- Key RF tester design-win at leading U.S. mobile customer
- 5G demand driving increase in RF test cell utilization
- Third quarter GAAP gross margin of 41.1%; non-GAAP gross margin of 42.3%
|
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|
|
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|
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|
GAAP Results (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
(in millions, except per share amounts) |
Q3 FY
|
|
Q2 FY 2019 |
|
Q3 FY
|
|
9 Months
|
|
9 Months
|
|
||||||||
|
|
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|
|
|
|
|
|
|
|
|
|
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|
|
|
|||
|
|
Net sales |
|
$ |
143.5 |
|
$ |
150.0 |
|
$ |
86.2 |
|
$ |
441.3 |
|
$ |
281.1 |
|
|
|
|
Income (loss) |
|
$ |
(10.5) |
|
$ |
(19.4) |
|
$ |
4.8 |
|
$ |
(52.7) |
|
$ |
24.6 |
|
|
|
|
Income (loss) per share |
|
$ |
(0.25) |
|
$ |
(0.47) |
|
$ |
0.16 |
|
$ |
(1.28) |
|
$ |
0.83 |
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
|
Non-GAAP Results (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
(in millions, except per share amounts) |
Q3 FY
|
|
Q2 FY
|
|
Q3 FY
|
|
9 Months
|
|
9 Months
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|||
|
|
Income |
|
$ |
4.9 |
|
$ |
0.8 |
|
$ |
9.0 |
|
$ |
4.3 |
|
$ |
38.3 |
|
|
|
|
Income per share |
|
$ |
0.12 |
|
$ |
0.02 |
|
$ |
0.30 |
|
$ |
0.10 |
|
$ |
1.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
All amounts presented are from continuing operations. FY 2019 results include Xcerra Corporation acquired on October 1, 2018. |
Total cash and investments at the end of third quarter 2019 were
“Cohu delivered stronger than expected non-GAAP profitability on sales of
Conference Call Information:
The company will host a live conference call and webcast with slides to discuss third quarter 2019 results at
About
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 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 acquired intangible assets including favorable/unfavorable lease adjustments, restructuring costs, manufacturing and sales transition and severance costs, acquisition-related costs and associated professional fees, fair value adjustment to contingent consideration, depreciation of purchase accounting adjustments to property, plant and equipment and purchase accounting inventory step-up included in cost of sales. 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 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.
Use of 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 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 integration and cost synergy savings, timing and targets; additional cost savings and expense reductions; new products and solutions; 5G and automotive growth, demand and opportunities; anticipated increase in sales for mobile 5G RF device test in 2020 driven by customers in
For press releases and other information of interest to investors, please visit Cohu’s website at www.cohu.com.
COHU, INC. |
||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||
(Unaudited) |
||||||||||||||
(in thousands, except per share amounts) |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended (1) |
|
Nine Months Ended (1) |
|
||||||||
|
|
|
September 28, |
|
September 29, |
|
September 28, |
|
September 29, |
|
||||
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
143,498 |
|
$ |
86,164 |
|
$ |
441,318 |
|
$ |
281,131 |
|
||
Cost and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Cost of sales (excludes amortization shown below) (2) |
|
84,565 |
|
|
51,142 |
|
|
265,564 |
|
|
163,742 |
|
|
|
Research and development |
|
20,483 |
|
|
11,088 |
|
|
65,324 |
|
|
33,914 |
|
|
|
Selling, general and administrative (3) |
|
33,690 |
|
|
