jefferies 2013 global technology, media and telecom … inc.pdfmay 9, 2013 semi/semi equipment...

May 9, 2013

Jefferies 2013Global Technology, Media and

Telecom Conference

May 9, 2013

..Forward Looking Statements and Regulation FDCertain matters discussed in this presentation, inc luding statements concerning Cohu's new products, expectations of business cond itions, orders, sales, expected accretion from the Ismeca acquisition, growth in th e LED market and operating results are forward-looking statements that are sub ject to risks and uncertainties that could cause actual results to differ materiall y from those projected or forecasted. Such risks and uncertainties include, but are not limited to, risks associated with acquisitions including the acquisit ion of Ismeca on December 31, 2012; inventory, goodwill and other intangible ass et write-downs; our ability to convert new products under development into product ion on a timely basis, support product development and meet customer deliv ery and acceptance requirements for next generation equipment; our rel iance on third-party contract manufacturers; failure to obtain customer acceptanc e resulting in the inability to recognize revenue and accounts receivable collectio n problems; customer orders may be canceled or delayed; the concentration of ou r revenues from a limited number of customers; intense competition in the sem iconductor test handler industry; our reliance on patents and intellectual property; compliance with U.S. export regulations; and the cyclical and unpredicta ble nature of capital expenditures by semiconductor manufacturers. These and other risks and uncertainties are discussed more fully in Cohu's fi lings with the Securities and Exchange Commission, including the most recently fi led Form 10-K and Form 10-Q. Cohu assumes no obligation to update the informatio n in this presentation.

May 9, 2013

Cohu Investment Highlights

� Enabling technologies and industry-leading products to drive market share gains

� Operating leverage provides opportunity for signifi cant earnings growth during upcycles

� Strong, debt-free balance sheet

� December 2012 acquisition of Ismeca, #1 turret hand ler company, increases SAM and provides entry into LED equipment market

� Cash dividend - currently $0.06/share

� Market leader in semiconductor test handling equipm ent

May 9, 2013

Semiconductor Manufacturing Process

Assembly TestWafer Fab

The “Front-End ”Final Manufacturing Processes

The “Back-End ”

Delta EDGE

Finishing

Cohu handlers, thermal subsystems and equipment are an essential part of the IC

manufacturing process - used with ATE to cost-effectively test ICs for quality and

functionality

Ismeca acquisition increases Cohu’s SAM and

provides expansion into finishing processes

May 9, 2013

� Cohu acquired Ismeca, the leading supplier of turre t-based semiconductor and LED test handler and back-end fin ishing equipment for $54.5 million in a cash transaction

� Acquiring Ismeca strengthens Cohu’s leadership posi tion in semiconductor test handling and provides new opport unities, including the rapidly growing LED market

� Transaction closed on December 31, 2012 - Cohu’s 201 3 Fiscal Year

Ismeca Acquisition

#2 in MEMS, Gravity-Feed and Strip Handlers

A Cohu Company

#1 in Pick&Place Handlersand Thermal Subsystems

#1 in Turret Handlers and Backend Finishing

May 9, 2013

� Complementary products in our core business

� Significantly increases Served Available Market (SA M)

� Enter fast growing LED equipment market with an ind ustry leader

� Expand product portfolio creating new customer oppo rtunities

� Strenghen and rationalize global customer support o rganization

� Leverage low -cost Asia manufacturing and supply chain

� EPS accretion >20% when business conditions improve

Ismeca Acquisition Strategic Rationale

May 9, 2013

� Increases SAM to $900M� Expansion into the turret segment extends leadershi p in handlers to

~40% market share� Entry into the fast-growing LED equipment market� Serve diversified and broad-based markets including consumer mobility,

LED, automotive, computing, industrial and power ma nagement

Leadership in Expanded SAM

Handler Market

Source: VLSI Research, Inc. and Company Estimates

(IC, Discrete & LED)

May 9, 2013

LED Market – a Key Growth Driver for Ismeca

LED Handler SAM

Source: Yole Development© - June 2011 and Company Estimates

� LED market driven by General Lighting (28% CAGR)

� Ismeca handlers well positioned for mid-high power LED test - required for General Lighting

� Customer base includes technology leaders

Packaged LED Revenue

May 9, 2013

Broadest Product Portfolio� The leader in technology and performance� Serving diversified markets

