0001437749-22-024995 | 10-Q | XBRL Viewer

Debt Disclosure [Text Block]

3.	Borrowings and Credit Agreements

The following table is a summary of our borrowings (in thousands):

	September 24,			December 25,
	2022			2021
Bank Term Loan under Credit Agreement	$	67,827		$	103,130
Bank Term Loans-Kita		2,304			3,070
Construction Loan- Cohu GmbH		7,962			10,045
Lines of Credit		1,744			3,059
Total debt		79,837			119,304
Less: financing fees and discount		(831	)		(1,514	)
Less: current portion⁽¹⁾		(6,029	)		(14,397	)
Total long-term debt	$	72,977		$	103,393

(1)

On January 28, 2022, Cohu prepaid $7.0 million of its term loan B debt facility and this $7.0 million has been classified as current installments of long-term debt as of December 25, 2021.

Credit Agreement

On October 1, 2018, we entered into a Credit Agreement providing for a $350.0 million Term Loan Credit Facility and borrowed the full amount to finance a portion of the Xcerra acquisition. Loans under the Term Loan Credit Facility amortize in equal quarterly installments of 0.25% of the original principal amount, with the balance payable at maturity. All outstanding principal and interest in respect of the Term Loan Credit Facility must be repaid on or before October 1, 2025. The loans under the Term Loan Credit Facility bear interest, at Cohu’s option, at a floating annual rate equal to LIBOR plus a margin of 3.00%. At September 24, 2022, the outstanding loan balance, net of discount and deferred financing costs, was $67.0 million and $3.2 million of the outstanding balance is presented as current installments of long-term debt in our condensed consolidated balance sheets. At December 25, 2021, the outstanding loan balance, net of discount and deferred financing costs, was $101.6 million and $10.1 million of the outstanding balance is presented as current installments of long-term debt in our condensed consolidated balance sheets. As of September 24, 2022, the fair value of the debt was $67.1 million. The measurement of the fair value of debt is based on the average of the bid and ask trading quotes as of September 24, 2022 and is considered a Level 2 fair value measurement.

Under the terms of the Credit Agreement, the lender may accelerate the payment terms upon the occurrence of certain events of default set forth therein, which include: the failure of Cohu to make timely payments of amounts due under the Credit Agreement, the failure of Cohu to adhere to the representations and covenants set forth in the Credit Agreement, the failure to provide notice of any event that causes a material adverse effect or to provide other required notices, upon the event that related collateral agreements become ineffective, upon the event that certain legal judgments are entered against Cohu, the insolvency of Cohu, or upon the change of control of Cohu. As of September 24, 2022, we believe no such events of default have occurred.

During the first nine months of 2022, we prepaid $31.8 million in principal of our Term Loan Credit Facility for $31.7 million in cash. We accounted for the prepayment as a debt extinguishment, which resulted in a loss of $0.3 million reflected in other expense, net, in our condensed consolidated statement of income and a $0.4 million reduction in debt discounts and deferred financing costs in our condensed consolidated balance sheets. During the first nine months of 2021, we repurchased $200.0 million in principal of our Term Loan Credit Facility for $200.0 million in cash. This resulted in a loss of $3.4 million reflected in other expense in our condensed consolidated statement of income and a corresponding $3.4 million reduction in debt discounts and deferred financing costs in our condensed consolidated balance sheets. Approximately $67.8 million in principal of the Term Loan Credit Facility remains outstanding as of September 24, 2022.

Kita Term Loans

We have a series of term loans with Japanese financial institutions primarily related to the expansion of our facility in Osaka, Japan. The loans are collateralized by the facility and land, carry interest rates ranging from 0.05% to 0.43%, and expire at various dates through 2034. At September 24, 2022, the outstanding loan balance was $2.3 million and $0.2 million of the outstanding balance is presented as current installments of long-term debt in our condensed consolidated balance sheets. At December 25, 2021, the outstanding loan balance was $3.1 million and $0.2 million of the outstanding balance is presented as current installments of long-term debt in our condensed consolidated balance sheets. The fair value of the debt approximates the carrying value at September 24, 2022.

The term loans are denominated in Japanese Yen and, as a result, amounts disclosed herein will fluctuate because of changes in currency exchange rates.

Construction Loans

In July 2019 and June 2020, one of our wholly owned subsidiaries located in Germany entered into a series of construction loans (“Loan Facilities”) with a German financial institution initially providing it with total borrowings of up to €10.1 million. In May 2022, one of the construction loans was amended, reducing total borrowings provided under the loans to up to €9.5 million. The Loan Facilities were utilized to finance the expansion of our facility in Kolbermoor, Germany and are secured by the land and the existing building on the site. The Loan Facilities bear interest at agreed upon rates based on the facility amounts as discussed below.

The first facility totaling €3.4 million has been fully drawn and is payable over 10 years at a fixed annual interest rate of 0.8%. Principal and interest payments are due each quarter over the duration of the facility ending in September 2029. The second facility totaling €5.2 million has been fully drawn and is payable over 15 years at an annual interest rate of 1.05%, which is fixed until April 2027. Principal and interest payments are due each month over the duration of the facility ending in January 2034. The third facility totaling €0.9 million has been fully drawn and is payable over 10 years at an annual interest rate of 1.2%. Principal and interest payments are due each month over the duration of the facility ending in May 2030.

At September 24, 2022, total outstanding borrowings under the Loan Facilities was $8.0 million with $0.9 million of the total outstanding balance being presented as current installments of long-term debt in our condensed consolidated balance sheets. At December 25, 2021, total outstanding borrowings under the Loan Facilities was $10.0 million with $1.0 million of the total outstanding balance being presented as current installments of long-term debt in our condensed consolidated balance sheets. The loans are denominated in Euros and, as a result, amounts disclosed herein will fluctuate because of changes in currency exchange rates. The fair value of the debt approximates the carrying value at September 24, 2022.

Lines of Credit

As a result of our acquisition of Kita, we assumed a series of revolving credit facilities with various financial institutions in Japan. The credit facilities renew monthly and provide Kita with access to working capital totaling up to 960 million Japanese Yen of which 250 million Japanese Yen is drawn. At September 24, 2022, total borrowings outstanding under the revolving lines of credit were $1.7 million. As these credit facility agreements renew monthly, they have been included in short-term borrowings in our condensed consolidated balance sheets.

The revolving lines of credit are denominated in Japanese Yen and, as a result, amounts disclosed herein will fluctuate because of changes in currency exchange rates.

Our wholly owned subsidiary in Switzerland has one available line of credit which provides borrowings of up to a total of 2.0 million Swiss Francs, a portion of which is reserved for tax guarantees. At September 24, 2022 and December 25, 2021 no amounts were outstanding under this line of credit.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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Note 13 - Contingencies

9 Months Ended

Sep. 24, 2022

Commitments and Contingencies Disclosure [Text Block]

13.

Contingencies

From time-to-time we are involved in various legal proceedings, examinations by various tax authorities and claims that have arisen in the ordinary course of our business. The outcome of any litigation is inherently uncertain. While there can be no assurance, we do not believe at the present time that the resolution of these matters will have a material adverse effect on our assets, financial position or results of operations.

Note 9 - Income Taxes (Details Textual)	3 Months Ended		9 Months Ended
Note 9 - Income Taxes (Details Textual)	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Effective Income Tax Rate Reconciliation, Percent, Total	29.10%	23.70%	25.20%	16.40%

Note 7 - Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 24, 2022

Schedule of Derivative Instruments [Table Text Block]

		Contract Amount		Contract Amount
Currency	Contract Position	(Local Currency)		(U.S. Dollars)
Euro	Buy		67,512	$	65,700
Swiss Franc	Buy		29,733		30,400
South Korean Won	Buy		3,087,700		2,200
Japanese Yen	Buy		85,752		600
				$	98,900

Derivative Instruments, Gain (Loss) [Table Text Block]

		Three months ended						Nine months ended
Derivatives not designated	Location of gain (loss)	Sept. 24,			Sept. 25,			Sept. 24,			Sept. 25,
as hedging instruments	recognized on derivatives	2022			2021			2022			2021
Foreign exchange forward contracts	Foreign transaction loss	$	(8,326	)	$	(934	)	$	(12,577	)		(2,283	)

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

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Raw materials and purchased parts

Note 1 - Summary of Significant Accounting Policies - Inventories (Details) - USD ($)
$ in Thousands

Sep. 24, 2022

Dec. 25, 2021

$ 98,440

$ 92,798

Work in process

41,352

40,732

Finished goods

25,452

27,523

Total inventories

$ 165,244

$ 161,053

^[1]

[1]	Derived from December 25, 2021 audited financial statements

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 24, 2022	Oct. 18, 2022
Document Information [Line Items]
Entity Central Index Key	0000021535
Entity Registrant Name	COHU INC
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2022
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 24, 2022
Document Transition Report	false
Entity File Number	001-04298
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	95-1934119
Entity Address, Address Line One	12367 Crosthwaite Circle
Entity Address, City or Town	Poway
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92064-6817
City Area Code	858
Local Phone Number	848-8100
Title of 12(b) Security	Common Stock, $1.00 par value
Trading Symbol	COHU
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		47,629,967

Note 1 - Summary of Significant Accounting Policies - Reported Share-based Compensation in Consolidated Financial Statements (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Share-based compensation of continuing operations	$ 3,740	$ 3,714	$ 11,095	$ 10,743
Income tax benefit	(770)	(155)	(3,232)	(569)
Total share-based compensation, net	2,970	3,559	7,863	10,174
Cost of Sales [Member]
Share-based compensation of continuing operations	161	239	478	692
Research and Development Expense [Member]
Share-based compensation of continuing operations	755	889	2,333	2,433
Selling, General and Administrative Expenses [Member]
Share-based compensation of continuing operations	$ 2,824	$ 2,586	$ 8,284	$ 7,618

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021
Cash flows from operating activities:
Net income	$ 75,219	$ 146,436
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on business divestitures	0	(75,754)
Loss on extinguishment of debt	312	3,411
Net amortization (accretion) on investments	(411)	0
Gain from sale of property, plant and equipment	(191)	(54)
Depreciation and amortization	34,645	37,102
Share-based compensation expense	11,095	10,743
Non-cash inventory related charges	4,826	2,330
Deferred income taxes	1,979	3,801
Changes in accrued retiree medical benefits	(650)	(409)
Changes in other accrued liabilities	(822)	49
Changes in other assets	(4,542)	(941)
Amortization of cloud-based software implementation costs	1,434	1,157
Interest capitalized associated with cloud computing implementation	(122)	(133)
Amortization of debt discounts and issuance costs	247	542
Changes in assets and liabilities:
Customer advances	2,241	(3,402)
Accounts receivable	(5,783)	(65,538)
Inventories	(12,678)	(27,531)
Other current assets	(9,955)	(1,932)
Accounts payable	(14,464)	18,284
Deferred profit	(3,027)	2,751
Income taxes payable	8,764	16,188
Accrued compensation, warranty and other liabilities	(2,980)	3,107
Operating lease right-of-use assets	3,954	5,339
Current and long-term operating lease liabilities	(3,796)	(5,443)
Net cash provided by operating activities	85,295	70,103
Cash flows from investing activities:
Purchases of short-term investments	(154,446)	(168,918)
Sales and maturities of short-term investments	106,525	113,567
Purchases of property, plant and equipment	(10,700)	(8,924)
Cash received from sale of property, plant and equipment	296	106
Cash received from disposition of business, net of cash paid	0	120,886
Net cash provided by (used in) investing activities	(58,325)	56,717
Cash flows from financing activities:
Payments on current and long-term finance lease liabilities	(126)	(142)
Repurchases of common stock, net	(3,546)	(5,808)
Proceeds from revolving line of credit and construction loans	0	1,279
Proceeds received from issuance of common stock, net of fees	0	223,119
Repayments of long-term debt	(36,935)	(205,879)
Acquisition of treasury stock	(38,078)	0
Net cash provided by (used in) financing activities	(78,685)	12,569
Effect of exchange rate changes on cash and cash equivalents	(6,088)	38
Net increase (decrease) in cash and cash equivalents	(57,803)	139,427
Cash and cash equivalents at beginning of period	290,201	149,358
Cash and cash equivalents at end of period	232,398	288,785
Supplemental disclosure of cash flow information:
Cash paid for income taxes	16,189	6,067
Inventory capitalized as property, plant and equipment	1,500	1,511
Property, plant and equipment purchases included in accounts payable	640	634
Cash paid for interest	$ 2,261	$ 5,381

Note 11 - Leases - Cash Flow Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021
Operating cash flows from operating leases	$ 4,946	$ 5,953
Operating cash flows from finance leases	1	1
Financing cash flows from finance leases	126	142
Leased assets obtained in exchange for new finance lease liabilities	0	54
Leased assets obtained in exchange for new operating lease liabilities	$ 1,308	$ 3,669

Note 10 - Segment and Geographic Information

9 Months Ended

Sep. 24, 2022

Segment Reporting Disclosure [Text Block]

10.

Segment and Geographic Information

The summary below presents our reportable segments, Semiconductor Test & Inspection and PCB Test, for the nine-month period ended September 25, 2021. Subsequent to the sale of our PCB Test business on June 24, 2021, we have one reportable segment, Semiconductor Test & Inspection. All amounts presented in our condensed consolidated balance sheet as of September 24, 2022 and our condensed consolidated statement of income for the three and nine months ended September 24, 2022 represents the financial position and results of our remaining reportable segment.

Financial information by reportable segment is as follows (in thousands):

	Three Months Ended			Nine Months Ended
	September 25,			September 25,
Net sales by segment:	2021			2021
Semiconductor Test & Inspection	$	225,063		$	668,594
PCB Test		-			26,760
Total consolidated net sales for reportable segments	$	225,063		$	695,354

Segment profit before tax:
Semiconductor Test & Inspection	$	36,345		$	113,573
PCB Test		-			3,907
Profit for reportable segments		36,345			117,480

Other unallocated amounts:
Corporate expenses		(2,747	)		(9,586	)
Gain on sale of PCB Test business		90			75,754
Interest expense		(966	)		(5,372	)
Interest income		53			197
Loss on extinguishment of debt		(1,650	)		(3,411	)
Income from operations before taxes	$	31,125		$	175,062

For revenues by geography and information on customer concentration, see Note 1, “Summary of Significant Accounting Policies”.

