march 3-4, 2011 investor presentation sidoti & company
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March 3-4, 2011March 3-4, 2011
Investor PresentationInvestor PresentationSidoti & CompanySidoti & Company
Page 2
03-03-11
....Forward Looking Statements and Regulation FDForward Looking Statements and Regulation FD
Certain matters discussed in this presentation, including Certain matters discussed in this presentation, including statements concerning expectations of Cohu’s future operating statements concerning expectations of Cohu’s future operating performance, are forward-looking statements that are subject to performance, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ risks and uncertainties that could cause actual results to differ materially from those projected or forecasted. Such risks and materially from those projected or forecasted. Such risks and uncertainties include, but are not limited to; our ability to convert uncertainties include, but are not limited to; our ability to convert new products under development into production on a timely new products under development into production on a timely basis, support product development and meet customer delivery basis, support product development and meet customer delivery and acceptance requirements for next generation equipment; and acceptance requirements for next generation equipment; inventory, goodwill, and other intangible asset write-downs, and inventory, goodwill, and other intangible asset write-downs, and customer orders may be cancelled or delayed. These and other customer orders may be cancelled or delayed. These and other risks are discussed more fully in Cohu’s filings with the Securities risks are discussed more fully in Cohu’s filings with the Securities and Exchange Commission, including the most recently filed Form and Exchange Commission, including the most recently filed Form 10-K and Form 10-Q. Cohu assumes no obligation to update the 10-K and Form 10-Q. Cohu assumes no obligation to update the information in this presentation.information in this presentation.
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03-03-11
Cohu Investment SummaryCohu Investment Summary Market leaderMarket leader in semiconductor test handling in semiconductor test handling
equipment equipment
Rasco acquisitionRasco acquisition in December 2008 extends in December 2008 extends market leadership and expands TAMmarket leadership and expands TAM
Key proprietary technologyKey proprietary technology for temperature for temperature control: improves IC yield and ASPscontrol: improves IC yield and ASPs
Operating leverage:Operating leverage: provides opportunity for provides opportunity for significant growth in profits during upcyclesignificant growth in profits during upcycle
Financial strength:Financial strength: strong, debt-free balance strong, debt-free balance sheetsheet
New products:New products: 3 new handlers to fuel market 3 new handlers to fuel market share growthshare growth
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03-03-11
SemiconductorSemiconductor Manufacturing ProcessManufacturing Process
WaferFab
The “Front-End”
Ship Inspection MarkTestAssembly
Cohu handlers, burn-in thermal subsystems and Cohu handlers, burn-in thermal subsystems and equipment are an essential part of the IC manufacturing equipment are an essential part of the IC manufacturing process - used with ATE to cost-effectively test ICs for process - used with ATE to cost-effectively test ICs for
quality and functionalityquality and functionality
Final Manufacturing Processes
The “Back-End”
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03-03-11
Cohu’s Semiconductor Equipment GroupCohu’s Semiconductor Equipment Group
#1 in Logic Pick & Place Test Handlers
#2 in Gravity-feed Test Handlers
COHUCOHUGlobal Leader in IC Test Handling
A Cohu Company
MATRiXMATRiX PyramidPyramid SO1000SO1000 SO3000SO3000X32 Tri-temp Next-Gen
Thermal HandlerX4 Tri-temp Test on Strip
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Rasco acquisition added gravity-feed and strip handlersRasco acquisition added gravity-feed and strip handlers Extends leadership in the test handler marketExtends leadership in the test handler market Complementary products with no overlapComplementary products with no overlap
Gravity-Feed is well-suited for handling small IC packages – critical Gravity-Feed is well-suited for handling small IC packages – critical to miniaturization of CE productsto miniaturization of CE products
