<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-4298
COHU, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-1934119
- -------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
5755 KEARNY VILLA ROAD, SAN DIEGO, CALIFORNIA 92123
- --------------------------------------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 619-277-6700
-----------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of March 31, 1999, the Registrant had 9,827,733 shares of its $1.00 par value
common stock outstanding.
<PAGE> 2
COHU, INC.
INDEX
FORM 10-Q
MARCH 31, 1999
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION PAGE NUMBER
- ------ -----------
<S> <C>
Item 1. Condensed Consolidated Balance Sheets
March 31, 1999 (Unaudited) and December 31, 1998..............................3
Condensed Consolidated Statements of Income (Unaudited)
Three Months Ended March 31, 1999 and 1998....................................4
Condensed Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended March 31, 1999 and 1998....................................5
Notes to Unaudited Condensed Consolidated Financial Statements................6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.................................8
Item 3. Quantitative and Qualitative Disclosures about Market Risk...................11
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.............................................13
Signatures.............................................................................13
</TABLE>
2
<PAGE> 3
COHU, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
ASSETS MARCH 31, DECEMBER 31,
1999 1998
--------- ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 60,574 $ 74,446
Short-term investments 26,420 12,257
Accounts receivable, less allowance for doubtful
accounts of $1,243 in 1999 and $1,338 in 1998 18,356 18,800
Inventories:
Raw materials and purchased parts 13,623 12,977
Work in process 10,404 5,927
Finished goods 4,019 6,973
-------- --------
28,046 25,877
Deferred income taxes 10,477 10,477
Prepaid expenses 1,489 1,541
-------- --------
Total current assets 145,362 143,398
Property, plant and equipment, at cost:
Land and land improvements 2,501 2,501
Buildings and building improvements 12,149 12,102
Machinery and equipment 18,018 17,801
-------- --------
32,668 32,404
Less accumulated depreciation and amortization 15,393 14,791
-------- --------
Net property, plant and equipment 17,275 17,613
Goodwill, net of accumulated amortization
of $2,044 in 1999 and $1,972 in 1998 1,083 1,155
Other assets 64 65
-------- --------
$163,784 $162,231
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,021 $ 3,016
Income taxes payable 3,109 3,070
Other accrued liabilities 12,850 17,169
-------- --------
Total current liabilities 23,980 23,255
Accrued retiree medical benefits 999 993
Deferred income taxes 520 520
Stockholders' equity:
Preferred stock -- --
Common stock 9,828 9,779
Paid in excess of par 11,435 11,169
Retained earnings 117,022 116,515
-------- --------
Total stockholders' equity 138,285 137,463
-------- --------
$163,784 $162,231
======== ========
</TABLE>
See accompanying notes
3
<PAGE> 4
COHU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1999 1998
------- -------
<S> <C> <C>
Net sales $29,526 $56,691
Cost and expenses:
Cost of sales 19,164 33,367
Research and development 4,297 5,401
Selling, general and administrative 5,087 6,176
------- -------
28,548 44,944
------- -------
Income from operations 978 11,747
Interest income 1,113 769
------- -------
Income before income taxes 2,091 12,516
Provision for income taxes 700 4,300
------- -------
Net income $ 1,391 $ 8,216
======= =======
Earnings per share:
Basic $ .14 $ .85
======= =======
Diluted $ .14 $ .82
======= =======
Weighted average shares used in
computing earnings per share:
Basic 9,807 9,687
======= =======
Diluted 10,059 10,067
======= =======
</TABLE>
See accompanying notes.
