Cohu Reports First Quarter Operating Results

POWAY, Calif.--([ BUSINESS WIRE ])--Cohu, Inc. (NASDAQ:COHU) today reported fiscal 2011 first quarter net sales of $89.7million and GAAP net income of $6.6million or $0.27per share. The Company also reported non-GAAP results, with first quarter 2011 net income of $8.8million or $0.36per share.

"First quarter sales were at the high end of our guidance due to solid contributions from our semiconductor equipment operations. Cohua�s cash and investments increased to $107million at March 26, 2011."


GAAP Results
	Q1 FY 2011	Q4 FY 2010	Q1 FY 2010
Net sales	$ 89.7 million	$ 96.9 million	$ 64.8 million
Net income	$ 6.6 million	$ 9.4 million	$ 0.9 million
Income per share	$0.27	$0.39	$0.04

Non-GAAP Results
	Q1 FY 2011	Q4 FY 2010	Q1 FY 2010
Non-GAAP net income	$ 8.8 million	$ 11.7 million	$ 3.1 million
Non-GAAP income per share	$0.36	$0.48	$0.13

Sales of semiconductor equipment accounted for 88.6% of fiscal 2011 first quarter sales. Microwave communications equipment and video cameras and related equipment contributed 7.8% and 3.6%, respectively, for the same period.

Orders were $75.3million for the first quarter of 2011 and $75.8million for the fourth quarter of 2010. Orders for semiconductor equipment were $61.1million in the first quarter of 2011 compared to $67.1million in the fourth quarter of 2010. Total consolidated backlog was $85.2million at March 26,2011 compared to $99.6million at December 25,2010. Cohu expects second quarter 2011 sales to be between $77million and $82million.

James A. Donahue, Chairman, President and Chief Executive Officer, stated, aFirst quarter sales were at the high end of our guidance due to solid contributions from our semiconductor equipment operations. Cohua�s cash and investments increased to $107million at March 26, 2011.a

Donahue concluded, aQuote activity is high but some customers are cautious in view of uncertainty over the impact of the Japan earthquake on the electronics supply chain. Ita�s encouraging that SEMI reported that through February 2011, monthly orders for backend semiconductor equipment have increased for three consecutive months.a

Use of Non-GAAP Financial Information:

Included within this press release are non-GAAP financial measures that supplement the Companya�s Condensed Consolidated Statements of Income prepared under generally accepted accounting principles (GAAP). These non-GAAP financial measures adjust the Companya�s actual results prepared under GAAP to exclude charges and the related income tax effect for share-based compensation, the amortization of acquired intangible assets and inventory step-up adjustments. Reconciliations of GAAP to non-GAAP amounts for the periods presented herein are provided in schedules accompanying this release and should be considered together with the Condensed Consolidated Statements of Income.

These non-GAAP measures are not meant as a substitute for GAAP, but are included solely for informational and comparative purposes. The Companya�s management believes that this information can assist investors in evaluating the Companya�s operational trends, financial performance, and cash generating capacity. Management believes these non-GAAP measures allow investors to evaluate Cohua�s financial performance using some of the same measures as management. However, the non-GAAP financial measures should not be regarded as a replacement for (or superior to) corresponding, similarly captioned, GAAP measures.

Forward-Looking Statements:

Certain matters discussed in this release, including statements concerning Cohua�s expectations of business conditions, orders, sales, revenues and operating results are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those projected or forecasted. Such risks and uncertainties include, but are not limited to, our ability to convert new products under development into production on a timely basis, support product development and meet customer delivery and acceptance requirements for next generation equipment; our reliance on third-party contract manufacturers; failure to obtain customer acceptance resulting in the inability to recognize revenue and accounts receivable collection problems; customer orders may be canceled or delayed; inventory, goodwill and other intangible asset write-downs; the concentration of our revenues from a limited number of customers; intense competition in the semiconductor test handler industry; our reliance on patents and intellectual property; compliance with U.S. export regulations; and the cyclical and unpredictable nature of capital expenditures by semiconductor manufacturers. These and other risks and uncertainties are discussed more fully in Cohua�s filings with the Securities and Exchange Commission, including the most recently filed Form 10-K and Form 10-Q. Cohu assumes no obligation to update the information in this release.

About Cohu:

Cohu is a supplier of test handling, burn-in and thermal solutions used by the global semiconductor industry, microwave communications and video equipment.

Cohu will be conducting their conference call on Wednesday, April 20, 2011 at 1:30 p.m. Pacific Time/4:30 p.m. Eastern Time. The call will be webcast at [ www.cohu.com ]. Replays of the call can be accessed at [ www.cohu.com ].

For press releases and other information of interest to investors, please visit Cohua�s website at [ www.cohu.com ].


