Company Profi le
Cohu is a supplier of test handling, burn-in, thermal subsystems and MEMS test solutions used by the global semiconductor
industry, microwave communications and video equipment.
Financial Highlights
(in thousands, except per share data)
Operations:
Orders
Net sales
Net income
Income per share:
Basic
Diluted
Balance Sheet:
Cash, cash equivalents and short-term investments
Working capital
Total assets
Stockholders’ equity
$350
300
250
200
150
100
50
0
$350
300
250
200
150
100
50
0
07 08 09 10 11
ORDERS
(In Millions)
07 08 09 10 11
SALES
(In Millions)
$40
30
20
10
0
-10
-20
-30
2011
$261,244
$308,968
$15,719
$0.65
$0.64
$105,002
$191,945
$361,608
$291,031
2010
$343,264
$322,667
$24,644
$1.04
$1.02
$98,175
$168,683
$366,043
$274,725
$350
300
250
200
150
100
50
0
07 08 09 10 11
NET INCOME (LOSS)
(In Millions)
07 08 09 10 11
STOCKHOLDERS’ EQUITY
(In Millions)
Forward-Looking Statements and Non-GAAP Amounts
This Cohu, Inc. 2011 Annual Report contains forward-looking statements including expectations of market conditions, challenges
and plans, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the Safe
Harbor provisions created by that statute. These forward-looking statements are based on management’s current expectations
and beliefs, including estimates and projections about our industries. These statements are not guarantees of future performance
and are subject to certain risks, uncertainties, and assumptions, including but not limited to, those discussed under the caption
“1A. Risk Factors” beginning on page 9 of this Annual Report that could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the
time they are made.
Certain amounts referred to in this Annual Report are “Non-GAAP” as contrasted with amounts prepared under generally accepted
accounting principles (GAAP). These Non-GAAP amounts adjust the Company’s actual results prepared under GAAP to exclude
charges and the related income tax effect for share-based compensation, the amortization of acquired intangible assets and
inventory step-up adjustments. These Non-GAAP amounts are not meant as a substitute for GAAP, but are included solely for
informational and comparative purposes. Cohu’s management believes that this information can assist investors in evaluating
the Company’s operational trends, (cid:192) nancial performance and cash generating capacity and allows investors to evaluate Cohu’s
(cid:192) nancial performance in the same manner as management. However, the non-GAAP (cid:192) nancial amounts should not be regarded as
a replacement for (or superior to) corresponding, similarly captioned, GAAP amounts.
Cohu, Inc. 2011 Annual Report
(cid:4)(cid:5)(cid:6)(cid:8)(cid:9)(cid:1)(cid:12)(cid:21)(cid:20)(cid:22)(cid:23)(cid:17)(cid:24)(cid:14)(cid:18)(cid:23)(cid:16)(cid:1)(cid:12)(cid:18)(cid:21)(cid:15)(cid:19)(cid:16)
