Business Wire | Jul 29, 2021 08:00AM EDT

Cohu Reports Second Quarter 2021 Results

Jul. 29, 2021

POWAY, Calif.--(BUSINESS WIRE)--Jul. 29, 2021--Cohu, Inc. (NASDAQ: COHU), a global leader in back-end semiconductor equipment and services, today reported fiscal 2021 second quarter net sales of $244.8 million and GAAP income of $95.1 million or $1.92 per share. On June 24, 2021 Cohu completed the divestment of its Printed Circuit Board Test ("PCB Test") business which resulted in a gain of $75.8 million. Net sales for the first six months of 2021 were $470.3 million and GAAP income was $122.7 million or $2.58 per share.(1) The divestment of the PCB Test business did not qualify for presentation as discontinued operations and its results are included in continuing operations for all periods presented.

Cohu also reported non-GAAP results, with second quarter 2021 income of $44.2 million or $0.89 per share and income of $84.8 million or $1.79 per share for the first six months of 2021.(1)



GAAP Results^ (1)

(in millions, except per Q2 FY Q1 FY Q2 FY 6 6 Months share amounts) 2021 2021 2020 Months 2020 2021



Net sales $ 244.8 $ 225.5 $ 144.1 $ 470.3 $ 283.0

Income (loss) $ 95.1 $ 27.6 $ (4.7) $ 122.7 $ (22.1)

Income (loss) per $ 1.92 $ 0.61 $ (0.11) $ 2.58 $ (0.53) share







Non-GAAP Results^ (1)

(in millions, except per Q2 FY Q1 FY Q2 FY 6 6 Months share amounts) 2021 2021 2020 Months 2020 2021



Income $ 44.2 $ 40.5 $ 7.1 $ 84.8 $ 7.3

Income per share $ 0.89 $ 0.89 $ 0.17 $ 1.79 $ 0.17



(1)

All amounts presented are from continuing operations.

Total cash and investments at the end of second quarter 2021 were $434.1 million. Utilizing a portion of the gross proceeds from the divestment of the PCB Test business, the Company prepaid $100 million of its term loan B debt facility on June 30, 2021.

"Year-to-date results and our forecast put Cohu on track for record full year revenue and profitability, benefiting from strong 5G mobility, automotive and improving consumer and industrial semiconductor demand," said Cohu President and CEO Luis Mller. "In the second quarter, we completed the sale of Cohu's PCB Test business, which was non-core to our growth strategy and enabled an accelerated $100 million prepayment of our term loan B debt facility. We continued to capture new customers with the Neon inspection system, had a design-win for a complete RF test cell solution, and introduced the DI-Core platform, our foray into software data analytics to improve customers' test cell productivity."

Cohu expects third quarter 2021 sales to be between $220 million and $235 million.

Conference Call Information:

The Company will host a live conference call and webcast with slides to discuss second quarter 2021 results at 5:30 a.m. Pacific Time/8:30 a.m. Eastern Time on July 29, 2021. Interested investors and analysts are invited to dial into the conference call by using 1-866-434-5330 (domestic) or +1-213-660-0873 (international) and entering the pass code 5582321. Webcast access will be available on the Investor Information section of the Company's website at www.cohu.com.

About Cohu:

Cohu (NASDAQ: COHU) is a global leader in back-end semiconductor equipment and services, delivering leading-edge solutions for the manufacturing of semiconductors. Additional information can be found at www.cohu.com.

Use of Non-GAAP Financial Information:

Included within this press release and accompanying materials are non-GAAP financial measures, including non-GAAP Gross Margin/Profit, Income and Income (adjusted earnings) per share, Operating Income, Operating Expense, effective tax rate and Adjusted EBITDA that supplement the Company's Condensed Consolidated Statements of Operations prepared under generally accepted accounting principles (GAAP). These non-GAAP financial measures adjust the Company's actual results prepared under GAAP to exclude charges and the related income tax effect for: share-based compensation, the amortization of purchased intangible assets, restructuring costs, manufacturing transition and severance costs, asset impairment charges, gain on sale of business, gain on sale of facility, employer payroll taxes related to accelerated vesting share-based awards, depreciation of purchase accounting adjustments to property, plant and equipment, amortization of cloud-based software implementation costs (Adjusted EBITDA only) and loss on extinguishment of debt (Adjusted EBITDA only). Reconciliations of GAAP to non-GAAP amounts for the periods presented herein are provided in schedules accompanying this release and should be considered together with the Condensed Consolidated Statements of Operations. With respect to any forward looking non-GAAP figures, we are unable to provide without unreasonable efforts, at this time, a GAAP to non-GAAP reconciliation of any forward-looking figures due to their inherent uncertainty.

These non-GAAP measures are not meant as a substitute for GAAP, but are included solely for informational and comparative purposes. The Company's management believes that this information can assist investors in evaluating the Company's operational trends, financial performance, and cash generating capacity. Management uses non-GAAP measures for a variety of reasons, including to make operational decisions, to determine executive compensation in part, to forecast future operational results, and for comparison to our annual operating plan. However, the non-GAAP financial measures should not be regarded as a replacement for (or superior to) corresponding, similarly captioned, GAAP measures.

Forward Looking Statements:

Certain statements contained in this release and accompanying materials may be considered forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding being on track for record full year revenue and profitability, benefiting from strong 5G mobility, automotive and improving consumer and industrial semiconductor demand, new customers and design wins, new Neon customers, DI-Core software platform, improving contactor operational efficiencies/lead-times/margins, estimated test cell utilization, any other comments on Cohu's FY 2021 outlook or growth, second half or fourth quarter 2021 outlook, target financial model for FY'21, % of incremental revenue expected to fall to operating income, debt deleveraging priority, estimated system versus recurring sales, sales impact of supply chain disruptions, Cohu's third quarter 2021 sales forecast, guidance, sales mix, non-GAAP operating expenses, gross margin, operating income, adjusted EBITDA, effective tax rate, free cash flow, cap ex, cash and shares outstanding, estimated minimum cash needed, estimated EBITDA breakeven point, any future Term Loan B principal reduction, non-cash charges and any other statements that are predictive in nature and depend upon or refer to future events or conditions, and/or include words such as "may," "will," "should," "would," "expect," "anticipate," "plan," "likely," "believe," "estimate," "project," "intend," and/or other similar expressions among others. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Any third party industry analyst forecasts quoted are for reference only and Cohu does not adopt or affirm any such forecasts.

Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: the ongoing global COVID-19 pandemic has adversely affected, and is continuing to adversely affect, our business and results of operations; ongoing increases in material, labor, supplier, logistics and other operating costs, or supply chain delays, could cause lower gross margins or lost sales and adversely impact our business, financial position, results of operations and cash flows; potential post-closing PCB Test sale purchase price adjustment based on final closing accounts mechanism; we are making investments in new products and product enhancements, which may adversely affect our operating results and these investments may not be commercially successful; we are exposed to the risks of operating a global business; we have manufacturing operations in Asia, and any failure to effectively manage multiple manufacturing sites and to secure raw materials meeting our quality, cost and other requirements, or failures by our suppliers to perform, could harm our sales, service levels and reputation; failure of critical suppliers to deliver sufficient quantities of parts in a timely and cost-effective manner could adversely impact our operations; the semiconductor industry is seasonal, volatile and unpredictable; the semiconductor equipment industry is intensely competitive; semiconductor equipment is subject to rapid technological change, product introductions and transitions which may result in inventory write-offs, and our new product development involves numerous risks and uncertainties; the seasonal nature of the semiconductor equipment industry places enormous demands on our employees, operations and infrastructure; a limited number of customers account for a substantial percentage of our net sales; a majority of our revenues are generated from exports to foreign countries, primarily in Asia, that are subject to economic and political instability and we compete against a number of Asia-based test contactor, test handler and automated test equipment suppliers; the incurrence of substantial indebtedness in connection with our financing of the Xcerra acquisition may have an adverse impact on Cohu's liquidity, limit Cohu's flexibility in responding to other business opportunities and increase Cohu's vulnerability to adverse economic and industry conditions; our Credit Agreement contains various representations and negative covenants that limit, subject to certain exceptions and baskets, our ability and/or our subsidiaries' ability to enter into financing and other transactions relating to our assets; because of high debt levels we may not be able to service our debt obligations in accordance with their terms; dilution of earnings per share due to our March 2021 follow-on equity offering; we are exposed to other risks associated with other acquisitions, investments and divestitures; we expect to continue to evaluate and pursue divestitures of non-core assets; our financial and operating results may vary and fall below analysts' estimates, or credit rating agencies may change their ratings on Cohu, any of which may cause the price of our common stock to decline or make it difficult to obtain other financing; potential goodwill impairments if our business underperforms; global economic and political conditions, including trade tariffs and export restrictions, and other regulatory requirements, have impacted our business and may continue to have an adverse impact on our business and financial condition; and our business and operations could suffer in the event of cybersecurity breaches.

These and other risks and uncertainties are discussed more fully in Cohu's filings with the SEC, including the most recently filed Form 10-K and Form 10-Q, and the other filings made by Cohu with the SEC from time to time, which are available via the SEC's website at www.sec.gov. Except as required by applicable law, Cohu does not undertake any obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

For press releases and other information of interest to investors, please visit Cohu's website at www.cohu.com.

(1) All amounts presented are from continuing operations.

Total cash and investments at the end of second quarter 2021 were $434.1 million. Utilizing a portion of the gross proceeds from the divestment of the PCB Test business, the Company prepaid $100 million of its term loan B debt facility on June 30, 2021.

"Year-to-date results and our forecast put Cohu on track for record full year revenue and profitability, benefiting from strong 5G mobility, automotive and improving consumer and industrial semiconductor demand," said Cohu President and CEO Luis Mller. "In the second quarter, we completed the sale of Cohu's PCB Test business, which was non-core to our growth strategy and enabled an accelerated $100 million prepayment of our term loan B debt facility. We continued to capture new customers with the Neon inspection system, had a design-win for a complete RF test cell solution, and introduced the DI-Core platform, our foray into software data analytics to improve customers' test cell productivity."

Cohu expects third quarter 2021 sales to be between $220 million and $235 million.

Conference Call Information:

The Company will host a live conference call and webcast with slides to discuss second quarter 2021 results at 5:30 a.m. Pacific Time/8:30 a.m. Eastern Time on July 29, 2021. Interested investors and analysts are invited to dial into the conference call by using 1-866-434-5330 (domestic) or +1-213-660-0873 (international) and entering the pass code 5582321. Webcast access will be available on the Investor Information section of the Company's website at www.cohu.com.

About Cohu:

Cohu (NASDAQ: COHU) is a global leader in back-end semiconductor equipment and services, delivering leading-edge solutions for the manufacturing of semiconductors. Additional information can be found at www.cohu.com.

Use of Non-GAAP Financial Information:

Included within this press release and accompanying materials are non-GAAP financial measures, including non-GAAP Gross Margin/Profit, Income and Income (adjusted earnings) per share, Operating Income, Operating Expense, effective tax rate and Adjusted EBITDA that supplement the Company's Condensed Consolidated Statements of Operations prepared under generally accepted accounting principles (GAAP). These non-GAAP financial measures adjust the Company's actual results prepared under GAAP to exclude charges and the related income tax effect for: share-based compensation, the amortization of purchased intangible assets, restructuring costs, manufacturing transition and severance costs, asset impairment charges, gain on sale of business, gain on sale of facility, employer payroll taxes related to accelerated vesting share-based awards, depreciation of purchase accounting adjustments to property, plant and equipment, amortization of cloud-based software implementation costs (Adjusted EBITDA only) and loss on extinguishment of debt (Adjusted EBITDA only). Reconciliations of GAAP to non-GAAP amounts for the periods presented herein are provided in schedules accompanying this release and should be considered together with the Condensed Consolidated Statements of Operations. With respect to any forward looking non-GAAP figures, we are unable to provide without unreasonable efforts, at this time, a GAAP to non-GAAP reconciliation of any forward-looking figures due to their inherent uncertainty.

These non-GAAP measures are not meant as a substitute for GAAP, but are included solely for informational and comparative purposes. The Company's management believes that this information can assist investors in evaluating the Company's operational trends, financial performance, and cash generating capacity. Management uses non-GAAP measures for a variety of reasons, including to make operational decisions, to determine executive compensation in part, to forecast future operational results, and for comparison to our annual operating plan. However, the non-GAAP financial measures should not be regarded as a replacement for (or superior to) corresponding, similarly captioned, GAAP measures.

Forward Looking Statements:

Certain statements contained in this release and accompanying materials may be considered forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding being on track for record full year revenue and profitability, benefiting from strong 5G mobility, automotive and improving consumer and industrial semiconductor demand, new customers and design wins, new Neon customers, DI-Core software platform, improving contactor operational efficiencies/lead-times/margins, estimated test cell utilization, any other comments on Cohu's FY 2021 outlook or growth, second half or fourth quarter 2021 outlook, target financial model for FY'21, % of incremental revenue expected to fall to operating income, debt deleveraging priority, estimated system versus recurring sales, sales impact of supply chain disruptions, Cohu's third quarter 2021 sales forecast, guidance, sales mix, non-GAAP operating expenses, gross margin, operating income, adjusted EBITDA, effective tax rate, free cash flow, cap ex, cash and shares outstanding, estimated minimum cash needed, estimated EBITDA breakeven point, any future Term Loan B principal reduction, non-cash charges and any other statements that are predictive in nature and depend upon or refer to future events or conditions, and/or include words such as "may," "will," "should," "would," "expect," "anticipate," "plan," "likely," "believe," "estimate," "project," "intend," and/or other similar expressions among others. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Any third party industry analyst forecasts quoted are for reference only and Cohu does not adopt or affirm any such forecasts.

Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: the ongoing global COVID-19 pandemic has adversely affected, and is continuing to adversely affect, our business and results of operations; ongoing increases in material, labor, supplier, logistics and other operating costs, or supply chain delays, could cause lower gross margins or lost sales and adversely impact our business, financial position, results of operations and cash flows; potential post-closing PCB Test sale purchase price adjustment based on final closing accounts mechanism; we are making investments in new products and product enhancements, which may adversely affect our operating results and these investments may not be commercially successful; we are exposed to the risks of operating a global business; we have manufacturing operations in Asia, and any failure to effectively manage multiple manufacturing sites and to secure raw materials meeting our quality, cost and other requirements, or failures by our suppliers to perform, could harm our sales, service levels and reputation; failure of critical suppliers to deliver sufficient quantities of parts in a timely and cost-effective manner could adversely impact our operations; the semiconductor industry is seasonal, volatile and unpredictable; the semiconductor equipment industry is intensely competitive; semiconductor equipment is subject to rapid technological change, product introductions and transitions which may result in inventory write-offs, and our new product development involves numerous risks and uncertainties; the seasonal nature of the semiconductor equipment industry places enormous demands on our employees, operations and infrastructure; a limited number of customers account for a substantial percentage of our net sales; a majority of our revenues are generated from exports to foreign countries, primarily in Asia, that are subject to economic and political instability and we compete against a number of Asia-based test contactor, test handler and automated test equipment suppliers; the incurrence of substantial indebtedness in connection with our financing of the Xcerra acquisition may have an adverse impact on Cohu's liquidity, limit Cohu's flexibility in responding to other business opportunities and increase Cohu's vulnerability to adverse economic and industry conditions; our Credit Agreement contains various representations and negative covenants that limit, subject to certain exceptions and baskets, our ability and/or our subsidiaries' ability to enter into financing and other transactions relating to our assets; because of high debt levels we may not be able to service our debt obligations in accordance with their terms; dilution of earnings per share due to our March 2021 follow-on equity offering; we are exposed to other risks associated with other acquisitions, investments and divestitures; we expect to continue to evaluate and pursue divestitures of non-core assets; our financial and operating results may vary and fall below analysts' estimates, or credit rating agencies may change their ratings on Cohu, any of which may cause the price of our common stock to decline or make it difficult to obtain other financing; potential goodwill impairments if our business underperforms; global economic and political conditions, including trade tariffs and export restrictions, and other regulatory requirements, have impacted our business and may continue to have an adverse impact on our business and financial condition; and our business and operations could suffer in the event of cybersecurity breaches.

These and other risks and uncertainties are discussed more fully in Cohu's filings with the SEC, including the most recently filed Form 10-K and Form 10-Q, and the other filings made by Cohu with the SEC from time to time, which are available via the SEC's website at www.sec.gov. Except as required by applicable law, Cohu does not undertake any obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

For press releases and other information of interest to investors, please visit Cohu's website at www.cohu.com.

COHU, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share amounts)



Three Months Ended ^(1) Six Months Ended^ (1)

June 26, June 27, June 26, June 27,

2021 2020 2021 2020



Net sales $ 244,803 $ 144,084 $ 470,291 $ 283,005

Cost and expenses:

Cost of sales (excluding 140,146 83,127 263,429 165,964 amortization)

Research and 23,423 20,424 46,575 42,892 development

Selling, general and 32,834 30,976 65,458 64,328 administrative

Amortization of purchased intangible 9,045 9,527 18,289 19,065 assets

Gain on sale of PCB (75,779 ) - (75,664 ) - Test business^ (2)

Restructuring charges 617 585 1,957 988

Impairment charges^ - - - 3,949 (3)

Gain on sale of - (27 ) - (27 ) facilities^ (4)

130,286 144,612 320,044 297,159

Income (loss) from 114,517 (528 ) 150,247 (14,154 ) operations

Other (expense) income:

Interest expense (1,831 ) (3,456 ) (4,406 ) (7,883 )

Interest income 94 21 144 168

Foreign transaction (25 ) (640 ) (287 ) (1,044 ) loss

Loss on extinguishment of - - (1,761 ) - debt^ (5)

Income (loss) fromcontinuing operations 112,755 (4,603 ) 143,937 (22,913 ) before taxes

Income tax provision 17,659 137 21,234 (855 ) (benefit)

Income (loss) from 95,096 (4,740 ) 122,703 (22,058 ) continuing operations



Discontinued operations:^ (6)

Income from discontinued - - - 46 operations before taxes

Income tax provision - - - 4

Income from - - - 42 discontinued operations

Net income (loss) $ 95,096 $ (4,740 ) $ 122,703 $ (22,016 )



Income (loss) per share:

Basic:

Income (loss) from $ 1.96 $ (0.11 ) $ 2.66 $ (0.53 ) continuing operations

Income from discontinued - - - 0.00 operations

Net income (loss) $ 1.96 $ (0.11 ) $ 2.66 $ (0.53 )



Diluted:

Income (loss) from $ 1.92 $ (0.11 ) $ 2.58 $ (0.53 ) continuing operations

Income from discontinued - - - 0.00 operations

Net income (loss) $ 1.92 $ (0.11 ) $ 2.58 $ (0.53 )



Weighted average shares used in computing income (loss) per share:^ (7)

Basic 48,555 41,844 46,155 41,673

Diluted 49,474 41,844 47,478 41,673



(1)

The three- and six-month periods ended June 26, 2021 and June 27, 2020 were both comprised of 13 weeks and 26 weeks, respectively.

(2)

On June 24, 2021 the Company completed the divestment of its PCB Test business. The divestment of this business did not qualify for presentation as discontinued operations and the results of the PCB Test business are included in continuing operations for all periods presented. During the three-month period ended March 27, 2021 the Company incurred approximately $0.1 million of costs related to the sale of this business and were previously included in SG&A. With the completion of the sale in the current quarter these amounts have been reclassified gain on sale of PCB Test business to conform with current presentation for the six-month period ended June 26, 2021.

(3)

Included in our results for the six-month period ended June 27, 2020 are impairment charges recorded to write certain of our in-process research and development assets ("IPR&D") obtained as part of our acquisition of Xcerra down to current estimated fair values.

(4)

During 2020 we completed the sale of our facility in Penang, Malaysia which generated a gain. The gain was previously included in SG&A and was reclassified to gain on sale of facility during the quarter ended September 26, 2020. The facility was sold as part of the previously announced Xcerra integration program.

