensive Loss, net of tax** | $(10,406) | $(23,021) | $(6,953) | $(45,144) | | **Comprehensive Income (Loss)** | $(6,491) | $1,861 | $23,231 | $30,075 | Condensed Consolidated Statements of Stockholders' Equity - Total stockholders' equity increased from **$928.8 million** at December 31, 2022, to **$946.2 million** at September 30, 2023. The increase was primarily driven by **net income of $30.2 million**, partially offset by **common stock repurchases of $10.9 million** and an increase in **accumulated other comprehensive loss of $7.0 million**[58](index=58&type=chunk)[16](index=16&type=chunk) Condensed Consolidated Statements of Cash Flows Cash Flow Summary for the Nine Months Ended (in thousands) | Cash Flow Activity | Sep 30, 2023 | Sep 24, 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $98,769 | $85,295 | | **Net cash provided by (used in) investing activities** | $12,255 | $(58,325) | | **Net cash used in financing activities** | $(56,007) | $(78,685) | | **Effect of exchange rate changes on cash** | $(3,972) | $(6,088) | | **Net increase (decrease) in cash** | $51,045 | $(57,803) | | **Cash and cash equivalents at end of period** | $293,386 | $232,398 | Notes to Unaudited Condensed Consolidated Financial Statements - On January 30, 2023, the company completed the acquisition of MCT Worldwide, LLC for a purchase price of **$26.8 million**. The acquisition was accounted for as a business combination, and MCT's results have been included since the acquisition date[115](index=115&type=chunk) - During the first nine months of 2023, the company prepaid **$34.1 million** of its Term Loan Credit Facility, resulting in a **loss on debt extinguishment of $0.4 million**. The outstanding principal as of September 30, 2023, was approximately **$30.2 million**[149](index=149&type=chunk) - The company initiated a restructuring program related to the MCT acquisition, incurring **$2.0 million** in charges during the first nine months of 2023. This program includes consolidating manufacturing operations in Malaysia[155](index=155&type=chunk)[130](index=130&type=chunk) - Subsequent to the quarter end, on October 2, 2023, Cohu completed the acquisition of Equiptest Engineering Pte Ltd. (EQT) for a cash payment of **66.0 million Singapore dollars**[234](index=234&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, noting significant net sales decline in Q3 and YTD 2023 due to macroeconomic factors and reduced demand Results of Operations Q3 2023 vs Q3 2022 Performance (in millions) | Metric | Q3 2023 | Q3 2022 | Change (%) | | :--- | :--- | :--- | :--- | | **Net Sales** | $150.8 | $206.7 | -27.0% | | **Gross Margin %** | 47.0% | 47.4% | -0.4 p.p. | | **Net Income** | $3.9 | $24.9 | -84.3% | Nine Months 2023 vs Nine Months 2022 Performance (in millions) | Metric | Nine Months 2023 | Nine Months 2022 | Change (%) | | :--- | :--- | :--- | :--- | | **Net Sales** | $499.1 | $621.7 | -19.7% | | **Gross Margin %** | 47.5% | 46.7% | +0.8 p.p. | | **Net Income** | $30.2 | $75.2 | -59.8% | - The decrease in net sales was primarily driven by lower demand for automotive, industrial, mobility (including 5G-related products), and computing applications due to the current macroeconomic environment[282](index=282&type=chunk)[212](index=212&type=chunk) Liquidity and Capital Resources - As of September 30, 2023, the company had cash, cash equivalents, and short-term investments of **$387.6 million**, a slight increase from **$385.6 million** at the end of 2022[295](index=295&type=chunk) - Net cash provided by operating activities for the first nine months of 2023 was **$98.8 million**, up from **$85.3 million** in the same period of 2022[223](index=223&type=chunk)[18](index=18&type=chunk) - During the first nine months of 2023, the company repurchased **309,985 shares** of its common stock for **$10.9 million**. As of September 30, 2023, **$71.1 million** remained available under the share repurchase program[299](index=299&type=chunk)[173](index=173&type=chunk) - Total indebtedness was reduced to **$41.4 million** at September 30, 2023, primarily through a **$34.1 million** prepayment of the Term Loan Credit Facility during the first nine months of the year[204](index=204&type=chunk)[352](index=352&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk from variable-rate debt and investments, and foreign currency exchange risk from its international operations - The company is exposed to interest rate risk on its **$30.2 million** Term Loan Credit Facility, which has a variable interest rate based on SOFR plus a margin. The effective rate was **8.9%** at September 30, 2023[331](index=331&type=chunk) - A hypothetical **10% devaluation** of the U.S. Dollar against the functional currencies of its foreign operations would result in an approximate **$37.0 million** positive translation adjustment to stockholders' equity[333](index=333&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including CEO and CFO, concluded disclosure controls and procedures were effective as of September 30, 2023, with no material internal control changes - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were **effective** at the reasonable assurance level as of the end of the period[334](index=334&type=chunk)[361](index=361&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[335](index=335&type=chunk) Part II Other Information [Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, which management does not expect to materially affect financial position or results - The company states that it is not currently involved in any legal proceedings that are expected to have a **material adverse effect** on its financial condition[231](index=231&type=chunk)[336](index=336&type=chunk) [Risk Factors](index=50&type=page&id=Item%201A.%20Risk%20Factors) Updates 2022 Form 10-K risk factors, covering financial institution instability, semiconductor market downturn, AI use, and geopolitical instability - The company identifies risks related to the instability of financial institutions, highlighting the potential for **loss of cash deposits exceeding FDIC limits**[363](index=363&type=chunk)[337](index=337&type=chunk) - A significant downturn in the semiconductor mobility market, with sales declining **56.7%** in the last twelve months, and recent weakening in automotive and industrial segments are cited as having an **adverse impact on sales**[365](index=365&type=chunk)[339](index=339&type=chunk) - Risks associated with the use of Artificial Intelligence (AI) are disclosed, including potential for **incorrect data**, **regulatory actions**, and **diminished human oversight**[340](index=340&type=chunk)[342](index=342&type=chunk) - Geopolitical instability, particularly in Asia (Taiwan Strait), the conflict in Ukraine, and conflict in the Middle East, are noted as risks that could **disrupt manufacturing, supply chains, and sales**[343](index=343&type=chunk)[368](index=368&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered equity sales and detailed common stock repurchases, including 133,100 shares for $4.7 million in Q3 2023 Issuer Purchases of Equity Securities (Q3 2023) | Period | Total Shares Purchased | Weighted-Average Price Paid per Share | Total Cost (in thousands) | | :--- | :--- | :--- | :--- | | Jul 2 - Jul 29, 2023 | 0 | N/A | $0 | | Jul 30 - Aug 26, 2023 | 43,000 | $35.72 | $1,540 | | Aug 27 - Sep 30, 2023 | 90,000 | $34.80 | $3,134 | | **Total** | **133,000** | **$35.10** | **$4,674** | - As of September 30, 2023, approximately **$71.1 million** remained available for future repurchases under the company's share repurchase program[345](index=345&type=chunk) [Defaults Upon Senior Securities](index=52&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - There were **no defaults** upon senior securities[370](index=370&type=chunk)[347](index=347&type=chunk) [Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists Form 10-Q exhibits, including CEO and CFO certifications under Sarbanes-Oxley Act and Inline XBRL documents - The report includes certifications from the Chief Executive Officer and Chief Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[350](index=350&type=chunk)