 Cohu Investor and Analyst Day June 18, 2015 9:30 a.m. – 1:00 p.m. NASDAQ MarketSite – NY Times Square Exhibit 99.1 |
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2 June 18, 2015
.. Forward Looking Statements and Regulation FD Certain matters discussed in this presentation, including statements regarding our
growth strategy, market expansion, revenue growth rate, near and mid-term
financial models, orders, sales, revenues and operating results are
forward-looking statements that are subject to risks and uncertainties
that could cause actual results to differ materially from those projected
or forecasted. Such risks and uncertainties include, but are not limited
to, risks associated with our ability to penetrate new markets and market
growth rates, 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;
acquisitions; inventory, goodwill and other intangible asset
write-downs; our reliance on third-party contract manufacturers; failure to
obtain customer acceptance resulting in the inability to recognize revenue
and accounts receivable collection problems; customer orders may be
canceled or delayed; 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 presentation. |
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3 June 18, 2015
Schedule Event Presenter 9:30 a.m. – 10:00 a.m. Registration 10:00 a.m. – 10:25 a.m. Opportunities for Growth and Differentiation L. Müller 10:25 a.m. – 10:45 a.m. Pick-and-Place and Thermal Subsystems S. Kabbani 10:45 a.m. – 11:05 a.m. Gravity and Test-in-Strip, MEMS Test A. Waldauf 11:05 a.m. – 11:25 a.m. Turret and Vision Inspection I. von Fellenberg 11:25 a.m. – 12:05 p.m. TAM Expansion – Contactors and WLP Probing M. Schaule 12:05 p.m. – 12:25 p.m. Lunch 12:25 p.m. – 12:50 p.m. Delivering Profitability and Shareholder Value J. Jones 12:50 p.m. – 1:00 p.m. Closing Remarks L. Müller Agenda - June 18, 2015 at NASDAQ MarketSite |
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4 June 18, 2015
CEO Luis Müller Rasco Alex Waldauf Delta Design Samer Kabbani ITS Jim McFarlane Ismeca Ian von Fellenberg Corporate CFO Jeff Jones Finance & Administration John Allen Human Resources Anna Aguirre Functional Groups Sales & Service Hock Chiang Operations L. Müller - interim Senior Leadership Team Product Groups Technology Max Schaule Color photo denotes participants at this Investor & Analyst Day event |
 Opportunities for Growth
and Differentiation Luis Müller President and CEO June 18, 2015 |
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6 June 18, 2015
Note: All Cohu financial results in this presentation have been adjusted to exclude the results of BMS which was sold on June 10, 2015 Amounts are Non-GAAP and exclude amortization of purchased intangibles, stock based compensation expense, impairment of goodwill and other assets, inventory step-up costs, manufacturing transition and severance costs. See Appendix for reconciliation of GAAP to Non GAAP results. Strategy Yields Results NASDAQ: COHU is the global technology and market leader in Semiconductor Final Test and Inspection Handlers Leader in $850M handler market: #1 in Served
Markets *
* Company estimate
Delivered Strong Financial Results
• Sales increased 48% Year-on-Year to $317M • Gross margin improved by 520 bps • Generated EPS of $1.09 and LTM cash from operations of $37M Launched Innovative Products • New industry leading products in each business unit • Solving customer challenges with broadest technology portfolio • Focused on requirements in growth segments Expanded Market Share • Realized ~ $25M of sales synergies from Ismeca acquisition • Grew mobility share with key thermal technology • Outpaced industry growth; leader with ~ 40%* market share |
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7 June 18, 2015
Our Growth Strategy Amounts are Non-GAAP and exclude amortization of purchased intangibles, stock based compensation expense, impairment of goodwill and other assets, inventory step-up costs, manufacturing transition and severance costs. See Appendix for reconciliation of GAAP to Non GAAP results. Expand Share in Core Markets • Mobility, Automotive and LED • Optimizing test yield [1% yield improvement ~ 3x Handler Capex]
• Innovative technologies for growing segments – thermal, vision Increase TAM from $850M to $2B • New business unit (ITS) to drive growth in contactor market
• Opportunity to uniquely solve customer challenges and increase yield in testing of singulated Wafer-Level-Packages Deliver Profitable Growth • Reduce product costs and increase scalability with Asia mfg. • Invest in products and markets with attractive margin profiles • Increasing mid-term financial targets |
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8 June 18, 2015
Semiconductor Back-end Manufacturing
What is Test Handling? Handling is the automation and thermal control of semiconductors (ICs, LEDs, Opto, Discrete, Sensors)
during final test Enables higher yield for high ASP products Optimizes productivity through high-speed automation Front-end Test Singulation ~80% Assembly Wafer-Level-Packages Packaged ICs WLP Probing Test Contactors ~20% Package Handling Gravity Pick-and-Place Turret Test Consumable Back-end Test Handling |
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9 June 18, 2015
Consumer Trends Fueling Growth
IC unit volume –
6% CAGR Growing applications Vehicle IC content increasing – 11% CAGR Mobility & Comm. – mobile, IoT, sensors, ... LED – General Lighting 15% CAGR Emerging Tech. – Adv. Packaging Key customer challenges – Thermal Control, Vision, Frequency & Power test contacting -Mobile- -Automotive- -Server Farms- -LED- Advanced IC Packaging Package on Package (PoP) Adv. Packaging (3D TSV) Bare Die Solving Customer Challenges Expanding Applications * Source: The Worldwide IC Packaging Market – 2013 Edition, Yole Development and Company estimates * * * |
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10 June 18, 2015