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI https://asc.fasb.org/topic&trid=2134510

Proceeds from Issuance of Common Stock

Note 7 - Derivative Financial Instruments - Foreign Currency Forward Contracts Outstanding (Details) - Sep. 24, 2022 - Not Designated as Hedging Instrument [Member] € in Thousands, ¥ in Thousands, SFr in Thousands, ₩ in Millions, $ in Millions	USD ($)	EUR (€)	JPY (¥)	CHF (SFr)	KRW (₩)
Euro Foreign Exchange Forward [Member] \| Long [Member]
Contract amount	$ 65.7	€ 67,512
Swiss Franc Foreign Exchange Forward [Member] \| Long [Member]
Contract amount	30.4			SFr 29,733
South Korean Won Forward Exchange Forward [Member] \| Long [Member]
Contract amount	2.2				₩ 3,087.7
Japanese Yen Foreign Exchange Forward [Member] \| Long [Member]
Contract amount	0.6		¥ 85,752
Foreign Exchange Forward [Member]
Contract amount	$ 98.9

Note 8 - Equity (Details Textual) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

9 Months Ended

Mar. 11, 2021

Mar. 08, 2021

Sep. 24, 2022

Sep. 25, 2021

Oct. 25, 2022

May 04, 2022

May 03, 2022

Dec. 25, 2021

^[1]

Oct. 28, 2021

$ 0

$ 223,119

Stock Repurchase Program, Authorized Amount

$ 70,000

Stock Repurchased During Period, Shares (in shares)

637,700

1,355,508

Stock Repurchased During Period, Value

$ 17,700

$ 38,100

Stock Repurchase Program, Remaining Authorized Repurchase Amount

$ 24,600

Common Stock, Shares Authorized (in shares)

90,000,000

60,000,000

90,000,000

Subsequent Event [Member]

Stock Repurchase Program, Additional Authorized Amount

$ 70,000

Stock Repurchase Program, Remaining Authorized Repurchase Amount

$ 94,600

Underwritten Public Offering [Member]

Stock Issued During Period, Shares, New Issues (in shares)

4,950,000

Shares Issued, Price Per Share (in dollars per share)

$ 41.00

Proceeds from Issuance of Common Stock

$ 223,100

Over-Allotment Option [Member]

Stock Issued During Period, Shares, New Issues (in shares)

742,500

[1]	Derived from December 25, 2021 audited financial statements

Note 5 - Financial Instruments Measured at Fair Value (Tables)

9 Months Ended

Sep. 24, 2022

Unrealized Gain (Loss) on Investments [Table Text Block]

	September 24, 2022
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses⁽¹⁾		Value
Corporate debt securities⁽²⁾	$	72,632	$	6	$	371	$	72,267
U.S. treasury securities		32,522		-		422		32,100
Bank certificates of deposit		23,325		9		51		23,283
Foreign government security		783		-		-		783
Asset-backed securities		8,624		-		74		8,550
	$	137,886	$	15	$	918	$	136,983

	December 25, 2021
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses⁽¹⁾		Value
Corporate debt securities ⁽²⁾	$	84,060	$	2	$	31	$	84,031
U.S. treasury securities		3,953		-		5		3,948
Bank certificates of deposit		800		-		-		800
Foreign government security		925		-		-		925
	$	89,738	$	2	$	36	$	89,704

Investments Classified by Contractual Maturity Date [Table Text Block]

	September 24, 2022				December 25, 2021
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
Due in one year or less	$	112,027	$	111,625	$	83,429	$	83,408
Due after one year through three years		25,859		25,358		6,309		6,296
	$	137,886	$	136,983	$	89,738	$	89,704

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

	Fair value measurements at September 24, 2022 using:
							Total estimated
	Level 1		Level 2		Level 3		fair value
Cash	$	152,841	$	-	$	-	$	152,841
U.S. treasury securities		-		32,100		-		32,100
Corporate debt securities		-		80,744		-		80,744
Asset-backed securities		-		8,550		-		8,550
Money market funds		-		71,080		-		71,080
Bank certificates of deposit		-		23,283		-		23,283
Foreign government security		-		783		-		783
	$	152,841	$	216,540	$	-	$	369,381

	Fair value measurements at December 25, 2021 using:
							Total estimated
	Level 1		Level 2		Level 3		fair value
Cash	$	195,297	$	-	$	-	$	195,297
Corporate debt securities		-		86,535		-		86,535
U.S. treasury securities		-		3,948		-		3,948
Money market funds		-		92,400		-		92,400
Bank certificates of deposit		-		800		-		800
Foreign government security		-		925		-		925
	$	195,297	$	184,608	$	-	$	379,905

Note 11 - Leases - Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Operating leases	$ 1,654	$ 1,799	$ 5,046	$ 5,866
Variable lease expense	520	508	1,583	1,634
Short-term operating leases	1	1	3	68
Amortization of leased assets	11	21	69	66
Interest on lease liabilities	0	0	1	1
Sublease income	(16)	(21)	(54)	(61)
Net lease cost	$ 2,170	$ 2,308	$ 6,648	$ 7,574

Note 4 - Restructuring Charges

9 Months Ended

Sep. 24, 2022

Restructuring and Related Activities Disclosure [Text Block]

4.	Restructuring Charges

Subsequent to the acquisition of Xcerra on October 1, 2018, during the fourth quarter of 2018, we began a strategic restructuring program designed to reposition our organization and improve our cost structure as part of our targeted integration plan regarding the recently acquired Xcerra (“Integration Program”). As part of the Integration Program we consolidated our global handler and contactor manufacturing operations and closed our manufacturing operations in Penang, Malaysia and Fontana, California in 2019.

In the second quarter of 2019, we entered into a social plan (“Plan”) with the German labor organization representing certain of the employees of our wholly owned subsidiary, Multitest elektronische Systeme GmbH, as part of our Integration Program. During the fourth quarter of 2020 we implemented a voluntary program and termination agreements with certain employees of our wholly owned subsidiary, Cohu GmbH. These programs collectively reduced headcount, enabled us to consolidate the facilities of our multiple operations located near Kolbermoor and Rosenheim, Germany, as well as transitioned certain manufacturing to other lower cost regions. The facility consolidations and reduction in force programs were implemented as part of a comprehensive review of our operations and were intended to streamline and reduce our operating cost structure and capitalize on acquisition synergies.

As a result of the activities described above, we recognized total pretax charges of $0.6 million and $2.0 million for the first nine months ended September 24, 2022, and September 25, 2021, respectively, that are within the scope of ASC 420. All costs of the Integration Program were, and will be, incurred by our Semiconductor Test & Inspection segment.

Costs associated with restructuring activities are presented in our condensed consolidated statements of income as restructuring charges, except for certain costs associated with inventory charges related to the decision to end manufacturing of certain of Xcerra’s semiconductor test handler products, which are classified within cost of sales. Other restructuring costs include expenses for professional fees associated with employee severance, impairments of fixed assets and building close expenses.

The following table summarizes the activity within the restructuring related accounts for the Integration Program during the first nine months ended September 24, 2022 and September 25, 2021 (in thousands):

	Severance and			Other Exit
	Other Payroll			Costs			Total
Balance, December 26, 2020	$	5,826		$	-		$	5,826
Costs accrued		1,124			864			1,988
Amounts paid or charged		(6,410	)		(864	)		(7,274	)
Impact of currency exchange		(83	)		-			(83	)
Balance, September 25, 2021	$	457		$	-		$	457

Balance, December 25, 2021	$	348		$	-		$	348
Costs accrued		(15	)		615			600
Amounts paid or charged		(269	)		(615	)		(884	)
Impact of currency exchange		(9	)		-			(9	)
Balance, September 24, 2022	$	55		$	-		$	55

At September 24, 2022, our total accrual for restructuring related items is reflected within current liabilities of our condensed consolidated balance sheets as these amounts are expected to be paid out within a year. The estimated costs associated with the employee severance and facility consolidation actions will be paid predominantly in cash.

Note 2 - Goodwill and Purchased Intangible Assets - Purchased Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 24, 2022	Dec. 25, 2021
Gross Carrying Amount, finite-lived intangible assets	$ 296,975	$ 316,232
Accumulated Amortization	154,198	138,912
Developed Technology Rights [Member]
Gross Carrying Amount, finite-lived intangible assets	214,975	229,131
Accumulated Amortization	$ 117,096	104,855
Remaining Useful Life (Year)	3 years 9 months 18 days
Customer Relationships [Member]
Gross Carrying Amount, finite-lived intangible assets	$ 62,138	65,916
Accumulated Amortization	$ 28,381	26,189
Remaining Useful Life (Year)	6 years 9 months 18 days
Trade Names [Member]
Gross Carrying Amount, finite-lived intangible assets	$ 19,616	20,877
Accumulated Amortization	$ 8,580	7,714
Remaining Useful Life (Year)	6 years 6 months
Noncompete Agreements [Member]
Gross Carrying Amount, finite-lived intangible assets	$ 246	308
Accumulated Amortization	$ 141	$ 154
Remaining Useful Life (Year)	4 years 3 months 18 days

Note 2 - Goodwill and Purchased Intangible Assets (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Amortization of Intangible Assets	$ 8,206	$ 8,879	$ 25,082	$ 27,168

Note 6 - Employee Stock Benefit Plans (Details Textual) $ in Millions	9 Months Ended
	Sep. 24, 2022 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)	0
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period (in shares)	12,442
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Number (in shares)	0
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number, Ending Balance (in shares)	0
Restricted Stock Units (RSUs) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	422,211
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period (in shares)	465,664
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Forfeited in Period (in shares)	28,436
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance (in shares)	985,919
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding \| $	$ 25.7
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms (Year)	1 year 3 months 18 days
Restricted Stock Units (RSUs) [Member] \| Vesting Over One Year Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	1 year
Restricted Stock Units (RSUs) [Member] \| Vesting Over Four Year Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	4 years
Performance Shares [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	150,633
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period (in shares)	55,009
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Forfeited in Period (in shares)	68,975
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance (in shares)	411,139
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding \| $	$ 10.7
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms (Year)	1 year 4 months 24 days
Equity Based Performance Stock Units Granted in 2022, 2021, 2020, and 2019 [Member] \| Vest on the Third Anniversary of Awards Grant [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	100.00%
Minimum [Member] \| Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Percentage of Shares Available for Issue	0.00%
Maximum [Member] \| Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Percentage of Shares Available for Issue	200.00%
Equity Incentive Plan 2005 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)	899,307
Equity Incentive Plan 2005 [Member] \| Share-Based Payment Arrangement, Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year)	10 years
Equity Incentive Plan 2005 [Member] \| Minimum [Member] \| Share-Based Payment Arrangement, Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	1 year
Equity Incentive Plan 2005 [Member] \| Maximum [Member] \| Share-Based Payment Arrangement, Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	4 years
Employee Stock Purchase Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)	429,992
Percentage of Fair Value to Determine Price of Common Stock	85.00%
Stock Issued During Period, Shares, New Issues (in shares)	77,361

Note 1 - Summary of Significant Accounting Policies

9 Months Ended

Sep. 24, 2022

Significant Accounting Policies [Text Block]

1.	Summary of Significant Accounting Policies

Basis of Presentation

Our fiscal years are based on a 52- or 53-week period ending on the last Saturday in December. Our current fiscal year will end on December 31, 2022 and will be comprised of 53 weeks. The condensed consolidated balance sheet at December 25, 2021, has been derived from our audited financial statements at that date. The interim condensed consolidated financial statements as of September 24, 2022, (also referred to as “the third quarter of fiscal 2022” and “the first nine months of fiscal 2022”) and September 25, 2021, (also referred to as “the third quarter of fiscal 2021” and “the first nine months of fiscal 2021”) are unaudited. However, in management’s opinion, these financial statements reflect all adjustments (consisting only of normal, recurring items) necessary to provide a fair presentation of our financial position, results of operations and cash flows for the periods presented. Both the three- and nine-month periods ended September 24, 2022 and September 25, 2021 were comprised of 13 and 39 weeks, respectively.

Our interim results are not necessarily indicative of the results that should be expected for the full year. The condensed consolidated financial statements presented herein reflect estimates and assumptions made by management at September 24, 2022 and for the nine-month period ended September 24, 2022. For a better understanding of Cohu, Inc. and our financial statements, we recommend reading these interim condensed consolidated financial statements in conjunction with our audited financial statements for the year ended December 25, 2021, which are included in our 2021 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”). In the following notes to our interim condensed consolidated financial statements, Cohu, Inc. is referred to as “Cohu”, “we”, “our” and “us”.

All significant consolidated transactions and balances have been eliminated in consolidation.

Concentration of Credit Risk

Financial instruments that potentially subject us to significant credit risk consist principally of cash equivalents, short-term investments and trade accounts receivable. We invest in a variety of financial instruments and, by policy, limit the amount of credit exposure with any one issuer.

Our trade accounts receivable are presented net of allowance for credit losses, which is determined in accordance with the guidance provided by Accounting Standards Codification (“ASC”) Topic 326, Financial Instruments-Credit Losses, (“ASC 326”). At September 24, 2022 and December 25, 2021, our allowance for credit losses was $0.2 million and $0.3 million, respectively. Our customers include semiconductor manufacturers and semiconductor test subcontractors throughout many areas of the world. While we believe that our allowance for credit losses is adequate and represents our best estimate at September 24, 2022, we will continue to monitor customer liquidity and other economic conditions, including the impact of the COVID-19 pandemic, which may result in changes to our estimates regarding expected credit losses.

Inventories

Inventories are stated at the lower of cost, determined on a first-in, first-out basis, or net realizable value. Cost includes labor, material and overhead costs. Determining net realizable value of inventories involves numerous estimates and judgments, including projecting average selling prices and sales volumes for future periods and costs to complete and dispose of inventory. As a result of these analyses, we record a charge to cost of sales in advance of the period when the inventory is sold, which occurs when estimated net realizable values are below our costs.

Inventories by category were as follows (in thousands):

September 24,

December 25,

2022

2021

Raw materials and purchased parts
$ 98,440 $ 92,798

Work in process
41,352 40,732

Finished goods
25,452 27,523

Total inventories
$ 165,244 $ 161,053

Property, Plant and Equipment

Depreciation and amortization of property, plant and equipment, both owned and under financing lease, is calculated principally on the straight-line method based on estimated useful lives of thirty to forty years for buildings, five to fifteen years for building improvements and three to ten years for machinery, equipment and software. Land is not depreciated.

Property, plant and equipment, at cost, consisted of the following (in thousands):

September 24,

December 25,

2022

2021

Land and land improvements
$ 6,439 $ 7,703

Buildings and building improvements
29,479 31,711

Machinery and equipment
100,911 95,542

136,829 134,956

Less accumulated depreciation and amortization
(75,040 ) (70,999 )

Property, plant and equipment, net
$ 61,789 $ 63,957

Cloud-based Enterprise Resource Planning Implementation Costs

We have capitalized certain costs associated with the implementation of our new cloud-based Enterprise Resource Planning (“ERP”) system in accordance with ASC Topic 350, Intangibles—Goodwill and Other, (“ASC 350”). Capitalized costs include only external direct costs of materials and services consumed in developing the system and interest costs incurred, when material, while developing the system.

Unamortized capitalized cloud computing implementation costs totaled $13.9 million and $13.5 million at September 24, 2022, and December 25, 2021, respectively. These amounts are recorded within other current assets and other assets in our condensed consolidated balance sheets. The change in the capitalized amount is due to costs capitalized in the current period, offset by amortization recorded. We began amortizing some of these costs when our new ERP system was placed into service during the first quarter of 2020 and we continue to capitalize costs related to implementation projects that are ongoing. Implementation costs are amortized using the straight-line method over seven years and we recorded amortization expense of $0.4 million and $1.4 million during the three and nine months ended September 24, 2022, respectively and amortization expense of $0.4 million and $1.2 million during the three and nine months ended September 25, 2021, respectively.