(cid:13)(cid:20)(cid:24)(cid:14)(cid:25)(cid:2)(cid:1)(cid:12)(cid:11)(cid:1)(cid:1)(cid:10)(cid:5)(cid:3)(cid:8)(cid:7)
(cid:3)(cid:9)(cid:6)(cid:14)(cid:1)(cid:4)(cid:9)(cid:12)(cid:12)(cid:13)(cid:16)(cid:1)(cid:5)(cid:15)(cid:13)(cid:7)(cid:11)(cid:10)(cid:13)(cid:12)(cid:8)(cid:9)(cid:14)(cid:2)
(cid:25)(cid:56)(cid:53)(cid:53)(cid:56)(cid:64)(cid:50)(cid:55)(cid:48)(cid:1)(cid:59)(cid:46)(cid:44)(cid:56)(cid:59)(cid:45)(cid:1)(cid:60)(cid:42)(cid:53)(cid:46)(cid:60)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:60)(cid:61)(cid:59)(cid:56)(cid:55)(cid:48)(cid:46)(cid:60)(cid:61)(cid:1)(cid:66)(cid:46)(cid:42)(cid:59)(cid:1)(cid:46)(cid:63)(cid:46)(cid:59)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:60)(cid:46)(cid:54)(cid:50)(cid:44)(cid:56)(cid:55)(cid:45)(cid:62)(cid:44)(cid:61)(cid:56)(cid:59)(cid:1)(cid:46)(cid:58)(cid:62)(cid:50)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:1)(cid:50)(cid:55)(cid:45)(cid:62)(cid:60)(cid:61)(cid:59)(cid:66)(cid:1)(cid:50)(cid:55)(cid:1)(cid:12)(cid:10)(cid:11)(cid:10)(cid:7)
(cid:50)(cid:55)(cid:45)(cid:62)(cid:60)(cid:61)(cid:59)(cid:66)(cid:1)(cid:42)(cid:55)(cid:42)(cid:53)(cid:66)(cid:60)(cid:61)(cid:60)(cid:1)(cid:57)(cid:59)(cid:46)(cid:45)(cid:50)(cid:44)(cid:61)(cid:46)(cid:45)(cid:1)(cid:61)(cid:49)(cid:42)(cid:61)(cid:1)(cid:12)(cid:10)(cid:11)(cid:11)(cid:1)(cid:64)(cid:56)(cid:62)(cid:53)(cid:45)(cid:1)(cid:43)(cid:46)(cid:1)(cid:42)(cid:1)(cid:45)(cid:56)(cid:64)(cid:55)(cid:1)(cid:66)(cid:46)(cid:42)(cid:59)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:60)(cid:46)(cid:54)(cid:50)(cid:44)(cid:56)(cid:55)(cid:45)(cid:62)(cid:44)(cid:61)(cid:56)(cid:59)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:60)(cid:46)(cid:54)(cid:50)(cid:1)(cid:46)(cid:58)(cid:62)(cid:50)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)
(cid:50)(cid:55)(cid:45)(cid:62)(cid:60)(cid:61)(cid:59)(cid:50)(cid:46)(cid:60)(cid:9)(cid:1)(cid:1)(cid:31)(cid:56)(cid:55)(cid:61)(cid:49)(cid:53)(cid:66)(cid:1)(cid:56)(cid:59)(cid:45)(cid:46)(cid:59)(cid:60)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:43)(cid:42)(cid:44)(cid:52)(cid:46)(cid:55)(cid:45)(cid:1)(cid:60)(cid:46)(cid:54)(cid:50)(cid:1)(cid:46)(cid:58)(cid:62)(cid:50)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:7)(cid:1)(cid:42)(cid:60)(cid:1)(cid:59)(cid:46)(cid:57)(cid:56)(cid:59)(cid:61)(cid:46)(cid:45)(cid:1)(cid:43)(cid:66)(cid:1)(cid:37)(cid:24)(cid:31)(cid:28)(cid:7)(cid:1)(cid:45)(cid:46)(cid:44)(cid:53)(cid:50)(cid:55)(cid:46)(cid:45)(cid:1)(cid:50)(cid:55)(cid:1)(cid:20)(cid:62)(cid:48)(cid:62)(cid:60)(cid:61)(cid:1)(cid:12)(cid:10)(cid:11)(cid:10)