OLBCastle VTS SummitOLBCastle VTS

ME

MS

Dis

cret

eLE

DIn

dust

rial

Con

sum

er

Com

putin

g

Aut

omot

ive

Mob

ility

App

. P

roce

ssor

s

Test Handlers Enabling TechnologiesMarkets

May 9, 2013

Wide Customer Base

IsmecaCohu

May 9, 2013

Global Sales & Service Infrastructure

Singapore

Suzhou

Manila

Malacca

San Diego

GERMANY

SWITZERLAND

Chengdu

Hong Kong

Shanghai

Tianjin

JAPAN

SOUTH KOREA

TAIWAN

INDONESIA

VIETNAM

THAILAND

PORTUGAL

MOROCCO

FRANCE ITALY

MALTA

UNITED

KINGDOM

ISRAEL

Hillsboro

San Jose Chandler

Boise

Toronto

BromontBurlington

Houston

Dallas

Costa Rica

Baguio

Penang

Boston

Donguan

Major OperationsSales/Customer Support

Austin

BELGIUM

Kuala Lumpur

� Largest sales and service network in the industry.. .

Depth and Breadth is aCompetitive Advantage

May 9, 2013

Global Operations

U.S.A.

� Thermal handlers� Thermal subsystems

� Volume Handler Final Assembly & Test� Contactor design & mfg.� Industrialization� Supply Chain

Malaysia

Philippines

� Kit design & manufacturing

� Handler subassemblies

� Final Assembly & Test of specialty turret handlers

SwitzerlandGermany

� Final Assembly & Test of gravity and strip handlers

� MEMS production

� Combined manufacturing locations driving lower cost and accelerating transition of production to Asia

May 9, 2013

Semi/Semi Equipment Update

Source: SEMI 2013

Book to Bill

� Monthly orders for backend equipment increased 28% in March, the first increase in ten months; orders are still only 46% o f the May 2012 level

� Handler utilization reached 80% in March, the highes t level in two years

� A gradual recovery in semi equipment seems to be un derway. Further improvement is expected in mobility and automotive; industrial is recovering and PCs are down

� Q2 guidance from the majority of semi and semi equi pment companies is for moderate sequential improvement

Orders

$20

$70

$120

$170

$220

$270

$320

$370

$420

$470

Millions

2006 2007 2008 2009 2010 2011 2012 2013Mar

0.450.550.650.750.850.951.051.151.251.351.451.55

2006 2007 2008 2009 2010 2011 2012 2013Mar

May 9, 2013

Q1’13 Results / Q2’13 Guidance

Amounts exclude amortization of purchased intangibles, stock based compensation expense, inventory step-up, restructuring cost and other acquisition costs in connection with the acquisition of Ismeca

� Q1 Highlights� Sales $56.0M

� Gross Margin 31.6%

� Orders $60.3M

� EPS ($0.32)

� Q1 impacted ~ $0.15 per share after tax, by unusual items including IFRS to GAAP conversion at Ismeca and rev enue shortfall at BMS due to government funding delays

� Backlog $63.4M

� Q2 Guidance� Sales $65M: up 16% QoQ

� Gross margin 36-37%: up ~ 500 bps sequentially

� Op Ex $24M-$25M: down $1.8M-$0.8M sequentially

May 9, 2013

Balance Sheet ($M, except per share amounts)

� Acquired Ismeca on December 31, 2012 for a cash pur chase price of $54.5 that was funded out of existing cash reserves

� Strong balance sheet, no bank debt post Ismeca acqu isition

IsmecaDec-11 Mar-13 Acquisition

Cash & Investments 110.2$ 48.7$ (54.5)$ Accounts Receivable 37.0 56.5 Inventory 62.3 73.3 Deferred Taxes & Other 11.5 14.7

Current Assets 221.0 193.2

PP&E, net 35.5 35.7 Other Assets 78.4 118.1

Total Assets 334.9$ 347.0$

Deferred Profit 2.1$ 5.6$ Other Current Liabilities 34.2 49.0

Current Liabilities 36.3 54.6

Other Liabilities 17.6 28.0 Stockholders' Equity 280.9 264.4 Total Lilabilities & Equity 334.8$ 347.0$

May 9, 2013

� #1 in IC Test Handler Industry� December 2012 acquisition of Ismeca, the #1 turret

handler company:� Expands SAM to $900M and increases market leadershi p� Provides new opportunities, including in the rapidl y growing

LED market� Enables leveraging of established low-cost Asia man ufacturing

and supply chain� Provides cross-selling synergies � Expected to deliver >20% accretion when business co nditions

improve

� Realizing improved gross margin from new products a nd Asia manufacturing

� Strong balance post-acquisition: cash ~ $50M and no bank debt

� Quarterly dividend of $0.06 (currently yielding >2% )

Summary

May 9, 2013

Jefferies 2013Global Technology, Media and

Telecom Conference

jefferies 2013 global technology, media and telecom … inc.pdfmay 9, 2013 semi/semi equipment...

Documents