15,899 |
|
|
108,404 |
|
|
50,988 |
|
|
|
Amortization of purchased intangible assets |
|
9,969 |
|
|
1,024 |
|
|
29,975 |
|
|
3,117 |
|
|
|
Restructuring charges |
|
814 |
|
|
- |
|
|
10,720 |
|
|
- |
|
|
|
|
|
|
149,521 |
|
|
79,153 |
|
|
479,987 |
|
|
251,761 |
|
Income (loss) from operations |
|
(6,023) |
|
|
7,011 |
|
|
(38,669) |
|
|
29,370 |
|
||
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|
|
|
||
Interest expense |
|
(5,000) |
|
|
(11) |
|
|
(15,789) |
|
|
(33) |
|
||
Interest income |
|
190 |
|
|
337 |
|
|
603 |
|
|
913 |
|
||
Foreign transaction gain (loss) |
|
1,630 |
|
|
(232) |
|
|
1,302 |
|
|
1,220 |
|
||
Income (loss) from continuing operations before taxes |
|
(9,203) |
|
|
7,105 |
|
|
(52,553) |
|
|
31,470 |
|
||
Income tax provision |
|
1,277 |
|
|
2,302 |
|
|
161 |
|
|
6,897 |
|
||
Income (loss) from continuing operations |
|
(10,480) |
|
|
4,803 |
|
|
(52,714) |
|
|
24,573 |
|
||
Discontinued operations: (4) |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Income from discontinued operations before taxes |
|
173 |
|
|
- |
|
|
400 |
|
|
- |
|
|
|
Income tax provision |
|
19 |
|
|
- |
|
|
58 |
|
|
- |
|
|
|
Income from discontinued operations |
|
154 |
|
|
- |
|
|
342 |
|
|
- |
|
|
Net income (loss) |
|
(10,326) |
|
$ |
4,803 |
|
$ |
(52,372) |
|
$ |
24,573 |
|
||
Net income attributable to noncontrolling interest |
|
142 |
|
|
- |
|
|
62 |
|
|
- |
|
||
Net income (loss) attributable to Cohu |
$ |
(10,468) |
|
$ |
4,803 |
|
$ |
(52,434) |
|
$ |
24,573 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before noncontrolling interest |
$ |
(0.25) |
|
$ |
0.17 |
|
$ |
(1.28) |
|
$ |
0.85 |
|
|
|
Income from discontinued operations |
|
0.00 |
|
|
- |
|
|
0.00 |
|
|
- |
|
|
|
Net income attributable to noncontrolling interest |
|
0.00 |
|
|
- |
|
|
0.00 |
|
|
- |
|
|
|
|
Net income (loss) attributable to Cohu |
$ |
(0.25) |
|
$ |
0.17 |
|
$ |
(1.28) |
|
$ |
0.85 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before noncontrolling interest |
$ |
(0.25) |
|
$ |
0.16 |
|
$ |
(1.28) |
|
$ |
0.83 |
|
|
|
Income from discontinued operations |
|
0.00 |
|
|
- |
|
|
0.00 |
|
|
- |
|
|
|
Net income attributable to noncontrolling interest |
|
0.00 |
|
|
- |
|
|
0.00 |
|
|
- |
|
|
|
|
Net income (loss) attributable to Cohu |
$ |
(0.25) |
|
$ |
0.16 |
|
$ |
(1.28) |
|
$ |
0.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
computing income (loss) per share: (5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
41,229 |
|
|
28,948 |
|
|
41,075 |
|
|
28,814 |
|
|
|
Diluted |
|
41,229 |
|
|
29,770 |
|
|
41,075 |
|
|
29,650 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The three- and nine-month periods ended September 28, 2019 and September 29, 2018 were both comprised of 13 weeks and 39 weeks, respectively. The Company’s results for the three- and nine-month periods ended September 28, 2019, include the results of Xcerra which was acquired on October 1, 2018. |
|
(2) |
In conjunction with the acquisition of Xcerra the Company assessed the need to realign its historical financial statement presentation and certain statement of operations classifications were reclassified to conform to current period presentation. The changes made were as follows: |
|
|
|
|
|
|
|
(3) |
SG&A expense for the nine-month period ended September 28, 2019 includes Xcerra transaction costs totaling $0.4 million. No acquisition costs were incurred during the three-month period ended September 28, 2019. For the three- and nine-month periods ended September 29, 2018 Xcerra transaction costs were $1.0 million and $5.2 million, respectively. |
|
(4) |
On October 1, 2018, the Company made the decision to sell the fixtures business acquired from Xcerra, and, as a result, the operating results of the fixtures business have been presented as discontinued operations. |