(cid:42)(cid:55)(cid:45)(cid:1)(cid:43)(cid:66)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:46)(cid:55)(cid:45)(cid:1)(cid:56)(cid:47)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:66)(cid:46)(cid:42)(cid:59)(cid:1)(cid:64)(cid:46)(cid:59)(cid:46)(cid:1)(cid:53)(cid:46)(cid:60)(cid:60)(cid:1)(cid:61)(cid:49)(cid:42)(cid:55)(cid:1)(cid:15)(cid:10)(cid:3)(cid:1)(cid:56)(cid:47)(cid:1)(cid:54)(cid:50)(cid:45)(cid:8)(cid:66)(cid:46)(cid:42)(cid:59)(cid:1)(cid:53)(cid:46)(cid:63)(cid:46)(cid:53)(cid:60)(cid:9)(cid:1)(cid:1)(cid:20)(cid:60)(cid:1)(cid:42)(cid:1)(cid:59)(cid:46)(cid:60)(cid:62)(cid:53)(cid:61)(cid:7)(cid:1)(cid:22)(cid:56)(cid:49)(cid:62)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:56)(cid:61)(cid:49)(cid:46)(cid:59)(cid:1)(cid:43)(cid:42)(cid:44)(cid:52)(cid:46)(cid:55)(cid:45)
(cid:46)(cid:58)(cid:62)(cid:50)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:1)(cid:44)(cid:56)(cid:54)(cid:57)(cid:42)(cid:55)(cid:50)(cid:46)(cid:60)(cid:1)(cid:46)(cid:55)(cid:61)(cid:46)(cid:59)(cid:46)(cid:45)(cid:1)(cid:12)(cid:10)(cid:11)(cid:11)(cid:1)(cid:64)(cid:50)(cid:61)(cid:49)(cid:1)(cid:53)(cid:56)(cid:64)(cid:46)(cid:59)(cid:1)(cid:43)(cid:42)(cid:44)(cid:52)(cid:53)(cid:56)(cid:48)(cid:60)(cid:1)(cid:44)(cid:56)(cid:54)(cid:57)(cid:42)(cid:59)(cid:46)(cid:45)(cid:1)(cid:61)(cid:56)(cid:1)(cid:61)(cid:49)(cid:56)(cid:60)(cid:46)(cid:1)(cid:46)(cid:42)(cid:59)(cid:53)(cid:50)(cid:46)(cid:59)(cid:1)(cid:50)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:66)(cid:46)(cid:42)(cid:59)(cid:9)(cid:1)(cid:1)(cid:33)(cid:59)(cid:45)(cid:46)(cid:59)(cid:60)
(cid:59)(cid:46)(cid:44)(cid:56)(cid:63)(cid:46)(cid:59)(cid:46)(cid:45)(cid:1)(cid:60)(cid:56)(cid:54)(cid:46)(cid:64)(cid:49)(cid:42)(cid:61)(cid:1)(cid:45)(cid:62)(cid:59)(cid:50)(cid:55)(cid:48)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:47)(cid:50)(cid:59)(cid:60)(cid:61)(cid:1)(cid:61)(cid:64)(cid:56)(cid:1)(cid:58)(cid:62)(cid:42)(cid:59)(cid:61)(cid:46)(cid:59)(cid:60)(cid:1)(cid:56)(cid:47)(cid:1)(cid:12)(cid:10)(cid:11)(cid:11)(cid:7)(cid:1)(cid:43)(cid:62)(cid:61)(cid:1)(cid:47)(cid:46)(cid:53)(cid:53)(cid:1)(cid:56)(cid:47)(cid:47)(cid:1)(cid:42)(cid:48)(cid:42)(cid:50)(cid:55)(cid:1)(cid:45)(cid:62)(cid:59)(cid:50)(cid:55)(cid:48)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:60)(cid:46)(cid:44)(cid:56)(cid:55)(cid:45)(cid:1)(cid:49)(cid:42)(cid:53)(cid:47)(cid:1)(cid:56)(cid:47)(cid:1)(cid:61)(cid:49)(cid:46)