Our products address 62% of the marketOur products address 62% of the market Rasco sales and orders at record levels in 2010Rasco sales and orders at record levels in 2010
Expanded TAMExpanded TAM
Semiconductor Test Handler MarketSemiconductor Test Handler Market
Source: VLSI Research, Inc. and Company estimates
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03-03-11
Leading TechnologiesLeading Technologies
PRODUCTIVITYPRODUCTIVITY
X32 (X4 Chuck) 125°C Thermal Testing
120.0
121.0
122.0
123.0
124.0
125.0
126.0
127.0
128.0
129.0
130.0
00.00 04.32 08.64 12.96 17.28 21.60 25.92 30.24 34.56 38.88Time (s)
Tem
per
atu
re (
°C)
Site B1
Site A1
Site D1
Site C1
Site B2
Site A2
Site D2
Site C2
Site B3
Site A3
Site D3
Site C3
Site B4
Site A4
Site D4
Site C4
Site A5
Site B5
Site C5
Site D5
Site A6
Site B6
Site C6
Site D6
Site A7
Site B7
Site C7
Site D7
Site A8
Site B8
Site C8
Site D8
- Tmin. = 123.4 °C- Tmax. = 127.9 °C- Temp. Range = 4.5°C- Sites A5 and A6 were not functioning, no temperature reading.80
90
100
110
120
130
140
0 2 4 6 8 10 12 14 16 18 20
Time (sec)
Tem
p (
C)
Temp Rise
6.0°C
4.3°C
3.9°C
3.4°C
2.6°C
Thermal response at 125W
FLEXIBILITYFLEXIBILITY
Industry-leading Parallelism & ThroughputIndustry-leading Parallelism & Throughput
Lowers cost-of-testLowers cost-of-test
Vision AlignmentVision Alignment
Enables accurate testing of small form Enables accurate testing of small form factor IC packages – a fast growing marketfactor IC packages – a fast growing market
Thermal ManagementThermal Management
Proprietary thermal technology increases Proprietary thermal technology increases accuracy and yieldsaccuracy and yields
Chamber-less Tri-TemperatureChamber-less Tri-Temperature
Allows on-line maintenance at temperature, Allows on-line maintenance at temperature, reducing downtimereducing downtime
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03-03-11
Proprietary Thermal Technology Proprietary Thermal Technology Solves a Growing Problem in IC TestSolves a Growing Problem in IC Test
Delta Design is the industry leader in high-power/DUT thermal Delta Design is the industry leader in high-power/DUT thermal managementmanagement
Enabling capability that optimizes speed grading, increasingly Enabling capability that optimizes speed grading, increasingly important for GPUsimportant for GPUs
Latest technology incorporated in next-gen Pyramid thermal handlerLatest technology incorporated in next-gen Pyramid thermal handler
2.79
2.82
2.85
2.88
2.91
2.94
2.97
3.00
3.03
3.06
3.09Fmax Uncertainty for MPUs
Freq. vs. Temp2% / 10oC Typical
2oC Tj errorFmax Uncertainty
10oC Tj errorFmax Uncertainty
Ma
x.
Fre
q. -
GH
z
Tj Setpoint – deg. C
Speed = $
Core i5 2.8 Ghz $189
Core i5 3.3 Ghz $249 (+32%)
Source: Computeredge.com
(February 28, 2011)
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03-03-11
Market Share LeadershipMarket Share LeadershipIC Test HandlersIC Test Handlers
Logic Pick & PlaceLogic Pick & Place HandlersHandlers Gravity Feed HandlersGravity Feed Handlers
Source: 2008 VLSI Research, Inc. and Company estimates
COHU (Rasco) 23%
COHU 24%
(Primarily Logic)
COHU (Delta Design)
48% COHU (Delta Design)
48%
#1 Position#1 Position
#1 Position#1 Position #2 Position#2 Position
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03-03-11
Wide Customer BaseWide Customer Base
Realizing cross-selling opportunities, resulting in market share gainsRealizing cross-selling opportunities, resulting in market share gains
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03-03-11
Broad Product PortfolioBroad Product Portfolio New industry-leading systems in each product lineNew industry-leading systems in each product line
Fin
al
an
d S
yste
m L
eve
l IC
Te
st
Delta Design - Thermal Pick & Place Handlers
Delta Design - High Speed Pick & Place Handlers
Rasco - Gravity-feed & Strip Handlers
Next Generation
Next Generation
Next GenerationF
ina
l a
nd
Syste
m L
eve
l IC
Te
st
Delta Design - Thermal Pick & Place Handlers
Delta Design - High Speed Pick & Place Handlers
Rasco - Gravity-feed & Strip Handlers
Next Generation
Next Generation
Next Generation
MATRiX
Pyramid
InDevelopment
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03-03-11
Largest global sales and service network in the industry...Largest global sales and service network in the industry...