COHU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)

	Three Months Ended (1)
	March 26,		March 27,
	2011		2010

Net sales	$	89,700	$	64,830
Cost and expenses:
Cost of sales		60,885		44,831
Research and development		9,083		8,649
Selling, general and administrative		12,090		9,879
		82,058		63,359
Income from operations		7,642		1,471
Interest and other, net		110		174
Income before income taxes		7,752		1,645
Income tax provision		1,178		738
Net income	$	6,574	$	907

Income per share:
Basic	$	0.27	$	0.04
Diluted	$	0.27	$	0.04


Weighted average shares used in
computing income per share:
Basic		24,018		23,549
Diluted		24,483		23,870

(1) The three-month periods ended March 26,2011 and March 27,2010 were each comprised of 13 weeks.


COHU, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) (Unaudited)

	March 26,		December 25,
	2011		2010
Assets:
Current assets:
Cash and investments	$	106,704	$	98,175
Accounts receivable		57,757		66,801
Inventories		68,033		63,224
Deferred taxes and other		11,904		12,017
Total current assets		244,398		240,217
Property, plant & equipment, net		39,587		39,804
Goodwill		61,155		58,498
Intangible assets, net		27,102		26,523
Other assets		1,046		1,001
Total assets	$	373,288	$	366,043

Liabilities & Stockholdersa� Equity:
Current liabilities:
Deferred profit	$	9,253	$	14,834
Other current liabilities		55,593		56,700
Total current liabilities		64,846		71,534
Deferred taxes and other noncurrent liabilities		20,059		19,784
Stockholdersa� equity		288,383		274,725
Total liabilities & stockholdersa� equity	$	373,288	$	366,043

COHU, INC.
Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (Unaudited)
(in thousands, except per share amounts)

	Three Months Ended
	March 26,			December 25,			March 27,
	2011			2010			2010

Income from operations - GAAP basis (a)	$	7,642		$	10,498		$	1,471

Non-GAAP adjustments:
Share-based compensation included in (b):
Cost of goods sold		92			64			81
Research and development		336			334			262
Selling, general and administrative		620			602			492
		1,048			1,000			835

Amortization of intangible assets included in (c):
Cost of goods sold		1,222			1,325			1,361
Research and development		-			-			-
Selling, general and administrative		196			210			216
		1,418			1,535			1,577

Inventory step-up included in costs of goods sold (d)		-			-			180

Income from operations - non-GAAP basis (e)	$	10,108		$	13,033		$	4,063

Net income - GAAP basis	$	6,574		$	9,428		$	907
Non-GAAP adjustments (as scheduled above)		2,466			2,535			2,592
Tax effect of non-GAAP adjustments (f)		(280	)		(285	)		(384	)
Net income - non-GAAP basis	$	8,760		$	11,678		$	3,115


GAAP net income per share - diluted	$	0.27		$	0.39		$	0.04

Non-GAAP net income per share - diluted (g)	$	0.36		$	0.48		$	0.13

Management believes the presentation of these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding the Companya�s operating performance. Our management uses these non-GAAP financial measures in assessing the Companya�s operating results, as well as when planning, forecasting and analyzing future periods and these non-GAAP measures allow investors to evaluate the Companya�s financial performance using some of the same measures as management. Management views share-based compensation as an expense that is unrelated to the Companya�s operational performance as it does not require cash payments and can vary in amount from period to period and the elimination of amortization charges provides better comparability of pre and post-acquisition operating results and to results of businesses utilizing internally developed intangible assets. Additionally, management has excluded inventory step-up costs associated with our acquisition of Rasco, primarily because it is not reflective of our ongoing operating results, and is not used by management to assess the core profitability of our business operations. However, the non-GAAP financial measures should not be regarded as a replacement for corresponding, similarly captioned, GAAP measures. The presentation of non-GAAP financial measures above may not be comparable to similarly titled measures reported by other companies and investors should be careful when comparing our non-GAAP financial measures to those of other companies.
(a) 8.5%, 10.8% and 2.3% of net sales, respectively.
(b) To eliminate compensation expense for employee stock options, restricted stock units and our employee stock purchase plan.
(c) To eliminate the amortization of intangible assets acquired in the fiscal 2008 acquisition of Rasco, the fiscal 2007 acquisition of Tandberg Television AVS GmbH and the fiscal 2006 acquisition of Unigen.
(c) To eliminate the amortization of intangible assets acquired in the fiscal 2008 acquisition of Rasco, the fiscal 2007 acquisition of Tandberg Television AVS GmbH and the fiscal 2006 acquisition of Unigen.
(d) To eliminate the inventory step-up associated with certain semiconductor test systems sold.
(e) 11.3%, 13.4% and 6.3% of net sales, respectively.
(f) To adjust the provision (benefit) for income taxes related to the adjustments described in notes (b), (c) and (d) above based on applicable tax rates.
(g) Computed using number of GAAP diluted shares outstanding for each period presented.

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Cohu Reports First Quarter Operating Results