4
<PAGE> 5
COHU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1999 1998
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,391 $ 8,216
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation and amortization 671 561
Purchase consideration to be paid with stock -- 286
Increase in accrued retiree medical benefits 6 23
Changes in assets and liabilities:
Accounts receivable 444 (3,532)
Inventories (2,169) (4,448)
Prepaid expenses 52 116
Accounts payable 5,005 (1,903)
Income taxes payable 39 3,277
Other accrued liabilities (4,319) (1,903)
-------- --------
Net cash provided from operating activities 1,120 693
Cash flows from investing activities:
Purchases of short-term investments (16,163) (4,000)
Maturities of short-term investments 2,000 12,815
Purchases of property, plant, equipment and other assets (260) (839)
-------- --------
Net cash provided by (used for) investing activities (14,423) 7,976
Cash flows from financing activities:
Issuance of stock, net 315 1,380
Cash dividends (884) (777)
-------- --------
Net cash provided by (used for) financing activities (569) 603
-------- --------
Net increase (decrease) in cash and cash equivalents (13,872) 9,272
Cash and cash equivalents at beginning of period 74,446 39,736
-------- --------
Cash and cash equivalents at end of period $ 60,574 $ 49,008
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes $ 661 $ 1,228
</TABLE>
See accompanying notes.
5
<PAGE> 6
COHU, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
1 - BASIS OF PRESENTATION
The accompanying interim financial statements are unaudited but include
all adjustments (consisting of normal recurring adjustments) which Cohu,
Inc. (the "Company") considers necessary for a fair statement of the
results for the period. The operating results for the three months ended
March 31, 1999 are not necessarily indicative of the operating results for
the entire year or any future period. These financial statements should be
read in conjunction with the consolidated financial statements
incorporated by reference in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998 and management's discussion and analysis
of financial condition and results of operations included elsewhere
herein. Certain amounts in the December 31, 1998 consolidated balance
sheet have been reclassified to conform to the March 31, 1999
presentation.
2 - EARNINGS PER SHARE
Earnings per share are computed in accordance with Financial Accounting
Standards Board ("FASB") Statement No. 128, Earnings per Share. Basic
earnings per share are computed using the weighted average number of
common shares outstanding during each period. Diluted earnings per share
include the dilutive effect of common shares potentially issuable upon the
exercise of stock options. For purposes of computing diluted earnings per
share, weighted average common share equivalents do not include stock
options with an exercise price that exceeds the average fair market value
of the Company's common stock for the period. For the three months ended
March 31, 1999, options to purchase approximately 111,000 shares of common
stock at an average price of $33.93 were excluded from the computation,
and for the three months ended March 31, 1998, options to purchase
approximately 24,000 shares of common stock at an average price of $43.50
were excluded from the computation. The following table reconciles the
denominators used in computing basic and diluted earnings per share:
<TABLE>
<CAPTION>
1999 1998
------ ------
(in thousands)
<S> <C> <C>
Weighted average common shares outstanding 9,807 9,687
Effect of dilutive stock options 252 380
------ ------
10,059 10,067
====== ======
</TABLE>
6
<PAGE> 7
COHU, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
3 - SEGMENT AND RELATED INFORMATION
The following information is presented pursuant to FASB Statement No. 131,
Disclosures about Segments of an Enterprise and Related Information.
Intersegment sales were not significant in either period.
<TABLE>
<CAPTION>
Three months ended March 31,
1999 1998
--------- ---------
(in thousands)
<S> <C> <C>
Net sales:
Semiconductor equipment $ 22,374 $ 47,613
Television cameras 4,229 5,396
--------- ---------
Net sales for reportable segments 26,603 53,009
All other 2,923 3,682
--------- ---------
Total consolidated net sales $ 29,526 $ 56,691
========= =========
Operating profit (loss):
Semiconductor equipment $ 1,458 $ 11,205
Television cameras 174 608
--------- ---------
Operating profit for reportable segments 1,632 11,813
All other (262) 232
--------- ---------
Total consolidated operating profit 1,370 12,045
Other unallocated amounts:
Corporate expenses (320) (259)
Interest income 1,113 769
Goodwill amortization (72) (39)
--------- ---------
Income before income taxes $ 2,091 $ 12,516
========= =========
</TABLE>
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
--------- ---------
(in thousands)
<S> <C> <C>
Total assets by segment:
Semiconductor equipment $ 50,032 $ 50,754
Television cameras 8,530 8,728
--------- ---------
Total assets for reportable segments 58,562 59,482
All other operating segments 7,013 7,537
Corporate 98,209 95,212
--------- ---------
Total consolidated assets $ 163,784 $ 162,231
========= =========
</TABLE>
7
<PAGE> 8
COHU, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
MARCH 31, 1999
This Form 10-Q contains certain forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, and is subject
to the Safe Harbor provisions created by that statute. The words "anticipate",
"expect", "believe", and similar expressions are intended to identify such
statements. Such statements are subject to certain risks and uncertainties,
including but not limited to those discussed herein and, in particular, under
the caption "Business and Market Risks" that could cause actual results to
differ materially from those projected.