|
(5) |
For the three- and nine-month periods ended September 28, 2019, potentially dilutive securities were excluded from the per share computations due to their antidilutive effect. The Company has utilized the "control number" concept in the computation of diluted earnings per share to determine whether a potential common stock instrument is dilutive. The control number used is income from continuing operations. The control number concept requires that the same number of potentially dilutive securities applied in computing diluted earnings per share from continuing operations be applied to all other categories of income or loss, regardless of their anti-dilutive effect on such categories. |
COHU, INC. |
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(Unaudited) |
||||||||
(in thousands) |
||||||||
|
|
|
September 28, |
|
December 29, |
|
||
|
|
|
2019 |
|
2018 |
|
||
Assets: |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
|
Cash and investments |
$ |
145,667 |
|
$ |
165,020 |
|
|
|
Accounts receivable |
|
126,474 |
|
|
149,276 |
|
|
|
Inventories |
|
133,923 |
|
|
139,314 |
|
|
|
Other current assets |
|
21,798 |
|
|
27,888 |
|
|
|
Current assets of discontinued operations |
|
3,733 |
|
|
3,741 |
|
|
|
|
Total current assets |
|
431,595 |
|
|
485,239 |
|
Property, plant & equipment, net |
|
70,439 |
|
|
74,332 |
|
||
Goodwill |
|
235,903 |
|
|
242,127 |
|
||
Intangible assets, net |
|
282,488 |
|
|
318,961 |
|
||
Operating lease right of use assets (1) |
|
34,096 |
|
|
- |
|
||
Other assets |
|
16,958 |
|
|
13,264 |
|
||
Noncurrent assets of discontinued operations |
|
130 |
|
|
79 |
|
||
|
|
Total assets |
$ |
1,071,609 |
|
$ |
1,134,002 |
|
|
|
|
|
|
|
|
|
|
Liabilities & Stockholders’ Equity: |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
|
Short-term borrowings |
$ |
3,241 |
|
$ |
3,115 |
|
|
|
Current installments of long-term debt |
|
3,141 |
|
|
3,672 |
|
|
|
Deferred profit |
|
7,952 |
|
|
6,896 |
|
|
|
Other current liabilities |
|
124,451 |
|
|
146,388 |
|
|
|
Current liabilities of discontinued operations |
|
564 |
|
|
518 |
|
|
|
|
Total current liabilities |
|
139,349 |
|
|
160,589 |
|
Long-term debt |
|
344,920 |
|
|
346,041 |
|
||
Non-current operating lease liabilities (1) |
|
29,396 |
|
|
- |
|
||
Other noncurrent liabilities |
|
66,513 |
|
|
81,428 |
|
||
Noncurrent liabilities of discontinued operations |
|
34 |
|
|
- |
|
||
Cohu stockholders’ equity |
|
491,753 |
|
|
546,243 |
|
||
Noncontrolling Interest |
|
(356) |
|
|
(299) |
|
||
|
|
Total liabilities & stockholders’ equity |
$ |
1,071,609 |
|
$ |
1,134,002 |
|
|
|
|
|
|
|
|
|
|
(1) |
Cohu adopted ASU 2016-02, Leases (Topic 842), as of December 30, 2018. Upon adoption, we recorded operating lease assets and operating lease liabilities based on the present value of future lease obligations. We applied the practical expedient available in this guidance, which does not require the restatement of prior year balances. |
COHU, INC. |
|||||||||||
Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (Unaudited) |
|||||||||||
(in thousands, except per share amounts) |
|||||||||||
|
|
|
|
Three Months Ended |
|||||||
|
|
|
|
September 28, |
|
June 29, |
|
September 29, |
|||
|
|
|
|
2019 (1) |
|
2019 (1) |
|
2018 |
|||
Income (loss) from operations - GAAP basis (a) |
|
$ |
(6,023) |
|
$ |
(14,662) |
|
$ |
7,011 |
||
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
||
|
Share-based compensation included in (b): |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales (COS) |
|
|
212 |
|
|
208 |
|
|
125 |
|
|
Research and development (R&D) |
|
|
820 |
|
|
776 |
|
|
354 |
|
|
Selling, general and administrative (SG&A) |
|
|
2,474 |