Segment Information

We applied the provisions of ASC Topic 280, Segment Reporting, (“ASC 280”), which sets forth a management approach to segment reporting and establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products, major customers and the geographies in which the entity holds material assets and reports revenue. An operating segment is defined as a component that engages in business activities whose operating results are reviewed by the chief operating decision maker and for which discrete financial information is available. We have determined that our three identified operating segments are: Test Handler Group (“THG”), Semiconductor Tester Group (“STG”) and Interface Solutions Group (“ISG”). Our THG, STG and ISG operating segments qualify for aggregation under ASC 280 due to similarities in their customers, their economic characteristics, and the nature of products and services provided. As a result, we report in one segment, Semiconductor Test and Inspection Equipment (“Semiconductor Test & Inspection”). Prior to the sale of our PCB Test Group (“PTG”) on June 24, 2021, we reported in two segments, Semiconductor Test & Inspection and PCB Test Equipment (“PCB Test”).

Goodwill and Other Intangible Assets

We evaluate goodwill for impairment annually and when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. We test goodwill for impairment by first comparing the book value of net assets to the fair value of the reporting unit. If the fair value is determined to be less than the book value, a second step is performed to compute the amount of impairment as the difference between the fair value of the reporting unit and its carrying value, not to exceed the carrying value of goodwill. We estimated the fair values of our reporting units primarily using the income approach valuation methodology that includes the discounted cash flow method, taking into consideration the market approach and certain market multiples as a validation of the values derived using the discounted cash flow methodology. Forecasts of future cash flows are based on our best estimate of future net sales and operating expenses, based primarily on customer forecasts, industry trade organization data and general economic conditions. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.

We conduct our annual impairment test as of October 1st of each year and have determined there was no impairment as of October 1, 2021 as the estimated fair values of our reporting units exceeded their carrying values on that date. Other events and changes in circumstances may also require goodwill to be tested for impairment between annual measurement dates.

Other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable. For other intangible assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. We measure the impairment loss based on the difference between the carrying amount and estimated fair value.

Product Warranty

Product warranty costs are accrued in the period sales are recognized. Our products are generally sold with standard warranty periods, which differ by product, ranging from 12- to 36-months. Parts and labor are typically covered under the terms of the warranty agreement. Our warranty expense accruals are based on historical and estimated costs by product and configuration. From time-to-time we offer customers extended warranties beyond the standard warranty period. In those situations, the revenue relating to the extended warranty is deferred at its estimated relative standalone selling price and recognized on a straight-line basis over the contract period. Costs associated with our extended warranty contracts are expensed as incurred.

Restructuring Costs

We record restructuring activities including costs for one-time termination benefits in accordance with ASC Topic 420, Exit or Disposal Cost Obligations (“ASC 420”). The timing of recognition for severance costs accounted for under ASC 420 depends on whether employees are required to render service until they are terminated in order to receive the termination benefits. If employees are required to render service until they are terminated in order to receive the termination benefits, a liability is recognized ratably over the future service period. Otherwise, a liability is recognized when management has committed to a restructuring plan and has communicated those actions to employees. Employee termination benefits covered by existing benefit arrangements are recorded in accordance with ASC Topic 712, Nonretirement Postemployment Benefits. These costs are recognized when management has committed to a restructuring plan and the severance costs are probable and estimable. See Note 4, “Restructuring Charges” for additional information.

Debt Issuance Costs

We capitalize costs related to the issuance of debt. Debt issuance costs directly related to our Term Loan Credit Facility are presented within noncurrent liabilities as a reduction of long-term debt in our condensed consolidated balance sheets. The amortization of such costs is recognized as interest expense using the effective interest method over the term of the respective debt issue. Amortization related to deferred debt issuance costs and original discount costs was $0.1 million and $0.3 million for the three and nine months ended September 24, 2022, respectively. Amortization related to deferred debt issuance costs and original discount costs was $0.1 million and $0.5 million for the three and nine months ended September 25, 2021, respectively.

Foreign Remeasurement and Currency Translation

Assets and liabilities of our wholly owned foreign subsidiaries that use the U.S. Dollar as their functional currency are re-measured using exchange rates in effect at the end of the period, except for nonmonetary assets, such as inventories and property, plant and equipment, which are re-measured using historical exchange rates. Revenues and costs are re-measured using average exchange rates for the period, except for costs related to those balance sheet items that are re-measured using historical exchange rates. Gains and losses on foreign currency transactions are recognized as incurred. During the three and nine months ended September 24, 2022, we recognized foreign exchange gains of $1.3 million and $4.0 million, respectively, in our condensed consolidated statements of income. During the three and nine months ended September 25, 2021, we recognized foreign exchange losses of $28,000 and $0.3 million, respectively, in our condensed consolidated statements of income. Certain of our foreign subsidiaries have designated the local currency as their functional currency and, as a result, their assets and liabilities are translated at the rate of exchange at the balance sheet date, while revenue and expenses are translated using the average exchange rate for the period. Cumulative foreign currency translation adjustments resulting from the translation of the financial statements are included as a separate component of stockholders’ equity.

Foreign Exchange Derivative Contracts

We operate and sell our products in various global markets. As a result, we are exposed to changes in foreign currency exchange rates. We enter into foreign currency forward contracts with a financial institution to hedge against future movements in foreign exchange rates that affect certain existing U.S. Dollar denominated assets and liabilities held at our subsidiaries whose functional currency is the local currency. For accounting purposes, our foreign currency forward contracts are not designated as hedging instruments and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our condensed consolidated balance sheets with changes in fair value recorded within foreign transaction gain (loss) in our condensed consolidated statements of income for both realized and unrealized gains and losses. See Note 7, “Derivative Financial Instruments” for additional information.

Share-Based Compensation

We measure and recognize all share-based compensation under the fair value method.

Reported share-based compensation is classified, in our condensed consolidated financial statements, as follows (in thousands):

Three Months Ended

Nine Months Ended

September 24,

September 25,

September 24,

September 25,

2022

2021

2022

2021

Cost of sales
$ 161 $ 239 $ 478 $ 692

Research and development
755 889 2,333 2,433

Selling, general and administrative
2,824 2,586 8,284 7,618

Total share-based compensation
3,740 3,714 11,095 10,743

Income tax benefit
(770 ) (155 ) (3,232 ) (569 )

Total share-based compensation, net
$ 2,970 $ 3,559 $ 7,863 $ 10,174

Income Per Share

Basic income per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted income per share includes the dilutive effect of common shares potentially issuable upon the exercise of stock options, vesting of outstanding restricted stock and performance stock units and issuance of stock under our employee stock purchase plan using the treasury stock method. In loss periods, potentially dilutive securities are excluded from the per share computations due to their anti-dilutive effect. For purposes of computing diluted income per share, stock options with exercise prices that exceed the average fair market value of our common stock for the period are excluded. For the three and nine months ended September 24, 2022, stock options and awards to issue approximately 325,000 and 300,000 shares of common stock were excluded from the computation, respectively. For the three and nine months ended September 25, 2021, stock options and awards to issue approximately 239,000 and 160,000 shares of common stock were excluded from the computation, respectively. All shares repurchased and held as treasury stock are reflected as a reduction to our basic weighted average shares outstanding based on the trade date of the share repurchase.

The following table reconciles the denominators used in computing basic and diluted income per share (in thousands):

Three Months Ended

Nine Months Ended

September 24,

September 25,

September 24,

September 25,

2022

2021

2022

2021

Weighted average common shares
47,984 48,666 48,412 46,992

Effect of dilutive securities
542 791 596 1,145

48,526 49,457 49,008 48,137

Leases

We determine if a contract contains a lease at inception. Operating leases are included in operating lease right of use (“ROU”) assets, current other accrued liabilities, and long-term lease liabilities on our condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, other current accrued liabilities, and long-term lease liabilities on our condensed consolidated balance sheets.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the adoption date or the commencement date for leases entered into after the adoption date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rates for the remaining lease terms based on the information available at the adoption date or commencement date in determining the present value of future payments.

The operating lease ROU asset also includes any lease payments made, lease incentives, favorable and unfavorable lease terms recognized in business acquisitions and excludes initial direct costs incurred and variable lease payments. Variable lease payments include estimated payments that are subject to reconciliations throughout the lease term, increases or decreases in the contractual rent payments, as a result of changes in indices or interest rates and tax payments that are based on prevailing rates. Our lease terms may include renewal options to extend the lease when it is reasonably certain that we will exercise those options. In addition, we include purchase option amounts in our calculations when it is reasonably certain that we will exercise those options. Rent expense for minimum payments under operating leases is recognized on a straight-line basis over the term.

Leases with an initial term of 12 months or less are not recorded on the balance sheet but recognized in our condensed consolidated statements of income on a straight-line basis over the lease term. We account for lease and non-lease components as a single lease component and include both in our calculation of the ROU assets and lease liabilities.

We sublease certain leased assets to third parties, mainly as a result of unused space in our facilities. None of our subleases contain extension options. Variable lease payments in our subleases include tax payments that are based on prevailing rates. We account for lease and non-lease components as a single lease component.

Revenue Recognition

Our net sales are derived from the sale of products and services and are adjusted for estimated returns and allowances, which historically have been insignificant. We recognize revenue when the obligations under the terms of a contract with our customers are satisfied; generally, this occurs with the transfer of control of our systems, non-system products or services. In circumstances where control is not transferred until destination or acceptance, we defer revenue recognition until such events occur.

Revenue for established products that have previously satisfied a customer’s acceptance requirements is generally recognized upon shipment. In cases where a prior history of customer acceptance cannot be demonstrated or from sales where customer payment dates are not determinable and in the case of new products, revenue and cost of sales are deferred until customer acceptance has been received. Our post-shipment obligations typically include installation and standard warranties. The relative standalone selling price of installation related revenue is recognized in the period the installation is performed. Service revenue is recognized over time as we transfer control to our customer for the related contract or upon completion of the services if they are short-term in nature. Spares, contactor and kit revenue is generally recognized upon shipment.

Certain of our equipment sales have multiple performance obligations. These arrangements involve the delivery or performance of multiple performance obligations, and transfer of control of performance obligations may occur at different points in time or over different periods of time. For arrangements containing multiple performance obligations, the revenue relating to the undelivered performance obligation is deferred using the relative standalone selling price method utilizing estimated sales prices until satisfaction of the deferred performance obligation.

Unsatisfied performance obligations primarily represent contracts for products with future delivery dates. At September 24, 2022, we had $7.3 million of revenue expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) for contracts with original expected durations of over one year. As allowed under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), we have opted to not disclose unsatisfied performance obligations for contracts with original expected durations of less than one year.

We generally sell our equipment with a product warranty. The product warranty provides assurance to customers that delivered products are as specified in the contract (an “assurance-type warranty”). Therefore, we account for such product warranties under ASC Topic 460, Guarantees (“ASC 460”), and not as a separate performance obligation.

The transaction price reflects our expectations about the consideration we will be entitled to receive from the customer and may include fixed or variable amounts. Fixed consideration primarily includes sales to customers that are known as of the end of the reporting period. Variable consideration includes sales in which the amount of consideration that we will receive is unknown as of the end of a reporting period. Such consideration primarily includes sales made to certain customers with cumulative tier volume discounts offered. Variable consideration arrangements are rare; however, when they occur, we estimate variable consideration as the expected value to which we expect to be entitled. Included in the transaction price estimate are amounts in which it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration that does not meet revenue recognition criteria is deferred.

Our contracts are typically less than one year in duration and we have elected to use the practical expedient available in ASC 606 to expense cost to obtain contracts as they are incurred because they would be amortized over less than one year.

Accounts receivable represents our unconditional right to receive consideration from our customer. Payments terms do not exceed one year from the invoice date and therefore do not include a significant financing component. To date, there have been no material impairment losses on accounts receivable. There were no material contract assets or contract liabilities recorded on our condensed consolidated balance sheet in any of the periods presented.

On shipments where sales are not recognized, gross profit is generally recorded as deferred profit in our condensed consolidated balance sheet representing the difference between the receivable recorded and the inventory shipped. At September 24, 2022, we had deferred revenue totaling approximately $17.2 million, current deferred profit of $9.8 million and deferred profit expected to be recognized after one year included in noncurrent other accrued liabilities of $5.6 million. At December 25, 2021, we had deferred revenue totaling approximately $21.9 million, current deferred profit of $13.2 million and deferred profit expected to be recognized after one year included in noncurrent other accrued liabilities of $6.1 million.

Net sales of our reportable segments, by type, are as follows (in thousands):

Three Months Ended

Nine Months Ended

Disaggregated Net Sales

September 24,

2022

September 25,

2021

September 24,

2022

September 25,

2021

Systems:

Semiconductor Test & Inspection
$ 120,672 $ 146,010 $ 369,972 $ 433,830

PCB Test
- - - 17,831

Non-systems:

Semiconductor Test & Inspection
86,015 79,053 251,698 234,764

PCB Test
- - - 8,929

Total net sales
$ 206,687 $ 225,063 $ 621,670 $ 695,354

Revenue by geographic area based upon product shipment destination (in thousands):

Three Months Ended

Nine Months Ended

Disaggregated Net Sales

September 24,

2022

September 25,

2021

September 24,

2022

September 25,

2021

China
$ 31,477 $ 60,205 $ 116,715 $ 171,653

Philippines
38,852 49,382 84,799 119,669

Malaysia
24,060 21,086 73,033 63,481

United States
19,510 15,498 62,826 57,435

Taiwan
11,243 15,006 46,620 74,392

Rest of the World
81,545 63,886 237,677 208,724

Total net sales
$ 206,687 $ 225,063 $ 621,670 $ 695,354

A small number of customers historically have been responsible for a significant portion of our net sales. Significant customer concentration information, by reportable segment, is as follows:

Three Months Ended

Nine Months Ended

September 24,

September 25,

September 24,

September 25,

2022

2021

2022

2021

Semiconductor Test & Inspection

Customers individually accounting for more than 10% of net sales

one

two
* one

Percentage of net sales
13% 32% * 14%

PCB Test

Customers individually accounting for more than 10% of net sales
N/A N/A N/A *

Percentage of net sales
N/A N/A N/A *

*

No single customer represented more than 10% of consolidated net sales.

Accumulated Other Comprehensive Loss

Our accumulated other comprehensive loss balance totaled approximately $72.4 million and $27.3 million at September 24, 2022 and December 25, 2021, respectively, and was attributed to all non-owner changes in stockholders’ equity and consists of, on an after-tax basis where applicable, foreign currency adjustments resulting from the translation of certain of our subsidiary accounts where the functional currency is not the U.S. Dollar, unrealized loss on investments and adjustments related to postretirement benefits. Reclassification adjustments from accumulated other comprehensive loss during the first nine months of fiscal 2022 and 2021 were not significant.

Retiree Medical Benefits

We provide post-retirement health benefits to certain retired executives, one director (who is a former executive) and their eligible dependents under a noncontributory plan. These benefits are no longer offered to any other retired Cohu employees. The net periodic benefit cost incurred during the first nine months of fiscal 2022 and 2021 was not significant.

Business Divestitures

On June 24, 2021, we completed the sale of our PCB Test Equipment (“PCB Test”) business, which represented our PCB Test segment. As part of the transaction we also sold certain intellectual property held by our Semiconductor Test & Inspection segment that is utilized by the PCB Test business. See Note 12, “Business Divestitures” for additional information on this transaction.

New Accounting Pronouncements

There have been no material changes in recently issued or adopted accounting standards from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 25, 2021.