(5)

Repayments of outstanding term loan B resulted in a loss from the extinguishment of debt. Loss on extinguishment of debt is the net result after any cash gain is offset by the required reduction in our capitalized debt issuance costs and original issuance discounts.

(6)

On October 1, 2018, the Company made the decision to sell the fixtures business acquired from Xcerra, and, as a result, the operating results of this business have been presented as discontinued operations. In February 2020, we completed the sale of this business.

(7)

For the three- and six-month periods ended June 27, 2020, potentially dilutive securities were excluded from the per share computations due to their antidilutive effect. The Company has utilized the "control number" concept in the computation of diluted earnings per share to determine whether a potential common stock instrument is dilutive. The control number used is income from continuing operations. The control number concept requires that the same number of potentially dilutive securities applied in computing diluted earnings per share from continuing operations be applied to all other categories of income or loss, regardless of their anti-dilutive effect on such categories.

(1) The three- and six-month periods ended June 26, 2021 and June 27, 2020 were both comprised of 13 weeks and 26 weeks, respectively.

On June 24, 2021 the Company completed the divestment of its PCB Test business. The divestment of this business did not qualify for presentation as discontinued operations and the results of the PCB Test business are included in continuing operations for all periods presented. During the(2) three-month period ended March 27, 2021 the Company incurred approximately $0.1 million of costs related to the sale of this business and were previously included in SG&A. With the completion of the sale in the current quarter these amounts have been reclassified gain on sale of PCB Test business to conform with current presentation for the six-month period ended June 26, 2021.

Included in our results for the six-month period ended June 27, 2020 are(3) impairment charges recorded to write certain of our in-process research and development assets ("IPR&D") obtained as part of our acquisition of Xcerra down to current estimated fair values.

During 2020 we completed the sale of our facility in Penang, Malaysia which generated a gain. The gain was previously included in SG&A and was(4) reclassified to gain on sale of facility during the quarter ended September 26, 2020. The facility was sold as part of the previously announced Xcerra integration program.

Repayments of outstanding term loan B resulted in a loss from the(5) extinguishment of debt. Loss on extinguishment of debt is the net result after any cash gain is offset by the required reduction in our capitalized debt issuance costs and original issuance discounts.

On October 1, 2018, the Company made the decision to sell the fixtures(6) business acquired from Xcerra, and, as a result, the operating results of this business have been presented as discontinued operations. In February 2020, we completed the sale of this business.

For the three- and six-month periods ended June 27, 2020, potentially dilutive securities were excluded from the per share computations due to their antidilutive effect. The Company has utilized the "control number" concept in the computation of diluted earnings per share to determine(7) whether a potential common stock instrument is dilutive. The control number used is income from continuing operations. The control number concept requires that the same number of potentially dilutive securities applied in computing diluted earnings per share from continuing operations be applied to all other categories of income or loss, regardless of their anti-dilutive effect on such categories.

COHU, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)

June 26,

December 26,

2021

2020

Assets:

Current assets:

Cash and investments

$

434,089

$

170,027

Accounts receivable

216,008

151,919

Inventories

155,850

142,500

Other current assets

20,650

20,600

Total current assets

826,597

485,046

Property, plant & equipment, net

65,021

66,916

Goodwill

226,577

252,304

Intangible assets, net

203,417

233,685

Operating lease right of use assets

26,850

29,203

Other assets

23,270

23,192

Total assets

$

1,371,732

$

1,090,346

Liabilities & Stockholders' Equity:

Current liabilities:

Short-term borrowings

$

3,160

$

5,314

Current installments of long-term debt (1)

102,474

3,075

Deferred profit

17,480

8,671

Other current liabilities

198,198

157,393

Total current liabilities

321,312

174,453

Long-term debt

111,744

311,551

Non-current operating lease liabilities

23,813

25,787

Other noncurrent liabilities

64,632

66,267

Cohu stockholders' equity

850,231

512,288

Total liabilities & stockholders' equity

$

1,371,732

$

1,090,346

COHU, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)

June 26, December 26,

2021 2020

Assets:

Current assets:

Cash and investments $ 434,089 $ 170,027

Accounts receivable 216,008 151,919

Inventories 155,850 142,500

Other current assets 20,650 20,600

Total current assets 826,597 485,046

Property, plant & equipment, net 65,021 66,916

Goodwill 226,577 252,304

Intangible assets, net 203,417 233,685

Operating lease right of use assets 26,850 29,203

Other assets 23,270 23,192

Total assets $ 1,371,732 $ 1,090,346



Liabilities & Stockholders' Equity:

Current liabilities:

Short-term borrowings $ 3,160 $ 5,314

Current installments of long-term debt^ (1) 102,474 3,075

Deferred profit 17,480 8,671

Other current liabilities 198,198 157,393

Total current liabilities 321,312 174,453

Long-term debt 111,744 311,551

Non-current operating lease liabilities 23,813 25,787

Other noncurrent liabilities 64,632 66,267

Cohu stockholders' equity 850,231 512,288

Total liabilities & stockholders' equity $ 1,371,732 $ 1,090,346



(1)

Utilizing a portion of the gross proceeds from the divestment of the PCB Test business, on June 30, 2021, the Company prepaid $100 million of its term loan B debt facility. As a result of this prepayment occurring during the third fiscal quarter of 2021, $100 million has been classified as current installments of long-term debt as of June 26, 2021.

Utilizing a portion of the gross proceeds from the divestment of the PCB Test business, on June 30, 2021, the Company prepaid $100 million of its(1) term loan B debt facility. As a result of this prepayment occurring during the third fiscal quarter of 2021, $100 million has been classified as current installments of long-term debt as of June 26, 2021.

COHU, INC.

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (Unaudited)

(in thousands, except per share amounts)

Three Months Ended

June 26,

March 27,

June 27,

2021

2021

2020

Income (loss) from operations - GAAP basis (a)

$

114,517

$

35,730

$

(528

)

Non-GAAP adjustments:

Share-based compensation included in (b):

Cost of sales (COS)

191

262

211

Research and development (R&D)

763

781

828

Selling, general and administrative (SG&A)

2,552

2,480

2,364

3,506

3,523

3,403

Amortization of purchased intangible assets (c)

9,045

9,244

9,527

Restructuring charges related to inventory adjustments in COS (d)

(263

)

400

72

Restructuring charges (d)

617

1,340

585

Manufacturing and sales transition costs included in (e):

SG&A

-

-

76

-

-

76

Gain on sale of PCB Test business (f)

(75,779

)

115

-

Gain on sale of facility (f)

-

-

(27

)

PP&E step-up included in SG&A (g)

145

145

243

Payroll taxes related to accelerated vesting of share-based awards included in SG&A (h)

-

300

-

Income from operations - non-GAAP basis (i)

$

51,788

$

50,797

$

13,351

Income (loss) from continuing operations - GAAP basis

$

95,096

$

27,607

$

(4,740

)