(cid:66)(cid:46)(cid:42)(cid:59)(cid:9)(cid:1)(cid:1)(cid:38)(cid:49)(cid:46)(cid:1)(cid:44)(cid:66)(cid:44)(cid:53)(cid:50)(cid:44)(cid:42)(cid:53)(cid:50)(cid:61)(cid:66)(cid:1)(cid:61)(cid:49)(cid:42)(cid:61)(cid:1)(cid:49)(cid:42)(cid:60)(cid:1)(cid:53)(cid:56)(cid:55)(cid:48)(cid:1)(cid:44)(cid:49)(cid:42)(cid:59)(cid:42)(cid:44)(cid:61)(cid:46)(cid:59)(cid:50)(cid:67)(cid:46)(cid:45)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:60)(cid:46)(cid:54)(cid:50)(cid:44)(cid:56)(cid:55)(cid:45)(cid:62)(cid:44)(cid:61)(cid:56)(cid:59)(cid:1)(cid:46)(cid:58)(cid:62)(cid:50)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:1)(cid:50)(cid:55)(cid:45)(cid:62)(cid:60)(cid:61)(cid:59)(cid:66)(cid:1)(cid:64)(cid:42)(cid:60)(cid:1)(cid:47)(cid:62)(cid:59)(cid:61)(cid:49)(cid:46)(cid:59)
(cid:50)(cid:54)(cid:57)(cid:42)(cid:44)(cid:61)(cid:46)(cid:45)(cid:1)(cid:43)(cid:66) (cid:61)(cid:49)(cid:46)(cid:1)(cid:55)(cid:42)(cid:61)(cid:62)(cid:59)(cid:42)(cid:53)(cid:1)(cid:45)(cid:50)(cid:60)(cid:42)(cid:60)(cid:61)(cid:46)(cid:59)(cid:1)(cid:50)(cid:55)(cid:1)(cid:29)(cid:42)(cid:57)(cid:42)(cid:55)(cid:1)(cid:42)(cid:55)(cid:45) (cid:54)(cid:42)(cid:44)(cid:59)(cid:56)(cid:46)(cid:44)(cid:56)(cid:55)(cid:56)(cid:54)(cid:50)(cid:44)(cid:1)(cid:47)(cid:42)(cid:44)(cid:61)(cid:56)(cid:59)(cid:60)(cid:7)(cid:1)(cid:50)(cid:55)(cid:44)(cid:53)(cid:62)(cid:45)(cid:50)(cid:55)(cid:48)(cid:1)(cid:49)(cid:50)(cid:48)(cid:49)(cid:1)(cid:62)(cid:55)(cid:46)(cid:54)(cid:57)(cid:53)(cid:56)(cid:66)(cid:54)(cid:46)(cid:55)(cid:61)(cid:7)
(cid:59)(cid:46)(cid:44)(cid:56)(cid:59)(cid:45)(cid:1)(cid:45)(cid:46)(cid:47)(cid:50)(cid:44)(cid:50)(cid:61)(cid:60)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:57)(cid:56)(cid:53)(cid:50)(cid:61)(cid:50)(cid:44)(cid:42)(cid:53)(cid:1)(cid:48)(cid:59)(cid:50)(cid:45)(cid:53)(cid:56)(cid:44)(cid:52)(cid:1)(cid:50)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:39)(cid:55)(cid:50)(cid:61)(cid:46)(cid:45)(cid:1)(cid:37)(cid:61)(cid:42)(cid:61)(cid:46)(cid:60)(cid:7)(cid:1)(cid:42)(cid:60)(cid:1)(cid:64)(cid:46)(cid:53)(cid:53)(cid:1)(cid:42)(cid:60)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:60)(cid:56)(cid:63)(cid:46)(cid:59)(cid:46)(cid:50)(cid:48)(cid:55)(cid:1)(cid:45)(cid:46)(cid:43)(cid:61)(cid:1)(cid:44)(cid:59)(cid:50)(cid:60)(cid:50)(cid:60)(cid:1)(cid:50)(cid:55)(cid:1)(cid:24)(cid:62)(cid:59)(cid:56)(cid:57)(cid:46)
(cid:42)(cid:55)(cid:45)(cid:1)(cid:44)(cid:56)(cid:55)(cid:44)(cid:46)(cid:59)(cid:55)(cid:60)(cid:1)(cid:42)(cid:43)(cid:56)(cid:62)(cid:61)(cid:1)(cid:42)(cid:55)(cid:1)(cid:56)(cid:63)(cid:46)(cid:59)(cid:49)(cid:46)(cid:42)(cid:61)(cid:46)(cid:45)(cid:1)(cid:22)(cid:49)(cid:50)(cid:55)(cid:46)(cid:60)(cid:46)(cid:1)(cid:46)(cid:44)(cid:56)(cid:55)(cid:56)(cid:54)(cid:66)(cid:9)