2014 e2019 SAM * ~$260M ~$350M COHU share 52% Automotive & Industrial Markets Secular growth for ICs, Discretes and Sensors Automotive – 11% CAGR: connectivity, power, ADAS driving processors and high frequency radar sensors Industrial – 6% CAGR: renewables, aircraft, medical MATRiX NX32 Wafer Saturn *IC Insights and Company estimates * * $M $M * * |
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11 2014 e2019 SAM * ~$55M ~$110M COHU share 27% Solid State Lighting Market Applications for high power (>50 lm) LEDs General Lighting – 15% CAGR: industrial & outdoor Automotive – 10% CAGR: currently 3% penetration Automotive Headlamps Industrial High Bays Outdoor Street Lights Outdoor Area Lights Outdoor Stadium Lights Jaguar NY32 Wafer *Strategies in Light and Company estimates * * $M $M * * June 18, 2015 |
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12 June 18, 2015
2014 e2019 SAM * ~$310M ~$430M COHU share 29% Mobility Market – Processors & RF ICs Mega trend in smart, connected devices Processors – adv. mobile processors = active thermal RF – IoT driving billions of connected devices Eclipse ATC (Active Thermal
Control) *
* *IC Insights and Company estimates $M $M WLP Prober |
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13 June 18, 2015
Multiple Markets – Leading Solutions Automotive Industrial Solid State Lighting (LED) Mobility Communications MEMS Computing High Speed Memory Capital Equipment - IC Test Handlers - Package Inspection - LED Test, Sort, Taping ~60% of sales Recurring Business - Device Kits - Contactors - Service & Spares ~40% of sales Markets Pick-and-place test handlers and thermal sub-systems for burn-in and system-level test Gravity-feed and test-in-strip handlers, and MEMS test solutions Turret-based test and inspection handlers Business Units High performance test contactors A Cohu Company |
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14 June 18, 2015
Broad Product Portfolio – Test Handlers Diversified applications – breadth of products in $850M market Solving key customer challenges – innovative technologies & IP Platforms Enabling Technologies Markets Thermal Solutions ATU Acoustic MEMS Modules Die Inspection Alignment Actuators Package Inspection High Performance Kelvin Contactors PTU Pressure MTU Hall OTU Optic MATRiX Eclipse Saturn Jaguar NY20 NX32 (wafer and package) Pyramid T-Core LinX Jupiter Vision Solutions |
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15 June 18, 2015
Sales Synergies Cross-selling works – leveraging our leading customer support: More than doubled Rasco market share in the last 5 years Delivered $25M incremental sales in 2014 from the Ismeca acquisition Next – grow Contactors and WLP Probing |
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16 June 18, 2015
1 2 3 1 – Delta Design, Rasco, Ismeca growth strategies for share gains 2 – Core markets are converging with growth in RF connectivity 3 – Less volatile, sales synergies with Cohu leading handler share TAM Expansion – Contactors & WLP Test Expanding Total Available Market (TAM) from $850M to ~$2B with Contactors and Wafer-Level-Package (WLP) test Differentiating opportunities – test yield, thermal, high frequency Market sizes are Company estimates |
 Samer
Kabbani VP and GM, Delta Design
June 18, 2015 Pick-and-Place Thermal Subsystems |
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18 June 18, 2015
Alignment Actuators Pick-and-Place and Thermal Portfolio Market Leader in pick-and-place; best-in-class
thermal Addressable market ~ $370M Platforms
Enabling Technologies Markets Thermal Solutions Die Inspection Pyramid MATRiX Eclipse Vision Solutions T-Core LinX |
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19 Pervasive growth of processors in various end-markets
Seasonal, consumer driven markets – no longer PC-centric Thermal control becoming a critical challenge in IC test Markets Automotive High Performance Memory Mobility Computing Source: KPCB Computing Growth Drivers Over Time, 1960-2020E June 18, 2015 |
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20 June 18, 2015
Best in Class Active Thermal Control
Leading active thermal management incumbent position with a
large IP portfolio and know-how
Improved Thermal Control
(T-Core) = Optimized Test Yield ($$) 1% Yield benefits ~3x Handler Capex Broad / highly scalable thermal solutions covering various IC form factors and test processes |
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21 June 18, 2015
Computing: CPUs & GPUs Growth in Cloud and Gaming processor segments Market leader in CPU (Central Processing Unit)
and GPU (Graphics
Processing Unit)
test – Active thermal Developing next generation Test Handler with T-Core thermal for GPU and high-end CPU (server) – yield, multi-site test and flexibility Source: Intel Estimates Test Coverage Material Automation T-Core: Thermal Subsystems Pyramid: Thermal PnP Handler Final Test Burn In + SLT LinX: Automated material handing |
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22 June 18, 2015
Mobility: Application Processors
Increased functionality of next generation smart phone processors
driving need for active thermal control to optimize yield Delta Design is uniquely positioned to capitalize on the mobile test paradigm shift Secured key smart phone customer in 2014 with T-Core Subsystems Qualified new handler – Eclipse with T-Core – at large US-Fabless account in Q1 with follow-on qualifications at test subcontractors Application Processor Test Coverage Final Test Burn In + SLT T-Core Thermal Eclipse PnP 0 500 1000 1500 2000 2500 2010 2011 2012 2013 2014 PC Tablet Phablet Smart Phone Feature Phone Global Mobile Device Sales (M units)
Source: Gartner & Insight Media |
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23 June 18, 2015
Vehicle IC content growing at ~ 11% CAGR
Technology leadership in multi-site – cryogenic thermal MATRiX is the tri-temperature