24/7 Global Customer Support24/7 Global Customer Support
POWAY, CADelta Headquarters
Long Island, NY
MALAYSIA- Kuala Lumpur- Penang- Malacca- Kulim
Burlington, VTTAIWAN- Taipei- Kaohsiung- Hsinchu
SOUTH KOREA- Seoul
JAPAN
CHINA- Tianjin- Shanghai- Suzhou- Chengdu
THAILAND- Bangkok
Hillsboro, ORBoise, ID
Austin, TX
COSTA RICA
Houston, TX
Chandler, AZ
UNITED KINGDOM
MALTA
Tyngsborough, MA
Dallas, TX
SINGAPOREDelta-Rasco
Asia Headquarters
KOLBERMOOR, DERasco Headquarters
San Jose, CA
INDONESIA
Depth and Breadth is a Competitive AdvantageDepth and Breadth is a Competitive Advantage
Tooling Design/Mfg
PHILIPPINES- Manila- Baguio- Cavite- Laguna
- Tokyo
- Batam
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03-03-11
Strong Q4 ResultsStrong Q4 Results
Q4 2010 HighlightsQ4 2010 Highlights
Sales grew 13% sequentially and 86% YoY to $96.9M, Sales grew 13% sequentially and 86% YoY to $96.9M, a Cohu recorda Cohu record
Non GAAP EPS $0.48 vs. $0.41 in Q3 and $0.11 in Non GAAP EPS $0.48 vs. $0.41 in Q3 and $0.11 in Q4 2009Q4 2009
Orders $75.8M, down 16% from Q3Orders $75.8M, down 16% from Q3
Semi-equipment orders declined 9% sequentially to Semi-equipment orders declined 9% sequentially to $67.1M$67.1M
Backlog of $99.6MBacklog of $99.6M
$0.06 cash dividend (quarterly dividend since 1977)$0.06 cash dividend (quarterly dividend since 1977)
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03-03-11
Semi/Semi Equipment UpdateSemi/Semi Equipment Update
Source: SEMI 2011
Backend semi equipment have increased for the last two monthsBackend semi equipment have increased for the last two months
““2010 will likely be the strongest year ever for the semiconductor 2010 will likely be the strongest year ever for the semiconductor equipment industry, which will be a nice rebound from the worst equipment industry, which will be a nice rebound from the worst year ever, growth will continue through 2012 as companies move year ever, growth will continue through 2012 as companies move from technology buys to capacity purchases.” from technology buys to capacity purchases.” (Klaus Rinnen, Gartner)(Klaus Rinnen, Gartner)
0.450.550.650.750.850.951.051.151.251.351.451.55
2006 2007 2008 2009 2010 2011
OrdersBook to Bill
$20
$70
$120
$170
$220
$270
$320
$370
$420
$470
Millions
2006 2007 2008 2009 2010 2011
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03-03-11
Multiple Business DriversMultiple Business Drivers
Source: Company reports
Broad-based demand for our handlersBroad-based demand for our handlers Production ramp of new thermal handler – PyramidProduction ramp of new thermal handler – Pyramid Capacity additions as IC unit volume increasesCapacity additions as IC unit volume increases Market share gains and sales synergies of expanded product lineMarket share gains and sales synergies of expanded product line
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10
Total Sales - Actual Semi-Equip Sales - Actual
$M
Q4
Gu
ida
nc
eSalesMillions
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03-03-11
Q1’11 Non GAAP GuidanceQ1’11 Non GAAP Guidance
Non GAAP excludes stock compensation expense and amortization of purchased intangibles
Gross margin subject to volume and product mixGross margin subject to volume and product mix
Opex lower mainly as a result of variable selling expense on Opex lower mainly as a result of variable selling expense on lower revenuelower revenue
Q4'10 Q1'11Results Guidance
Quarterly Revenue ($M) $96.9 $85 to $90
Gross Margin 34.9% Consistent with Q4
Operating Expenses 21.5% Slightly Lower
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03-03-11
Strong Balance SheetStrong Balance Sheet ($M, except per share amounts)($M, except per share amounts)
Cash increased $13.3M in 2010 despite volume-driven working capital Cash increased $13.3M in 2010 despite volume-driven working capital requirementsrequirements
~10%+ sequential increase in Q4 shipments results in lower inventory~10%+ sequential increase in Q4 shipments results in lower inventory No bank debtNo bank debt
Cash and Investments $84.7 $89.9 $91.3 $98.2
Accounts Receivable $44.9 $55.1 $67.2 $66.8
Inventory $59.4 $61.9 $66.0 $63.2
Key Metrics
Cash per share $3.59 $3.79 $3.82 $4.09
DSO 62 61 67 60
Inventory Days 114 118 107 91
Mar ’10 Jun ’10 Sep ’10 Dec’10
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03-03-11
Rasco acquisition expanded TAM and has been Rasco acquisition expanded TAM and has been highly successfulhighly successful
Well positioned for market share growth from:Well positioned for market share growth from:
New, industry-leading pick & place handlersNew, industry-leading pick & place handlers
Ramp of Pyramid, next-gen thermal handlerRamp of Pyramid, next-gen thermal handler
Gravity-feed handlers optimized for small IC testing – Gravity-feed handlers optimized for small IC testing – new product in 2011new product in 2011
Significant cross selling opportunitiesSignificant cross selling opportunities
Strong balance sheet to enable future growth Strong balance sheet to enable future growth opportunitiesopportunities
SummarySummary
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