Note 10 - Segment and Geographic Information - Summary of Current Segments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Net sales	$ 206,687	$ 225,063	$ 621,670	$ 695,354
Profit (loss) for reportable segments		36,345		117,480
Gain (Loss) on Disposition of Business	(0)	90	(0)	75,754
Interest expense	(1,028)	(966)	(2,928)	(5,372)
Interest income	1,132	53	1,551	197
Gain (Loss) on Extinguishment of Debt, Total	(80)	(1,650)	(312)	(3,411)
Income from operations before taxes	$ 35,075	31,125	$ 100,604	175,062
Corporate, Non-Segment [Member]
Corporate expenses		(2,747)		(9,586)
Semiconductor Test and Inspection [Member]
Net sales		225,063		668,594
Profit (loss) for reportable segments		36,345		113,573
PCB Test [Member]
Net sales		0		26,760
Profit (loss) for reportable segments		$ 0		$ 3,907

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Net income	$ 24,882	$ 23,733	$ 75,219	$ 146,436
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(22,520)	(5,206)	(43,960)	(12,562)
Adjustments related to postretirement benefits	(129)	44	(302)	15
Change in unrealized gain/loss on investments	(372)	(11)	(882)	(25)
Reclassifications due to sale of PCB Test business	0	0	0	(2,515)
Other comprehensive loss, net of tax	(23,021)	(5,173)	(45,144)	(15,087)
Comprehensive income	$ 1,861	$ 18,560	$ 30,075	$ 131,349

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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Thereafter, operating leases

Note 11 - Leases - Future Minimum Lease Payments (Details) - USD ($)
$ in Thousands

Sep. 24, 2022

Dec. 25, 2021

2022, operating leases

^[1]

$ 1,615

2022, finance leases

2022, total

1,654

2023, operating leases

^[1]

5,649

2023, finance leases

2023, total

5,696

2024, operating leases

^[1]

5,204

2024, finance leases

2024, total

5,214

2025, operating leases

^[1]

5,018

2025, finance leases

2025, total

5,028

2026, operating leases

^[1]

2,705

2026, finance leases

2026, total

2,708

^[1]

9,492

Thereafter, finance leases

Thereafter, total

9,492

Total lease payments, operating leases

^[1]

29,683

Total lease payments, finance leases

109

Total lease payments, total

29,792

Less: Interest, operating leases

^[1]

(5,913)

Less: Interest, finance leases

(2)

Less: Interest, total

(5,915)

Present value of lease liabilities, finance leases

107

Present value of lease liabilities, total

23,877

$ 27,093

Other Accrued Liabilities and Long-term Lease Liabilities [Member]

Present value of lease liabilities, operating leases

^[1]

$ 23,770

[1]	Excludes sublease income of $0.1 million in 2023.

Note 1 - Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) - USD ($)
$ in Thousands

Sep. 24, 2022

Dec. 25, 2021

Less accumulated depreciation and amortization

$ 136,829

$ 134,956

(75,040)

(70,999)

Property, plant and equipment, net

61,789

63,957

^[1]

Land and Land Improvements [Member]

Building and Building Improvements [Member]

6,439

7,703

Machinery and Equipment [Member]

29,479

31,711

$ 100,911

$ 95,542

[1]	Derived from December 25, 2021 audited financial statements

Note 3 - Borrowings and Credit Agreements (Tables)

9 Months Ended

Sep. 24, 2022

Schedule of Debt [Table Text Block]

	September 24,			December 25,
	2022			2021
Bank Term Loan under Credit Agreement	$	67,827		$	103,130
Bank Term Loans-Kita		2,304			3,070
Construction Loan- Cohu GmbH		7,962			10,045
Lines of Credit		1,744			3,059
Total debt		79,837			119,304
Less: financing fees and discount		(831	)		(1,514	)
Less: current portion⁽¹⁾		(6,029	)		(14,397	)
Total long-term debt	$	72,977		$	103,393

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands

Common Stock [Member]

Additional Paid-in Capital [Member]

Retained Earnings [Member]

AOCI Attributable to Parent [Member]

Treasury Stock [Member]

Total

Balance at Dec. 26, 2020

$ 42,190

$ 448,194

$ 26,230

$ (4,326)

$ 0

$ 512,288

146,436

Changes in unrealized gains and losses on investments, net of tax

(12,562)

(25)

696

(696)

(240)

(10,167)

(10,407)

Exercise of stock options

11,371

250

2,260

2,510

Shares issued under ESPP

1,654

1,749

Impact of sale of PCB Test business

(2,515)

Sale of common stock, net of issuance costs

5,693

217,426

223,119

Balance at Sep. 25, 2021

48,684

670,042

172,666

(19,413)

871,979

Balance at Jun. 26, 2021

48,596

666,942

148,933

(14,240)

850,231

23,733

Changes in unrealized gains and losses on investments, net of tax

(5,206)

(11)

(76)

(24)

(853)

(877)

Exercise of stock options

3,714

315

351

Balance at Sep. 25, 2021

48,684

670,042

172,666

(19,413)

871,979

Balance at Dec. 25, 2021

48,756

674,777

193,555

(27,262)

(7,324)

882,502

^[1]

75,219

Changes in unrealized gains and losses on investments, net of tax

(43,960)

(302)

(882)

521

(521)

(180)

(5,467)

(5,647)

Common stock repurchases

(38,078)

Exercise of stock options

11,095

105

118

Shares issued under ESPP

1,669

1,746

Balance at Sep. 24, 2022

49,187

681,658

268,774

(72,406)

(45,402)

881,811

Balance at Jun. 25, 2022

49,152

678,495

243,892

(49,385)

(27,702)

894,452

24,882

Changes in unrealized gains and losses on investments, net of tax

(22,520)

(129)

(372)

(55)

(20)

(522)

(542)

Common stock repurchases

(17,700)

Sale of PCB Test Business (1)

3,740

Balance at Sep. 24, 2022

$ 49,187

$ 681,658

$ 268,774

$ (72,406)

$ (45,402)

$ 881,811

[1]	Derived from December 25, 2021 audited financial statements

Note 2 - Goodwill and Purchased Intangible Assets - Changes in Carrying Value of Goodwill (Details) - USD ($)
$ in Thousands

9 Months Ended

12 Months Ended

Sep. 24, 2022

Dec. 25, 2021

Beginning balance

$ 219,791

^[1]

$ 252,304

^[2]

(21,899)

Impact of currency exchange

(17,077)

(10,614)

Ending balance

202,714

219,791

^[1]

Semiconductor Test and Inspection [Member]

Beginning balance

219,791

230,724

Sale of PCB Test Business (1)

^[2]

Impact of currency exchange

(17,077)

(10,933)

Ending balance

202,714

219,791

PCB Test [Member]

Beginning balance

21,580

Sale of PCB Test Business (1)

^[2]

(21,899)

Impact of currency exchange

319

Ending balance

$ 0

[1]	Derived from December 25, 2021 audited financial statements
[2]	On June 24, 2021, we completed the sale of our PCB Test business. See Note 12, “Business Divestitures” for additional information.

Less: financing fees and discount

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Note 3 - Borrowings and Credit Agreements - Summary of Borrowings (Details) - USD ($)
$ in Thousands

Sep. 24, 2022

Dec. 25, 2021

Lines of Credit

$ 1,744

$ 3,059

Total debt

79,837

119,304

(831)

(1,514)

Less: current portion (1)

^[1]

(6,029)

(14,397)

Total long-term debt

72,977

103,393

Secured Term Loan Facility [Member]

Long term Debt

67,827

103,130

Less: current portion (1)

(3,200)

(10,100)

Kita Term Loans [Member]

Long term Debt

2,304

3,070

Less: current portion (1)

(200)

Construction Loan [Member]

Long term Debt

$ 7,962

$ 10,045

[1]	On January 28, 2022, Cohu prepaid $7.0 million of its term loan B debt facility and this $7.0 million has been classified as current installments of long-term debt as of December 25, 2021.

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Note 14 - Guarantees (Details Textual) - USD ($) $ in Millions	9 Months Ended
	Sep. 24, 2022	Dec. 25, 2021
Non-current Other Accrued Liabilities [Member]
Product Warranty Accrual, Noncurrent	$ 0.6	$ 1.1
Minimum [Member]
Standard Product Warranty Term (Month)	12 months
Maximum [Member]
Standard Product Warranty Term (Month)	36 months

Note 5 - Financial Instruments Measured at Fair Value - Short-term Investments by Security Type (Details) - USD ($)
$ in Thousands

Sep. 24, 2022

Dec. 25, 2021

$ 137,886

$ 89,738

^[1]

918

Corporate Debt Securities [Member]

136,983

89,704

^[2]

72,632

84,060

^[2]

^[1],[2]

371

US Treasury Securities [Member]

^[2]

72,267

84,031

32,522

3,953

^[1]

422

Certificates of Deposit [Member]

32,100

3,948

23,325

800

^[1]

Debt Security, Government, Non-US [Member]

23,283

800

783

925

^[1]

Asset-Backed Securities [Member]

783

$ 925

8,624

^[1]

$ 8,550

[1]

As of September 24, 2022, the cost and fair value of investments with loss positions was approximately $119.3 million and $118.4 million, respectively. As of December 25, 2021, the cost and fair value of investments with loss positions was approximately $57.0 million. We evaluated the nature of these investments, credit worthiness of the issuer and the duration of these impairments to determine if an other-than-temporary decline in fair value had occurred and concluded that these losses were temporary and we have the ability and intent to hold these investments to maturity.

[2]

Corporate debt securities include investments in financial and other corporate institutions. No single issuer represents a significant portion of the total corporate debt securities portfolio.

Note 7 - Derivative Financial Instruments - Locations and Amounts of Gains (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Foreign Currency Gain (Loss) [Member] \| Foreign Exchange Forward [Member] \| Not Designated as Hedging Instrument [Member]
Foreign exchange forward contracts	$ (8,326)	$ (934)	$ (12,577)	$ (2,283)

Note 2 - Goodwill and Purchased Intangible Assets (Tables)

9 Months Ended

Sep. 24, 2022

Schedule of Goodwill [Table Text Block]

	Semiconductor
	& Inspection			PCB Test			Total
Balance, December 26, 2020	$	230,724		$	21,580		$	252,304
Sale of PCB Test Business⁽¹⁾		-			(21,899	)		(21,899	)
Impact of currency exchange		(10,933	)		319			(10,614	)
Balance, December 25, 2021		219,791			-			219,791
Impact of currency exchange		(17,077	)		-			(17,077	)
Balance, September 24, 2022	$	202,714		$	-		$	202,714

Schedule of Finite-Lived and Indefinite-Lived Intangible Assets [Table Text Block]

	September 24, 2022						December 25, 2021
					Remaining
					Weighted
	Gross				Average		Gross
	Carrying		Accum.		Amort.		Carrying		Accum.
	Amount		Amort.		Period (years)		Amount		Amort.
Developed technology	$	214,975	$	117,096		3.8	$	229,131	$	104,855
Customer relationships		62,138		28,381		6.8		65,916		26,189
Trade names		19,616		8,580		6.5		20,877		7,714
Covenant not-to-compete		246		141		4.3		308		154
Total intangible assets	$	296,975	$	154,198			$	316,232	$	138,912

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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Note 1 - Summary of Significant Accounting Policies - Computation of Basic and Diluted Income (Loss) Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Weighted average common shares (in shares)	47,984	48,666	48,412	46,992
Effect of dilutive securities (in shares)	542	791	596	1,145
Weighted Average Number of Shares Outstanding, Diluted, Total	48,526	49,457	49,008	48,137

Note 7 - Derivative Financial Instruments

9 Months Ended

Sep. 24, 2022

Derivative Instruments and Hedging Activities Disclosure [Text Block]

7.	Derivative Financial Instruments

Foreign Exchange Derivative Contracts

We operate and sell our products in various global markets and, as a result, we are exposed to changes in foreign currency exchange rates. In the fourth quarter of 2020, we began utilizing foreign currency forward contracts to offset future movements in foreign exchange rates that affect certain existing foreign currency denominated assets and liabilities. Under this program, our strategy is to have increases or decreases in our foreign currency exposures mitigated by gains or losses on the foreign currency forward contracts to mitigate the risks and volatility associated with foreign currency transaction gains or losses.

We do not use derivative financial instruments for speculative or trading purposes. For accounting purposes, our foreign currency forward contracts are not designated as hedging instruments and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our condensed consolidated balance sheets with changes in fair value recorded within foreign transaction gain (loss) in our condensed consolidated statements of income for both realized and unrealized gains and losses. The cash flows associated with the foreign currency forward contracts are reported in net cash provided by operating activities in our condensed consolidated statements of cash flows.

The fair value of our foreign exchange derivative contracts was determined based on current foreign currency exchange rates and forward points. All our foreign exchange derivative contracts outstanding at September 24, 2022 will mature during the fourth quarter of fiscal 2022.

The following table provides information about our foreign currency forward contracts outstanding as of September 24, 2022 (in thousands):

		Contract Amount		Contract Amount
Currency	Contract Position	(Local Currency)		(U.S. Dollars)
Euro	Buy		67,512	$	65,700
Swiss Franc	Buy		29,733		30,400
South Korean Won	Buy		3,087,700		2,200
Japanese Yen	Buy		85,752		600
				$	98,900

Our foreign currency contracts are classified within Level 2 of the fair value hierarchy as they are valued using pricing models that utilize observable market inputs. The fair values of foreign currency contracts outstanding at September 24, 2022 were immaterial.

The location and amount of losses related to non-designated derivative instruments in the condensed consolidated statements of income were as follows (in thousands):

		Three months ended						Nine months ended
Derivatives not designated	Location of gain (loss)	Sept. 24,			Sept. 25,			Sept. 24,			Sept. 25,
as hedging instruments	recognized on derivatives	2022			2021			2022			2021
Foreign exchange forward contracts	Foreign transaction loss	$	(8,326	)	$	(934	)	$	(12,577	)		(2,283	)

Note 6 - Employee Stock Benefit Plans

9 Months Ended

Sep. 24, 2022

Share-Based Payment Arrangement [Text Block]

6.	Employee Stock Benefit Plans

Our 2005 Equity Incentive Plan (“2005 Plan”) is a broad-based, long-term retention program intended to attract, motivate, and retain talented employees as well as align stockholder and employee interests. Awards that may be granted under the program include, but are not limited to, non-qualified and incentive stock options, restricted stock units, and performance stock units. We settle employee stock option exercises, employee stock purchase plan purchases, and the vesting of restricted stock units, and performance stock units with newly issued common shares. At September 24, 2022, there were 899,307 shares available for future equity grants under the 2005 Plan.

Stock Options

Stock options may be granted to employees, consultants and non-employee directors to purchase a fixed number of shares of our common stock. The exercise prices of options granted are at least equal to the fair market value of our common stock on the dates of grant and options vest and become exercisable in annual increments that range from one to four years from the date of grant. Stock options granted under the 2005 Plan have a maximum contractual term of ten years. In the first nine months of fiscal 2022, we did not grant any stock options and we issued 12,442 shares of our common stock on the exercise of options that were granted previously. At September 24, 2022, we had no stock options exercisable and outstanding.

Restricted Stock Units

We grant restricted stock units (“RSUs”) to certain employees, consultants and directors. RSUs vest in annual increments that range from one to four years from the date of grant. Prior to vesting, RSUs do not have dividend equivalent rights, do not have voting rights and the shares underlying the RSUs are not considered issued and outstanding. New shares of our common stock will be issued on the date the RSUs vest net of the minimum statutory tax withholding requirements to be paid by us on behalf of our employees. As a result, the actual number of shares issued will be fewer than the actual number of RSUs outstanding at September 24, 2022.