RESULTS OF OPERATIONS
FIRST QUARTER 1999 COMPARED TO FIRST QUARTER 1998
Net sales decreased 48% to $29.5 million in 1999 compared to net sales of $56.7
million in 1998. Net sales during the first quarter of 1999 were negatively
impacted by the semiconductor equipment industry downturn that began in 1998.
In addition, sales of the Company's gravity-feed semiconductor test handler
products have declined significantly, as this equipment is no longer suitable
for handling many types of DRAMs. Sales of semiconductor test handling equipment
in 1999 decreased 53% from the 1998 period and accounted for 76% of consolidated
net sales in 1999 versus 84% in 1998. Sales of television cameras and other
equipment decreased 22% while the combined sales of metal detection and
microwave equipment decreased 21%. Export sales accounted for 54% of net sales
in the first quarter of 1999 compared to 44% for the year ended December 31,
1998.
Gross margin as a percentage of net sales declined to 35.1% in 1999 versus 41.1%
in 1998 as a result of lower margins in the semiconductor equipment business.
Within the semiconductor equipment segment, margins decreased in 1999 primarily
as a result of reduced business volume. Research and development expense as a
percentage of net sales was 14.6% in 1999, compared to 9.5% in 1998, decreasing
in absolute dollars from $5.4 million in 1998 to $4.3 million in 1999. Selling,
general and administrative expense as a percentage of net sales increased to
17.2% in 1999 from 10.9% in 1998 primarily as a result of the decrease in
business volume. Interest income was $1.1 million in 1999 and $.8 million in
1998 as the increase in average cash and investments offset the impact of lower
interest rates. The provision for income taxes expressed as a percentage of
pre-tax income was 33.5% in the first quarter of 1999. As a result of the
factors set forth above, net income decreased from $8.2 million in 1998 to $1.4
million in 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company's net cash flows generated from operating activities in the first
three months of 1999 totaled $1.1 million. The major components of cash flows
from operating activities were net income of $1.4 million and an increase in
accounts payable of $5 million offset by an increase in inventories of $2.2
million and a decrease in other accrued liabilities of $4.3 million. Net cash
used for investing activities included $14.2 million for the purchase of
short-term investments, less maturities, and purchases of property, plant and
equipment and other assets of $.3 million. Net cash used for financing
activities was $.6 million. Cash used for financing activities included $.9
million for the payment of dividends, offset by $.3 million received from the
issuance of stock upon the exercise of stock options. The Company had $10
million available under its bank line of credit and working capital of $121.4
million at March 31, 1999. It is anticipated that present working capital and
available borrowings under the line of credit will be sufficient to meet the
Company's 1999 operating requirements.
8
<PAGE> 9
COHU, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
MARCH 31, 1999
BUSINESS AND MARKET RISKS
INDUSTRY CYCLES
The Company's operating results are substantially dependent on its semiconductor
equipment business. This capital equipment business is in turn highly dependent
on the overall strength of the semiconductor industry. Historically, the
semiconductor industry has been highly cyclical with recurring periods of
oversupply and excess capacity, which often have had a significant effect on the
semiconductor industry's demand for capital equipment, including equipment of
the type manufactured and marketed by the Company. The Company believes that the
markets for newer generations of semiconductors may also be subject to similar
cycles and severe downturns such as those experienced in 1996 and 1998.
Reductions in capital equipment investment by semiconductor manufacturers will
adversely affect the Company's financial position and results of operations.
