Cohu, Inc. reports 198% Net Income decline in 2018 and 14.1 pp EBITDA Margin decline from 13.3% to -0.83%
03/12/2019 • About Cohu, Inc. (
$COHU) • By InTwits
Cohu, Inc. reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Cohu, Inc. is a growth stock: FY2018 revenue growth was 28.1%, 5 year revenue CAGR was 14.3% at FY2018 ROIC -4.9%
- EBITDA Margin is quite volatile: -0.8% in FY2018, 13.3% in FY2017, 5.7% in FY2016, 7.1% in FY2015, 6.8% in FY2014
- Cohu, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.4%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: $5m in FY2018, $6m in FY2017, $3m in FY2016, $7m in FY2015, $2m in FY2014
- The company has unprofitable business model: ROIC is -4.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 28.1%. Revenue growth showed acceleration in FY18Q4 - it increased 102.9% YoY. During FY2014-FY2018 Revenue growth bottomed in FY2015 at -19.1% and was accelerating since that time. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.63 pp from 3.1% to 3.7% in 2018.
Gross Margin decreased on 5.4 pp from 40.7% to 35.3% in FY2018. SG&A as a % of Revenue increased on 4.2 pp from 17.2% to 21.4% in FY2018.
Net Income margin dropped on 16.4 pp from 9.3% to -7.1% in FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.1% in FY2018. Cohu, Inc.'s CAPEX/Revenue decreased slightly on 1.3 pp from 2.4% in FY2015 to 1.1% in FY2018. For the last three years the average CAPEX/Revenue was 1.4%.
Return on investment
The company operates at negative ROIC (-4.9%) and ROE (-7.7%). ROIC dropped on 18.9 pp from 14.0% to -4.9% in FY2018. ROE dropped on 20.2 pp from 12.5% to -7.7% in FY2018.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.9x and Debt / EBITDA is . Net Debt / EBITDA jumped on 2.7x from -2.7x to in FY2018. Debt jumped on 3,836% while cash jumped on 22.5%.
Cohu, Inc. has no short term refinancing risk: cash is higher than short term debt (2,423.2%).
Management team
Cohu, Inc.'s CEO Luis A Muller is a founder and has spent 4 years with the company. The company's CFO Jeffrey D Jones has spent 11 years with the company.
Financial and operational results
FY ended 12/29/2018
Cohu, Inc. ($COHU) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 333.3 | 269.7 | 282.1 | 352.7 | 451.8 | 28.1% |
| Gross Profit | 112.2 | 89.0 | 94.8 | 143.4 | 159.3 | 11.1% |
| SG&A | 57.5 | 51.2 | 54.3 | 60.7 | 96.8 | 59.3% |
| EBITDA | 22.6 | 19.2 | 16.1 | 46.9 | -3.7 | -108.0% |
| Net Income | 8.7 | 0.3 | 3.0 | 32.8 | -32.2 | -198.0% |
Balance Sheet
|
|---|
| Cash | 70.9 | 115.4 | 96.0 | 134.3 | 164.5 | 22.5% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 4.4 | 6.8 | 54.7% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 4.6 | 346.0 | 7,463.7% |
Cash flow
|
|---|
| Capex | 1.7 | 6.6 | 3.5 | 6.1 | 5.0 | -18.5% |
Ratios
|
|---|
| Revenue growth | 43.9% | -19.1% | 4.6% | 25.0% | 28.1% | |
| EBITDA growth | -195.1% | -15.0% | -16.4% | 191.8% | -108.0% | |
|
|---|
| Gross Margin | 33.7% | 33.0% | 33.6% | 40.7% | 35.3% | -5.4% |
| EBITDA Margin | 6.8% | 7.1% | 5.7% | 13.3% | -0.8% | -14.1% |
| SG&A, % of revenue | 17.3% | 19.0% | 19.3% | 17.2% | 21.4% | 4.2% |
| Net Income Margin | 2.6% | 0.1% | 1.1% | 9.3% | -7.1% | -16.4% |
| CAPEX, % of revenue | 0.5% | 2.4% | 1.2% | 1.7% | 1.1% | -0.6% |
|
|---|
| ROIC | 3.5% | 3.2% | 2.4% | 14.0% | -4.9% | -18.9% |
| ROE | 3.5% | 0.1% | 1.3% | 12.5% | -7.7% | -20.2% |
| Net Debt/EBITDA | -3.1x | -6.0x | -6.0x | -2.7x | |
Cohu, Inc. ($COHU) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 95 | 100 | 86 | 171 | | 17.3% | 6.3% | -8.0% | 102.9% |
| EBITDA | 14 | 13 | 9 | -40 | | 37.4% | -4.3% | -28.3% | -643.5% |
| Net Income | 8 | 12 | 5 | -57 | | 20.1% | 11.7% | -45.1% | -923.1% |
