Cohu, Inc. (Form: 8-K)

POWAY, Calif., October 23, 2008 — Cohu, Inc. (NASDAQ:COHU) today announced that net sales were $48.0 million for the third quarter ended September 27, 2008 compared to $64.5 million for the third quarter ended September 29, 2007 and $51.8 million for the second quarter ended June 28, 2008. Net income for the third quarter of 2008 was $37,000, or $0.00 per share compared to $2.2 million or $0.10 per share for the third quarter of 2007 and $0.2 million or $0.01 per share in the second quarter of 2008.

Net sales for the first nine months of 2008 were $158.3 million with net income of $2.2 million or $0.09 per share compared to net sales of $184.3 million with net income of $5.9 million or $0.26 per share for the first nine months of 2007.

Semiconductor test handling equipment accounted for 79.3% of total third quarter 2008 sales, microwave communications equipment contributed 11.9% and closed circuit television cameras and related equipment were 8.8% of sales for the same period.

Consolidated orders for the third quarter of 2008 were $46.0 million compared to $50.1 million for the second quarter of 2008. Third quarter 2008 orders for semiconductor equipment decreased from $39.0 million in the second quarter of 2008 to $31.0 million in the third quarter of 2008. Backlog was $52.0 million at September 27, 2008 compared to $54.0 million at June 28, 2008. Cohu expects fourth quarter 2008 sales to be approximately $37.0 million.

James A. Donahue, President and Chief Executive Officer, stated, “An already challenging environment for semiconductor equipment has been further impacted by the global financial crisis. Last week, SEMI reported that preliminary September orders for test and assembly equipment declined 47% compared to September 2007 and that the book to bill ratio fell to 0.70.”

Donahue concluded, “Visibility in the backend semiconductor industry is limited to several quarters at best, and over this time horizon, we expect business conditions to remain difficult. Despite the current economic headwinds, we are optimistic about the long term prospects for our industry and confident in our products, people and strategy. Through this downturn, we plan to continue to invest in new product development and key initiatives to improve gross margin and operating performance that will benefit the Company when industry conditions improve.”

Cohu’s Board of Directors approved a quarterly cash dividend of $0.06 per share payable on January 2, 2009 to shareholders of record on November 28, 2008. Cohu has paid consecutive quarterly cash dividends since 1977.

Certain matters discussed in this release, including statements concerning Cohu’s new products and expectations of business conditions, orders, 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, the concentration of our revenues from a limited number of customers; 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; inventory write-offs; intense competition in the semiconductor test handler industry; our reliance on patents and intellectual property; compliance with U.S. export regulations; the cyclical and unpredictable nature of capital expenditures by semiconductor manufacturers; difficulties in integrating acquisitions and new technologies and other risks addressed 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.

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

Cohu will be conducting a conference call on Thursday, October 23, 2008 at 2:00 p.m. Pacific Time. The call will be webcast at www.cohu.com. Replays of the call can be accessed at www.cohu.com.


	Three months ended (1)					Nine months ended (1)
	September 27, 2008			September 29, 2007		September 27, 2008			September 29, 2007

Net sales	$	48,016		$	64,490	$	158,258		$	184,265
Cost and expenses:
Cost of sales		30,458			43,885		101,453			124,691
Research and development		9,140			9,575		29,582			29,298
Selling, general and administrative		9,693			9,861		27,652			27,408

		49,291			63,321		158,687			181,397

Income (loss) from operations		(1,275	)		1,169		(429	)		2,868
Interest and other, net		1,391			2,106		4,282			6,286

Income from continuing operations before		116			3,275		3,853			9,154
income taxes
Income tax provision		79			1,040		1,690			3,163

Income from continuing operations		37			2,235		2,163			5,991

Discontinued operations (2):
Loss from discontinued operations		—			—		—			(66	)
before income taxes
Income tax benefit		—			—		—			(23	)

Loss from discontinued operations		—			—		—			(43	)

Net income	$	37		$	2,235	$	2,163		$	5,948

Income (loss) per share:
Basic:
Income from continuing operations	$	0.00		$	0.10	$	0.09		$	0.26
Loss from discontinued operations		—			—		—			(0.00	)

Net income	$	0.00		$	0.10	$	0.09		$	0.26

Diluted:
Income from continuing operations	$	0.00		$	0.10	$	0.09		$	0.26
Loss from discontinued operations		—			—		—			(0.00	)

Net income	$	0.00		$	0.10	$	0.09		$	0.26

Weighted average shares used in computing income (loss) per share:
Basic		23,233			22,945		23,142			22,830
Diluted		23,477			23,433		23,380			23,282

(1)

The three- and nine-month periods ended September 27, 2008 and September 29, 2007 each contain 13 weeks and 39 weeks, respectively. Total share-based compensation recorded in the three-month period ended September 27, 2008 under SFAS 123R was approximately $1,094,000 and is included in cost of sales ($88,000); research and development ($331,000); and selling, general and administrative expense ($675,000). Total share-based compensation recorded in the nine-month period ended September 27, 2008 was approximately $3,188,000 and is included in cost of sales ($266,000); research and development ($951,000); and selling, general and administrative expense ($1,971,000). Total share-based compensation recorded in the three-month period ended September 29, 2007 was approximately $1,016,000 and is included in cost of sales ($119,000); research and development ($322,000); and selling, general and administrative expense ($575,000). Total share-based compensation recorded in the nine-month period ended September 29, 2007 was approximately $3,138,000 and is included in cost of sales ($347,000); research and development ($937,000); and selling, general and administrative expense ($1,854,000).

(2)

In May, 2006, Cohu sold its metal detection equipment business, Fisher Research Laboratory (FRL). As a result of the disposition, the operating results of FRL have been presented as discontinued operations and all prior period amounts have been reclassified accordingly.


				,
	September 27, 2008		December 29, 2007

Assets:
Current assets:
Cash and investments	$	171,179	$	170,118
Accounts receivable		34,464		45,491
Inventories		48,337		42,165
Deferred taxes and other		21,984		25,952
Current assets of discontinued operations		5		28

Total current assets		275,969		283,754
Property, plant & equipment, net		29,095		29,818
Goodwill		16,370		16,377
Other assets		8,284		9,959
Noncurrent assets of discontinued operations		471		471

Total assets	$	330,189	$	340,379

Liabilities & Stockholders’ Equity:
Current liabilities:
Deferred profit	$	4,784	$	4,868
Other current liabilities		32,957		44,383
Current liabilities of discontinued operations		144		158

Total current liabilities		37,885		49,409
Deferred taxes and other noncurrent liabilities		6,604		7,502
Stockholders’ equity		285,700		283,468

Total liabilities & stockholders’ equity	$	330,189	$	340,379

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


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)


	Cohu, Inc.

October 23, 2008	By:	Jeffrey D. Jones

		Name: Jeffrey D. Jones
		Title: VP Finance and Chief Financial Officer


Exhibit No.		Description

99.1		Third Quarter 2008 Earnings Release, dated October 23, 2008, of Cohu, Inc.


Date of Report (Date of Earliest Event Reported):		October 23, 2008


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