Cohu Reports Third Quarter 2008 Operating Results

POWAY, Calif.--(Business Wire)--
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.

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Cohu, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts) (unaudited)

Three months ended (1) Nine months ended (1)
September September September September
27, 29, 27, 29,
2008 2007 2008 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 income
taxes 116 3,275 3,853 9,154
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 before
income taxes - - - (66)
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.
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Cohu, Inc.
Condensed Consolidated Balance Sheets
(in thousands) (unaudited)

September 27, December 29,
2008 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
----------------------------------------------------------------------
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For press releases and other information of interest to investors,
please visit Cohu's website at www.cohu.com.

Cohu, Inc.
Jeffrey D. Jones - Investor Relations, 858-848-8106

Copyright Business Wire 2008