Balance Sheet
|
|---|
| Cash | 115 | 127 | 171 | 164 | | 37.3% | 37.3% | 39.9% | 22.5% |
| Short Term Debt | 5 | 4 | 4 | 7 | | 4.9% | -5.2% | -7.4% | 54.7% |
| Long Term Debt | 5 | 4 | 4 | 346 | | -22.9% | -22.2% | -20.9% | 7,463.7% |
Ratios
|
|---|
| Gross Margin | 42.3% | 42.2% | 39.9% | 24.6% | | 2.5% | 2.7% | 0.5% | -17.2% |
| EBITDA Margin | 14.8% | 13.2% | 10.7% | -23.7% | | 2.2% | -1.5% | -3.0% | -32.5% |
| Net Income Margin | 8.5% | 11.7% | 5.6% | -33.3% | | 0.2% | 0.6% | -3.8% | -41.5% |
Peers in Semiconductor Equipment
Below you can find Cohu, Inc. benchmarking vs. other companies in Semiconductor Equipment industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Atomera Incorporated ($ATOM) | | | | | 123.6% |
| ACM Research, Inc. ($ACMR) | | | -12.3% | 33.4% | 104.5% |
| SCI Engineered Materials Inc ($SCIA) | | -13.0% | -32.1% | 24.4% | 67.0% |
| Aehr Test Systems ($AEHR) | | -49.1% | 44.7% | 30.3% | 56.4% |
| SolarEdge Technologies, Inc. ($SEDG) | | 144.0% | 50.7% | 23.9% | 54.4% |
| |
|---|
| Median (37 companies) | | -0.5% | 7.8% | 24.2% | 14.0% |
|---|
| Cohu, Inc. ($COHU) | | -19.1% | 4.6% | 25.0% | 28.1% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | 99.5% | 99.8% | 99.8% | 98.3% | 96.7% |
| KLA-Tencor Corporation ($KLAC) | 57.9% | 56.8% | 61.0% | 63.0% | 64.1% |
| Teradyne, Inc. ($TER) | 53.3% | 55.8% | 54.7% | 57.2% | 58.1% |
| Nova Measuring Instruments Ltd. ($NVMI) | 52.7% | 51.9% | 45.9% | 59.1% | 57.8% |
| Nanometrics Incorporated ($NANO) | 47.2% | 47.9% | 51.6% | 52.9% | 56.7% |
| |
|---|
| Median (38 companies) | 34.6% | 38.9% | 40.0% | 44.0% | 41.2% |
|---|
| Cohu, Inc. ($COHU) | 33.7% | 33.0% | 33.6% | 40.7% | 35.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 29.2% | 26.4% | 34.4% | 38.3% | 39.6% |
| DAQO New Energy Corp. ($DQ) | 32.9% | 31.6% | 43.3% | 49.1% | 36.1% |
| Xperi Corporation ($XPER) | 66.7% | 67.5% | 47.6% | 23.4% | 34.3% |
| Lam Research Corporation ($LRCX) | 21.1% | 20.3% | 23.2% | 27.6% | 32.0% |
| Cabot Microelectronics Corporation ($CCMP) | 21.6% | 22.6% | 23.4% | 27.2% | 31.5% |
| |
|---|
| Median (37 companies) | 7.0% | 10.3% | 12.1% | 16.2% | 16.6% |
|---|
| Cohu, Inc. ($COHU) | 6.8% | 7.1% | 5.7% | 13.3% | -0.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rubicon Technology, Inc. ($RBCN) | 15.0% | 4.0% | 3.6% | 0.0% | 58.8% |
| DAQO New Energy Corp. ($DQ) | 42.2% | 44.7% | 29.5% | 19.8% | 47.4% |
| AXT Inc ($AXTI) | 2.4% | 5.4% | 3.4% | 21.6% | 39.6% |
| STR Holdings Inc ($STRI) | 7.9% | 8.1% | 1.6% | 9.0% | 36.6% |
| Photronics, Inc. ($PLAB) | 20.0% | 19.8% | 10.4% | 20.4% | 17.3% |
| |
|---|
| Median (37 companies) | 2.3% | 2.9% | 2.6% | 3.2% | 3.0% |
|---|
| Cohu, Inc. ($COHU) | 0.5% | 2.4% | 1.2% | 1.7% | 1.1% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 17.9% | 16.5% | 27.2% | 34.0% | 39.9% |
| Lam Research Corporation ($LRCX) | 10.7% | 10.9% | 11.8% | 18.7% | 33.9% |
| Versum Materials, Inc. ($VSM) | | 26.2% | 32.4% | 30.0% | 32.1% |
| Advanced Energy Industries, Inc. ($AEIS) | 8.8% | 30.2% | 41.2% | 45.7% | 31.3% |
| SolarEdge Technologies, Inc. ($SEDG) | -815.6% | 33.6% | 31.2% | 26.5% | 28.6% |
| |
|---|
| Median (39 companies) | 3.4% | 6.0% | 7.6% | 12.2% | 12.1% |
|---|
| Cohu, Inc. ($COHU) | 3.5% | 3.2% | 2.4% | 14.0% | -4.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | -0.3x | -0.1x | 4.2x | 5.0x | 2.6x |
| Ultra Clean Holdings, Inc. ($UCTT) | -1.2x | 1.5x | 0.4x | -0.2x | 2.4x |
| Ichor Holdings ($ICHR) | 3.1x | 1.7x | -0.4x | 2.0x | 1.8x |
| Versum Materials, Inc. ($VSM) | -0.2x | -0.1x | 2.7x | 2.1x | 1.4x |
| DAQO New Energy Corp. ($DQ) | 4.6x | 4.3x | 2.3x | 0.9x | 1.2x |
| |
|---|
| Median (32 companies) | -1.2x | -1.0x | -1.2x | -0.7x | -1.0x |
|---|