(cid:28)(cid:55)(cid:1)(cid:61)(cid:49)(cid:42)(cid:61)(cid:1)(cid:44)(cid:49)(cid:42)(cid:53)(cid:53)(cid:46)(cid:55)(cid:48)(cid:50)(cid:55)(cid:48)(cid:1)(cid:46)(cid:55)(cid:63)(cid:50)(cid:59)(cid:56)(cid:55)(cid:54)(cid:46)(cid:55)(cid:61)(cid:7)(cid:1)(cid:22)(cid:56)(cid:49)(cid:62)(cid:1)(cid:64)(cid:42)(cid:60)(cid:1)(cid:55)(cid:46)(cid:63)(cid:46)(cid:59)(cid:61)(cid:49)(cid:46)(cid:53)(cid:46)(cid:60)(cid:60)(cid:1)(cid:42)(cid:43)(cid:53)(cid:46)(cid:1)(cid:61)(cid:56)(cid:1)(cid:57)(cid:56)(cid:60)(cid:61)(cid:1)(cid:60)(cid:56)(cid:53)(cid:50)(cid:45)(cid:1)(cid:59)(cid:46)(cid:60)(cid:62)(cid:53)(cid:61)(cid:60)(cid:9)(cid:1)(cid:1)(cid:25)(cid:56)(cid:59)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:66)(cid:46)(cid:42)(cid:59)(cid:1)(cid:46)(cid:55)(cid:45)(cid:46)(cid:45)
(cid:23)(cid:46)(cid:44)(cid:46)(cid:54)(cid:43)(cid:46)(cid:59)(cid:1)(cid:13)(cid:11)(cid:7)(cid:1)(cid:12)(cid:10)(cid:11)(cid:11)(cid:7)(cid:1)(cid:60)(cid:42)(cid:53)(cid:46)(cid:60)(cid:1)(cid:64)(cid:46)(cid:59)(cid:46)(cid:1)(cid:2)(cid:13)(cid:10)(cid:19)(cid:9)(cid:10)(cid:1)(cid:54)(cid:50)(cid:53)(cid:53)(cid:50)(cid:56)(cid:55)(cid:1)(cid:44)(cid:56)(cid:54)(cid:57)(cid:42)(cid:59)(cid:46)(cid:45)(cid:1)(cid:61)(cid:56)(cid:1)(cid:2)(cid:13)(cid:12)(cid:12)(cid:9)(cid:17)(cid:1)(cid:54)(cid:50)(cid:53)(cid:53)(cid:50)(cid:56)(cid:55)(cid:1)(cid:50)(cid:55)(cid:1)(cid:12)(cid:10)(cid:11)(cid:10)(cid:9)(cid:1)(cid:1)(cid:32)(cid:56)(cid:55)(cid:8)(cid:26)(cid:20)(cid:20)(cid:34)(cid:1)(cid:55)(cid:46)(cid:61)
(cid:50)(cid:55)(cid:44)(cid:56)(cid:54)(cid:46)(cid:1)(cid:64)(cid:42)(cid:60)(cid:1)(cid:2)(cid:12)(cid:13)(cid:9)(cid:14)(cid:1)(cid:54)(cid:50)(cid:53)(cid:53)(cid:50)(cid:56)(cid:55)(cid:7)(cid:1)(cid:56)(cid:59)(cid:1)(cid:2)(cid:10)(cid:9)(cid:19)(cid:16)(cid:1)(cid:57)(cid:46)(cid:59)(cid:1)(cid:60)(cid:49)(cid:42)(cid:59)(cid:46)(cid:7)(cid:1)(cid:44)(cid:56)(cid:54)(cid:57)(cid:42)(cid:59)(cid:46)(cid:45)(cid:1)(cid:61)(cid:56)(cid:1)(cid:32)(cid:56)(cid:55)(cid:8)(cid:26)(cid:20)(cid:20)(cid:34)(cid:1)(cid:55)(cid:46)(cid:61)(cid:1)(cid:50)(cid:55)(cid:44)(cid:56)(cid:54)(cid:46)(cid:1)(cid:56)(cid:47)(cid:1)(cid:2)(cid:13)(cid:13)(cid:9)(cid:12)(cid:1)(cid:54)(cid:50)(cid:53)(cid:53)(cid:50)(cid:56)(cid:55)(cid:7)(cid:1)(cid:56)(cid:59)
(cid:2)(cid:11)(cid:9)(cid:13)(cid:18)(cid:1)(cid:57)(cid:46)(cid:59)(cid:1)(cid:60)(cid:49)(cid:42)(cid:59)(cid:46)(cid:7)(cid:1)(cid:50)(cid:55)(cid:1)(cid:12)(cid:10)(cid:11)(cid:10)(cid:9)(cid:1)(cid:1)(cid:33)(cid:55)(cid:1)(cid:42)(cid:1)(cid:26)(cid:20)(cid:20)(cid:34)(cid:1)(cid:43)(cid:42)(cid:60)(cid:50)(cid:60)(cid:7)(cid:1)(cid:12)(cid:10)(cid:11)(cid:11)(cid:1)(cid:55)(cid:46)(cid:61)(cid:1)(cid:50)(cid:55)(cid:44)(cid:56)(cid:54)(cid:46)(cid:1)(cid:64)(cid:42)(cid:60)(cid:1)(cid:2)(cid:11)(cid:15)(cid:9)(cid:17)(cid:1)(cid:54)(cid:50)(cid:53)(cid:53)(cid:50)(cid:56)(cid:55)(cid:7)(cid:1)(cid:56)(cid:59)(cid:1)(cid:2)(cid:10)(cid:9)(cid:16)(cid:14)(cid:1)(cid:57)(cid:46)(cid:59)(cid:1)(cid:60)(cid:49)(cid:42)(cid:59)(cid:46)(cid:7)