(cold-hot) pick-and-place benchmark High Throughput High Parallelism MEMS Active Thermal Automotive: µControllers & Analog ICs MATRiX Average IC content per vehicle could double in the next 8 years* *IC Insights and Company estimates |
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24 June 18, 2015
New Opportunity: Advanced Memory
Server demand introducing disruptive memory IC test requirements
Memory IC has led transistor scaling and now 3D-IC packaging
(vertical structures) resulting in overheating challenges in
test Opportunity to solve customer challenge with T-Core thermal
Early win at a major advanced memory IC manufacturer
3D Memory IC Backend Test
In-Process Test Rasco’s Jaguar T-Core Thermal Pyramid PnP Final Test Burn In |
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25 June 18, 2015
Test Parallelism 32 16 4 8 2 Test Time (min) 0.1 0.2 0.4 1 2 4 8
10 15 60 120+ Breadth of Solutions 64 256 512 Logic Test Handlers Custom Batch Test Cells (Burn In / SLT) 128 512+ High Product Mix Higher Pin Count Low Product Mix Lower Pin Count (BiST) Industry’s largest pick-and-place test coverage offering leading solutions in Automotive, Mobility and Computing 2.5/3D packaging with embedded memory driving longer test time and higher power densities that benefits our thermal technology Summit Pyramid Eclipse MATRiX VTS-300 Fusion Emerging Emerging |
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26 June 18, 2015
Aligned with Growth Segments
MATRiX handler gaining share in
automotive applications with
extreme cold-hot test capability
Incumbent leader in CPU & GPU
fueling IP for emerging markets
T-Core thermal engine capturing
customers in evolving Mobile and
Advanced Memory markets
Positioned to benefit from emerging thermal challenges in IC test
$M $M $M $M *IC Insights, Strategies in Light and Company estimates * * * * |
 Gravity
and Test-in-Strip MEMS Test
Alex Waldauf VP and GM, Rasco June 18, 2015 |
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28 June 18, 2015
Gravity & Strip, MEMS Test Portfolio
Market Leader in gravity segment
Addressable market ~
$220M Markets
Platforms Enabling Technologies ATU Acoustic MEMS Modules PTU Pressure MTU Hall OTU Optic Saturn Jupiter Jaguar |
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29 June 18, 2015
Markets 90% Automotive and Industrial mainly power management ICs
Energy requirements driving growth of large packages
(Automotive & Industrial) and small devices
(Consumer) MEMS growth in mobility products is driving sensor
integration in small, difficult to handle packages
Opportunities in LED and High Performance Memory test
Body and Convenience
Driver Information & Entertainment
Powertrain and Transmission –
HEV Touchless Control and IoT Autonomous Driving |
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30 June 18, 2015
Power Management ICs Hybrid electrical vehicle and renewable energy ICs are growing (~8% CAGR) and driving the need for large package gravity handlers Mobile products are driving growth of small packages |
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31 June 18, 2015
New Products Driving Share Growth
Product Portfolio Differentiation: Highest quality – “zero defect” for automotive Leading cryogenic test capability: -60°C to +175°C Scalable platform for small to mid-size packages Rasco’s YieldBooster technology – electro-chemical yield optimization Jupiter Jaguar Saturn Market Leader - Innovation - Sales Synergies |
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32 June 18, 2015
MEMS Market MEMS sensors growing from $11B (2014) to fcst. $20B* (2020) Key drivers
– mobility, Internet-of-Things, automotive (ADAS)
Leading in Magnetic and Pressure in automotive applications * Yole Development – Status of the MEMS Industry 2015 Sensorization of the Electronics Industry * |
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33 MEMS Test $1M Test solution with handler + MEMS module 75% of the total Handlers $250K to $450K: amb or tri-temp x4 to x100 parallelism MEMS $50K to $350K: x8 acoustic to x100 gyro Testers are mostly simple, dedicated solutions (not “big iron” ATE) June 18, 2015 ATE $100K - $300K MEMS $50K - $350K HANDLER $250K - $450K |
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34 June 18, 2015
New Opportunities: 3D-IC and LED
3D-IC Market grow 52%+ CAGR
Jaguar Strip Handler
Total LED Market growth 20% CAGR
3D-IC packages (Advanced Memory)
may benefit from in-process test
control – opportunity for incremental Jaguar sales Parallel test of LED tiles could set a new cost benchmark in the industry and be an enabler to growth in general lighting – additional Jaguar growth opportunity *3D IC & TSV Interconnects 2012 Business Update, July 2012, Yole
Development |
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35 June 18, 2015
Positioned for Continued Growth
Doubled gravity share since
acquisition, largely through sales
synergies Leader in Magnetic and Pressure automotive MEMS applications New solution for multi-site LED test Bare die capability for testing advanced 3D-ICs in Memory Strong incumbent position and capturing new customers $M $M $M $M *IC Insights, Strategies in Light and Company estimates * * * * |
 Turret
and Vision Inspection Ian von Fellenberg
VP and GM, Ismeca June 18, 2015 |
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37 June 18, 2015
Turret Portfolio Market Leader in turret segment Addressable market ~ $260M Platforms
Enabling Technologies Markets Package Inspection Alignment Actuators Die Inspection Vision Solutions NX32 (wafer and package) NY20 |
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38 June 18, 2015
Markets High Performance Mixed Signal, RF devices, sensors and MEMS – connectivity, Internet-of-Things, portable and wearable devices, mobility, communication, cyber security and power management, Small signal & power discrete – mobility, industrial & automotive – very high volume Solid State Lighting – LEDs in automotive, outdoor / hi-bay lighting Cyber security Internet of Things Portable/Wearable Connected cars Mobility SSL- Lighting SSL - Automotive |