Non-GAAP adjustments (as scheduled above)

(62,729

)

15,067

13,879

Tax effect of non-GAAP adjustments (j)

11,853

(2,045

)

(2,011

)

Income from continuing operations - non-GAAP basis

$

44,220

$

40,629

$

7,128

GAAP income (loss) from continuing operations per share - diluted

$

1.92

$

0.61

$

(0.11

)

Non-GAAP income from continuing operations per share - diluted (k)

$

0.89

$

0.89

$

0.17

Management believes the presentation of these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding the Company's operating performance. Our management uses these non-GAAP financial measures in assessing the Company's operating results, as well as when planning, forecasting and analyzing future periods and these non-GAAP measures allow investors to evaluate the Company's financial performance using some of the same measures as management. Management views share-based compensation as an expense that is unrelated to the Company's operational performance as it does not require cash payments and can vary in amount from period to period and the elimination of amortization charges provides better comparability of pre and post-acquisition operating results and to results of businesses utilizing internally developed intangible assets. Management initiated certain restructuring activities including employee headcount reductions and other organizational changes to align our business strategies in light of the merger with Xcerra. Restructuring costs have been excluded because such expense is not used by Management to assess the core profitability of Cohu's business operations. Manufacturing and sales transition costs relate principally to expenses incurred as a result of moving certain manufacturing activities to Asia and incremental costs incurred related to the buildup of a direct sales force for certain equipment sales in Asia. Employee severance are costs incurred in conjunction with the termination of certain employees to streamline our operations and reduce costs. Management has excluded these costs primarily because they are not reflective of the ongoing operating results and they are not used to assess ongoing operational performance. Impairment charges and the gains from the sale of the PCB Test business and the facility in Penang Malaysia have been excluded as these amounts are infrequent and are unrelated to the operational performance of Cohu. Employer payroll taxes related to accelerated severance stock-based compensation are dependent on the Company's stock price and the timing and size of the vesting of their restricted stock, over which management has limited to no control, and as such management does not believe it correlates to the company's operation of the business. Impairment charges and gain on sale of facility have been excluded as these amounts are infrequent and are unrelated to the operational performance of Cohu. Acquisition costs, fair value adjustment to contingent consideration and adjustments for inventory and PP&E step-up costs have been excluded by management as they are unrelated to the core operating activities of the Company and the frequency and variability in the nature of the charges can vary significantly from period to period. Excluding this data provides investors with a basis to compare Cohu's performance against the performance of other companies without this variability. However, the non-GAAP financial measures should not be regarded as a replacement for (or superior to) 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.COHU, INC.

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(Unaudited)

(in thousands, except per share amounts)

Three Months Ended

June 26, March 27, June 27,

2021 2021 2020

Income (loss) from operations - GAAP $ 114,517 $ 35,730 $ (528 )basis (a)

Non-GAAP adjustments:

Share-based compensation included in (b):

Cost of sales (COS) 191 262 211

Research and development (R&D) 763 781 828

Selling, general and 2,552 2,480 2,364 administrative (SG&A)

3,506 3,523 3,403

Amortization of purchased 9,045 9,244 9,527 intangible assets (c)

Restructuring charges related to (263 ) 400 72 inventory adjustments in COS (d)

Restructuring charges (d) 617 1,340 585

Manufacturing and sales transition costs included in (e):

SG&A - - 76

- - 76

Gain on sale of PCB Test business (75,779 ) 115 - (f)

Gain on sale of facility (f) - - (27 )

PP&E step-up included in SG&A (g) 145 145 243

Payroll taxes related to accelerated vesting of share-based - 300 - awards included in SG&A (h)

Income from operations - non-GAAP $ 51,788 $ 50,797 $ 13,351 basis (i)



Income (loss) from continuing $ 95,096 $ 27,607 $ (4,740 )operations - GAAP basis

Non-GAAP adjustments (as scheduled (62,729 ) 15,067 13,879 above)

Tax effect of non-GAAP adjustments 11,853 (2,045 ) (2,011 ) (j)

Income from continuing operations - $ 44,220 $ 40,629 $ 7,128 non-GAAP basis



GAAP income (loss) from continuing $ 1.92 $ 0.61 $ (0.11 )operations per share - diluted



Non-GAAP income from continuing $ 0.89 $ 0.89 $ 0.17 operations per share - diluted (k)



Management believes the presentation of these non-GAAP financial measures, whentaken together with the corresponding GAAP financial measures, providesmeaningful supplemental information regarding the Company's operatingperformance. Our management uses these non-GAAP financial measures in assessingthe Company's operating results, as well as when planning, forecasting andanalyzing future periods and these non-GAAP measures allow investors toevaluate the Company's financial performance using some of the same measures asmanagement. Management views share-based compensation as an expense that isunrelated to the Company's operational performance as it does not require cashpayments and can vary in amount from period to period and the elimination ofamortization charges provides better comparability of pre and post-acquisitionoperating results and to results of businesses utilizing internally developedintangible assets. Management initiated certain restructuring activitiesincluding employee headcount reductions and other organizational changes toalign our business strategies in light of the merger with Xcerra. Restructuringcosts have been excluded because such expense is not used by Management toassess the core profitability of Cohu's business operations. Manufacturing andsales transition costs relate principally to expenses incurred as a result ofmoving certain manufacturing activities to Asia and incremental costs incurredrelated to the buildup of a direct sales force for certain equipment sales inAsia. Employee severance are costs incurred in conjunction with the terminationof certain employees to streamline our operations and reduce costs. Managementhas excluded these costs primarily because they are not reflective of theongoing operating results and they are not used to assess ongoing operationalperformance. Impairment charges and the gains from the sale of the PCB Testbusiness and the facility in Penang Malaysia have been excluded as theseamounts are infrequent and are unrelated to the operational performance ofCohu. Employer payroll taxes related to accelerated severance stock-basedcompensation are dependent on the Company's stock price and the timing and sizeof the vesting of their restricted stock, over which management has limited tono control, and as such management does not believe it correlates to thecompany's operation of the business. Impairment charges and gain on sale offacility have been excluded as these amounts are infrequent and are unrelatedto the operational performance of Cohu. Acquisition costs, fair valueadjustment to contingent consideration and adjustments for inventory and PP&Estep-up costs have been excluded by management as they are unrelated to thecore operating activities of the Company and the frequency and variability inthe nature of the charges can vary significantly from period to period.Excluding this data provides investors with a basis to compare Cohu'sperformance against the performance of other companies without thisvariability. However, the non-GAAP financial measures should not be regarded asa replacement for (or superior to) corresponding, similarly captioned, GAAPmeasures. The presentation of non-GAAP financial measures above may not becomparable to similarly titled measures reported by other companies andinvestors should be careful when comparing our non-GAAP financial measures tothose of other companies.(a)

46.8%, 15.8% and (0.4)% of net sales, respectively.