RAPID TECHNOLOGICAL CHANGE AND NEW PRODUCTS
Semiconductor equipment and processes are subject to rapid technological change.
The Company believes that its future success will depend in part on its ability
to enhance existing products and develop new products with improved performance
capabilities. The Company expects to continue to invest heavily in research and
development and must manage product transitions successfully as introductions of
new products could adversely impact sales or margins of existing products. In
addition, the introduction of new products increases the risk that existing
products will become obsolete resulting in greater excess and obsolete inventory
exposure. This increased exposure may result in increased inventory reserve
requirements similar to or in excess of those recorded in 1998 that could have a
material adverse impact on the Company's financial condition and results of
operations.
The design, development, manufacture and commercial introduction of new
semiconductor test handling equipment is an inherently complex process that
involves a number of risks and uncertainties. These risks include potential
problems in meeting customer performance requirements, integration of the test
handler with other suppliers' equipment and the customers' manufacturing
processes and the ability of the equipment to satisfy the semiconductor
industry's constantly evolving needs and achieve commercial acceptance at prices
that produce satisfactory profit margins. The design and development of new test
handling equipment is heavily influenced by changes in integrated circuit (IC)
back-end manufacturing processes and IC package design changes. The Company
believes that the rate of change in such processes and IC packages is
accelerating. As a result of these changes and other factors, assessing the
market potential and commercial viability of new test handling products is
extremely difficult and subject to a great deal of risk. In addition, not all IC
manufacturers employ the same manufacturing processes. Differences in such
processes make it difficult to design standard semiconductor test handler
products that are capable of achieving broad market acceptance. No assurance can
be made that the Company will accurately assess the semiconductor industry's
future test handler requirements and design and develop products that meet such
requirements and achieve market acceptance. Failure to accurately assess
customer requirements and market trends for new semiconductor test handler
products may have a materially adverse impact on the Company's operations,
financial condition and results of operations.
9
<PAGE> 10
COHU, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
MARCH 31, 1999
BUSINESS AND MARKET RISKS (CONT.)
The transition from product development to the manufacture of new semiconductor
equipment is a difficult process and delays in product introductions are common.
During 1998 and 1999 the Company experienced delays in the introduction of its
new Enterprise and Castle test handlers and difficulties in manufacturing and
volume production of these products. In addition, after sale support and
warranty costs are typically greater with new test handlers than with
established products. There can be no assurance that future technologies,
processes and product developments will not render the Company's current or
future product offerings obsolete or that the Company will be able to develop
and introduce new products or enhancements to its existing products in a timely
manner to satisfy customer needs or achieve market acceptance. Furthermore,
there is no assurance that the Company will realize acceptable profit margins on
such products.
DECLINE IN GRAVITY-FEED IC TEST HANDLER BUSINESS
Sales of gravity-feed IC test handlers used in DRAM testing have represented a
significant percentage of the Company's total semiconductor equipment related
revenue during the last five years. Due to changes in IC package technology,
gravity-feed handlers are no longer suitable for handling many types of DRAMs.
As a result, the Company has seen a significant decline in sales of its
gravity-feed test handler products. The Company introduced its Enterprise
handler in 1998 that employs a handling technique known as test-in-tray that is
particularly suited for parallel test applications like DRAMs. While the
benefits of test-in-tray may be significant and the Company sold a significant
number of these handlers in 1998, market acceptance of this product has been
very limited and the future use of this technology is uncertain. If the Company
is unable to successfully develop and market new products or enhancements to
existing products for memory applications the Company's results of operations
will be adversely impacted.
HIGHLY COMPETITIVE INDUSTRY
The semiconductor equipment industry is intensely competitive and the Company
faces substantial competition from numerous companies throughout the world. Some
of these competitors have substantially greater financial, engineering,
manufacturing and customer support capabilities and offer more extensive product
offerings than the Company. In addition, there are smaller, emerging
semiconductor equipment companies that provide or may provide innovative
technology incorporated in products that may compete favorably against those of
the Company. The Company expects its competitors to continue to improve the
design and performance of their current products and to introduce new products
with improved performance capabilities. Failure to introduce new products in a
timely manner, the introduction by competitors of products with perceived or
actual advantages or disputes over rights of the Company or its competitors to
use certain intellectual property or technology could result in a loss of the
Company's competitive position and reduced sales of or margins on existing
products.