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39 June 18, 2015
Broad Process Capabilities
Product Portfolio: 2 platforms -
150 process modules Differentiation through technology Motion & force control thin, fragile device, down to 50 m Fast image processing µ-crack, 3D inspection Intelligent machine control scalability, flexibility High performance contacting high yield and long life time NY20 series 20 positions turret Wafer Contactors Inspection Tray Tube Inspection Bowl Tube Inspection Contactors NY32 series 32 positions turret NY32W Wafer series 32 positions turret |
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40 June 18, 2015
Enabling Technology: Vision
Fast & high accuracy image processing
New 3D vision technology for WLP inspection
High speed true 3D inspection –
Moiré interferometry 3D imaging of WLP Micro crack in silicon die 5 Side inspection Few micron cracks 3D Flex – Miniaturized Module Inspects up to 30,000 parts/hour |
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41 June 18, 2015
HPMS, RF, Sensors & MEMS
Represents approx. half of revenues
Markets with double digit growth rates
Higher end applications –
Ismeca profits from Cohu synergies
Thin & fragile device handling, WLPs
High Vision inspection requirements
20 billion in 2018 Internet of Things |
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42 June 18, 2015
Small Signal & Power Discrete
Small Signal & Power Discrete
(e.g. 0.2 x 0.4 mm) NY20: 1 million / day Represents approximately 30% of revenues Steady growth, low single digits, cyclical Very high volume – standard products (transistors,
diodes) Strong incumbent position, large installed base
NY20 highest productivity solution in the market |
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43 June 18, 2015
Solid State Lighting Approximately 20% of revenues High & super high power LED Automotive and outdoor lighting with double digit growth rates Higher requirements for test reliability, vision, traceability, fragile devices Headlamps 22% to 42% LED in Automotive Exterior Source: Strategies Unlimited February 2015 LED in Outdoor Luminaires Source: Strategies Unlimited February 2015 |
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44 June 18, 2015
Expanding Test & Inspection Capabilities
Leader in small device handling
for mobility, portable and
wearables, IoT, cyber security
Best solution for integrated test
and scan processes for WLPs
Optimized test reliability for high power SSL applications Leverage sales and product synergies to accelerate growth Benefiting from “connected world” and new lighting technology $M $M 2012
2020 *IC Insights, Strategies in Light
and Company estimates *
* * Internet of Things * |
 TAM
Expansion: Contactors Max Schaule
Chief Technologist June 18, 2015 |
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46 June 18, 2015
Semiconductor Back-end Manufacturing
What is Test Contacting? Front-end Test Singulation ~80% Assembly Wafer-Level-Packages Packaged ICs TAM Expansion Test Contactors ~20% Mechanical and signal path interface between Handlers and Testers Consumables: contacts
wear-out and are replaced multiple times a year Yield Improvement: YieldBooster technology optimizes overall
test efficiency Accurately positions IC
Thermally conditions IC
Signal path interface
to tester
Package Handling Gravity Pick-and-Place Turret Back-end Test Handling Test Consumable WLP Probing |
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47 June 18, 2015
Total available market $650M
higher margin than equipment
Growing with IC unit volume, not tied to
Capex – less volatile Fragmented market – no supplier has greater than 10% share Spring Probes $490M segment 2014 e2019 SAM * ~$650M ~$825M COHU share 2.6% Test Contacting Market * Source: VLSI Research and Company estimates Cantilever Contacts $90M segment Rocking Contacts $70M segment Courtesy of Ardent Concepts * * * * |
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48 June 18, 2015
Strategy Markets Cohu Handler Share * Technology Differentiation Automotive and Industrial 52% • Cantilever and Kelvin • Thermal management • Kelvin for high current & voltage Consumer Mobility, Communications 29% • Spring Probes • Cantilever • Rocking • Signal integrity • Small device & WLP • Positional accuracy Mobile and Computing (processors) & High Speed Memory 26% • Spring Probes • Thermal management MEMS & LED 27% • Cantilever and Kelvin • Spring Probes • Integration & thermal • MEMS requirements Aligning with strong Cohu handler share in key markets Automotive, Industrial, LED: thermal and high voltage/current Kelvin
Mobility, Comm., Computing: RF, small device, tight
pitch, thermal Drive consolidation and growth
*Company estimates |
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49 June 18, 2015
Gravity
MEMS Pick & Place
Test in
Strip LED Turret
Spring Probes up to 80 GHz Cantilever Precision Series Cantilever Kelvin Power Series Integrated Solutions RF Exact Small Kelvin ESX ESX Power G-Pin Expanding Product Portfolio Available for all Cohu Handlers and competitors’ systems New products aligning with growth markets |
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50 June 18, 2015
Our Value Proposition Integration – leveraging our leading handler share to solve the greater parallelism and complexities challenging test yield at key customers Technology – solving key market challenges Automotive & Industrial: better thermal control, insertion force compensation, safe high voltage/current applications Consumer & Mobility: signal integrity at high frequency (RF, radar sensors), small device contacting Mobile and Computing: thermal management MEMS and LED: custom solutions for high insertion count/long-life applications MATRiX x32 test solution delivers thermal performance and support for the DUT board to withstand up to 1,000 lbs. insertion force Test In Strip application provides high temperature accuracy of +/-0.2°C for 170 DUT‘s in parallel |