(b)

To eliminate compensation expense for employee stock options, stock units and our employee stock purchase plan.

(c)

To eliminate the amortization of acquired intangible assets.

(d)

To eliminate restructuring costs incurred related to the integration of Xcerra and the Company's German operations.

(e)

To eliminate manufacturing and sales transition and severance costs.

(f)

To eliminate the gains generated from the sale of the PCB Test business and the facility in Penang Malaysia.

(g)

To eliminate the accelerated depreciation from the property, plant & equipment step-up related to the acquisition of Xcerra.

(h)

To eliminate the impact of employer payroll taxes associated with the acceleration of Pascal Rond? share-based awards under the terms of his separation agreement.

(i)

21.2%, 22.5% and 9.3% of net sales, respectively.

(j)

To adjust the provision for income taxes related to the adjustments described above based on applicable tax rates.

(k)

All periods presented were computed using the number of GAAP diluted shares outstanding except the three months ended June 27, 2020 which was computed using 42,283 shares outstanding as the effect of dilutive securities was excluded from GAAP diluted common shares due to the reported net loss under GAAP, but are included for non-GAAP diluted common shares since the Company has non-GAAP net income.

(a) 46.8%, 15.8% and (0.4)% of net sales, respectively.

(b) To eliminate compensation expense for employee stock options, stock units and our employee stock purchase plan.

(c) To eliminate the amortization of acquired intangible assets.

(d) To eliminate restructuring costs incurred related to the integration of Xcerra and the Company's German operations.

(e) To eliminate manufacturing and sales transition and severance costs.

(f) To eliminate the gains generated from the sale of the PCB Test business and the facility in Penang Malaysia.

(g) To eliminate the accelerated depreciation from the property, plant & equipment step-up related to the acquisition of Xcerra.

To eliminate the impact of employer payroll taxes associated with the(h) acceleration of Pascal Rond? share-based awards under the terms of his separation agreement.

(i) 21.2%, 22.5% and 9.3% of net sales, respectively.

(j) To adjust the provision for income taxes related to the adjustments described above based on applicable tax rates.

All periods presented were computed using the number of GAAP diluted shares outstanding except the three months ended June 27, 2020 which was(k) computed using 42,283 shares outstanding as the effect of dilutive securities was excluded from GAAP diluted common shares due to the reported net loss under GAAP, but are included for non-GAAP diluted common shares since the Company has non-GAAP net income.

COHU, INC.

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (Unaudited)

(in thousands, except per share amounts)

Six Months Ended

June 26,

June 27,

2021

2020

Income (loss) from operations - GAAP basis (a)

$

150,247

$

(14,154

)

Non-GAAP adjustments:

Share-based compensation included in (b):

Cost of sales (COS)

453

423

Research and development (R&D)

1,544

1,661

Selling, general and administrative (SG&A)

5,032

4,930

7,029

7,014

Amortization of purchased intangible assets (c)

18,289

19,065

Restructuring charges related to inventory adjustments in COS (d)

137

1,675

Restructuring charges (d)

1,957

988

Manufacturing and sales transition costs included in (e):

SG&A

-

139

-

139

Impairment charges (f)

-

3,949

Gain on sale of PCB Test business (g)

(75,664

)

-

Gain on sale of facility (g)

-

(27

)

PP&E step-up included in SG&A (h)

290

486

Payroll taxes related to accelerated vesting of share-based awards included in SG&A (i)

300

-

Income from operations - non-GAAP basis (j)

$

102,585

$

19,135

Income (loss) from continuing operations - GAAP basis

$

122,703

$

(22,058

)

Non-GAAP adjustments (as scheduled above)

(47,662

)

33,289

Tax effect of non-GAAP adjustments (k)

9,808

(3,971

)

Income from continuing operations - non-GAAP basis

$

84,849

$

7,260

GAAP income (loss) per share from continuing operations - diluted

$

2.58

$

(0.53

)

Non-GAAP income per share - diluted (l)

$

1.79

$

0.17

Management believes the presentation of these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding the Company's operating performance. Our management uses these non-GAAP financial measures in assessing the Company's operating results, as well as when planning, forecasting and analyzing future periods and these non-GAAP measures allow investors to evaluate the Company's financial performance using some of the same measures as management. Management views share-based compensation as an expense that is unrelated to the Company's operational performance as it does not require cash payments and can vary in amount from period to period and the elimination of amortization charges provides better comparability of pre and post-acquisition operating results and to results of businesses utilizing internally developed intangible assets. Management initiated certain restructuring activities including employee headcount reductions and other organizational changes to align our business strategies in light of the merger with Xcerra. Restructuring costs have been excluded because such expense is not used by Management to assess the core profitability of Cohu's business operations. Manufacturing and sales transition costs relate principally to expenses incurred as a result of moving certain manufacturing activities to Asia and incremental costs incurred related to the buildup of a direct sales force for certain equipment sales in Asia. Employee severance are costs incurred in conjunction with the termination of certain employees to streamline our operations and reduce costs. Management has excluded these costs primarily because they are not reflective of the ongoing operating results and they are not used to assess ongoing operational performance. Impairment charges and gains from the sale of the PCB Test business and the facility in Penang Malaysia have been excluded as these amounts are infrequent and are unrelated to the operational performance of Cohu. Employer payroll taxes related to accelerated severance stock-based compensation are dependent on the Company's stock price and the timing and size of the vesting of their restricted stock, over which management has limited to no control, and as such management does not believe it correlates to the company's operation of the business. Impairment charges and gain on sale of facility have been excluded as these amounts are infrequent and are unrelated to the operational performance of Cohu. Acquisition costs, fair value adjustment to contingent consideration and adjustments for inventory and PP&E step-up costs have been excluded by management as they are unrelated to the core operating activities of the Company and the frequency and variability in the nature of the charges can vary significantly from period to period. Excluding this data provides investors with a basis to compare Cohu's performance against the performance of other companies without this variability. However, the non-GAAP financial measures should not be regarded as a replacement for (or superior to) 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.COHU, INC.

