Market Overview

Cohu Reports Third Quarter 2017 Results

  • Sales up 35% year-over-year to $93.7 million
  • GAAP gross margin of 39.4%; non-GAAP gross margin of 40.9%
  • GAAP income per share of $0.30; non-GAAP EPS of $0.43
  • Cash and investments increased $24 million to $138.3 million

Cohu, Inc. (NASDAQ:COHU), a leading supplier of semiconductor
equipment, today reported fiscal 2017 third quarter net sales of
$93.7 million and GAAP income of $8.8 million or $0.30 per share. Net
sales for the first nine months of 2017 were $268.6 million and GAAP
income was $26.2 million or $0.92 per share.

Cohu also reported non-GAAP results, with third quarter 2017 income of
$12.6 million or $0.43 per share and income of $36.3 million or
$1.27 per share for the first nine months of 2017. (1)

  GAAP Results (1)          
(in millions, except per share amounts) Q3 FY 2017 Q2 FY 2017 Q3 FY 2016 (2) 9 Months 2017 9 Months 2016 (2)
  Net sales $ 93.7 $ 93.9 $ 69.3 $ 268.6 $ 211.4
Income $ 8.8 $ 10.7 $ 0.1 $ 26.2 $ 1.0
Income per share $ 0.30 $ 0.37 $ 0.01 $ 0.92 $ 0.03
Non-GAAP Results (1)
(in millions, except per share amounts) Q3 FY 2017 Q2 FY 2017 Q3 FY 2016 (2) (3) 9 Months 2017 9 Months 2016 (2) (3)
Income $ 12.6 $ 13.8 $ 4.3 $ 36.3 $ 12.1
Income per share $ 0.43 $ 0.48 $ 0.16 $ 1.27 $ 0.44
(1)   All amounts presented are from continuing operations.
(2) In the fourth quarter of 2016 the Company adopted ASU 2016-09,
Improvements to Employee Share-Based Payment Accounting, (ASU
2016-09). As a result of the adoption of ASU 2016-09 certain quarter
and year-to-date amounts ended September 24, 2016 have been restated
as if the new accounting guidance was adopted starting with the
first day of our 2016 fiscal year. The impact of these restatements
was not significant.
(3) Non-GAAP results for the third quarter and first nine months of 2016
were revised in the current period to exclude the impact of other
acquisition costs incurred in connection with the acquisition of
Kita Manufacturing Ltd. ("Kita") on January 4, 2017.

Total cash and investments at the end of the third quarter were
$138.3 million.

Luis Müller, President and Chief Executive Officer of Cohu, stated,
"Results were toward the higher end of our guidance due to stronger
recurring sales, particularly in the computing market, and increasing
demand for our test contactors and spring probes. We continue to drive
share gains for new and existing products in support of our mid-term
operating goals. We received repeat orders for a new configuration of
the Eclipse handler for factory automation and ramped shipments of
gravity handlers for automotive and industrial applications. We made
solid progress on our newest products, including a recent new customer
order for the PANTHER platform and the initial customer acceptance of
our new system-level test platform."

Müller concluded, "Momentum is strong in the first month of the fourth
quarter, and we expect orders to exceed the previous record set in the
second quarter of 2017, confirming our strong market position and the
robust business environment entering 2018."

Cohu expects fourth quarter 2017 sales to be approximately $84 million.
Cohu's Board of Directors approved a quarterly cash dividend of $0.06
per share payable on January 2, 2018 to shareholders of record on
November 17, 2017.

Use of Non-GAAP Financial Information:

Included within this press release are non-GAAP financial measures,
including non-GAAP gross margin, Income and Income per share, 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, manufacturing transition costs, employee severance costs,
acquisition related costs, fair value adjustment to contingent
consideration and 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 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
regarding increasing demand for our test contactors (including cDragon)
and spring probes, share gains for new and existing products, progress
on new products, s

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