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51 June 18, 2015
Market Penetration Roadmap
Grow business organically, through M&A and partnerships Strategy Expand in automotive and MEMS Accelerate growth in Consumer and Mobility Partnership for high bandwidth RF contactors Capturing pogo probes replacement sales Leverage synergy with handler customers Expand our Philippines operation for design and manufacturing of contactors *VLSI Research and Company estimates * $M $M |
 TAM
Expansion: WLP Probing Max Schaule
Chief Technologist June 18, 2015 |
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53 June 18, 2015
Semiconductor Back-end Manufacturing
What is WLP Probing? Probing is the automation and thermal control of wafer-level packages (WLPs) during test Enables higher yield for high ASP products Optimizes productivity through improved process flow Front-end Test Singulation ~80% Assembly Wafer-Level-Packages Packaged ICs Test Contactors ~20% Back-end Test Handling Test Consumable Gravity Pick-and-Place Turret WLP Probing Package Handling |
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54 June 18, 2015
WLP Growth Wafer Level Packages (WLPs) are growing faster than traditional packages and are expected to account for ~ 23% of total 300 mm wafers equivalents by 2017 Top growth driver is mobile consumer devices Mobile devices are becoming smaller, thinner, more complex and less expensive *Source: StatsChipPAC * *Yole Development, October 2012 * |
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55 June 18, 2015
WLP Market Drivers Smaller form factor, higher speed, broader RF bandwidth, less power consumption and lower costs are key drivers for WLPs Typical applications: power management, RF communication, stacked memory, MEMS sensors, LEDs and mobile processors A large percentage are tested on wafer probers before dicing – risk of inducing non-detectable damage during singulation WLPs would benefit from post-singulation test – improved yield Yole Developpement © January 2012 |
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56 June 18, 2015
Final test performed on wafer, prior to singulation – downstream mechanical processes can induce quality escapes and µ-cracks Devices are extensively vision inspected, creating large (5-25%) “over-rejection” rates – yield losses with no retest solution available Higher test parallelism leads to reduced touch-down efficiency in wafer test Today’s WLP Test Flow Test on Wafer prober Back grinding + Laser mark Singulation Dicing 5S Vision Tape & Reel x2 test x4 test Device-under-test Testable dies on wafer Untested touch-downs - inefficiency |
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57 June 18, 2015
New Approach in WLP Test Final test on finished die (WLP), 100% quality check after singulation – higher yield Stress free handling – no mechanical clamping (i.e. carriers) High parallel test – 100% touch-down efficiency Full process in one system – reduced material work-in-process Singulation Dicing Reconstruct wafer on AccuChuck “any pattern” High parallel Test on WLP Prober Vision Inspection Tape & Reel WLP Prober |
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58 June 18, 2015
Market Penetration Roadmap
Replace up to 20% of wafer
probing with new WLP test
flow Strategy to grow sales Singulated WLP probing improves final test yield Solve key challenges in RF and Power Mgmt. IC test Later expand to MEMS and processor front-end test Cohu has the technology portfolio to pursue this opportunity *VLSI Research and Company estimates * $M $M |
 Delivering Profitability and
Shareholder Value Jeff Jones VP Finance and CFO June 18, 2015 |
 Global
Operations & Customer Support Largest
installed base – drives recurring business 40% of sales Singapore Suzhou Philippines Malaysia San Diego Germany Switzerland Major Operations Sales/Customer Support ISMECA RASCO DELTA DESIGN KIT FACTORY Kit design & manufacturing Handler subassemblies Contactor design & manufacturing HANDLER FACTORY ~10,500 Active Installed Base ITS Asia manufacturing – optimizing operations to deliver model profitability, infrastructure flexibility and scalability Global support – a key competitive advantage June 18, 2015 Page 60 Supply Chain Volume Handler Mfg. |
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61 June 18, 2015
Asia Manufacturing Strategy
Malaysia operation acquired with Ismeca in 2013
Consolidating handler manufacturing and supply chain for all products
Converting fixed costs to variable by outsourcing major sub-
assemblies; performing value-add final assembly and test in-house
Consolidated facility in 1H’16 will provide better scalability and
higher leverage of fixed cost infrastructure
2013 2014 2015 Handler Mfg in Asia at Year End 25% 50% 70% Transition of first pick- and-place handler Initial gravity-feed handler transitioned in Q2’15 New products begin in late 2H’15 Ismeca turret handler manufacturing Malaysia Manufacturing Timeline Lowering Cost and Increasing Scalability – a Competitive Advantage |
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62 June 18, 2015
Realizing sales synergies from Ismeca acquisition ~$25M in
2014 New
products gaining in key segments – est. 5 pt share gain in 2014 Enhancing gross margin with Asia manufacturing +520 bps YoY
Broad customer base and diversified markets
Strategic Actions Delivering Results
Year-on-Year
2013 vs.
2014 $214.5M
30.4% $79.7M $(0.59) $316.6M 35.6% $77.6M $1.09 +48% +520 bps -$2.1M +$1.68 Amounts are Non-GAAP and exclude amortization of purchased intangibles, stock based compensation expense, impairment of
goodwill and other assets, inventory step-up costs,
manufacturing transition and severance costs.