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(Unaudited)

(in thousands, except per share amounts)

Six Months Ended

June 26, June 27,

2021 2020

Income (loss) from operations - GAAP basis (a) $ 150,247 $ (14,154 )

Non-GAAP adjustments:

Share-based compensation included in (b):

Cost of sales (COS) 453 423

Research and development (R&D) 1,544 1,661

Selling, general and administrative (SG&A) 5,032 4,930

7,029 7,014

Amortization of purchased intangible assets 18,289 19,065 (c)

Restructuring charges related to inventory 137 1,675 adjustments in COS (d)

Restructuring charges (d) 1,957 988

Manufacturing and sales transition costs included in (e):

SG&A - 139

- 139

Impairment charges (f) - 3,949



Gain on sale of PCB Test business (g) (75,664 ) -

Gain on sale of facility (g) - (27 )

PP&E step-up included in SG&A (h) 290 486

Payroll taxes related to accelerated vesting of share-based awards included in 300 - SG&A (i)



Income from operations - non-GAAP basis (j) $ 102,585 $ 19,135



Income (loss) from continuing operations - $ 122,703 $ (22,058 )GAAP basis

Non-GAAP adjustments (as scheduled above) (47,662 ) 33,289

Tax effect of non-GAAP adjustments (k) 9,808 (3,971 )

Income from continuing operations - non-GAAP $ 84,849 $ 7,260 basis



GAAP income (loss) per share from continuing $ 2.58 $ (0.53 )operations - diluted



Non-GAAP income per share - diluted (l) $ 1.79 $ 0.17



Management believes the presentation of these non-GAAP financial measures,when taken together with the corresponding GAAP financial measures, providesmeaningful supplemental information regarding the Company's operatingperformance. Our management uses these non-GAAP financial measures inassessing the Company's operating results, as well as when planning,forecasting and analyzing future periods and these non-GAAP measures allowinvestors to evaluate the Company's financial performance using some of thesame measures as management. Management views share-based compensation as anexpense that is unrelated to the Company's operational performance as it doesnot require cash payments and can vary in amount from period to period and theelimination of amortization charges provides better comparability of pre andpost-acquisition operating results and to results of businesses utilizinginternally developed intangible assets. Management initiated certainrestructuring activities including employee headcount reductions and otherorganizational changes to align our business strategies in light of the mergerwith Xcerra. Restructuring costs have been excluded because such expense isnot used by Management to assess the core profitability of Cohu's businessoperations. Manufacturing and sales transition costs relate principally toexpenses incurred as a result of moving certain manufacturing activities toAsia and incremental costs incurred related to the buildup of a direct salesforce for certain equipment sales in Asia. Employee severance are costsincurred in conjunction with the termination of certain employees tostreamline our operations and reduce costs. Management has excluded thesecosts primarily because they are not reflective of the ongoing operatingresults and they are not used to assess ongoing operational performance.Impairment charges and gains from the sale of the PCB Test business and thefacility in Penang Malaysia have been excluded as these amounts are infrequentand are unrelated to the operational performance of Cohu. Employer payrolltaxes related to accelerated severance stock-based compensation are dependenton the Company's stock price and the timing and size of the vesting of theirrestricted stock, over which management has limited to no control, and as suchmanagement does not believe it correlates to the company's operation of thebusiness. Impairment charges and gain on sale of facility have been excludedas these amounts are infrequent and are unrelated to the operationalperformance of Cohu. Acquisition costs, fair value adjustment to contingentconsideration and adjustments for inventory and PP&E step-up costs have beenexcluded by management as they are unrelated to the core operating activitiesof the Company and the frequency and variability in the nature of the chargescan vary significantly from period to period. Excluding this data providesinvestors with a basis to compare Cohu's performance against the performanceof other companies without this variability. However, the non-GAAP financialmeasures should not be regarded as a replacement for (or superior to)corresponding, similarly captioned, GAAP measures. The presentation ofnon-GAAP financial measures above may not be comparable to similarly titledmeasures reported by other companies and investors should be careful whencomparing our non-GAAP financial measures to those of other companies.(a)

31.9% and (5.0)% of net sales, respectively.

(b)

To eliminate compensation expense for employee stock options, stock units and our employee stock purchase plan.

(c)

To eliminate the amortization of acquired intangible assets.

(d)

To eliminate restructuring costs incurred related to the integration of Xcerra and the Company's German operations.

(e)

To eliminate manufacturing and sales transition and severance costs.

(f)

To eliminate impairment charges recorded to adjust IPR&D assets obtained in the acquisition of Xcerra to current fair value.

(g)

To eliminate the gains generated from the sale of the PCB Test business and the facility in Penang Malaysia.

(h)

To eliminate the property, plant & equipment step-up depreciation accelerated related to the acquisition of Xcerra.

(i)

To eliminate the impact of employer payroll taxes associated with the acceleration of Pascal Rond? share-based awards under the terms of his separation agreement.

(j)

21.8% and 6.8% of net sales, respectively.

(k)

To adjust the provision for income taxes related to the adjustments described above based on applicable tax rates.

(l)

The six-months ended June 27, 2020 was computed using 42,355 shares outstanding, respectively, as the effect of dilutive securities was excluded from GAAP diluted common shares due to the reported net loss under GAAP, but are included for non-GAAP diluted common shares since the Company has non-GAAP net income. All other periods were calculated utilizing the GAAP diluted shares outstanding.

(a) 31.9% and (5.0)% of net sales, respectively.

(b) To eliminate compensation expense for employee stock options, stock units and our employee stock purchase plan.

(c) To eliminate the amortization of acquired intangible assets.

(d) To eliminate restructuring costs incurred related to the integration of Xcerra and the Company's German operations.

(e) To eliminate manufacturing and sales transition and severance costs.

(f) To eliminate impairment charges recorded to adjust IPR&D assets obtained in the acquisition of Xcerra to current fair value.

(g) To eliminate the gains generated from the sale of the PCB Test business and the facility in Penang Malaysia.

(h) To eliminate the property, plant & equipment step-up depreciation accelerated related to the acquisition of Xcerra.

To eliminate the impact of employer payroll taxes associated with the(i) acceleration of Pascal Rond? share-based awards under the terms of his separation agreement.

(j) 21.8% and 6.8% of net sales, respectively.

(k) To adjust the provision for income taxes related to the adjustments described above based on applicable tax rates.

The six-months ended June 27, 2020 was computed using 42,355 shares outstanding, respectively, as the effect of dilutive securities was(l) excluded from GAAP diluted common shares due to the reported net loss under GAAP, but are included for non-GAAP diluted common shares since the Company has non-GAAP net income. All other periods were calculated utilizing the GAAP diluted shares outstanding.

COHU, INC.