In the first nine months of fiscal 2022, we awarded 422,211 RSUs and issued 465,664 shares of our common stock on vesting of previously granted awards and 28,436 shares were forfeited. At September 24, 2022, we had 985,919 RSUs outstanding with an aggregate intrinsic value of approximately $25.7 million and the weighted average remaining vesting period was approximately 1.3 years.

Performance Stock Units

We also grant performance stock units (“PSUs”) to senior executives as a part of our long-term equity compensation program. The number of shares of common stock that will ultimately be issued to settle PSUs granted ranges from 0% to 200% of the number granted and is determined based on certain performance criteria over a three-year measurement period. The performance criteria for the PSUs are based on a combination of our annualized Total Shareholder Return (“TSR”) for the performance period and the relative performance of our TSR compared with the annualized TSR of certain peer companies or index for the performance period. PSUs granted vest 100% on the third anniversary of their grant, assuming achievement of the applicable performance criteria.

We estimated the fair value of the PSUs using a Monte Carlo simulation model on the date of grant. Compensation expense is recognized ratably over the explicit service period. New shares of our common stock will be issued on the date the PSUs vest net of the minimum statutory tax withholding requirements to be paid by us on behalf of our employees.

In the first nine months of fiscal 2022, we awarded 150,633 PSUs, we issued 55,009 shares of our common stock on vesting of previously granted awards and 68,975 shares were forfeited. At September 24, 2022, we had 411,139 PSUs outstanding with an aggregate intrinsic value of approximately $10.7 million and the weighted average remaining vesting period was approximately 1.4 years.

Employee Stock Purchase Plan

The Cohu, Inc. 1997 Employee Stock Purchase Plan (“ESPP”) provides for the issuance of shares of our common stock. Under the ESPP, eligible employees may purchase shares of Cohu common stock through payroll deductions at a price equal to 85 percent of the lower of the fair market value of Cohu common stock at the beginning or end of each 6-month purchase period, subject to certain limits. During the first nine months of fiscal 2022, 77,361 shares of our common stock were sold to our employees under the ESPP leaving 429,992 shares available for future issuance.

Note 4 - Restructuring Charges - Charges Related to the Wind Down Plan (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Costs accrued	$ 17	$ 31	$ 600	$ 1,988
Integration Program [Member]
Costs accrued			600	2,000
Integration Program [Member] \| Employee Severance [Member]
Accrued restructuring, beginning balance			348	5,826
Costs accrued			(15)	1,124
Amounts paid or charged			(269)	(6,410)
Impact of currency exchange			(9)	(83)
Accrued restructuring, ending balance	55	457	55	457
Integration Program [Member] \| Other Restructuring [Member]
Accrued restructuring, beginning balance			0	0
Costs accrued			615	864
Amounts paid or charged			(615)	(864)
Impact of currency exchange			0	0
Accrued restructuring, ending balance	0	0	0	0
Integration Program [Member] \| Employee Severance and Other Exit Costs [Member]
Accrued restructuring, beginning balance			348	5,826
Costs accrued			600	1,988
Amounts paid or charged			(884)	(7,274)
Impact of currency exchange			(9)	(83)
Accrued restructuring, ending balance	$ 55	$ 457	$ 55	$ 457

Note 5 - Financial Instruments Measured at Fair Value - Assets Measured at Fair Value on Recurring Basis (Details) - USD ($)
$ in Thousands

Sep. 24, 2022

Dec. 25, 2021

US Treasury Securities [Member]

$ 136,983

$ 89,704

Corporate Debt Securities [Member]

32,100

3,948

Asset-Backed Securities [Member]

^[1]

72,267

84,031

Certificates of Deposit [Member]

8,550

Debt Security, Government, Non-US [Member]

23,283

800

Fair Value, Recurring [Member]

783

925

Fair Value, Recurring [Member] | US Treasury Securities [Member]

369,381

379,905

Fair Value, Recurring [Member] | Corporate Debt Securities [Member]

32,100

3,948

Fair Value, Recurring [Member] | Asset-Backed Securities [Member]

80,744

86,535

Fair Value, Recurring [Member] | Certificates of Deposit [Member]

8,550

Fair Value, Recurring [Member] | Debt Security, Government, Non-US [Member]

23,283

800

Fair Value, Recurring [Member] | Cash [Member]

783

925

Fair Value, Recurring [Member] | Money Market Funds [Member]

152,841

195,297

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]

71,080

92,400

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | US Treasury Securities [Member]

152,841

195,297

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Corporate Debt Securities [Member]

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Asset-Backed Securities [Member]

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Certificates of Deposit [Member]

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Debt Security, Government, Non-US [Member]

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Cash [Member]

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member]

152,841

195,297

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | US Treasury Securities [Member]

216,540

184,608

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member]

32,100

3,948

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Asset-Backed Securities [Member]

80,744

86,535

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Certificates of Deposit [Member]

8,550

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Debt Security, Government, Non-US [Member]

23,283

800

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Cash [Member]

783

925

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member]

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]

71,080

92,400

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | US Treasury Securities [Member]

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Corporate Debt Securities [Member]

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Asset-Backed Securities [Member]

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Certificates of Deposit [Member]

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Debt Security, Government, Non-US [Member]

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Cash [Member]

Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Money Market Funds [Member]

Preferred stock, par value (in dollars per share)

$ 0

[1]	Corporate debt securities include investments in financial and other corporate institutions. No single issuer represents a significant portion of the total corporate debt securities portfolio.

Note 1 - Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Net sales	$ 206,687	$ 225,063	$ 621,670	$ 695,354
Semiconductor Test and Inspection [Member]
Net sales		225,063		668,594
PCB Test [Member]
Net sales		0		26,760
Systems [Member] \| Semiconductor Test and Inspection [Member]
Net sales	120,672	146,010	369,972	433,830
Systems [Member] \| PCB Test [Member]
Net sales	0	0	0	17,831
Non-systems [Member] \| Semiconductor Test and Inspection [Member]
Net sales	86,015	79,053	251,698	234,764
Non-systems [Member] \| PCB Test [Member]
Net sales	0	0	0	8,929
CHINA
Net sales	31,477	60,205	116,715	171,653
PHILIPPINES
Net sales	38,852	49,382	84,799	119,669
Malaysia [Member]
Net sales	24,060	21,086	73,033	63,481
UNITED STATES
Net sales	19,510	15,498	62,826	57,435
TAIWAN
Net sales	11,243	15,006	46,620	74,392
Rest of the World [Member]
Net sales	$ 81,545	$ 63,886	$ 237,677	$ 208,724

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares

Sep. 24, 2022

Dec. 25, 2021

^[1]

$ 1

Preferred stock, shares authorized (in shares)

1,000,000

Preferred stock, shares issued (in shares)

Common stock, par value (in dollars per share)

$ 1

Common stock, shares authorized (in shares)

90,000,000

Common stock, shares issued (in shares)

49,187,000

48,756,000

Common stock, shares outstanding (in shares)

49,187,000

48,756,000

Treasury stock, shares (in shares)

1,562,000

207,000

[1]	Derived from December 25, 2021 audited financial statements

Note 11 - Leases - Balance Sheet Information (Details) - USD ($)
$ in Thousands

Sep. 24, 2022

Dec. 25, 2021

Operating lease assets

$ 22,339

$ 25,060

^[1]

Total lease assets

22,655

25,483

Total lease liabilities

$ 23,877

$ 27,093

Operating leases (Year)

6 years 6 months

6 years 10 months 24 days

Finance leases (Year)

1 year 6 months

1 year 9 months 18 days

Operating leases

6.30%

Finance leases

1.30%

0.70%

Property, Plant and Equipment, Net [Member]

Finance lease assets

^[2]

$ 316

$ 423

Other Accrued Liabilities [Member]

Operating, current

4,615

4,886

Finance, current

167

Long-term Lease Liabilities [Member]

Operating, noncurrent

19,155

21,977

Finance, noncurrent

$ 26

$ 63

[1]	Derived from December 25, 2021 audited financial statements
[2]	Finance lease assets are recorded net of accumulated amortization of $0.2 million and $0.1 million as of September 24, 2022 and December 25, 2021, respectively.

Note 1 - Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 24, 2022

Schedule of Inventory, Current [Table Text Block]

	September 24,		December 25,
	2022		2021
Raw materials and purchased parts	$	98,440	$	92,798
Work in process		41,352		40,732
Finished goods		25,452		27,523
Total inventories	$	165,244	$	161,053

Property, Plant and Equipment [Table Text Block]

	September 24,			December 25,
	2022			2021
Land and land improvements	$	6,439		$	7,703
Buildings and building improvements		29,479			31,711
Machinery and equipment		100,911			95,542
		136,829			134,956
Less accumulated depreciation and amortization		(75,040	)		(70,999	)
Property, plant and equipment, net	$	61,789		$	63,957

Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

	Three Months Ended						Nine Months Ended
	September 24,			September 25,			September 24,			September 25,
	2022			2021			2022			2021
Cost of sales	$	161		$	239		$	478		$	692
Research and development		755			889			2,333			2,433
Selling, general and administrative		2,824			2,586			8,284			7,618
Total share-based compensation		3,740			3,714			11,095			10,743
Income tax benefit		(770	)		(155	)		(3,232	)		(569	)
Total share-based compensation, net	$	2,970		$	3,559		$	7,863		$	10,174

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended				Nine Months Ended
	September 24,		September 25,		September 24,		September 25,
	2022		2021		2022		2021
Weighted average common shares		47,984		48,666		48,412		46,992
Effect of dilutive securities		542		791		596		1,145
		48,526		49,457		49,008		48,137

Disaggregation of Revenue [Table Text Block]

	Three Months Ended				Nine Months Ended
Disaggregated Net Sales	September 24, 2022		September 25, 2021		September 24, 2022		September 25, 2021
Systems:
Semiconductor Test & Inspection	$	120,672	$	146,010	$	369,972	$	433,830
PCB Test		-		-		-		17,831
Non-systems:
Semiconductor Test & Inspection		86,015		79,053		251,698		234,764
PCB Test		-		-		-		8,929
Total net sales	$	206,687	$	225,063	$	621,670	$	695,354

	Three Months Ended				Nine Months Ended
Disaggregated Net Sales	September 24, 2022		September 25, 2021		September 24, 2022		September 25, 2021
China	$	31,477	$	60,205	$	116,715	$	171,653
Philippines		38,852		49,382		84,799		119,669
Malaysia		24,060		21,086		73,033		63,481
United States		19,510		15,498		62,826		57,435
Taiwan		11,243		15,006		46,620		74,392
Rest of the World		81,545		63,886		237,677		208,724
Total net sales	$	206,687	$	225,063	$	621,670	$	695,354

Schedules of Concentration of Risk, by Risk Factor [Table Text Block]

Three Months Ended

Nine Months Ended

September 24,

September 25,

September 24,

September 25,

2022

2021

2022

2021

Semiconductor Test & Inspection

Customers individually accounting for more than 10% of net sales

one

two

one

Percentage of net sales

13%

32%

14%

PCB Test

Customers individually accounting for more than 10% of net sales

N/A

Percentage of net sales

N/A

Note 5 - Financial Instruments Measured at Fair Value (Details Textual) - USD ($) $ in Millions	Sep. 24, 2022	Dec. 25, 2021
Debt Securities, Available-for-Sale, Unrealized Loss Position, Amortized Cost	$ 119.3	$ 57.0
Debt Securities, Available-for-Sale, Unrealized Loss Position, Total	$ 118.4	$ 57.0

Note 2 - Goodwill and Purchased Intangible Assets

9 Months Ended

Sep. 24, 2022

Goodwill and Intangible Assets Disclosure [Text Block]

2.	Goodwill and Purchased Intangible Assets

Goodwill and Intangible Assets

Changes in the carrying value of goodwill during the year ended December 25, 2021, and the nine-month period ended September 24, 2022, by segment, were as follows (in thousands):

	Semiconductor
	& Inspection			PCB Test			Total
Balance, December 26, 2020	$	230,724		$	21,580		$	252,304
Sale of PCB Test Business⁽¹⁾		-			(21,899	)		(21,899	)
Impact of currency exchange		(10,933	)		319			(10,614	)
Balance, December 25, 2021		219,791			-			219,791
Impact of currency exchange		(17,077	)		-			(17,077	)
Balance, September 24, 2022	$	202,714		$	-		$	202,714

(1)

On June 24, 2021, we completed the sale of our PCB Test business. See Note 12, “Business Divestitures” for additional information.

Purchased intangible assets subject to amortization are as follows (in thousands):

	September 24, 2022						December 25, 2021
					Remaining
					Weighted
	Gross				Average		Gross
	Carrying		Accum.		Amort.		Carrying		Accum.
	Amount		Amort.		Period (years)		Amount		Amort.
Developed technology	$	214,975	$	117,096		3.8	$	229,131	$	104,855
Customer relationships		62,138		28,381		6.8		65,916		26,189
Trade names		19,616		8,580		6.5		20,877		7,714
Covenant not-to-compete		246		141		4.3		308		154
Total intangible assets	$	296,975	$	154,198			$	316,232	$	138,912

Changes in the carrying values of purchased intangible assets presented above are a result of the impact of fluctuation in currency exchange rates.

Amortization expense related to intangible assets was approximately $8.2 million in the third quarter of fiscal 2022 and $25.1 million in the first nine months of fiscal 2022. Amortization expense related to intangible assets was approximately $8.9 million in the third quarter of fiscal 2021 and $27.2 million in the first nine months of fiscal 2021.

Note 3 - Borrowings and Credit Agreements (Details Textual)
$ in Thousands, € in Millions, ¥ in Millions, SFr in Millions

3 Months Ended

9 Months Ended

Jan. 28, 2022

USD ($)

Oct. 01, 2018

USD ($)

Sep. 24, 2022

USD ($)

Sep. 25, 2021

USD ($)

Sep. 24, 2022

USD ($)

Sep. 25, 2021

USD ($)

Sep. 24, 2022

EUR (€)

Sep. 24, 2022

JPY (¥)

Sep. 24, 2022

CHF (SFr)

May 31, 2022

EUR (€)

Dec. 25, 2021

USD ($)

Jun. 30, 2020

EUR (€)

Repayments of Long-Term Debt, Total

^[1]

$ 6,029

$ 14,397

36,935

$ 205,879

Gain (Loss) on Extinguishment of Debt, Total

(80)

$ (1,650)

(312)

(3,411)

Long-Term Line of Credit, Total

1,744

3,059

Ismeca [Member]

Line of Credit Facility, Maximum Borrowing Capacity | SFr

SFr 2

Long-Term Line of Credit, Total

$ 0

Number of Available Lines of Credit

Revolving Credit Facility [Member]

Line of Credit Facility, Maximum Borrowing Capacity | ¥

¥ 960

Long-Term Line of Credit, Total

$ 1,700

¥ 250

Term Loan B Debt Facility [Member]

Extinguishment of Debt, Amount

$ 7,000

Secured Term Loan Facility [Member]

7,000

Extinguishment of Debt, Amount

31,800

200,000

Debt Instrument, Face Amount

3,200

10,100

$ 350,000

Debt Instrument, Amortization, Percentage of Principal Amount

0.25%

Long-Term Debt, Total

67,000

101,600

Long-Term Debt, Fair Value

67,100

Repayments of Long-Term Debt, Total

31,700

200,000

Gain (Loss) on Extinguishment of Debt, Total

(300)

(3,400)

Extinguishment of Debt Decrease Deferred Financing Costs

400

$ 3,400

Long-Term Debt, Gross

67,827

103,130

Secured Term Loan Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]

Debt Instrument, Basis Spread on Variable Rate

3.00%

Kita Term Loans [Member]

Kita Term Loans [Member] | Minimum [Member]

200

Long-Term Debt, Total

2,300

3,100

Long-Term Debt, Gross

$ 2,304

3,070

Kita Term Loans [Member] | Maximum [Member]

0.05%

Loan Facilities [Member] | Construction Loans [Member]

0.43%

Debt Instrument, Face Amount | €

$ 900

1,000

€ 9.5

€ 10.1

Long-Term Debt, Total

$ 8,000

$ 10,000

First Facility [Member] | Construction Loans [Member]

Debt Instrument, Face Amount | €

€ 3.4

Debt Instrument, Term (Year)

0.80%

10 years

Second Facility [Member] | Construction Loans [Member]

Debt Instrument, Face Amount | €

€ 5.2

Debt Instrument, Term (Year)

1.05%

15 years

Third Facility [Member] | Construction Loans [Member]

Debt Instrument, Term (Year)

1.20%

10 years

Debt Instrument, Collateral Amount | €

€ 0.9

[1]	On January 28, 2022, Cohu prepaid $7.0 million of its term loan B debt facility and this $7.0 million has been classified as current installments of long-term debt as of December 25, 2021.

