Cohu Reports Significant Declines in Revenue and Profitability Amid Challenging Market Conditions

Cohu, Inc. reported significant declines in revenue and profitability for the third quarter and first nine months of fiscal 2024, reflecting challenging market conditions. For the three months ended September 28, 2024, net sales were $95.3 million, a decrease of 36.8% compared to $150.8 million in the same period of the previous year. For the nine months ended September 28, 2024, net sales totaled $307.7 million, down 38.4% from $499.1 million in the prior year. The decline was attributed to lower demand in automotive, industrial, and mobile applications, influenced by global economic factors such as higher capital costs.

Cohu's income from operations for the third quarter of 2024 was a loss of $15.8 million, compared to a profit of $7.4 million in the third quarter of 2023. The net loss for the quarter was $18.1 million, contrasting with a net income of $3.9 million in the same quarter last year. For the nine-month period, the net loss was $48.5 million, compared to a net income of $30.2 million in the previous year.

The company's gross margin for the third quarter of 2024 was 46.8%, slightly down from 47.0% in the prior year. Research and Development (R&D) expenses decreased to $20.3 million (21.3% of net sales) from $21.5 million (14.2% of net sales) in the previous year. Selling, General and Administrative (SG&A) expenses also fell to $30.3 million (31.8% of net sales) from $32.4 million (21.5% of net sales) in the prior year, although the current quarter included one-time severance costs and incremental costs from the recently acquired Equiptest Engineering Pte. Ltd. (EQT).

Cohu completed the acquisition of EQT on October 2, 2023, for a total cash payment of approximately $50.3 million. This acquisition is expected to enhance Cohu's capabilities in semiconductor test contactors and other test consumables. The company also acquired MCT Worldwide, LLC in January 2023, which provides automated solutions for the semiconductor industry.

As of September 28, 2024, Cohu's cash and cash equivalents stood at $189.3 million, down from $245.5 million at the end of 2023. Total current assets decreased to $542.5 million, while total current liabilities were reduced to $85.0 million. The company reported total stockholders' equity of $884.5 million, down from $950.2 million at the end of the previous fiscal year.

Cohu's share repurchase program remains active, with $31.4 million available for future repurchases as of September 28, 2024. The company repurchased 915,504 shares for $27.0 million during the first nine months of fiscal 2024.