-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F9YnlFFPUNvprHAs7E8pnNYkgGdIWRYsMk0Q/5dCssY7RhXpXtfMkGZMDeeM6Wn0 lVcj3GA/K3Kf4G//+odrgg== 0000936392-96-000133.txt : 19960506 0000936392-96-000133.hdr.sgml : 19960506 ACCESSION NUMBER: 0000936392-96-000133 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960503 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COHU INC CENTRAL INDEX KEY: 0000021535 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 951934119 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04298 FILM NUMBER: 96555832 BUSINESS ADDRESS: STREET 1: 5755 KEARNY VILLA RD CITY: SAN DIEGO STATE: CA ZIP: 92123 BUSINESS PHONE: 6192776700 MAIL ADDRESS: STREET 1: 5755 KEARNY VILLA ROAD CITY: SAN DIEGO STATE: CA ZIP: 92123 FORMER COMPANY: FORMER CONFORMED NAME: COHU ELECTRONICS INC DATE OF NAME CHANGE: 19720809 10-Q 1 COHU, INC. -- FORM 10-Q ENDING 3/31/96 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, 1996 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, 1996, the Registrant had 9,237,805 shares of its $1.00 par value common stock outstanding. 2 COHU, INC. INDEX FORM 10-Q MARCH 31, 1996 PART I FINANCIAL INFORMATION Item 1. Condensed Consolidated Balance Sheets March 31, 1996 (unaudited) and December 31, 1995...................3 Condensed Consolidated Statements of Income (Unaudited) Three Months Ended March 31, 1996 and 1995........................4 Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, 1996 and 1995.........................5 Notes to Unaudited Condensed Consolidated Financial Statements.....6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations......................7 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K...................................9 Signatures.................................................................9 2 3 COHU, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
ASSETS MARCH 31, 1996 DECEMBER 31, 1995 -------------- ----------------- (Unaudited) Current assets: Cash and cash equivalents $ 34,666 $ 28,874 Accounts receivable, less allowance for doubtful accounts 27,425 27,572 Inventories, at lower of average cost or market: Finished goods 4,772 3,466 Work in process 9,192 7,759 Raw materials and purchased parts 9,929 10,019 -------- -------- 23,893 21,244 Deferred income taxes 9,413 9,413 Prepaid expenses 1,004 973 -------- -------- Total current assets 96,401 88,076 Property, plant and equipment, at cost: Land and land improvements 1,150 1,150 Buildings and building improvements 11,437 10,355 Machinery and equipment 13,090 11,697 -------- -------- 25,677 23,202 Less accumulated depreciation and amortization 10,354 10,031 -------- -------- Net property, plant and equipment 15,323 13,171 Goodwill, net 2,587 2,626 Other assets 60 61 -------- -------- $114,371 $103,934 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 12,259 $ 7,453 Income taxes payable 6,715 7,062 Other accrued liabilities 14,467 16,333 -------- -------- Total current liabilities 33,441 30,848 Accrued retiree medical benefits 881 859 Deferred income taxes 198 198 Stockholders' equity: Preferred stock - - Common stock 9,238 9,092 Paid in excess of par 4,495 4,252 Retained earnings 66,118 58,685 -------- -------- Total stockholders' equity 79,851 72,029 -------- -------- $114,371 $103,934 ======== ========
See accompanying notes. 3 4 COHU, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands, except per share amounts)
Three Months Ended March 31, 1996 1995 ------- ------- Net sales $50,232 $32,182 Cost and expenses: Cost of sales 27,348 19,359 Research and development 3,528 2,235 Selling, general and administrative 6,873 4,932 ------- ------- Income from operations 12,483 5,656 Interest income 411 34 Interest expense - (10) ------- ------- Income before income taxes 12,894 5,680 Provision for income taxes 5,000 2,200 ------- ------- Net income $ 7,894 $ 3,480 ======= ======= Net income per share $ 0.81 $ 0.37 ======= ======= Average common shares and equivalents 9,705 9,396 ======= =======
See accompanying notes. 4 5 COHU, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three Months Ended March 31, 1996 1995 ------- ------- Cash flows from operating activities: Net income $ 7,894 $ 3,480 Adjustments to reconcile net income to net cash provided from operating activities: Depreciation and amortization 362 394 Daymarc earnout to be paid in stock 414 - Increase in accrued retiree medical benefits 22 14 Changes in assets and liabilities: Accounts receivable 147 (2,551) Inventories (2,649) (2,303) Prepaid expenses (31) (41) Accounts payable 4,806 4,085 Income taxes payable (347) 1,236 Other accrued liabilities (2,280) (1,203) ------- ------- Net cash provided from operating activities 8,338 3,111 Cash flows from investing activities: Purchases of property, plant, equipment and other assets (2,474) (174) ------- ------- Net cash used for investing activities (2,474) (174) Cash flows from financing activities: Reduction in long-term borrowings - (1,400) Issuance of stock, net 389 319 Cash dividends (461) (312) ------- ------- Net cash used for financing activities (72) (1,393) ------- ------- Net increase in cash and cash equivalents 5,792 1,544 Cash and cash equivalents at beginning of period 28,874 3,096 ------- ------- Cash and cash equivalents at end of period $34,666 $ 4,640 ======= ======= Supplemental disclosure of cash flow information: Cash paid during the period for: Income taxes $ 5,335 $ 964 Interest - 10
See accompanying notes. 5 6 COHU, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1996 1 - The accompanying interim financial statements are unaudited but include all adjustments (consisting of normal recurring adjustments) which the Company considers necessary for a fair statement of the results for the period. The operating results for the three months ended March 31, 1996 are not necessarily indicative of the operating results for the entire year. These financial statements should be read in conjunction with the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. 2 - Per share information is based on the weighted average number of shares outstanding during each period and the dilutive effect of the assumed exercise of stock options. 