Note 4 - Restructuring Charges (Tables)

9 Months Ended

Sep. 24, 2022

Restructuring and Related Costs [Table Text Block]

	Severance and			Other Exit
	Other Payroll			Costs			Total
Balance, December 26, 2020	$	5,826		$	-		$	5,826
Costs accrued		1,124			864			1,988
Amounts paid or charged		(6,410	)		(864	)		(7,274	)
Impact of currency exchange		(83	)		-			(83	)
Balance, September 25, 2021	$	457		$	-		$	457

Balance, December 25, 2021	$	348		$	-		$	348
Costs accrued		(15	)		615			600
Amounts paid or charged		(269	)		(615	)		(884	)
Impact of currency exchange		(9	)		-			(9	)
Balance, September 24, 2022	$	55		$	-		$	55

Note 11 - Leases (Details Textual) - USD ($) $ in Millions	9 Months Ended
Note 11 - Leases (Details Textual) - USD ($) $ in Millions	Sep. 24, 2022	Dec. 25, 2021
Lessee, Operating Lease, Renewal Term (Year)	25 years
Finance Lease, Right-of-Use Asset, Accumulated Amortization	$ 0.2	$ 0.1
Lessor, Operating Lease, Payment to be Received, Year One	$ 0.1
Minimum [Member]
Lessee, Lease, Remaining Term of Contract (Year)	1 year
Maximum [Member]
Lessee, Lease, Remaining Term of Contract (Year)	35 years

Note 14 - Guarantees

9 Months Ended

Sep. 24, 2022

Guarantees [Text Block]

14.

Guarantees

Product Warranty

Our products are generally sold with warranty periods that range from 12 to 36 months following sale or acceptance. The product warranty promises customers that delivered products are as specified in the contract (an “assurance-type warranty”). Therefore, we account for such product warranties under ASC 460, and not as a separate performance obligation. Parts and labor are covered under the terms of the warranty agreement. The warranty provision is based on historical and projected experience by product and configuration.

Changes in accrued warranty were as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 24,			September 25,			September 24,			September 25,
	2022			2021			2022			2021
Balance at beginning of period	$	7,015		$	7,541		$	7,691		$	6,382
Warranty expense accruals		2,090			4,148			6,733			9,800
Warranty payments		(2,605	)		(3,005	)		(7,924	)		(6,553	)
Liability transferred⁽¹⁾		-			-			-			(945	)
Balance at end of period	$	6,500		$	8,684		$	6,500		$	8,684

(1)

Warranty liability transferred in connection with the sale of our PCB Test business.

Accrued warranty amounts expected to be incurred after one year are included in noncurrent other accrued liabilities in the condensed consolidated balance sheet. These amounts totaled $0.6 million and $1.1 million at September 24, 2022 and December 25, 2021, respectively.

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands

Sep. 24, 2022

Dec. 25, 2021

^[1]

Current assets:

$ 232,398

$ 290,201

Property, plant and equipment, net

136,983

89,704

Accounts receivable, net

188,240

192,873

Inventories

165,244

161,053

Prepaid expenses

24,498

16,194

Other current assets

1,968

768

Total current assets

749,331

750,793

61,789

63,957

Goodwill

202,714

219,791

Intangible assets, net

142,777

177,320

Other assets

18,965

22,123

Operating lease right of use assets

22,339

25,060

Assets, Total

1,197,915

1,259,044

Current liabilities:

Short-term borrowings

1,744

3,059

Current installments of long-term debt

4,285

11,338

Accounts payable

69,613

85,230

Customer advances

8,914

7,300

Accrued compensation and benefits

39,835

Deferred profit

9,803

13,208

Accrued warranty

5,888

6,614

Income taxes payable

15,223

6,873

Other accrued liabilities

15,452

19,002

Total current liabilities

170,757

192,459

Long-term debt

72,977

103,393

Deferred income taxes

23,371

25,887

Noncurrent income tax liabilities

5,009

6,138

Accrued retirement benefits

17,171

18,037

Long-term lease liabilities

19,181

22,040

Other accrued liabilities

7,638

8,588

Stockholders’ equity

Preferred stock, $1 par value; 1,000 shares authorized, none issued

Common stock, $1 par value; 90,000 shares authorized, 49,187 shares issued and outstanding in 2022 and 48,756 shares in 2021

49,187

48,756

Paid-in capital

681,658

674,777

Treasury stock, at cost; 1,562 shares in 2022 and 207 shares in 2021

(45,402)

(7,324)

Retained earnings

268,774

193,555

Accumulated other comprehensive loss

(72,406)

(27,262)

Total stockholders’ equity

881,811

882,502

Liabilities and Equity, Total

$ 1,197,915

$ 1,259,044

[1]	Derived from December 25, 2021 audited financial statements

Note 1 - Summary of Significant Accounting Policies (Details Textual)

3 Months Ended

9 Months Ended

Oct. 01, 2021

USD ($)

Jun. 24, 2021

Sep. 24, 2022

USD ($)

Sep. 25, 2021

USD ($)

Sep. 24, 2022

USD ($)

Sep. 25, 2021

USD ($)

Dec. 25, 2021

USD ($)

Accounts Receivable, Allowance for Credit Loss, Ending Balance

$ 200,000

$ 300,000

Capitalized Computer Software, Gross

13,900,000

13,500,000

Capitalized Computer Software, Amortization

400,000

$ 400,000

$ 1,434,000

$ 1,157,000

Number of Operating Segments

Number of Reportable Segments

Goodwill and Intangible Asset Impairment, Total

$ 0

Amortization of Debt Issuance Costs

100,000

$ 300,000

500,000

Foreign Currency Transaction Gain (Loss), Realized

$ 1,300,000

$ (28,000)

$ 4,000,000.0

$ (300,000)

Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | shares

325,000

239,000

300,000

160,000

Revenue, Remaining Performance Obligation, Amount

$ 7,300,000

Provision for Doubtful Accounts

Contract with Customer, Asset, after Allowance for Credit Loss, Total

Deferred Revenue, Total

17,200,000

21,900,000

Deferred Profit

9,803,000

13,208,000

^[1]

Deferred Profit Long-term

5,600,000

6,100,000

Accumulated Other Comprehensive Income (Loss), Net of Tax, Total

$ (72,406,000)

$ (27,262,000)

^[1]

Computer Software, Intangible Asset [Member]

Finite-Lived Intangible Asset, Useful Life (Year)

7 years

Minimum [Member]

Standard Product Warranty Term (Month)

12 months

Maximum [Member]

Standard Product Warranty Term (Month)

36 months

Building [Member] | Minimum [Member]

Building [Member] | Maximum [Member]

30 years

Building Improvements [Member] | Minimum [Member]

40 years

Building Improvements [Member] | Maximum [Member]

5 years

Machinery, Equipment and Software [Member] | Minimum [Member]

15 years

Machinery, Equipment and Software [Member] | Maximum [Member]

3 years

10 years

[1]	Derived from December 25, 2021 audited financial statements

Note 8 - Equity

9 Months Ended

Sep. 24, 2022

Stockholders' Equity Note Disclosure [Text Block]

8.	Equity

Common Stock Issuance

On March 8, 2021, we closed an underwritten public offering of 4,950,000 shares of our common stock at $41.00 per share. As part of the transaction, the underwriters were also granted a 30-day option to purchase up to an aggregate of 742,500 additional shares of common stock to cover over-allotments which was exercised in full on March 11, 2021. The offering, and the follow-on option to sell additional shares, resulted in net proceeds, after deducting underwriting discounts and commissions and offering expenses, of approximately $223.1 million. All of the shares were sold pursuant to an effective shelf registration statement previously filed with the SEC.

Share Repurchase Program

On October 28, 2021, we announced that our Board of Directors authorized a $70 million share repurchase program. On October 25, 2022, our Board of Directors authorized an additional $70 million under the share repurchase program. This share repurchase program was effective as of November 2, 2021 and has no expiration date, and the timing of share repurchases and the number of shares of common stock to be repurchased will depend upon prevailing market conditions and other factors. Repurchases under this program will be made using our existing cash resources and may be commenced or suspended from time-to-time at our discretion without prior notice. Repurchases may be made in the open market, through 10b5-1 programs, or in privately negotiated transactions at prevailing market rates in accordance with federal securities laws. During the three months ended September 24, 2022, we repurchased 637,700 shares of our common stock for $17.7 million to be held as treasury stock. During the nine months ended September 24, 2022, we repurchased 1,355,508 shares of our common stock for $38.1 million to be held as treasury stock. As of September 24, 2022, $24.6 million of shares of our common stock remained available for us to repurchase under our share repurchase program, and $94.6 million of shares of our common stock remained available for us to repurchase as of October 25, 2022 (excluding shares repurchased between September 24 and October 25) after our Board of Directors authorized the additional $70 million for the share repurchase program.

Common Stock

On May 4, 2022, our stockholders approved an amendment to Cohu’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 60,000,000 to 90,000,000 shares. Accordingly, on May 5, 2022, we filed with the Secretary of State of the State of Delaware an Amended and Restated Certificate of Incorporation implementing the approved changes (the “Restated Certificate”), and the Restated Certificate was effective as of that date.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Note 11 - Leases (Tables)

9 Months Ended

Sep. 24, 2022

Leases, Balance Sheet Information [Table Text Block]

(in thousands)	Classification	September 24, 2022			December 25, 2021
Assets
Operating lease assets	Operating lease right-of-use assets	$	22,339		$	25,060
Finance lease assets	Property, plant and equipment, net ⁽¹⁾		316			423
Total lease assets		$	22,655		$	25,483
Liabilities
Current
Operating	Other accrued liabilities	$	4,615		$	4,886
Finance	Other accrued liabilities		81			167
Noncurrent
Operating	Long-term lease liabilities		19,155			21,977
Finance	Long-term lease liabilities		26			63
Total lease liabilities		$	23,877		$	27,093

Weighted-average remaining lease term (years)
Operating leases			6.5			6.9
Finance leases			1.5			1.8

Weighted-average discount rate
Operating leases			6.3	%		6.3	%
Finance leases			1.3	%		0.7	%

Lease, Cost [Table Text Block]

	Three Months Ended						Six Months Ended
(in thousands)	September 24, 2022			September 25, 2021			September 24, 2022			September 25, 2021
Operating leases	$	1,654		$	1,799		$	5,046		$	5,866
Variable lease expense		520			508			1,583			1,634
Short-term operating leases		1			1			3			68
Finance leases
Amortization of leased assets		11			21			69			66
Interest on lease liabilities		-			-			1			1
Sublease income		(16	)		(21	)		(54	)		(61	)
Net lease cost	$	2,170		$	2,308		$	6,648		$	7,574

Lessee, Lease, Liability, Maturity [Table Text Block]

	Operating			Finance
(in thousands)	leases⁽¹⁾			leases			Total
2022	$	1,615		$	39		$	1,654
2023		5,649			47			5,696
2024		5,204			10			5,214
2025		5,018			10			5,028
2026		2,705			3			2,708
Thereafter		9,492			-			9,492
Total lease payments		29,683			109			29,792
Less: Interest		(5,913	)		(2	)		(5,915	)
Present value of lease liabilities	$	23,770		$	107		$	23,877

Lease, Cash Flow Information [Table Text Block]

	Nine Months Ended
(in thousands)	September 24, 2022		September 25, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,946	$	5,953
Operating cash flows from finance leases	$	1	$	1
Financing cash flows from finance leases	$	126	$	142
Leased assets obtained in exchange for new finance lease liabilities	$	-	$	54
Leased assets obtained in exchange for new operating lease liabilities	$	1,308	$	3,669

Note 9 - Income Taxes

9 Months Ended

Sep. 24, 2022

Income Tax Disclosure [Text Block]

9.	Income Taxes

We used the estimated annual effective tax rate (“ETR”) expected to be applicable for the full fiscal year in computing our tax provision. The ETR on income for the three and nine months ended September 24, 2022 was 29.1% and 25.2%, respectively, and reflects the impact of both new tax regulations and previously-enacted tax regulations now impacting us for the first time. New regulations impacting the tax provision include final regulations on foreign tax credits which limit our ability to claim credits in certain jurisdictions. Previously enacted legislation now impacting Cohu include the requirements to capitalize research expenditures and software development costs, and we are now being subjected to base erosion and anti-abuse tax rules as we exceeded certain revenue thresholds. These impacts were offset by a partial release of our domestic valuation allowance on deferred tax assets to offset tax liabilities on current year earnings and excess benefits relating to stock-based compensation. The ETR on income for the three and nine months ended September 25, 2021 was 23.7% and 16.4%, respectively, which were not impacted by the aforementioned tax regulations, reflected a partial release of our domestic valuation allowance on deferred tax assets to offset tax liabilities on current year earnings and excess benefits relating to stock-based compensation.

We conduct business globally and as a result, Cohu or one or more of its subsidiaries files income tax returns in the US and various state and foreign jurisdictions. In the normal course of business, we are subject to examinations by taxing authorities throughout the world and are currently under examination in Germany, Philippines and Malaysia. We believe our financial statement accruals for income taxes are appropriate.

In accordance with the disclosure requirements as described in ASC Topic 740, Income Taxes, we have classified unrecognized tax benefits as non-current income tax liabilities, or a reduction in non-current deferred tax assets, unless expected to be paid within one year. Our continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. There were no material changes to our unrecognized tax benefits and interest accrued related to unrecognized tax benefits during the three and nine months ended September 24, 2022. There were no material changes to our unrecognized tax benefits and interest accrued related to unrecognized tax benefits during the three and nine months ended September 25, 2021.