|
|
2,678 |
|
|
1,401 |
|
|
|
|
|
3,506 |
|
|
3,662 |
|
|
1,880 |
|
Amortization of purchased intangible assets (c) |
|
|
9,969 |
|
|
9,987 |
|
|
1,024 |
|
|
Restructuring charges related to inventory adjustments in COS (d) |
|
|
1,114 |
|
|
(1,259) |
|
|
- |
|
|
Restructuring charges included in operating expenses (d): |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
- |
|
|
- |
|
|
273 |
|
|
Selling, general and administrative |
|
|
- |
|
|
- |
|
|
107 |
|
|
Restructuring charges |
|
|
814 |
|
|
8,545 |
|
|
- |
|
|
|
|
|
814 |
|
|
8,545 |
|
|
380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing and sales transition costs included in (e): |
|
|
|
|
|
|
|
|
|
|
|
|
COS |
|
|
416 |
|
|
560 |
|
|
- |
|
|
SG&A |
|
|
152 |
|
|
588 |
|
|
23 |
|
|
|
|
|
568 |
|
|
1,148 |
|
|
23 |
|
Adjustment to contingent consideration included in SG&A (f) |
|
|
- |
|
|
- |
|
|
227 |
|
|
Acquisition costs included in SG&A (g) |
|
|
- |
|
|
180 |
|
|
1,034 |
|
|
PP&E step-up included in SG&A (h) |
|
|
1,257 |
|
|
1,257 |
|
|
- |
|
Income from operations - non-GAAP basis (i) |
|
$ |
11,205 |
|
$ |
8,858 |
|
$ |
11,579 |
||
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations - GAAP basis |
|
$ |
(10,480) |
|
$ |
(19,383) |
|
$ |
4,803 |
||
|
Non-GAAP adjustments (as scheduled above) |
|
|
17,228 |
|
|
23,520 |
|
|
4,568 |
|
|
Tax effect of non-GAAP adjustments (j) |
|
|
(1,836) |
|
|
(3,348) |
|
|
(373) |
|
Income from continuing operations - non-GAAP basis |
|
$ |
4,912 |
|
$ |
789 |
|
$ |
8,998 |
||
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income (loss) from continuing operations per share - diluted |
|
$ |
(0.25) |
|
$ |
(0.47) |
|
$ |
0.16 |
||
|
|
|
|
|
|
|
|
|
|
||
Non-GAAP income from continuing operations per share - diluted (k) |
$ |
0.12 |
|
$ |
0.02 |
|
$ |
0.30 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes operating results from Xcerra acquired on
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. Restructuring costs have been excluded because such expense is not used by Management to assess the core profitability of Cohu’s business operations. Manufacturing and sales transition costs relate principally to expenses incurred as a result of moving certain manufacturing activities to
(a) |
(4.2)%, (9.8)% and 8.1% 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 restructuring costs incurred related to the integration of Xcerra. |
|
(e) |
To eliminate manufacturing and sales transition and severance costs. |
|
(f) |
To eliminate fair value adjustment to contingent consideration related to the acquisition of Kita. |
|
(g) |
To eliminate professional fees and other direct incremental expenses incurred related to acquisitions. |
|
(h) |
To eliminate the accelerated depreciation from the property, plant & equipment step-up related to the acquisition of Xcerra. |
|
(i) |
7.8%, 5.9% and 13.4% of net sales, respectively. |
|
(j) |
To adjust the provision for income taxes related to the adjustments described above based on applicable tax rates. |
|
(k) |
The three months ended September 28, 2019 and June 29, 2019 were computed using 41,587 and 41,534 shares outstanding respectively, as 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 each period. |
COHU, INC. |
|
|
|
|
|
|||
Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (Unaudited) |
||||||||
(in thousands, except per share amounts) |
|
|
|
|
|
|||
|
|
|
Nine Months Ended |
|||||
|
|
|
September 28, |
|
September 29, |
|||
|
|
|
2019 (1) |
|
2018 |
|||
Income (loss) from operations - GAAP basis (a) |
$ |
(38,669) |
|
$ |
29,370 |
|||
Non-GAAP adjustments: |
|
|
|
|
|
|||
|
Share-based compensation included in (b): |
|
|
|
|
|
||
|
|
Cost of sales (COS) |
|
545 |
|
|
408 |
|
|
|
Research and development (R&D) |
