8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 21, 2010

Cohu, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-04298	95-1934119
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)
12367 Crosthwaite Circle, Poway, California		92064
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:  858-848-8100

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On July 21, 2010, Cohu, Inc. (the “Company”) issued a press release regarding its financial results for the second fiscal quarter ended June 26, 2010. The Company’s press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.

The information in this Item 2.02 of this Current Report on Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

In addition to financial results determined in accordance with generally accepted accounting principles (“GAAP”), the earnings press release also contains financial information determined by methods other than in accordance with GAAP. The Company’s management uses these non-GAAP measures in their analysis of the Company’s performance. 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 acquired intangible assets, inventory step-up adjustments and the deferred tax asset valuation allowance. 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 believes these non-GAAP measures allow investors to evaluate the Company’s financial performance using some of the same measures as management. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Item 9.01 Financial Statements and Exhibits.

The exhibit listed below is being furnished with this Current Report on Form 8-K.

Exhibit No. — 99.1

Description — Second Quarter 2010 Earnings Release, dated July 21, 2010, of Cohu, Inc.

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 hereunto duly authorized.

	Cohu, Inc.
July 22, 2010	By:	Jeffrey D. Jones Name: Jeffrey D. Jones
		Title: VP Finance and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
99.1	Second Quarter 2010 Earnings Release, dated July 21, 2010, of Cohu, Inc

EX-99.1

Exhibit 99.1

Cohu Reports Second Quarter 2010 Operating Results

POWAY, Calif., July 21, 2010 — Cohu, Inc. (NASDAQ:COHU) today reported fiscal 2010 second quarter net sales of $74.9 million and GAAP net income of $6.7 million or $0.28 per share. Net sales for the first six months of 2010 were $139.7 million and GAAP net income was $7.6 million or $0.32 per share.

The Company also reported non-GAAP results, with second quarter 2010 net income of $8.7 million or $0.36 per share and net income of $11.8 million or $0.49 per share for the first six months of 2010.

GAAP Results

	Q2 FY 2010	Q1 FY 2010	Q2 FY 2009
Net sales	$74.9 million	$64.8 million	$38.4 million
Net income (loss)	$6.7 million	$0.9 million	$(22.6) million
Income (loss) per share	$0.28	$0.04	$(0.97)

	6 Months 2010	6 Months 2009
Net sales	$139.7 million	$75.0 million
Net income (loss)	$7.6 million	$(28.9) million
Income (loss) per share	$0.32	$(1.24)

Non-GAAP Results

	Q2 FY 2010	Q1 FY 2010	Q2 FY 2009
Non-GAAP net income (loss)	$8.7 million	$3.1 million	$(1.4) million
Non-GAAP income (loss) per share	$0.36	$0.13	$(0.06)

	6 Months 2010	6 Months 2009
Non-GAAP net income (loss)	$11.8 million	$(6.1) million
Non-GAAP income (loss) per share	$0.49	$(0.26)

Sales of semiconductor equipment accounted for 87.6% of fiscal 2010 second quarter sales. Microwave communications equipment and video cameras and related equipment contributed 6.5% and 5.9%, respectively, for the same period.

Orders were $95.4 million for the second quarter of 2010 and $81.8 million for the first quarter of 2010. Orders for semiconductor equipment were $84.8 million in the second quarter of 2010 compared to $74.7 million in the first quarter of 2010. Total consolidated backlog was $116.6 million at June 26, 2010 compared to $96.1 million at March 27, 2010. Cohu expects third quarter 2010 sales to be approximately $83 million.

James A. Donahue, Chairman, President and Chief Executive Officer stated, “On a 15% sequential increase in sales, Cohu’s Q2 non-GAAP operating income increased to 14.9% compared to 6.3% in Q1. Consolidated and semiconductor equipment orders of $95.4 million and $84.8 million, respectively, are new company records. We obtained initial customer acceptance of our new Pyramid thermal handler, enabling Cohu to recognize revenue associated with multiple Pyramid handlers in Q2.”

Donahue concluded, “Unit orders for handlers increased by 32% compared to the first quarter and demand was strong for both pick-and-place and gravity systems. Equipment utilization on customer test floors remains high, forecasts are strong and order momentum has continued into the third quarter.”

Cohu’s Board of Directors approved a quarterly cash dividend of $0.06 per share payable on October 29, 2010 to shareholders of record on September 3, 2010. Cohu has paid consecutive quarterly cash dividends since 1977.