See Appendix for reconciliation of GAAP to Non GAAP
results. Sales
GM OPEX EPS Orders $244.7M $308.1M +26% 2014 Sales Breakdown Rank Market % of Sales 1. Computing 15% 2. Mobility 9% 3. Automotive 8% 4. Automotive 5% 2014 Top Customers Rank Market % of Sales 1. Computing 15% 2. Mobility 9% 3. Automotive 8% 4. Automotive 5% 2014 Top Customers Automotive & Industrial, 45% LED, 5% Mobility, Comms & MEMS, 30% Computing & Memory, 20% |
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63 June 18, 2015
Profitable Through Cycles Amounts are Non-GAAP and exclude amortization of purchased intangibles, stock based compensation expense,
impairment of goodwill and other assets, inventory step-up costs,
manufacturing transition and severance costs. See Appendix
for reconciliation of GAAP to Non GAAP results. Revenue ($M)
Opex ($M) Adjusted EBITDA In-line with Financial Model Gross Margin Five quarters of profitable results Delivering adjusted EBITDA in-line with financial model Updated Q2’15 guidance from June 10, 2015 press release announcing the sale of BMS. * * * * * R&D SG&A ~ ~ ~ |
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64 June 18, 2015
First Half 2015 Profitable in seasonally slow Q1 Q1 GM comparable YoY excluding accounting impact in 2014 1H’15 Sales projected to be ~ 2% higher YoY 1H’15 projected results are in-line with financial model Year-on-Year Q1’14 vs. Q1’15
$60.2M 36.0% $20.3M $0.04 $63.4M 34.1% $18.5M $0.06 +5% -190 bps -$1.8M +$0.02 Q2’14 Q2’15 $74.3M 35.0% $19.3M $0.20 ~$73M ~36% ~flat Amounts are Non-GAAP and exclude amortization of purchased intangibles, stock based compensation expense, impairment of
goodwill and other assets, inventory step-up costs,
manufacturing transition and severance costs.
Sales GM OPEX EPS * * +100 bps Guidance ~$19M ~flat See Appendix for reconciliation of GAAP to Non GAAP results. Updated Q2’15 guidance from June 10, 2015 press release announcing the sale of BMS. * * (1) Benefits by ~ 230 bps from timing of high margin revenue recognition
(1) |
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65 June 18, 2015
Near Term Financial Model Gross Margin improving with Asia manufacturing transition Scalable model 40% Fall Through Target Effective Tax Rate in the low 20% range Revenue $55M $70M $85M Gross Margin 33% 36% 38% Operating Expenses 33% 28% 24% Adjusted EBITDA 0% 10% 15% EPS - Quarterly $0.00 $0.17 $0.36 Amounts are Non-GAAP and exclude amortization of purchased intangibles, stock based compensation expense, manufacturing
transition and severance costs. Assumes 26.5 million shares
outstanding. |
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66 June 18, 2015
Revenue $215M $317M $400M Gross Margin 30% 36% 40% Adjusted EBITDA - 5% 13% 17% Mid-Term Financial Target Acquired Ismeca in Jan 2013 - rationalized workforce, technologies and factories Developed new products across each business unit Began cross-selling customer evaluations Amounts are Non-GAAP and exclude amortization of purchased intangibles, stock based compensation expense, manufacturing
transition and severance costs.. 2013
Actual 2014 Actual Mid Term Target Realized sales synergies and growth in mobility market Improved gross margin with Asia mfg. and sales volume Lowered Opex - cost synergies and disciplined R&D investing TAM expansion in contactors and WLP probing Increasing Asia mfg. content Leverage in operating model |
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67 June 18, 2015
Strong Balance Sheet ($M)
Cash from operations LTM of $37M
Q1’15 cash balance ~ $70M (excludes
$5.5M proceeds from 6/10/15 sale of BMS)
$35M to support operations including Capex
of $3M - $5M per year $6M / year returned to shareholders through quarterly dividend Excess allocated to strategic growth opportunities Rationalizing excess capacity in Poway facility – current market value of $30M+ Healthy cash conversion cycle: No bank debt Assets 12/27/2014 3/28/2015 Cash & Equivalents $72.0 $69.7 Accounts Receivable 70.5 62.6 Inventory 49.2 53.0 Other Current Assets 12.8 11.9 Property & Equipment 31.9 30.7 Goodwill & Intangibles 96.2 91.4 Other Assets 5.9 5.4 Total Assets $338.5 $324.7 Liabilities Accounts Payable $25.1 $29.9 Deferred Profit 6.9 7.4 Other Current Liabilities 34.6 26.7 Noncurrent Liabilities 31.6 33.2 Total Liabilities 98.2 97.2 Stockholders’ Equity 240.3 227.5 Total Liabilities & Equity $338.5 $324.7 Q1’14 Q1’15 Days Sales Outstanding 87 88 Days Sales of Inventory 120 119 Accounts Payable Days 61 67 Cash Conversion 146 140 Note: Unaudited pro-forma balance sheet excluding BMS |
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68 June 18, 2015
Corporate Development Strong track record of successful acquisitions Future Investment criteria Expand into profitable, complementary market segments Leverage infrastructure: technology, sales and customer support, operations Deliver margin expansion in-line with mid-term target Capitalize on sales and cost synergies Criteria Rasco Dec 2008 Ismeca Jan 2013 Market Expansion Gravity, Test-in-Strip, MEMS Turret, Inspection, LED Market Share #2 in 2008, grew to #1 in 2014 #1, acquired the leader Infrastructure Leverage 100% complementary products; Common sales and customer support 100% complementary products; Common sales and customer support; Malaysia Mfg. and Supply Chain Synergies Sales ~ $16M; Cost ~ $2M Sales ~ $25M; Costs ~$14M |
 Closing
Remarks Luis Müller
President and CEO June 18, 2015 |
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70 June 18, 2015
Expanded
$2B TAM WLP Probing Test Contactors $850M Handler Market Driving for profitable growth in expanded $2B TAM Differentiate through thermal, vision, automation – higher yield Increasing Total Available Market |
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71 June 18, 2015
Key Takeaways Increasing Total Available Market to $2 billion with test contactors and WLP prober Strategic Acquisitions in profitable, complementary market segments Mid-Term Target delivers 17% EBITDA at $400M a year sales Strong Balance Sheet ~$70M in cash and no bank debt; $37M cash from operations LTM Driving Growth With new products and synergies; 2014 sales were up 48% YoY Expanding Share in Core Markets with innovative thermal & vision technologies |
 Thank You June 18, 2015 9:30 a.m. – 1:00 p.m. NASDAQ MarketSite – NY Times Square |
 Biographies June 18, 2015 |
 Biographies Luis A. Müller President and Chief Executive Officer Luis A. Müller joined Cohu's Delta Design in 2005 and has been President and Chief Executive Officer of Cohu, Inc. since December 2014. Mr. Müller was previously President
of Cohu's Semiconductor Equipment Group (SEG) since January 2011, Managing Director
of SEG's Rasco
GmbH business unit in Germany, and Vice President of SEG's High Speed
Pick-and-Place handler products. Prior to joining Cohu,
Inc. Mr. Müller spent nine years at Teradyne, where he held
management positions in engineering and business
development.