|
2,234 |
|
|
1,098 |
|
|
|
Selling, general and administrative (SG&A) |
|
8,082 |
|
|
3,991 |
|
|
|
|
|
10,861 |
|
|
5,497 |
|
|
Amortization of purchased intangible assets (c) |
|
29,975 |
|
|
3,117 |
||
|
|
|
|
|
|
|
|
|
|
Restructuring charges related to inventory adjustments in COS (d) |
|
321 |
|
|
- |
||
|
Restructuring charges included in operating expenses (d): |
|
|
|
|
|
||
|
|
Research and development |
|
- |
|
|
273 |
|
|
|
Selling, general and administrative |
|
- |
|
|
107 |
|
|
|
Restructuring charges |
|
10,720 |
|
|
- |
|
|
|
|
|
10,720 |
|
|
380 |
|
|
|
|
|
|
|
|
|
|
|
Manufacturing and sales transition costs included in (e): |
|
|
|
|
|
||
|
|
COS |
|
1,211 |
|
|
- |
|
|
|
SG&A |
|
1,266 |
|
|
110 |
|
|
|
|
|
2,477 |
|
|
110 |
|
|
Adjustment to contingent consideration included in SG&A (f) |
|
- |
|
|
657 |
||
|
Acquisition costs included in SG&A (g) |
|
404 |
|
|
5,178 |
||
|
Inventory step-up included in COS (h) |
|
6,038 |
|
|
- |
||
|
PP&E step-up included in SG&A (i) |
|
3,771 |
|
|
- |
||
Income from operations - non-GAAP basis (j) |
$ |
25,898 |
|
$ |
44,309 |
|||
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations - GAAP basis |
$ |
(52,714) |
|
$ |
24,573 |
|||
|
Non-GAAP adjustments (as scheduled above) |
|
64,567 |
|
|
14,939 |
||
|
Tax effect of non-GAAP adjustments (k) |
|
(7,542) |
|
|
(1,179) |
||
Income from continuing operations - non-GAAP basis |
$ |
4,311 |
|
$ |
38,333 |
|||
|
|
|
|
|
|
|
|
|
GAAP income (loss) per share from continuing operations - diluted |
$ |
(1.28) |
|
$ |
0.83 |
|||
|
|
|
|
|
|
|
|
|
Non-GAAP income per share - diluted (l) |
$ |
0.10 |
|
$ |
1.29 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes operating results from Xcerra acquired on
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. Restructuring costs have been excluded because such expense is not used by Management to assess the core profitability of Cohu’s business operations. Manufacturing and sales transition costs relate principally to expenses incurred as a result of moving certain manufacturing activities to
(a) |
(8.8)% and 10.4% 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 Xcerra. |
|
(e) |
To eliminate manufacturing and sales transition and severance costs. |
|
(f) |
To eliminate fair value adjustment to contingent consideration related to the acquisition of Kita. |
|
(g) |
To eliminate professional fees and other direct incremental expenses incurred related to the acquisitions. |
|
(h) |
To eliminate the inventory step-up costs incurred related to acquisitions. |
|
(i) |
To eliminate the property, plant & equipment step-up depreciation accelerated related to the acquisition of Xcerra. |
|
(j) |
5.9% and 15.8% of net sales, respectively. |
|
(k) |
To adjust the provision for income taxes related to the adjustments described above based on applicable tax rates. |
|
(l) |
The nine months ended September 28, 2019 were computed using 41,527 shares outstanding as 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. The nine months ended September 29, 2018 was computed using the number of GAAP diluted shares outstanding for the period. |
COHU, INC. |
||||||||||
Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (Unaudited) |
||||||||||
(in thousands) |
||||||||||
|
|
|
Three Months Ended |
|||||||
|
|
|
September 28, |
|
June 29, |
|
September 29, |
|||
|
|
|
2019 (1) |
|
2019 (1) |
|
2018 |
|||
|
|
|
|
|
|
|
|
|
|
|
Gross Profit Reconciliation |
|
|
|
|
|
|
|
|
||
|
Gross profit - GAAP basis (excluding amortization) (2) |
$ |
58,933 |
|
$ |
62,406 |
|
$ |
35,022 |
|
|
|
Non-GAAP adjustments to cost of sales (as scheduled above) |
|
1,742 |
|
|
(491) |
|
|
125 |
|
Gross profit - Non-GAAP basis |
$ |
60,675 |
|
$ |
61,915 |
|
$ |
35,147 |
|