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures (Unaudited)

(in thousands)

Three Months Ended

June 26,

March 27,

June 27,

2021

2021

2020

Gross Profit Reconciliation

Gross profit - GAAP basis (excluding amortization) (1)

$

104,657

$

102,205

$

60,957

Non-GAAP adjustments to cost of sales (as scheduled above)

(72

)

662

283

Gross profit - Non-GAAP basis

$

104,585

$

102,867

$

61,240

As a percentage of net sales:

GAAP gross profit

42.8

%

45.3

%

42.3

%

Non-GAAP gross profit

42.7

%

45.6

%

42.5

%

Adjusted EBITDA Reconciliation

Net income (loss) - GAAP Basis

$

95,096

$

27,607

$

(4,740

)

Income tax provision (benefit)

17,659

3,575

137

Interest expense

1,831

2,575

3,456

Interest income

(94

)

(50

)

(21

)

Amortization of purchased intangible assets

9,045

9,244

9,527

Depreciation

3,385

3,323

3,557

Amortization of cloud-based software implementation costs (2)

378

370

308

Loss on extinguishment of debt

-

1,761

-

Other non-GAAP adjustments (as scheduled above)

(71,919

)

5,678

4,109

Adjusted EBITDA

$

55,381

$

54,083

$

16,333

As a percentage of net sales:

Net income (loss) - GAAP Basis

38.8

%

12.2

%

(3.3

)%

Adjusted EBITDA

22.6

%

24.0

%

11.3

%

Operating Expense Reconciliation

Operating Expense - GAAP basis

$

65,919

$

66,360

$

61,485

Non-GAAP adjustments to operating expenses (as scheduled above)

(13,122

)

(14,290

)

(13,596

)

Operating Expenses - Non-GAAP basis

$

52,797

$

52,070

$

47,889

COHU, INC.

Supplemental Reconciliation of GAAP Results to Non-GAAP Financial Measures(Unaudited)

(in thousands)

Three Months Ended

June 26, March 27, June 27,

2021 2021 2020



Gross Profit Reconciliation

Gross profit - GAAP basis (excluding $ 104,657 $ 102,205 $ 60,957 amortization)^ (1)

Non-GAAP adjustments to cost of (72 ) 662 283 sales (as scheduled above)

Gross profit - Non-GAAP basis $ 104,585 $ 102,867 $ 61,240



As a percentage of net sales:

GAAP gross profit 42.8 % 45.3 % 42.3 %

Non-GAAP gross profit 42.7 % 45.6 % 42.5 %



Adjusted EBITDA Reconciliation

Net income (loss) - GAAP Basis $ 95,096 $ 27,607 $ (4,740 )

Income tax provision (benefit) 17,659 3,575 137

Interest expense 1,831 2,575 3,456

Interest income (94 ) (50 ) (21 )

Amortization of purchased 9,045 9,244 9,527 intangible assets

Depreciation 3,385 3,323 3,557

Amortization of cloud-based 378 370 308 software implementation costs^ (2)

Loss on extinguishment of debt - 1,761 -

Other non-GAAP adjustments (as (71,919 ) 5,678 4,109 scheduled above)

Adjusted EBITDA $ 55,381 $ 54,083 $ 16,333



As a percentage of net sales:

Net income (loss) - GAAP Basis 38.8 % 12.2 % (3.3 ) %

Adjusted EBITDA 22.6 % 24.0 % 11.3 %



Operating Expense Reconciliation

Operating Expense - GAAP basis $ 65,919 $ 66,360 $ 61,485

Non-GAAP adjustments to operating (13,122 ) (14,290 ) (13,596 ) expenses (as scheduled above)

Operating Expenses - Non-GAAP basis $ 52,797 $ 52,070 $ 47,889





(1)

Excludes amortization of $7,043, $7,101 and $7,256 for the three months ending June 26, 2021, March 27, 2021 and June 27, 2020, respectively.

(2)

Represents amortization of capitalized implementation costs related to cloud-based software arrangements that are included within SG&A.

(1) Excludes amortization of $7,043, $7,101 and $7,256 for the three months ending June 26, 2021, March 27, 2021 and June 27, 2020, respectively.

(2) Represents amortization of capitalized implementation costs related to cloud-based software arrangements that are included within SG&A.

Six Months Ended

June 26,

June 27,

2021

2020

Gross Profit Reconciliation

Gross profit - GAAP basis (excluding amortization) (1)

$

206,862

$

117,041

Non-GAAP adjustments to cost of sales (as scheduled above)

590

2,098

Gross profit - Non-GAAP basis

$

207,452

$

119,139

GAAP gross profit

44.0

%

41.4

%

Non-GAAP gross profit

44.1

%

42.1

%

Adjusted EBITDA Reconciliation

Net income (loss) - GAAP Basis

$

122,703

$

(22,016

)

(Income) loss from discontinued operations

-

(42

)

Income tax provision (benefit)

21,234

(855

)

Interest expense

4,406

7,883

Interest income

(144

)

(168

)

Amortization of purchased intangible assets

18,289

19,065

Depreciation

6,708

6,973

Amortization of cloud-based software implementation costs (2)

748

513

Loss on extinguishment of debt

1,761

-

Other non-GAAP adjustments (as scheduled above)

(66,241

)

13,738

Adjusted EBITDA

$

109,464

$

25,091

As a percentage of net sales:

Net income (loss) - GAAP Basis

26.1

%

(7.8

)%

Adjusted EBITDA

23.3

%

8.9

%

Operating Expense Reconciliation

Operating Expense - GAAP basis

$

132,279

$

131,195

Non-GAAP adjustments to operating expenses (as scheduled above)

(27,412

)

(31,191

)

Operating Expenses - Non-GAAP basis

$

104,867

$

100,004

Six Months Ended

June 26, June 27,

2021 2020

Gross Profit Reconciliation

Gross profit - GAAP basis (excluding amortization)^ $ 206,862 $ 117,041 (1)

Non-GAAP adjustments to cost of sales (as 590 2,098 scheduled above)

Gross profit - Non-GAAP basis $ 207,452 $ 119,139





GAAP gross profit 44.0 % 41.4 %

Non-GAAP gross profit 44.1 % 42.1 %



Adjusted EBITDA Reconciliation

Net income (loss) - GAAP Basis $ 122,703 $ (22,016 )

(Income) loss from discontinued operations - (42 )

Income tax provision (benefit) 21,234 (855 )

Interest expense 4,406 7,883

Interest income (144 ) (168 )

Amortization of purchased intangible assets 18,289 19,065

Depreciation 6,708 6,973

Amortization of cloud-based software 748 513 implementation costs^ (2)

Loss on extinguishment of debt 1,761 -

Other non-GAAP adjustments (as scheduled above) (66,241 ) 13,738

Adjusted EBITDA $ 109,464 $ 25,091



As a percentage of net sales:

Net income (loss) - GAAP Basis 26.1 % (7.8 ) %

Adjusted EBITDA 23.3 % 8.9 %



Operating Expense Reconciliation

Operating Expense - GAAP basis $ 132,279 $ 131,195

Non-GAAP adjustments to operating expenses (as (27,412 ) (31,191 ) scheduled above)

Operating Expenses - Non-GAAP basis $ 104,867 $ 100,004



(1)

Excludes amortization of $14,144 and $14,522 for the six months ending June 26, 2021 and June 27, 2020, respectively.

(2)

Represents amortization of capitalized implementation costs related to cloud-based software arrangements that are included within SG&A.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210729005257/en/

CONTACT: Cohu, Inc. Jeffrey D. Jones - Investor Relations 858-848-8106