Cohu, Inc. (NASDAQ:COHU) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 08:30 am ET

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Cohu, Inc. (NASDAQ:COHU) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Thank you for standing by, and welcome to the Cohu Incorporated Second Quarter 2020 Financial Results Conference Call. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised today's conference is being recorded. [Operator Instructions]

I'd now like to hand the conference over to your speaker today, Mr. Jeff Jones. Thank you. Please go ahead, sir.

Executive
Jeff Jones

Thank you and good morning and welcome to our conference call to discuss Cohu's second quarter results and third quarter 2020 outlook. I'm joined today by our President and CEO, Luis Muller. If you need a copy of our earnings release, you may access it from our website at cohu.com or by contacting Cohu Investor Relations.

There's also a slide presentation in conjunction with today's call that may be accessed on Cohu's website in the Investor Relations section. Replays of this call will be available via the same page after the call concludes.

Now to the Safe Harbor. During today's call, we will make forward-looking statements reflecting management's current expectations concerning Cohu's future business. These statements are based on current information that we have assessed, which by its nature is subject to rapid and even abrupt changes.

We encourage you to review the forward-looking statements section of the slide presentation and the earnings release, as well as Cohu's filings with the SEC, including the most recently filed Form 10-K and Form 10-Q. Our comments speak only as of today, July 30, 2020 and Cohu assumes no obligation to update these statements for developments occurring after this call.

Finally, during this call, we will discuss certain non-GAAP financial measures. Please refer to our earnings release and slide presentation for reconciliations to the most comparable GAAP measures.

Now I'd like to turn the call over to Luis Muller, Cohu's President and CEO. Luis?

Executive
Luis Muller

Thanks, Jeff. Hello everyone and thanks for joining us. Today, I'll discuss some of our accomplishments in the second quarter and provide our perspective for the rest of the year. Jeff will later discuss financial results and provide guidance for the third quarter.

Sales in the second quarter were approximately $144 million and a little better than the midpoint of guidance with our manufacturing facilities back to full operation after the COVID-19 disruption that started in mid-March.

Thanks to our operations team, we incurred lower outsourcing costs than originally anticipated and delivered higher gross margin and profitability in Q2. Orders were split 52% recurring and 48% systems and mobility once again represented close to one-third of our system bookings.

We saw strong RF tester demand for connectivity in the second quarter with one of our major customers committing their flagship 5G RF Front-End ICs to our platform. We capture a new opportunity testing transceivers, further expanding our product penetration in the RF segment. There was also increased demand for IoT connectivity, testing devices using Bluetooth, Zigbee and newer Wi-Fi six technologies.

Cohu's RF instruments delivered leading throughput and performance and ultimately low-cost of test for next-generation RF semiconductor devices.