|
|
|
|
|
|
|
|
|
|
|
|
As a percentage of net sales: |
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit |
|
41.1% |
|
|
41.6% |
|
|
40.6% |
|
|
Non-GAAP gross profit |
|
42.3% |
|
|
41.3% |
|
|
40.8% |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Reconciliation |
|
|
|
|
|
|
|
|
||
|
Net income (loss) attributable to Cohu - GAAP Basis |
$ |
(10,468) |
|
$ |
(19,323) |
|
$ |
4,803 |
|
|
|
Income from discontinued operations |
|
(154) |
|
|
(24) |
|
|
- |
|
|
Income tax provision |
|
1,277 |
|
|
(916) |
|
|
2,302 |
|
|
Interest expense |
|
5,000 |
|
|
5,282 |
|
|
11 |
|
|
Interest income |
|
(190) |
|
|
(191) |
|
|
(337) |
|
|
Amortization |
|
9,969 |
|
|
9,987 |
|
|
1,024 |
|
|
Depreciation |
|
5,231 |
|
|
5,102 |
|
|
1,378 |
|
|
Other non-GAAP adjustments (as scheduled above) |
|
5,456 |
|
|
11,866 |
|
|
3,544 |
|
Adjusted EBITDA |
$ |
16,121 |
|
$ |
11,783 |
|
$ |
12,725 |
|
|
|
|
|
|
|
|
|
|
|
|
|
As a percentage of net sales: |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to Cohu - GAAP Basis |
|
(7.3)% |
|
|
(12.9)% |
|
|
5.6% |
|
|
Adjusted EBITDA |
|
11.2% |
|
|
7.9% |
|
|
14.8% |
|
|
|
|
|
|
|
|
|
|
|
Operating Expense Reconciliation |
|
|
|
|
|
|
|
|
||
|
Operating Expense - GAAP basis |
$ |
64,956 |
|
$ |
77,068 |
|
$ |
28,011 |
|
|
|
Non-GAAP adjustments to operating expenses (as scheduled above) |
|
(15,486) |
|
|
(24,011) |
|
|
(4,443) |
|
Operating Expenses - Non-GAAP basis |
$ |
49,470 |
|
$ |
53,057 |
|
$ |
23,568 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Includes operating results from Xcerra acquired on October 1, 2018 |
|||||||||
(2) |
Excludes amortization of $7,597 for the three months ending September 28, 2019, $7,625 for the three months ending June 29, 2019 and $644 for the three months ended September 29, 2018. |
|
|
|
Nine Months Ended |
||||
|
|
|
September 28, |
|
September 29, |
||
|
|
|
2019 (1) |
|
2018 |
||
Gross Profit Reconciliation |
|
|
|
|
|
||
|
Gross profit - GAAP basis (excluding amortization) (2) |
$ |
175,754 |
|
$ |
117,389 |
|
|
|
Non-GAAP adjustments to cost of sales (as scheduled above) |
|
8,115 |
|
|
408 |
|
Gross profit - Non-GAAP basis |
$ |
183,869 |
|
$ |
117,797 |
|
|
|
|
|
|
|
|
|
|
As a percentage of net sales: |
|
|
|
|
|
|
|
|
GAAP gross profit |
|
39.8% |
|
|
41.8% |
|
|
Non-GAAP gross profit |
|
41.7% |
|
|
41.9% |
|
|
|
|
|
|
|
|
Adjusted EBITDA Reconciliation |
|
|
|
|
|
||
|
Net income (loss) attributable to Cohu - GAAP Basis |
$ |
(52,434) |
|
$ |
24,573 |
|
|
|
Income from discontinued operations |
|
(342) |
|
|
- |
|
|
Income tax provision |
|
161 |
|
|
6,897 |
|
|
Interest expense |
|
15,789 |
|
|
33 |
|
|
Interest income |
|
(603) |
|
|
(913) |
|
|
Amortization |
|
29,975 |
|
|
3,117 |
|
|
Depreciation |
|
15,353 |
|
|
4,159 |
|
|
Other non-GAAP adjustments (as scheduled above) |
|
29,728 |
|
|
11,822 |
|
Adjusted EBITDA |
$ |
37,627 |
|
$ |
49,688 |
|
|
|
|
|
|
|
|
|
|
As a percentage of net sales: |
|
|
|
|
|
|
|
|
Net income (loss) attributable to Cohu - GAAP Basis |
|
(11.9)% |
|
|
8.7% |
|
|
Adjusted EBITDA |
|
8.5% |
|
|
17.7% |
|
|
|
|
|
|
|
|
Operating Expense Reconciliation |
|
|
|
|
|
||
|
Operating Expense - GAAP basis |
$ |
214,423 |
|
$ |
88,019 |
|
|
|
Non-GAAP adjustments to operating expenses (as scheduled above) |
|
(56,452) |
|
|
(14,531) |
|
Operating Expenses - Non-GAAP basis |
$ |
157,971 |
|
$ |
73,488 |
|
|
|
|
|
|
|
|
|
(1) |
Includes operating results from Xcerra acquired on October 1, 2018 |
||
(2) |
Excludes amortization of $22,863 for the nine months ending September 28, 2019 and $1,959 for the nine months ended September 29, 2018. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20191103005021/en/
Source:
Cohu, Inc.
Jeffrey D. Jones - Investor Relations
858-848-8106