Use of Non-GAAP Financial Information:

Included within this press release are non-GAAP financial measures 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 acquired intangible assets, inventory step-up adjustments and the deferred tax asset valuation allowance. 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.

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 believes these non-GAAP measures allow investors to evaluate Cohu’s financial performance using some of the same measures as management. However, the non-GAAP financial measures should not be regarded as a replacement for (or superior to) corresponding, similarly captioned, GAAP measures.

Forward Looking Statements:

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

About Cohu:

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

Cohu will be conducting their conference call on Wednesday, July 21, 2010 at 1:30 p.m. Pacific Time/4:30 p.m. Eastern Time. The call will be webcast at www.cohu.com. Replays of the call can be accessed at www.cohu.com.

For press releases and other information of interest to investors, please visit Cohu’s website at www.cohu.com. Contact: Jeffrey D. Jones — Investor Relations (858) 848-8106

COHU, INC.
CONDENSED 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,
	2010		2009			2010		2009
Net sales	$	74,869	$	38,424		$	139,699	$	75,006
Cost and expenses:
Cost of sales		47,441		26,096			92,272		55,283
Research and development		9,012		7,773			17,661		15,738
Selling, general and administrative		9,489		8,655			19,368		17,700
		65,942		42,524			129,301		88,721
Income (loss) from operations		8,927		(4,100	)		10,398		(13,715	)
Interest and other, net		138		343			312		826
Income (loss) before income taxes		9,065		(3,757	)		10,710		(12,889	)
Income tax provision (2)		2,367		18,848			3,105		15,978
Net income (loss)	$	6,698	$	(22,605	)	$	7,605	$	(28,867	)
Income (loss) per share:
Basic	$	0.28	$	(0.97	)	$	0.32	$	(1.24	)
Diluted	$	0.28	$	(0.97	)	$	0.32	$	(1.24	)
Weighted average shares used in computing income (loss) per share (3):
Basic		23,657		23,381			23,603		23,362
Diluted		24,086		23,381			23,978		23,362

(1)	The three- and six-month periods ended June 26, 2010 and June 27, 2009 were each comprised of 13 weeks and 26 weeks, respectively.
(2)	During the second quarter of 2009, the Company recorded a charge of $19.6 million for an increase in the valuation allowance against deferred tax assets.
(3)	For the three- and six-month periods ended June 27, 2009, potentially dilutive securities were excluded from the per share computations due to their antidilutive effect.

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

	June 26,		December 26,
	2010		2009
Assets:
Current assets:
Cash and investments	$	89,926	$	84,906
Accounts receivable		55,114		43,389
Inventories		61,860		52,428
Deferred taxes and other		9,725		12,827
Total current assets		216,625		193,550
Property, plant & equipment, net		37,666		38,006
Goodwill		56,461		61,764
Intangible assets, net		27,793		35,483
Other assets		2,061		1,315
Total assets	$	340,606	$	330,118
Liabilities & Stockholders’ Equity:
Current liabilities:
Deferred profit	$	11,707	$	5,322
Other current liabilities		56,910		48,631
Total current liabilities		68,617		53,953
Deferred taxes and other noncurrent liabilities		18,678		18,916
Stockholders’ equity		253,311		257,249
Total liabilities & stockholders’ equity	$	340,606	$	330,118

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,
	2010			2010			2009
Income (loss) from operations — GAAP basis (a)	$	8,927		$	1,471		$	(4,100	)
Non-GAAP adjustments:
Share-based compensation included in (b):
Costs of goods sold		68			81			89
Research and development		204			262			270
Selling, general and administrative		474			492			483
		746			835			842
Amortization of intangible assets included in (c):
Costs of goods sold		1,284			1,361			1,311
Research and development		—			—			—
Selling, general and administrative		204			216			208
		1,488			1,577			1,519
Inventory step-up included in costs of goods sold (d)		—			180			—
Income (loss) from operations — non-GAAP basis (e)	$	11,161		$	4,063		$	(1,739	)
Net income (loss) — GAAP basis	$	6,698		$	907		$	(22,605	)
Non-GAAP adjustments (as scheduled above)		2,234			2,592			2,361
Tax effect of non-GAAP adjustments (f)		(274	)		(384	)		(682	)
Non-cash increase of valuation allowances (g)		—			—			19,551
Net income (loss) — non-GAAP basis	$	8,658		$	3,115		$	(1,375	)
GAAP net income (loss) per share — diluted	$	0.28		$	0.04		$	(0.97	)
Non-GAAP net income (loss) per share — diluted (h)	$	0.36		$	0.13		$	(0.06	)