(cid:44)(cid:56)(cid:54)(cid:57)(cid:42)(cid:59)(cid:46)(cid:45)(cid:1)(cid:61)(cid:56)(cid:1)(cid:2)(cid:12)(cid:14)(cid:9)(cid:16)(cid:1)(cid:54)(cid:50)(cid:53)(cid:53)(cid:50)(cid:56)(cid:55)(cid:7)(cid:1)(cid:56)(cid:59)(cid:1)(cid:2)(cid:11)(cid:9)(cid:10)(cid:12)(cid:1)(cid:57)(cid:46)(cid:59)(cid:1)(cid:60)(cid:49)(cid:42)(cid:59)(cid:46)(cid:7)(cid:1)(cid:50)(cid:55)(cid:1)(cid:12)(cid:10)(cid:11)(cid:10)(cid:9)(cid:1)(cid:1)(cid:22)(cid:56)(cid:49)(cid:62)(cid:68)(cid:60)(cid:1)(cid:43)(cid:42)(cid:53)(cid:42)(cid:55)(cid:44)(cid:46)(cid:1)(cid:60)(cid:49)(cid:46)(cid:46)(cid:61)(cid:1)(cid:59)(cid:46)(cid:54)(cid:42)(cid:50)(cid:55)(cid:46)(cid:45)(cid:1)(cid:60)(cid:61)(cid:59)(cid:56)(cid:55)(cid:48)(cid:7)(cid:1)(cid:64)(cid:50)(cid:61)(cid:49) (cid:55)(cid:56)
(cid:43)(cid:42)(cid:55)(cid:52)(cid:1)(cid:45)(cid:46)(cid:43)(cid:61)(cid:7)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:44)(cid:42)(cid:60)(cid:49)(cid:1)(cid:50)(cid:55)(cid:44)(cid:59)(cid:46)(cid:42)(cid:60)(cid:50)(cid:55)(cid:48)(cid:1)(cid:61)(cid:56)(cid:1)(cid:2)(cid:11)(cid:10)(cid:15)(cid:1)(cid:54)(cid:50)(cid:53)(cid:53)(cid:50)(cid:56)(cid:55)(cid:9)(cid:1)(cid:1)(cid:20)(cid:60)(cid:1)(cid:64)(cid:46)(cid:1)(cid:49)(cid:42)(cid:63)(cid:46)(cid:1)(cid:44)(cid:56)(cid:55)(cid:61)(cid:50)(cid:55)(cid:62)(cid:56)(cid:62)(cid:60)(cid:53)(cid:66)(cid:1)(cid:60)(cid:50)(cid:55)(cid:44)(cid:46)(cid:1)(cid:11)(cid:19)(cid:17)(cid:17)(cid:7)(cid:1)(cid:22)(cid:56)(cid:49)(cid:62)(cid:1)(cid:57)(cid:42)(cid:50)(cid:45)(cid:1)(cid:50)(cid:61)(cid:60)
(cid:60)(cid:49)(cid:42)(cid:59)(cid:46)(cid:49)(cid:56)(cid:53)(cid:45)(cid:46)(cid:59)(cid:60)(cid:1)(cid:42)(cid:1)(cid:58)(cid:62)(cid:42)(cid:59)(cid:61)(cid:46)(cid:59)(cid:53)(cid:66)(cid:1)(cid:44)(cid:42)(cid:60)(cid:49)(cid:1)(cid:45)(cid:50)(cid:63)(cid:50)(cid:45)(cid:46)(cid:55)(cid:45)(cid:7)(cid:1)(cid:50)(cid:55)(cid:1)(cid:12)(cid:10)(cid:11)(cid:11)(cid:1)(cid:56)(cid:47)(cid:1)(cid:2)(cid:10)(cid:9)(cid:10)(cid:16)(cid:1)(cid:57)(cid:46)(cid:59)(cid:1)(cid:60)(cid:49)(cid:42)(cid:59)(cid:46)(cid:9)
(cid:5)(cid:10)(cid:15)(cid:12)(cid:8)(cid:17)(cid:16)(cid:9)(cid:21)(cid:8)(cid:20)(cid:17)(cid:18)(cid:1)(cid:6)(cid:10)(cid:19)(cid:20)(cid:1)(cid:3)(cid:7)(cid:16)(cid:9)(cid:14)(cid:10)(cid:18)(cid:19)(cid:1)(cid:7)(cid:16)(cid:9)(cid:1)(cid:6)(cid:11)(cid:10)(cid:18)(cid:15)(cid:7)(cid:14)(cid:1)(cid:5)(cid:22)(cid:19)(cid:20)(cid:10)(cid:15)(cid:19)