On August 9, 2022, President Biden signed into law the CHIPS and Science Act, and on August 19,2022, the Inflation Reduction Act. The new legislations provide tax incentives as well as impose a 15% minimum tax on certain corporation’s book income and a 1% excise tax on certain stock buybacks. While we may be subject to the new excise tax on certain stock buybacks if our repurchase exceed the $1 million threshold, the enactment of both the CHIPS and Science Act and Inflation Reduction Act did not result in any material adjustments to our income tax provision for the three and nine months ended September 24, 2022.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
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-Section 50
-Paragraph 2
-Subparagraph (a)
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Note 12 - Business Divestitures

9 Months Ended

Sep. 24, 2022

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

12.

Business Divestitures

PCB Test Equipment Business

On June 24, 2021, we completed the sale of our PCB Test Equipment (“PCB Test”) business, which represented our PCB Test reportable segment. As part of the transaction we also sold certain intellectual property held by our Semiconductor Test & Inspection segment that is utilized by the PCB Test business. Our decision to sell this non-core business resulted from management’s determination that it was no longer a fit within our organization. We received gross proceeds of $125.1 million, after completion of certain closing adjustments. The divestment generated a $70.8 million pre-tax gain on sale of business, which was recorded in our condensed consolidated statements of income. As a result of the closing of the transaction, we derecognized net assets of $48.2 million, including goodwill of $21.9 million and intangible assets of $14.8 million.

We evaluated the guidance in ASC Topic 205-20, Presentation of Financial Statements – Discontinued Operations, and determined that the divestment of our PCB Test business does not represent a strategic shift as the divestiture will not have a major effect on Cohu’s operations and financial results and, as a result, it is not presented as discontinued operations in any periods presented. Subsequent to the sale of our PCB Test business, we have one reportable segment, Semiconductor Test & Inspection.

Note 14 - Guarantees - Changes in Accrued Warranty (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 24, 2022

Sep. 25, 2021

Sep. 24, 2022

Sep. 25, 2021

Balance at beginning of period

$ 7,015

$ 7,541

$ 7,691

$ 6,382

Warranty expense accruals

2,090

4,148

6,733

9,800

Warranty payments

(2,605)

(3,005)

(7,924)

(6,553)

Liability transferred (1)

^[1]

(945)

Balance at end of period

$ 6,500

$ 8,684

$ 6,500

$ 8,684

[1]	Warranty liability transferred in connection with the sale of our PCB Test business.

Note 4 - Restructuring Charges (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 24, 2022	Sep. 25, 2021
Restructuring Charges, Total	$ 17	$ 31	$ 600	$ 1,988
Integration Program [Member]
Restructuring Charges, Total			$ 600	$ 2,000

Condensed Consolidated Statements of Income (Unaudited) - USD ($)
shares in Thousands, $ in Thousands

3 Months Ended

9 Months Ended

Sep. 24, 2022

Sep. 25, 2021

Sep. 24, 2022

Sep. 25, 2021

Net sales

$ 206,687

$ 225,063

$ 621,670

$ 695,354

Cost and expenses:

Cost of sales (1)

^[1]

108,621

129,358

331,495

392,787

Research and development

23,372

22,792

69,638

69,367

Selling, general and administrative

32,764

30,377

96,541

95,835

Amortization of purchased intangible assets

8,206

8,879

25,082

27,168

Restructuring charges

600

1,988

Gain on sale of PCB Test business

(90)

(75,754)

Costs and Expenses, Total

172,980

191,347

523,356

511,391

Income from operations

33,707

33,716

98,314

183,963

Other (expense) income:

Interest expense

(1,028)

(966)

(2,928)

(5,372)

Interest income

1,132

1,551

197

Foreign transaction gain (loss)

1,344

(28)

3,979

(315)

Gain (Loss) on Extinguishment of Debt, Total

(80)

(1,650)

(312)

(3,411)

Income from operations before taxes

35,075

31,125

100,604

175,062

Income tax provision

10,193

7,392

25,385

28,626

Basic (in dollars per share)

$ 24,882

$ 23,733

$ 75,219

$ 146,436

$ 0.52

$ 0.49

$ 1.55

$ 3.12

Diluted (in dollars per share)

$ 0.51

$ 0.48

$ 1.53

$ 3.04

Weighted average shares used in computing income per share:

Basic (in shares)

47,984

48,666

48,412

46,992

Diluted (in shares)

48,526

49,457

49,008

48,137

[1]	Excludes amortization of $6,433 and $6,988 for the three months ended September 24, 2022 and September 25, 2021, respectively, and $19,673 and $21,133 for the nine months ended September 24, 2022 and September 25, 2021, respectively.

Note 5 - Financial Instruments Measured at Fair Value - Effective Maturities of Short-term Investments (Details) - USD ($) $ in Thousands	Sep. 24, 2022	Dec. 25, 2021
Due in one year or less	$ 112,027	$ 83,429
Due in one year or less, fair value	111,625	83,408
Due after one year through three years	25,859	6,309
Due after one year through three years, fair value	25,358	6,296
Debt Securities, Available-for-Sale, Maturity, Allocated and Single Maturity Date, Amortized Cost, Total	137,886	89,738
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Fair Value, Total	$ 136,983	$ 89,704

Note 10 - Segment and Geographic Information (Details Textual)		9 Months Ended
	Jun. 24, 2021	Sep. 24, 2022
Number of Reportable Segments	2	1

Note 1 - Summary of Significant Accounting Policies - Significant Customer Concentration Information (Details) - Customer Concentration Risk [Member] - Revenue Benchmark [Member] - Semiconductor Test and Inspection [Member]	3 Months Ended		9 Months Ended
	Sep. 24, 2022	Sep. 25, 2021	Sep. 25, 2021
Customers individually accounting for more than 10% of net sales	1	2	1
One Customer [Member]
Percentage of net sales	13.00%	32.00%	14.00%

Note 14 - Guarantees (Tables)

9 Months Ended

Sep. 24, 2022

Schedule of Product Warranty Liability [Table Text Block]

	Three Months Ended						Nine Months Ended
	September 24,			September 25,			September 24,			September 25,
	2022			2021			2022			2021
Balance at beginning of period	$	7,015		$	7,541		$	7,691		$	6,382
Warranty expense accruals		2,090			4,148			6,733			9,800
Warranty payments		(2,605	)		(3,005	)		(7,924	)		(6,553	)
Liability transferred⁽¹⁾		-			-			-			(945	)
Balance at end of period	$	6,500		$	8,684		$	6,500		$	8,684

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 24, 2022

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

Our interim results are not necessarily indicative of the results that should be expected for the full year. The condensed consolidated financial statements presented herein reflect estimates and assumptions made by management at September 24, 2022 and for the nine-month period ended September 24, 2022. For a better understanding of Cohu, Inc. and our financial statements, we recommend reading these interim condensed consolidated financial statements in conjunction with our audited financial statements for the year ended December 25, 2021, which are included in our 2021 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”). In the following notes to our interim condensed consolidated financial statements, Cohu, Inc. is referred to as “Cohu”, “we”, “our” and “us”.

All significant consolidated transactions and balances have been eliminated in consolidation.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of Credit Risk

Financial instruments that potentially subject us to significant credit risk consist principally of cash equivalents, short-term investments and trade accounts receivable. We invest in a variety of financial instruments and, by policy, limit the amount of credit exposure with any one issuer.

Our trade accounts receivable are presented net of allowance for credit losses, which is determined in accordance with the guidance provided by Accounting Standards Codification (“ASC”) Topic 326, Financial Instruments-Credit Losses, (“ASC 326”). At September 24, 2022 and December 25, 2021, our allowance for credit losses was $0.2 million and $0.3 million, respectively. Our customers include semiconductor manufacturers and semiconductor test subcontractors throughout many areas of the world. While we believe that our allowance for credit losses is adequate and represents our best estimate at September 24, 2022, we will continue to monitor customer liquidity and other economic conditions, including the impact of the COVID-19 pandemic, which may result in changes to our estimates regarding expected credit losses.

Inventory, Policy [Policy Text Block]

Inventories

Inventories are stated at the lower of cost, determined on a first-in, first-out basis, or net realizable value. Cost includes labor, material and overhead costs. Determining net realizable value of inventories involves numerous estimates and judgments, including projecting average selling prices and sales volumes for future periods and costs to complete and dispose of inventory. As a result of these analyses, we record a charge to cost of sales in advance of the period when the inventory is sold, which occurs when estimated net realizable values are below our costs.

Inventories by category were as follows (in thousands):

	September 24,		December 25,
	2022		2021
Raw materials and purchased parts	$	98,440	$	92,798
Work in process		41,352		40,732
Finished goods		25,452		27,523
Total inventories	$	165,244	$	161,053

Property, Plant and Equipment, Policy [Policy Text Block]

Property, Plant and Equipment

Depreciation and amortization of property, plant and equipment, both owned and under financing lease, is calculated principally on the straight-line method based on estimated useful lives of thirty to forty years for buildings, five to fifteen years for building improvements and three to ten years for machinery, equipment and software. Land is not depreciated.

Property, plant and equipment, at cost, consisted of the following (in thousands):

	September 24,			December 25,
	2022			2021
Land and land improvements	$	6,439		$	7,703
Buildings and building improvements		29,479			31,711
Machinery and equipment		100,911			95,542
		136,829			134,956
Less accumulated depreciation and amortization		(75,040	)		(70,999	)
Property, plant and equipment, net	$	61,789		$	63,957

Internal Use Software, Policy [Policy Text Block]

Cloud-based Enterprise Resource Planning Implementation Costs

We have capitalized certain costs associated with the implementation of our new cloud-based Enterprise Resource Planning (“ERP”) system in accordance with ASC Topic 350, Intangibles—Goodwill and Other, (“ASC 350”). Capitalized costs include only external direct costs of materials and services consumed in developing the system and interest costs incurred, when material, while developing the system.

Unamortized capitalized cloud computing implementation costs totaled $13.9 million and $13.5 million at September 24, 2022, and December 25, 2021, respectively. These amounts are recorded within other current assets and other assets in our condensed consolidated balance sheets. The change in the capitalized amount is due to costs capitalized in the current period, offset by amortization recorded. We began amortizing some of these costs when our new ERP system was placed into service during the first quarter of 2020 and we continue to capitalize costs related to implementation projects that are ongoing. Implementation costs are amortized using the straight-line method over seven years and we recorded amortization expense of $0.4 million and $1.4 million during the three and nine months ended September 24, 2022, respectively and amortization expense of $0.4 million and $1.2 million during the three and nine months ended September 25, 2021, respectively.

Segment Reporting, Policy [Policy Text Block]

Segment Information

We applied the provisions of ASC Topic 280, Segment Reporting, (“ASC 280”), which sets forth a management approach to segment reporting and establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products, major customers and the geographies in which the entity holds material assets and reports revenue. An operating segment is defined as a component that engages in business activities whose operating results are reviewed by the chief operating decision maker and for which discrete financial information is available. We have determined that our three identified operating segments are: Test Handler Group (“THG”), Semiconductor Tester Group (“STG”) and Interface Solutions Group (“ISG”). Our THG, STG and ISG operating segments qualify for aggregation under ASC 280 due to similarities in their customers, their economic characteristics, and the nature of products and services provided. As a result, we report in one segment, Semiconductor Test and Inspection Equipment (“Semiconductor Test & Inspection”). Prior to the sale of our PCB Test Group (“PTG”) on June 24, 2021, we reported in two segments, Semiconductor Test & Inspection and PCB Test Equipment (“PCB Test”).

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill and Other Intangible Assets

We evaluate goodwill for impairment annually and when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. We test goodwill for impairment by first comparing the book value of net assets to the fair value of the reporting unit. If the fair value is determined to be less than the book value, a second step is performed to compute the amount of impairment as the difference between the fair value of the reporting unit and its carrying value, not to exceed the carrying value of goodwill. We estimated the fair values of our reporting units primarily using the income approach valuation methodology that includes the discounted cash flow method, taking into consideration the market approach and certain market multiples as a validation of the values derived using the discounted cash flow methodology. Forecasts of future cash flows are based on our best estimate of future net sales and operating expenses, based primarily on customer forecasts, industry trade organization data and general economic conditions. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.

We conduct our annual impairment test as of October 1st of each year and have determined there was no impairment as of October 1, 2021 as the estimated fair values of our reporting units exceeded their carrying values on that date. Other events and changes in circumstances may also require goodwill to be tested for impairment between annual measurement dates.

Other intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable. For other intangible assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. We measure the impairment loss based on the difference between the carrying amount and estimated fair value.

Standard Product Warranty, Policy [Policy Text Block]

Product Warranty

Product warranty costs are accrued in the period sales are recognized. Our products are generally sold with standard warranty periods, which differ by product, ranging from 12- to 36-months. Parts and labor are typically covered under the terms of the warranty agreement. Our warranty expense accruals are based on historical and estimated costs by product and configuration. From time-to-time we offer customers extended warranties beyond the standard warranty period. In those situations, the revenue relating to the extended warranty is deferred at its estimated relative standalone selling price and recognized on a straight-line basis over the contract period. Costs associated with our extended warranty contracts are expensed as incurred.

Costs Associated with Exit or Disposal Activities or Restructurings, Policy [Policy Text Block]

Restructuring Costs

We record restructuring activities including costs for one-time termination benefits in accordance with ASC Topic 420, Exit or Disposal Cost Obligations (“ASC 420”). The timing of recognition for severance costs accounted for under ASC 420 depends on whether employees are required to render service until they are terminated in order to receive the termination benefits. If employees are required to render service until they are terminated in order to receive the termination benefits, a liability is recognized ratably over the future service period. Otherwise, a liability is recognized when management has committed to a restructuring plan and has communicated those actions to employees. Employee termination benefits covered by existing benefit arrangements are recorded in accordance with ASC Topic 712, Nonretirement Postemployment Benefits. These costs are recognized when management has committed to a restructuring plan and the severance costs are probable and estimable. See Note 4, “Restructuring Charges” for additional information.

Debt, Policy [Policy Text Block]

Debt Issuance Costs

We capitalize costs related to the issuance of debt. Debt issuance costs directly related to our Term Loan Credit Facility are presented within noncurrent liabilities as a reduction of long-term debt in our condensed consolidated balance sheets. The amortization of such costs is recognized as interest expense using the effective interest method over the term of the respective debt issue. Amortization related to deferred debt issuance costs and original discount costs was $0.1 million and $0.3 million for the three and nine months ended September 24, 2022, respectively. Amortization related to deferred debt issuance costs and original discount costs was $0.1 million and $0.5 million for the three and nine months ended September 25, 2021, respectively.

Derivatives, Policy [Policy Text Block]

Foreign Remeasurement and Currency Translation

Assets and liabilities of our wholly owned foreign subsidiaries that use the U.S. Dollar as their functional currency are re-measured using exchange rates in effect at the end of the period, except for nonmonetary assets, such as inventories and property, plant and equipment, which are re-measured using historical exchange rates. Revenues and costs are re-measured using average exchange rates for the period, except for costs related to those balance sheet items that are re-measured using historical exchange rates. Gains and losses on foreign currency transactions are recognized as incurred. During the three and nine months ended September 24, 2022, we recognized foreign exchange gains of $1.3 million and $4.0 million, respectively, in our condensed consolidated statements of income. During the three and nine months ended September 25, 2021, we recognized foreign exchange losses of $28,000 and $0.3 million, respectively, in our condensed consolidated statements of income. Certain of our foreign subsidiaries have designated the local currency as their functional currency and, as a result, their assets and liabilities are translated at the rate of exchange at the balance sheet date, while revenue and expenses are translated using the average exchange rate for the period. Cumulative foreign currency translation adjustments resulting from the translation of the financial statements are included as a separate component of stockholders’ equity.

