Cohu Reports Third Quarter 1999 Results and Record Sales, Orders and Backlog.

SAN DIEGO--(BUSINESS WIRE)--Oct. 14, 1999--

Cohu, Inc. (Nasdaq:COHU) today announced sales were a record $61.7 million for the third quarter ended September 30, 1999 compared to $34.3 million for the third quarter of 1998 and $43.5 million for the second quarter of 1999. Net income for the third quarter of 1999 was $7.5 million, or $.36 per share, compared to net income of $.5 million or $.02 per share for the third quarter of 1998 and net income of $4.9 million or $.24 for the second quarter of 1999.

Sales for the first nine months of 1999 were $134.7 million with net income of $13.7 million and earnings per share of $.67. This compares to sales of $146.2 million with net income of $14.0 million and earnings per share of $.70 for the first nine months of 1998.

On August 19, 1999, the Company's Board of Directors authorized a two-for-one stock split in the form of a 100% stock dividend that was paid September 24, 1999, to stockholders of record on September 3, 1999. All share and per share amounts included herein have been restated to reflect the split.

New orders for the third quarter of 1999 were a record $76.5 million compared to $17.7 million for the third quarter of 1998 and $62.3 million for the second quarter of 1999. Backlog was a record $71.1 million at September 30, 1999 compared to $56.3 million at June 30, 1999.

Third quarter 1999 sales of test handling equipment accounted for 86% of total sales. Sales of television cameras and related equipment were 9% of sales and metal detection and microwave equipment contributed 5% of sales.

Charles A. Schwan, chairman and chief executive officer, stated, "Increased orders for our pick and place semiconductor test handler products, particularly our new Castle and Summit handlers, resulted in record orders for the quarter. We are pleased with the market acceptance of our new test handlers and remain committed to developing new products to meet the future requirements of our semiconductor customers."

The Company's Board of Directors announced that it has approved a quarterly cash dividend of $.045 per share payable on January 14, 2000 to shareholders of record on December 1, 1999. The Company has paid consecutive quarterly cash dividends since 1977.

Certain matters discussed in this report 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 Company's ability to convert new products under development into production on a timely basis, realize acceptable profit margins on such products and support product development and meet customer delivery requirements for next generation equipment; the effect of competitive products; the concentration of revenues in a limited number of customers; demands on the Company's infrastructure; the cyclical and volatile nature of capital expenditures by semiconductor manufacturers; and other risks addressed in filings with the Securities and Exchange Commission. The Company assumes no obligation to update the information in this report.

Cohu is the largest U.S. based and one of the world's largest suppliers of test handling equipment used by semiconductor manufacturers in final test operations. The Company, with sales and service personnel worldwide, also manufactures closed circuit television, metal detection and microwave equipment.

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

                          Three Months Ended        Nine Months Ended
                            September 30,             September 30,
                           1999        1998        1999        1998
                           ----        ----        ----        ----
Net Sales              $  61,728   $  34,277    $ 134,725   $ 146,170
Cost and expenses:
 Cost of sales            37,076      25,606       81,990      94,598
 Research and
  development              5,798       4,726       15,145      16,032
 Selling,
  general and
  administrative           8,439       4,226       19,680      16,641

                          51,313      34,558      116,815     127,271

Income (loss)
 from operations          10,415        (281)      17,910      18,899
Interest income            1,067         847        3,233       2,396

Income before
 income taxes             11,482         566       21,143      21,295
Provision for
 income taxes              4,000         100        7,400       7,300

Net income             $   7,482   $     466    $  13,743   $  13,995

Earnings per share (see note A):
 Basic                 $     .38   $     .02    $     .70   $     .72
 Diluted               $     .36   $     .02    $     .67   $     .70

Weighted average
 number of shares (see note A):
 Basic                    19,818      19,474       19,719      19,434
 Diluted                  20,699      19,820       20,387      20,002

Note A: Restated for two-for-one stock split effective September 1999


Condensed Consolidated Balance Sheets
(in thousands) (unaudited)

                                          September 30,   December 31,
                                               1999           1998
                                               ----           ----
Assets:
Current assets:
   Cash and investments                     $ 74,203         $ 86,703
   Accounts receivable                        43,864           18,800
   Inventories                                51,263           25,877
   Deferred taxes and other                   12,186           12,018

                                             181,516          143,398

Property, plant & equipment, net              17,058           17,613
Other assets                                   1,003            1,220
      Total assets                          $199,577         $162,231

Liabilities & Stockholders' Equity:
   Current liabilities                      $ 48,196         $ 23,255
   Noncurrent liabilities                      1,510            1,513
   Stockholders' equity                      149,871          137,463
      Total liabilities & equity            $199,577         $162,231