(cid:24)(cid:58)(cid:62)(cid:50)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:1)(cid:62)(cid:61)(cid:50)(cid:53)(cid:50)(cid:67)(cid:42)(cid:61)(cid:50)(cid:56)(cid:55)(cid:1)(cid:59)(cid:42)(cid:61)(cid:46)(cid:60)(cid:1)(cid:56)(cid:55)(cid:1)(cid:44)(cid:62)(cid:60)(cid:61)(cid:56)(cid:54)(cid:46)(cid:59)(cid:1)(cid:57)(cid:59)(cid:56)(cid:45)(cid:62)(cid:44)(cid:61)(cid:50)(cid:56)(cid:55)(cid:1)(cid:47)(cid:53)(cid:56)(cid:56)(cid:59)(cid:60)(cid:1)(cid:49)(cid:42)(cid:63)(cid:46)(cid:1)(cid:57)(cid:59)(cid:56)(cid:63)(cid:46)(cid:55)(cid:1)(cid:61)(cid:56)(cid:1)(cid:43)(cid:46)(cid:1)(cid:42)(cid:1)(cid:59)(cid:46)(cid:53)(cid:50)(cid:42)(cid:43)(cid:53)(cid:46)(cid:1)(cid:50)(cid:55)(cid:45)(cid:50)(cid:44)(cid:42)(cid:61)(cid:56)(cid:59)(cid:1)(cid:56)(cid:47)(cid:1)(cid:55)(cid:46)(cid:42)(cid:59)
(cid:61)(cid:46)(cid:59)(cid:54)(cid:1)(cid:43)(cid:62)(cid:60)(cid:50)(cid:55)(cid:46)(cid:60)(cid:60)(cid:1)(cid:57)(cid:59)(cid:56)(cid:60)(cid:57)(cid:46)(cid:44)(cid:61)(cid:60)(cid:9)(cid:1)(cid:1)(cid:24)(cid:65)(cid:44)(cid:46)(cid:57)(cid:61)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:55)(cid:46)(cid:44)(cid:46)(cid:60)(cid:60)(cid:42)(cid:59)(cid:66)(cid:1)(cid:61)(cid:46)(cid:44)(cid:49)(cid:55)(cid:56)(cid:53)(cid:56)(cid:48)(cid:66)(cid:8)(cid:43)(cid:42)(cid:60)(cid:46)(cid:45)(cid:1)(cid:57)(cid:62)(cid:59)(cid:44)(cid:49)(cid:42)(cid:60)(cid:46)(cid:60)(cid:7)(cid:1)(cid:44)(cid:62)(cid:60)(cid:61)(cid:56)(cid:54)(cid:46)(cid:59)(cid:60)(cid:1)(cid:42)(cid:59)(cid:46)(cid:1)(cid:55)(cid:56)(cid:61)(cid:1)(cid:53)(cid:50)(cid:52)(cid:46)(cid:53)(cid:66)(cid:1)(cid:61)(cid:56)
(cid:43)(cid:62)(cid:66) (cid:55)(cid:46)(cid:64)(cid:1)(cid:46)(cid:58)(cid:62)(cid:50)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:1)(cid:64)(cid:49)(cid:46)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:66)(cid:1)(cid:49)(cid:42)(cid:63)(cid:46)(cid:1)(cid:50)(cid:45)(cid:53)(cid:46)(cid:1)(cid:44)(cid:42)(cid:57)(cid:42)(cid:44)(cid:50)(cid:61)(cid:66)(cid:9)(cid:1)(cid:1)(cid:38)(cid:49)(cid:59)(cid:56)(cid:62)(cid:48)(cid:49)(cid:56)(cid:62)(cid:61)(cid:1)(cid:12)(cid:10)(cid:11)(cid:11)(cid:7)(cid:1)(cid:62)(cid:61)(cid:50)(cid:53)(cid:50)(cid:67)(cid:42)(cid:61)(cid:50)(cid:56)(cid:55)(cid:1)(cid:59)(cid:42)(cid:61)(cid:46)(cid:60) (cid:45)(cid:59)(cid:56)(cid:57)(cid:57)(cid:46)(cid:45)(cid:7)(cid:1)(cid:59)(cid:46)(cid:42)(cid:44)(cid:49)(cid:50)(cid:55)(cid:48)
(cid:61)(cid:49)(cid:46)(cid:1)(cid:54)(cid:50)(cid:45)(cid:1)(cid:16)(cid:10)(cid:3)(cid:1)(cid:59)(cid:42)(cid:55)(cid:48)(cid:46)(cid:1)(cid:50)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:47)(cid:56)(cid:62)(cid:59)(cid:61)(cid:49)(cid:1)(cid:58)(cid:62)(cid:42)(cid:59)(cid:61)(cid:46)(cid:59)(cid:9)(cid:1)(cid:1)(cid:22)(cid:56)(cid:49)(cid:62)(cid:1)(cid:43)(cid:46)(cid:55)(cid:46)(cid:47)(cid:50)(cid:61)(cid:61)(cid:46)(cid:45)(cid:1)(cid:47)(cid:59)(cid:56)(cid:54)(cid:1)(cid:60)(cid:46)(cid:63)(cid:46)(cid:59)(cid:42)(cid:53)(cid:1)(cid:47)(cid:42)(cid:44)(cid:61)(cid:56)(cid:59)(cid:60)(cid:1)(cid:61)(cid:49)(cid:42)(cid:61)(cid:1)(cid:64)(cid:46)(cid:1)(cid:43)(cid:46)(cid:53)(cid:50)(cid:46)(cid:63)(cid:46)(cid:1)(cid:46)(cid:55)(cid:42)(cid:43)(cid:53)(cid:46)(cid:45)(cid:1)(cid:62)(cid:60)