CUSTOMER CONCENTRATION
As is common in the semiconductor equipment industry, the Company relies on a
limited number of customers for a substantial percentage of its net sales. In
1998, three customers of the semiconductor equipment segment accounted for 51%
of the Company's net sales. The loss of or a significant reduction in orders by
these or other significant customers would adversely impact the Company's
financial condition and results of operations. Furthermore, the concentration of
the Company's revenues in a limited number of large customers may cause
significant fluctuations in the Company's future annual and quarterly operating
results.
FOREIGN SALES
In 1998, 44% of the Company's total net sales were exported to foreign
countries, including 51% of the sales in the semiconductor equipment segment.
The majority of the Company's export sales are made to destinations in Asia.
Instability in global economic markets, particularly in Asia, may adversely
impact the demand for capital equipment, including equipment of the type
manufactured and marketed by the Company. In addition, changes in the amount or
price of semiconductors produced in Asia could impact the profitability or
capital equipment spending programs of the Company's foreign and domestic
customers.
10
<PAGE> 11
COHU, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
MARCH 31, 1999
BUSINESS AND MARKET RISKS (CONT.)
WORK FORCE REDUCTIONS
During 1996 and 1998 the Company reduced the size of its work force and
implemented other cost reduction measures. Cost reduction measures may have a
negative impact on the Company's operations and operating results. Furthermore,
no assurance can be made that such cost reduction measures will be implemented
successfully.
NON SEMICONDUCTOR EQUIPMENT BUSINESSES
The Company develops, manufactures and sells products used in closed circuit
television, metal detection and microwave radio applications. These products are
sold in highly competitive markets and many competitors are segments of large,
diversified companies with substantially greater financial, engineering,
marketing, manufacturing and customer support capabilities than the Company. No
assurance can be given that the Company will continue to compete successfully in
any of these businesses.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
At March 31, 1999 the Company's investment portfolio includes fixed-income
securities of $80.1 million. These securities are subject to interest rate risk
and will decline in value if interest rates increase. Due to the short duration
of the Company's investment portfolio, an immediate 10 percent increase in
interest rates would have no material impact on the Company's financial
condition or results of operations.
The Company generally conducts business, including sales to foreign customers,
in U. S. dollars and as a result has limited foreign currency exchange rate
risk. Monetary assets and liabilities of the Company's Singapore and Taiwan
operations are not significant. The effect of an immediate 10 percent change in
foreign exchange rates would not have a material impact on the Company's
financial condition or results of operations.
YEAR 2000 RISKS
The Company has a Year 2000 ("Y2K") Task Force focusing on four key readiness
areas: 1) Internal Infrastructure Readiness, addressing internal hardware and
software, including both information technology and non-information technology
systems; 2) Product Readiness, addressing product functionality; 3) Supplier
Readiness, addressing the preparedness of key suppliers to the Company and 4)
Customer Readiness, addressing customer support. For each readiness area, the
Company is performing a risk assessment, conducting testing and remediation,
developing contingency plans to mitigate unknown risks and communicating with
employees, suppliers, customers and other third parties to raise awareness of
the Y2K problem.
Internal Infrastructure Readiness: The Company, assisted by third parties, has
completed an assessment of internal applications and computer hardware. Some
software applications have been made Y2K compliant and resources have been
assigned to address other applications based on their importance and the time
required to make them Y2K compliant. All software remediation is expected to be
completed no later than June 1999. The Y2K compliance evaluation of hardware,
including hubs, routers, telecommunication equipment, workstations and other
items is expected to be completed by June 1999.
In addition to applications and information technology hardware, the Company is
in the process of assessing, testing and remediating its non-information
technology systems including embedded systems, facilities and other operations.
The Company expects to have this work completed by August 1999.