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 has excluded inventory step-up costs associated with our acquisition of Rasco, primarily because it is not reflective of our ongoing operating results, and is not used by management to assess the core profitability of our business operations. Additionally, management does not consider charges to the deferred tax valuation allowance as related to the Company’s operational performance and, as such, has excluded them to provide a better understanding of the company’s underlying operational results and a more meaningful basis for comparison with our historical and future results. However, the non-GAAP financial measures should not be regarded as a replacement for corresponding, similarly captioned, GAAP measures. The presentation of non-GAAP financial measures above may not be comparable to similarly titled measures reported by other companies and investors should be careful when comparing our non-GAAP financial measures to those of other companies.

(a)	11.9%, 2.3% and (10.7)% of net sales, respectively.
(b)	To eliminate compensation expense for employee stock options, restricted stock units and our employee stock purchase plan.
(c)	To eliminate the amortization of intangible assets acquired in the fiscal 2008 acquisition of Rasco, the fiscal 2007 acquisition of Tandberg Television AVS GmbH and the fiscal 2006 acquisition of Unigen.
(d)	To eliminate the inventory step-up associated with certain semiconductor test systems sold.
(e)	14.9%, 6.3% and (4.5)% of net sales, respectively.
(f)	To adjust the provision (benefit) for income taxes related to the adjustments described in notes (b) and (c) above based on applicable tax rates.
(g)	To exclude the non-cash net impact on the tax provision pertaining to the increase of the deferred asset valuation allowance.
(h)	Computed using number of GAAP diluted shares outstanding for each period presented.

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,
	2010			2009
Income (loss) from operations — GAAP basis (a)	$	10,398		$	(13,715	)
Non-GAAP adjustments:
Share-based compensation included in (b):
Costs of goods sold		149			147
Research and development		466			474
Selling, general and administrative		966			929
		1,581			1,550
Amortization of intangible assets included in (c):
Costs of goods sold		2,645			2,614
Research and development		—			—
Selling, general and administrative		420			415
		3,065			3,029
Inventory step-up included in costs of goods sold (d)		180			—
Income (loss) from operations — non-GAAP basis (e)	$	15,224		$	(9,136	)
Net income (loss) — GAAP basis	$	7,605		$	(28,867	)
Non-GAAP adjustments (as scheduled above)		4,826			4,579
Tax effect of non-GAAP adjustments (f)		(658	)		(1,387	)
Non-cash increase of valuation allowance (g)		—			19,551
Net income (loss) — non-GAAP basis	$	11,773		$	(6,124	)
GAAP net income (loss) per share — diluted	$	0.32		$	(1.24	)
Non-GAAP net income (loss) per share — diluted (h)	$	0.49		$	(0.26	)

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 has excluded inventory step-up costs associated with our acquisition of Rasco, primarily because it is not reflective of our ongoing operating results, and is not used by management to assess the core profitability of our business operations. Additionally, management does not consider charges to the deferred tax valuation allowance as related to the Company’s operational performance and, as such, has excluded them to provide a better understanding of the company’s underlying operational results and a more meaningful basis for comparison with our historical and future results. However, the non-GAAP financial measures should not be regarded as a replacement for corresponding, similarly captioned, GAAP measures. The presentation of non-GAAP financial measures above may not be comparable to similarly titled measures reported by other companies and investors should be careful when comparing our non-GAAP financial measures to those of other companies.

(a)	7.4% and (18.3)% of net sales, respectively.
(b)	To eliminate compensation expense for employee stock options, restricted stock units and our employee stock purchase plan.
(c)	To eliminate the amortization of intangible assets acquired in the fiscal 2008 acquisition of Rasco, the fiscal 2007 acquisition of Tandberg Television AVS GmbH, the fiscal 2006 acquisition of Unigen.
(d)	To eliminate the inventory step-up associated with certain semiconductor test systems sold.
(e)	10.9% and (12.2)% of net sales, respectively.
(f)	To adjust the provision (benefit) for income taxes related to the adjustments described in notes (b), (c) and (d) above based on applicable tax rates.
(g)	To exclude the non-cash net impact on the tax provision pertaining to the increase of the deferred tax asset valuation allowance.
(h)	Computed using number of GAAP diluted shares outstanding for each period presented.