Mr. Müller has a PhD in Mechanical Engineering from the Massachusetts
Institute of Technology (MIT).
Jeffrey D. Jones
Vice President Finance and Chief Financial Officer
Jeff Jones joined Cohu’s Delta Design in July 2005 as Vice President Finance and Controller. In November, 2007, Mr. Jones was named Vice President, Finance & Chief Financial Officer
of Cohu. Prior to joining Delta Design, Mr. Jones, was a consultant and Vice
President and General Manager of the Systems Group at SBS
Technologies, Inc., a designer and manufacturer of embedded
computer products. Prior to SBS Technologies, Mr. Jones was
an Audit Manager for Coopers & Lybrand (now
PricewaterhouseCoopers). Mr. Jones is a CPA and graduate of the
University of Redlands. |
 Biographies Samer Kabbani Vice President and General Manager, Delta Design Samer Kabbani joined Cohu's Delta Design in 2003 and has been Vice President and General Manager of Delta Design business unit since March 2015. He was previously President of
Delta Design’s Systems Group and also held the positions of Vice
President of Engineering and Vice President of SEG's High
Performance Handler Group. Prior to joining Cohu, Mr. Kabbani
worked at Brooks Automation, where he held management positions in
engineering.
Mr. Kabbani has a Mechanical Engineering degree from McGill University in
Montreal, Canada.
Ian von Fellenberg
Vice President and General Manager, Ismeca
Ian von Fellenberg joined Cohu’s Ismeca in 2004 and has been Vice President and General Manager of Ismeca Business Unit since September 2013. In 2004 he set up operations in China and managed both the North Asia and South Asia region for Ismeca. Prior to Ismeca,
Mr. Fellenberg spent five years at Orell Füssli Security Printing where he held the position of director of security technologies. He has also held various positions in sales and product
management for companies in the automation components (sensors, drives)
industry. Mr.
Fellenberg holds a Master of Robotics Engineering from the Swiss Federal School of Technology (ETH). |
 Biographies Alexander J. Waldauf Vice President and General Manager, Rasco Alex Waldauf was one of the founders of Cohu's Rasco subsidiary in 1998 and has been Vice President and General Manager of Rasco since January 2011. He was previously responsible for the Test-In-Strip product line, Managing Director of Rasco and global Vice President of Sales and Service. Prior to founding Rasco, Mr. Waldauf spent 6 years at Multitest and held key positions in engineering. Mr. Waldauf has a Mechanical Engineering degree from the Austrian School of Technology
in Salzburg (HTL).