11
<PAGE> 12
COHU, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
MARCH 31, 1999
BUSINESS AND MARKET RISKS (CONT.)
Product Readiness: This program focuses on identifying and resolving Y2K issues
existing in the Company's products. The program encompasses a number of
activities including testing, evaluation, engineering and manufacturing
implementation. Customers are being notified of known risk areas and proposed
remediation plans. The Company has made Y2K retrofits available to certain
customers and expects to have retrofits available for all customers by June
1999. A contingency team will be available after June 1999 to assist those
customers experiencing difficulties with the Company's products.
Supplier Readiness: This program focuses on minimizing the risks associated with
key suppliers. The Company has identified and contacted key suppliers to solicit
information on their Y2K readiness. To date, the Company has received responses
from the majority of its key suppliers most of whom indicate that they believe
products provided to the Company are either Y2K compliant or will be made Y2K
complaint on a timely basis. Based on the Company's assessment of each
supplier's progress to adequately address the Y2K issue, the Company is
developing a supplier action list and contingency plans. Supplier readiness
issues that potentially affect the Company's products are expected to be
addressed by June 1999.
Customer Readiness: This program focuses on customer support, including the
coordination of retrofit activity and developing contingency plans where
appropriate. The Company is currently working with its customers to develop and
implement potential retrofit or upgrade programs and offering assistance in
making its products Y2K compliant.
The Company estimates that total Y2K costs will be approximately $500,000, the
great majority of which will be incurred by January 2000. Y2K costs incurred
through March 31, 1999 have been charged to operations and have not been
material. The Company is continuing its assessments and developing alternatives
that will necessitate refinement of this estimate over time. There can be no
assurance, however, that there will not be a delay in, or increased costs
associated with, the programs described in this section.
Since the efforts described above are ongoing, all potential Y2K complications
have not yet been identified. Therefore, the potential impact of these
complications on the Company's financial condition and results of operations
cannot be determined at this time. If computer systems used by the Company or
its suppliers, the performance of products provided to the Company by suppliers,
or the software applications used in products manufactured and sold by the
Company, fail or experience significant difficulties related to Y2K, the
Company's results of operations and financial condition could be materially
adversely affected.
Due to all the above and other factors, historical results may not be indicative
of results of operations for any future period. In addition, certain matters
discussed above are forward-looking statements that are subject to the risks and
uncertainties noted herein and the other risks and uncertainties listed from
time to time in the Company's filings with the Securities and Exchange
Commission, including but not limited to the 1998 Annual Report on Form 10-K,
that could cause actual results to differ materially from those projected or
forecasted. The Company undertakes no obligation to update the information,
including the forward-looking statements, in this Form 10-Q.
12
<PAGE> 13
Part II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
27.1 - Financial Data Schedule
(b) Reports on Form 8-K: The Company did not file any reports on Form
8-K during the quarter ended March 31, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COHU, INC.
----------------------------------------
(Registrant)
Date: April 22, 1999 /s/ Charles A. Schwan
------------------------- ----------------------------------------
Charles A. Schwan
President & Chief Executive Officer
Date: April 22, 1999 /s/ John H. Allen
------------------------- ----------------------------------------
John H. Allen
Vice President, Finance & Chief
Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 1999
FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 60,574
<SECURITIES> 26,420
<RECEIVABLES> 18,356
<ALLOWANCES> 0
<INVENTORY> 28,046
<CURRENT-ASSETS> 145,362
<PP&E> 32,668
<DEPRECIATION> 15,393
<TOTAL-ASSETS> 163,784
<CURRENT-LIABILITIES> 23,980
<BONDS> 0
0
0
<COMMON> 9,828
<OTHER-SE> 128,457
<TOTAL-LIABILITY-AND-EQUITY> 163,784
<SALES> 29,526
<TOTAL-REVENUES> 29,526
<CGS> 19,164
<TOTAL-COSTS> 19,164
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,091
<INCOME-TAX> 700
<INCOME-CONTINUING> 1,391
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,391
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
</TABLE>