Foreign Exchange Derivative Contracts

We operate and sell our products in various global markets. As a result, we are exposed to changes in foreign currency exchange rates. We enter into foreign currency forward contracts with a financial institution to hedge against future movements in foreign exchange rates that affect certain existing U.S. Dollar denominated assets and liabilities held at our subsidiaries whose functional currency is the local currency. For accounting purposes, our foreign currency forward contracts are not designated as hedging instruments and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our condensed consolidated balance sheets with changes in fair value recorded within foreign transaction gain (loss) in our condensed consolidated statements of income for both realized and unrealized gains and losses. See Note 7, “Derivative Financial Instruments” for additional information.

Share-Based Payment Arrangement [Policy Text Block]

Share-Based Compensation

We measure and recognize all share-based compensation under the fair value method.

Reported share-based compensation is classified, in our condensed consolidated financial statements, as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 24,			September 25,			September 24,			September 25,
	2022			2021			2022			2021
Cost of sales	$	161		$	239		$	478		$	692
Research and development		755			889			2,333			2,433
Selling, general and administrative		2,824			2,586			8,284			7,618
Total share-based compensation		3,740			3,714			11,095			10,743
Income tax benefit		(770	)		(155	)		(3,232	)		(569	)
Total share-based compensation, net	$	2,970		$	3,559		$	7,863		$	10,174

Earnings Per Share, Policy [Policy Text Block]

Income Per Share

Basic income per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted income per share includes the dilutive effect of common shares potentially issuable upon the exercise of stock options, vesting of outstanding restricted stock and performance stock units and issuance of stock under our employee stock purchase plan using the treasury stock method. In loss periods, potentially dilutive securities are excluded from the per share computations due to their anti-dilutive effect. For purposes of computing diluted income per share, stock options with exercise prices that exceed the average fair market value of our common stock for the period are excluded. For the three and nine months ended September 24, 2022, stock options and awards to issue approximately 325,000 and 300,000 shares of common stock were excluded from the computation, respectively. For the three and nine months ended September 25, 2021, stock options and awards to issue approximately 239,000 and 160,000 shares of common stock were excluded from the computation, respectively. All shares repurchased and held as treasury stock are reflected as a reduction to our basic weighted average shares outstanding based on the trade date of the share repurchase.

The following table reconciles the denominators used in computing basic and diluted income per share (in thousands):

	Three Months Ended				Nine Months Ended
	September 24,		September 25,		September 24,		September 25,
	2022		2021		2022		2021
Weighted average common shares		47,984		48,666		48,412		46,992
Effect of dilutive securities		542		791		596		1,145
		48,526		49,457		49,008		48,137

Lessee, Leases [Policy Text Block]

Leases

We determine if a contract contains a lease at inception. Operating leases are included in operating lease right of use (“ROU”) assets, current other accrued liabilities, and long-term lease liabilities on our condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, other current accrued liabilities, and long-term lease liabilities on our condensed consolidated balance sheets.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the adoption date or the commencement date for leases entered into after the adoption date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rates for the remaining lease terms based on the information available at the adoption date or commencement date in determining the present value of future payments.

The operating lease ROU asset also includes any lease payments made, lease incentives, favorable and unfavorable lease terms recognized in business acquisitions and excludes initial direct costs incurred and variable lease payments. Variable lease payments include estimated payments that are subject to reconciliations throughout the lease term, increases or decreases in the contractual rent payments, as a result of changes in indices or interest rates and tax payments that are based on prevailing rates. Our lease terms may include renewal options to extend the lease when it is reasonably certain that we will exercise those options. In addition, we include purchase option amounts in our calculations when it is reasonably certain that we will exercise those options. Rent expense for minimum payments under operating leases is recognized on a straight-line basis over the term.

Leases with an initial term of 12 months or less are not recorded on the balance sheet but recognized in our condensed consolidated statements of income on a straight-line basis over the lease term. We account for lease and non-lease components as a single lease component and include both in our calculation of the ROU assets and lease liabilities.

We sublease certain leased assets to third parties, mainly as a result of unused space in our facilities. None of our subleases contain extension options. Variable lease payments in our subleases include tax payments that are based on prevailing rates. We account for lease and non-lease components as a single lease component.

Revenue [Policy Text Block]

Revenue Recognition

Our net sales are derived from the sale of products and services and are adjusted for estimated returns and allowances, which historically have been insignificant. We recognize revenue when the obligations under the terms of a contract with our customers are satisfied; generally, this occurs with the transfer of control of our systems, non-system products or services. In circumstances where control is not transferred until destination or acceptance, we defer revenue recognition until such events occur.

Revenue for established products that have previously satisfied a customer’s acceptance requirements is generally recognized upon shipment. In cases where a prior history of customer acceptance cannot be demonstrated or from sales where customer payment dates are not determinable and in the case of new products, revenue and cost of sales are deferred until customer acceptance has been received. Our post-shipment obligations typically include installation and standard warranties. The relative standalone selling price of installation related revenue is recognized in the period the installation is performed. Service revenue is recognized over time as we transfer control to our customer for the related contract or upon completion of the services if they are short-term in nature. Spares, contactor and kit revenue is generally recognized upon shipment.

Certain of our equipment sales have multiple performance obligations. These arrangements involve the delivery or performance of multiple performance obligations, and transfer of control of performance obligations may occur at different points in time or over different periods of time. For arrangements containing multiple performance obligations, the revenue relating to the undelivered performance obligation is deferred using the relative standalone selling price method utilizing estimated sales prices until satisfaction of the deferred performance obligation.

Unsatisfied performance obligations primarily represent contracts for products with future delivery dates. At September 24, 2022, we had $7.3 million of revenue expected to be recognized in the future related to performance obligations that were unsatisfied (or partially unsatisfied) for contracts with original expected durations of over one year. As allowed under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), we have opted to not disclose unsatisfied performance obligations for contracts with original expected durations of less than one year.

We generally sell our equipment with a product warranty. The product warranty provides assurance to customers that delivered products are as specified in the contract (an “assurance-type warranty”). Therefore, we account for such product warranties under ASC Topic 460, Guarantees (“ASC 460”), and not as a separate performance obligation.

The transaction price reflects our expectations about the consideration we will be entitled to receive from the customer and may include fixed or variable amounts. Fixed consideration primarily includes sales to customers that are known as of the end of the reporting period. Variable consideration includes sales in which the amount of consideration that we will receive is unknown as of the end of a reporting period. Such consideration primarily includes sales made to certain customers with cumulative tier volume discounts offered. Variable consideration arrangements are rare; however, when they occur, we estimate variable consideration as the expected value to which we expect to be entitled. Included in the transaction price estimate are amounts in which it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration that does not meet revenue recognition criteria is deferred.

Our contracts are typically less than one year in duration and we have elected to use the practical expedient available in ASC 606 to expense cost to obtain contracts as they are incurred because they would be amortized over less than one year.

Accounts receivable represents our unconditional right to receive consideration from our customer. Payments terms do not exceed one year from the invoice date and therefore do not include a significant financing component. To date, there have been no material impairment losses on accounts receivable. There were no material contract assets or contract liabilities recorded on our condensed consolidated balance sheet in any of the periods presented.

On shipments where sales are not recognized, gross profit is generally recorded as deferred profit in our condensed consolidated balance sheet representing the difference between the receivable recorded and the inventory shipped. At September 24, 2022, we had deferred revenue totaling approximately $17.2 million, current deferred profit of $9.8 million and deferred profit expected to be recognized after one year included in noncurrent other accrued liabilities of $5.6 million. At December 25, 2021, we had deferred revenue totaling approximately $21.9 million, current deferred profit of $13.2 million and deferred profit expected to be recognized after one year included in noncurrent other accrued liabilities of $6.1 million.

Net sales of our reportable segments, by type, are as follows (in thousands):

	Three Months Ended				Nine Months Ended
Disaggregated Net Sales	September 24, 2022		September 25, 2021		September 24, 2022		September 25, 2021
Systems:
Semiconductor Test & Inspection	$	120,672	$	146,010	$	369,972	$	433,830
PCB Test		-		-		-		17,831
Non-systems:
Semiconductor Test & Inspection		86,015		79,053		251,698		234,764
PCB Test		-		-		-		8,929
Total net sales	$	206,687	$	225,063	$	621,670	$	695,354

Revenue by geographic area based upon product shipment destination (in thousands):

	Three Months Ended				Nine Months Ended
Disaggregated Net Sales	September 24, 2022		September 25, 2021		September 24, 2022		September 25, 2021
China	$	31,477	$	60,205	$	116,715	$	171,653
Philippines		38,852		49,382		84,799		119,669
Malaysia		24,060		21,086		73,033		63,481
United States		19,510		15,498		62,826		57,435
Taiwan		11,243		15,006		46,620		74,392
Rest of the World		81,545		63,886		237,677		208,724
Total net sales	$	206,687	$	225,063	$	621,670	$	695,354

A small number of customers historically have been responsible for a significant portion of our net sales. Significant customer concentration information, by reportable segment, is as follows:

Three Months Ended

Nine Months Ended

September 24,

September 25,

September 24,

September 25,

2022

2021

2022

2021

Semiconductor Test & Inspection

Customers individually accounting for more than 10% of net sales

one

two

one

Percentage of net sales

13%

32%

14%

PCB Test

Customers individually accounting for more than 10% of net sales

N/A

Percentage of net sales

N/A

No single customer represented more than 10% of consolidated net sales.

Comprehensive Income, Policy [Policy Text Block]

Accumulated Other Comprehensive Loss

Our accumulated other comprehensive loss balance totaled approximately $72.4 million and $27.3 million at September 24, 2022 and December 25, 2021, respectively, and was attributed to all non-owner changes in stockholders’ equity and consists of, on an after-tax basis where applicable, foreign currency adjustments resulting from the translation of certain of our subsidiary accounts where the functional currency is not the U.S. Dollar, unrealized loss on investments and adjustments related to postretirement benefits. Reclassification adjustments from accumulated other comprehensive loss during the first nine months of fiscal 2022 and 2021 were not significant.

Pension and Other Postretirement Plans, Policy [Policy Text Block]

Retiree Medical Benefits

We provide post-retirement health benefits to certain retired executives, one director (who is a former executive) and their eligible dependents under a noncontributory plan. These benefits are no longer offered to any other retired Cohu employees. The net periodic benefit cost incurred during the first nine months of fiscal 2022 and 2021 was not significant.

Discontinued Operations, Policy [Policy Text Block]

Business Divestitures

On June 24, 2021, we completed the sale of our PCB Test Equipment (“PCB Test”) business, which represented our PCB Test segment. As part of the transaction we also sold certain intellectual property held by our Semiconductor Test & Inspection segment that is utilized by the PCB Test business. See Note 12, “Business Divestitures” for additional information on this transaction.

New Accounting Pronouncements, Policy [Policy Text Block]

New Accounting Pronouncements

There have been no material changes in recently issued or adopted accounting standards from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 25, 2021.

Note 5 - Financial Instruments Measured at Fair Value

9 Months Ended

Sep. 24, 2022

Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block]

5.	Financial Instruments Measured at Fair Value

Our cash, cash equivalents, and short-term investments consisted primarily of cash and other investment grade securities. We do not hold investment securities for trading purposes. All short-term investments in debt securities are classified as available-for-sale and recorded at fair value. Investment securities are exposed to market risk due to changes in interest rates and credit risk and we monitor credit risk and attempt to mitigate exposure by making high-quality investments and through investment diversification.

We assess whether unrealized loss positions on available-for-sale debt securities are due to credit-related factors. The credit-related portion of unrealized losses, and any subsequent improvements, are recorded in earnings through an allowance account. Unrealized gains and losses that are not due to credit-related factors are included in accumulated other comprehensive income (loss). Factors that could indicate an impairment exists include, but are not limited to earnings performance, changes in credit rating or adverse changes in the regulatory or economic environment of the asset. Gross realized gains and losses on sales of short-term investments are included in interest income. Realized gains and losses for the periods presented were not significant.

Investments that we have classified as short-term, by security type, are as follows (in thousands):

	September 24, 2022
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses⁽¹⁾		Value
Corporate debt securities⁽²⁾	$	72,632	$	6	$	371	$	72,267
U.S. treasury securities		32,522		-		422		32,100
Bank certificates of deposit		23,325		9		51		23,283
Foreign government security		783		-		-		783
Asset-backed securities		8,624		-		74		8,550
	$	137,886	$	15	$	918	$	136,983

	December 25, 2021
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses⁽¹⁾		Value
Corporate debt securities ⁽²⁾	$	84,060	$	2	$	31	$	84,031
U.S. treasury securities		3,953		-		5		3,948
Bank certificates of deposit		800		-		-		800
Foreign government security		925		-		-		925
	$	89,738	$	2	$	36	$	89,704

(1)

As of September 24, 2022, the cost and fair value of investments with loss positions was approximately $119.3 million and $118.4 million, respectively. As of December 25, 2021, the cost and fair value of investments with loss positions was approximately $57.0 million. We evaluated the nature of these investments, credit worthiness of the issuer and the duration of these impairments to determine if an other-than-temporary decline in fair value had occurred and concluded that these losses were temporary and we have the ability and intent to hold these investments to maturity.

(2)

Corporate debt securities include investments in financial and other corporate institutions. No single issuer represents a significant portion of the total corporate debt securities portfolio.

Effective maturities of short-term investments are as follows (in thousands):

	September 24, 2022				December 25, 2021
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
Due in one year or less	$	112,027	$	111,625	$	83,429	$	83,408
Due after one year through three years		25,859		25,358		6,309		6,296
	$	137,886	$	136,983	$	89,738	$	89,704

Accounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. When available, we use quoted market prices to determine the fair value of our investments, and they are included in Level 1. When quoted market prices are unobservable, we use quotes from independent pricing vendors based on recent trading activity and other relevant information, and they are included in Level 2.

The following table summarizes, by major security type, our financial instruments that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):

	Fair value measurements at September 24, 2022 using:
							Total estimated
	Level 1		Level 2		Level 3		fair value
Cash	$	152,841	$	-	$	-	$	152,841
U.S. treasury securities		-		32,100		-		32,100
Corporate debt securities		-		80,744		-		80,744
Asset-backed securities		-		8,550		-		8,550
Money market funds		-		71,080		-		71,080
Bank certificates of deposit		-		23,283		-		23,283
Foreign government security		-		783		-		783
	$	152,841	$	216,540	$	-	$	369,381

	Fair value measurements at December 25, 2021 using:
							Total estimated
	Level 1		Level 2		Level 3		fair value
Cash	$	195,297	$	-	$	-	$	195,297
Corporate debt securities		-		86,535		-		86,535
U.S. treasury securities		-		3,948		-		3,948
Money market funds		-		92,400		-		92,400
Bank certificates of deposit		-		800		-		800
Foreign government security		-		925		-		925
	$	195,297	$	184,608	$	-	$	379,905

Note 10 - Segment and Geographic Information (Tables)

9 Months Ended

Sep. 24, 2022