Maximilian W. Schaule
Chief Technologist
Max Schaule joined Cohu in 2012 and was instrumental in the acquisition of Ismeca. After the acquisition, he assumed responsibilities for technology development and integration across the Cohu group. Prior to joining Cohu, Mr. Schaule spent two years as CTO at Ricmar, a start-up wafer handling company, and spent 13 years as Vice President of Engineering at Multitest. Prior to Multitest, Mr. Schaule worked 10 years for Digital Equipment in development of disk drive technology. Mr. Schaule has a Master of Mechanical Engineering from the Technical University of
Munich. |
 Appendix June 18, 2015 |
 Reconciliation of GAAP to Non-GAAP Results
(In thousands except per share amounts)
Earnings Reconciliation
Mar 29, 2014 Diluted EPS June 28, 2014 Diluted EPS Sept 27, 2014 Diluted EPS Dec 27, 2014 Diluted EPS Mar 28, 2015 Diluted EPS Income (Loss) From Continuing Operations - GAAP ($2,706) ($0.11) $2,095 $0.08 $10,119 $0.39 $5,272 $0.20 ($1,745) ($0.07) Share Based Compensation 1,435 0.06 1,613 0.06 1,586 0.06 1,754 0.07 1,698 0.06 Amortization of Purchased Intangible Assets 2,003 0.08 2,002 0.08 1,954 0.07 1,843 0.07 1,775 0.07 Manufacturing Transition and Severance Costs 783 0.03 233 0.01 159 0.01 191 0.01 101 0.00 Other Acquisition Costs 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 Inventory Step-Up 0 0.00 0 0.00 0 0.00 0 0.00 0 0.00 Impairment of Goodwill and Other Assets 0 0.00 0 0.00 0 0.00 0 0.00 273 0.01 Tax Effect of Non-GAAP Adjustments (554) (0.02) (683) (0.03) (342) (0.01) (493) (0.02) (445) (0.02) Income (Loss) From Continuing Operations - Non-GAAP $961 $0.04 $5,260 $0.20 $13,476 $0.51 $8,567 $0.33 $1,657 $0.06 Weighted Average Shares - GAAP and Non-GAAP Diluted 25,715 Diluted 25,797 Diluted 26,174 Diluted 26,338 Diluted 26,519 Gross Profit Reconciliation Mar 29, 2014 % of Net Sales June 28, 2014 % of Net Sales Sept 27, 2014 % of Net Sales Dec 27, 2014 % of Net Sales Mar 28, 2015 % of Net Sales Net Sales $60,170 $74,299 $91,573 $90,587 $63,447 Gross Profit - GAAP 20,030 33.3% 24,262 32.7% 32,953 36.0% 28,727 31.7% 20,145 31.8% Share Based Compensation 75 0.1% 190 0.3% 85 0.1% 140 0.2% 115 0.2% Amortization of Purchased Intangible Assets 1,573 2.6% 1,570 2.1% 1,533 1.7% 1,445 1.6% 1,385 2.2% Manufacturing Transition and Severance Costs 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0% Inventory Step-Up 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0% Gross Profit - Non-GAAP $21,678 36.0% $26,022 35.0% $34,571 37.8% $30,312 33.5% $21,645 34.1% Operating Expense Reconciliation Mar 29, 2014 % of Net Sales June 28, 2014 % of Net Sales Sept 27, 2014 % of Net Sales Dec 27, 2014 % of Net Sales Mar 28, 2015 Diluted EPS Operating Expense - GAAP $22,852 38.0% $21,358 28.7% $20,946 22.9% $21,440 23.7% $20,862 32.9% Share Based Compensation (1,361) -2.3% (1,423) -1.9% (1,502) -1.6% (1,614) -1.8% (1,583) -2.5% Amortization of Purchased Intangible Assets (430) -0.7% (432) -0.6% (421) -0.5% (398) -0.4% (390) -0.6% Manufacturing Transition and Severance Costs (783) -1.3% (233) -0.3% (159) -0.2% (206) -0.2% (101) -0.2% Other Acquisition Costs 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0% Impairment of Goodwill and Other Assets 0 0.0% 0 0.0% 0 0.0% 0 0.0% (273) -0.4% Operating Expense - Non-GAAP $20,278 33.7% $19,270 25.9% $18,864 20.6% $19,222 21.2% $18,515 29.2% 3 Months Ending 3 Months Ending 3 Months Ending 3 Months Ending 3 Months Ending 3 Months Ending 3 Months Ending 3 Months Ending 3 Months Ending 3 Months Ending 3 Months Ending 3 Months Ending 3 Months Ending 3 Months Ending 3 Months Ending |
 Reconciliation of GAAP to Non-GAAP Results
(In thousands except per share amounts)
Earnings Reconciliation
Dec 28, 2013 Basic EPS Dec 27, 2014 Diluted EPS Income (Loss) From Continuing Operations - GAAP ($28,682) ($1.15) $14,780 $0.57 Share Based Compensation 5,113 0.21 6,388 0.25 Amortization of Purchased Intangible Assets 7,763 0.31 7,802 0.30 Manufacturing Transition and Severance Costs 2,151 0.09 1,366 0.05 Other Acquisition Costs 385 0.02 0 0.00 Inventory Step-Up 987 0.04 0 0.00 Impairment of Goodwill and Other Assets 0 0.00 0 0.00 Tax Effect of Non-GAAP Adjustments (2,306) (0.09) (2,072) (0.08) Income (Loss) From Continuing Operations - Non-GAAP ($14,589) ($0.59) $28,264 $1.09 Weighted Average Shares - GAAP and Non-GAAP Basic 24,859 Diluted 26,006 Gross Profit Reconciliation Dec 28, 2013 % of Net Sales Dec 27, 2014 % of Net Sales Net Sales $214,511 $316,629 Gross Profit - GAAP 57,400 26.8% 105,972 33.5% Share Based Compensation 389 0.2% 490 0.2% Amortization of Purchased Intangible Assets 6,067 2.8% 6,121 1.9% Manufacturing Transition and Severance Costs 288 0.1% 0 0.0% Inventory Step-Up 987 0.5% 0 0.0% Gross Profit - Non-GAAP $65,131 30.4% $112,583 35.6% Operating Expense Reconciliation Dec 28, 2013 % of Net Sales Dec 27, 2014 % of Net Sales Operating Expense - GAAP $88,376 41.2% $86,596 27.3% Share Based Compensation (4,723) -2.2% (5,900) -1.9% Amortization of Purchased Intangible Assets (1,696) -0.8% (1,681) -0.5% Manufacturing Transition and Severance Costs (1,863) -0.9% (1,381) -0.4% Other Acquisition Costs (385) -0.2% 0 0.0% Impairment of Goodwill and Other Assets 0 0.0% 0 0.0% Operating Expense - Non-GAAP $79,709 37.2% $77,634 24.5% 12 Months Ending 12 Months Ending 12 Months Ending 12 Months Ending 12 Months Ending 12 Months Ending |