3 - In October 1995, the Financial Accounting Standards Board (FASB) issued statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation," which provides an alternative to APB Opinion No. 25, "Accounting for Stock Issued to Employees," in accounting for stock-based compensation issued to employees. The Statement allows for a fair value-based method of accounting for employee stock options and similar equity instruments. However, for companies that continue to account for stock-based compensation arrangements under Opinion No. 25, Statement No. 123 requires disclosure of the pro forma effect on net income and earnings per share of its fair value-based accounting for those arrangements. These disclosure requirements are effective for fiscal years beginning after December 15, 1995. The Company plans to continue to account for stock-based compensation under Opinion No. 25. In March 1995, the FASB issued Statement No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. Statement 121 also addresses the accounting for long-lived assets for which disposal is expected. The Company adopted Statement 121 in the first quarter of 1996 and such adoption did not have a material impact on its financial condition and results of operations. 6 7 COHU, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS MARCH 31, 1996 RESULTS OF OPERATIONS Net sales increased 56% to $50.2 million in the first quarter of 1996 compared to net sales of $32.2 million in 1995. Sales of semiconductor test handling equipment by the Company's Delta Design and Daymarc subsidiaries increased an aggregate of 73% in 1996 and accounted for 82% of consolidated net sales in the first quarter of 1996. Sales of television cameras and equipment increased 5% while the combined sales of metal detection and microwave equipment increased 13% over 1995. Gross margin as a percentage of net sales in the first quarter of 1996 was approximately 46% versus 40% in 1995. The increase in margin was due to the increasing percentage of total net sales attributable to semiconductor equipment which has higher margins than television and other equipment. Within the semiconductor equipment segment margins improved due to production efficiencies, volume material purchase discounts, price increases in certain product lines and reduced provisions for excess and obsolete inventories as a percentage of net sales. Research and development expense as a percentage of net sales was 7% in the first quarter of 1996 and 1995. Selling, general and administrative expense increased 39% in 1996 over 1995 but decreased as a percentage of net sales from 15% to 14%. Interest income in the quarter increased to $.4 million due to the significant increase in cash and cash equivalents. The provision for income taxes expressed as a percentage of pre-tax income was 39% in the first quarter of 1996 and for the year ended December 31, 1995. For the first fiscal quarter, as a result of the factors set forth above, net income increased 127% to $7.9 million in 1996 from $3.5 million in 1995. LIQUIDITY AND CAPITAL RESOURCES The Company's net cash flows generated from operating activities in the first quarter of 1996 totaled $8.3 million. The major components of cash flows from operating activities were net income of $7.9 million, increased inventory of $2.6 million and increased accounts payable of $4.8 million due mainly to inventory purchases. Net cash used for investing activities was $2.5 million and was used for the purchase of property, plant and equipment. Net cash used for financing activities was $72,000. Cash used for financing activities included $.5 million for the payment of dividends offset by $.4 million received from the issuance of stock upon the exercise of stock options. The Company has $3 million available under its bank line of credit and working capital of $63 million at March 31, 1996. It is anticipated that present working capital, profitable operations and available borrowings under the line of credit will be sufficient to meet the Company's 1996 operating requirements and the remaining anticipated capital expenditures for 1996 of approximately $2.5 million. BUSINESS RISKS AND UNCERTAINTIES The Company's operating results are substantially dependent on the semiconductor test handling equipment business conducted through its Delta Design and Daymarc subsidiaries. This capital equipment business is in turn highly dependent on the overall strength of the semiconductor industry. Worldwide demand for semiconductors has historically been subject to substantial cyclical swings and price volatility. The Company's favorable operating results in 1995 and the first quarter 7 8 COHU, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS BUSINESS RISKS AND UNCERTAINTIES (cont.) of 1996 benefited from the record growth in worldwide demand for and production of semiconductors. There can be no assurance that such growth can be sustained. Recent announcements by certain semiconductor manufacturers and the declining book to bill ratio indicate there has been a slowdown in demand for semiconductors, particularly in the personal computer market. This slowdown may impact the Company's operating results in the second half of 1996. In addition, as is common in the industry, the Company relies on a limited number of customers for a substantial percentage of its net sales (two customers accounted for 37% of net sales in the first quarter of 1996 and 35% for the year ended December 31, 1995). The loss of or a significant reduction in orders by either of these or other significant customers not compensated for by other customer orders could adversely impact the Company's annual and quarter to quarter results of operations. 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 that enable semiconductor manufacturers to handle and test semiconductors more efficiently. 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 competitive position and reduced sales of existing products. Due to these and other factors, historical results may not necessarily 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 risk factors listed from time to time in the Company's SEC reports, including but not limited to the 1995 Annual Report on Form 10-K, that could cause actual results to differ materially from those projected or forecasted. 8 9 PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (A) Exhibits: 27.1 - Financial Data Schedule (Filed electronically) (B) Reports on Form 8-K: The Company did not file any reports on Form 8-K during the quarter ended March 31, 1996. 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 30, 1996 /s/ Charles A. Schwan --------------------------- ------------------------------- Charles A. Schwan President & Chief Executive Officer Date: April 30, 1996 /s/ John H. Allen --------------------------- -------------------------------- John H. Allen Vice President, Finance & Chief Financial Officer 9 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 1995 AND 1996 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1995 JAN-01-1996 MAR-31-1996 34,666 0 27,425 0 23,893 96,401 25,677 10,354 114,371 33,441 0 9,238 0 0 70,613 114,371 50,232 50,232 27,348 27,348 0 0 0 12,894 5,000 7,894 0 0 0 7,894 .81 .81
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