(cid:61)(cid:56)(cid:1)(cid:56)(cid:63)(cid:46)(cid:59)(cid:8)(cid:57)(cid:46)(cid:59)(cid:47)(cid:56)(cid:59)(cid:54)(cid:1)(cid:50)(cid:55)(cid:1)(cid:61)(cid:49)(cid:50)(cid:60)(cid:1)(cid:45)(cid:50)(cid:47)(cid:47)(cid:50)(cid:44)(cid:62)(cid:53)(cid:61)(cid:1)(cid:46)(cid:55)(cid:63)(cid:50)(cid:59)(cid:56)(cid:55)(cid:54)(cid:46)(cid:55)(cid:61)(cid:9)(cid:1)(cid:1)(cid:25)(cid:50)(cid:59)(cid:60)(cid:61)(cid:7)(cid:1)(cid:42)(cid:1)(cid:54)(cid:42)(cid:51)(cid:56)(cid:59)(cid:1)(cid:54)(cid:50)(cid:44)(cid:59)(cid:56)(cid:57)(cid:59)(cid:56)(cid:44)(cid:46)(cid:60)(cid:60)(cid:56)(cid:59)(cid:1)(cid:44)(cid:56)(cid:54)(cid:57)(cid:42)(cid:55)(cid:66)(cid:1)(cid:44)(cid:56)(cid:55)(cid:61)(cid:50)(cid:55)(cid:62)(cid:46)(cid:45)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:59)(cid:42)(cid:54)(cid:57)
(cid:56)(cid:47)(cid:1)(cid:56)(cid:62)(cid:59)(cid:1)(cid:55)(cid:46)(cid:64)(cid:1)(cid:61)(cid:49)(cid:46)(cid:59)(cid:54)(cid:42)(cid:53)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:1)(cid:49)(cid:42)(cid:55)(cid:45)(cid:53)(cid:46)(cid:59)(cid:7)(cid:1)(cid:34)(cid:66)(cid:59)(cid:42)(cid:54)(cid:50)(cid:45)(cid:7)(cid:1)(cid:50)(cid:55)(cid:61)(cid:56)(cid:1)(cid:50)(cid:61)(cid:60)(cid:1)(cid:48)(cid:53)(cid:56)(cid:43)(cid:42)(cid:53)(cid:1)(cid:57)(cid:59)(cid:56)(cid:45)(cid:62)(cid:44)(cid:61)(cid:50)(cid:56)(cid:55)(cid:1)(cid:47)(cid:42)(cid:44)(cid:50)(cid:53)(cid:50)(cid:61)(cid:50)(cid:46)(cid:60)(cid:9)(cid:1)(cid:1)(cid:34)(cid:66)(cid:59)(cid:42)(cid:54)(cid:50)(cid:45)(cid:1)(cid:50)(cid:55)(cid:44)(cid:56)(cid:59)(cid:57)(cid:56)(cid:59)(cid:42)(cid:61)(cid:46)(cid:60)(cid:1)(cid:61)(cid:49)(cid:46)
(cid:53)(cid:42)(cid:61)(cid:46)(cid:60)(cid:61)(cid:1)(cid:63)(cid:46)(cid:59)(cid:60)(cid:50)(cid:56)(cid:55)(cid:1)(cid:56)(cid:47)(cid:1)(cid:56)(cid:62)(cid:59)(cid:1)(cid:57)(cid:59)(cid:56)(cid:57)(cid:59)(cid:50)(cid:46)(cid:61)(cid:42)(cid:59)(cid:66)(cid:1)(cid:61)(cid:49)(cid:46)(cid:59)(cid:54)(cid:42)(cid:53)(cid:1)(cid:61)(cid:46)(cid:44)(cid:49)(cid:55)(cid:56)(cid:53)(cid:56)(cid:48)(cid:66)(cid:7)(cid:1)(cid:63)(cid:50)(cid:46)(cid:64)(cid:46)(cid:45)(cid:1)(cid:43)(cid:66)(cid:1)(cid:44)(cid:62)(cid:60)(cid:61)(cid:56)(cid:54)(cid:46)(cid:59)(cid:60)(cid:1)(cid:42)(cid:60)(cid:1)(cid:46)(cid:55)(cid:42)(cid:43)(cid:53)(cid:50)(cid:55)(cid:48)(cid:1)(cid:61)(cid:46)(cid:44)(cid:49)(cid:55)(cid:56)(cid:53)(cid:56)(cid:48)(cid:66)(cid:1)(cid:47)(cid:56)(cid:59)
(cid:61)(cid:46)(cid:60)(cid:61)(cid:50)(cid:55)(cid:48)(cid:1)(cid:56)(cid:47)(cid:1)(cid:49)(cid:50)(cid:48)(cid:49)(cid:1)(cid:57)(cid:46)(cid:59)(cid:47)(cid:56)(cid:59)(cid:54)(cid:42)(cid:55)(cid:44)(cid:46)(cid:1)(cid:54)(cid:50)(cid:44)(cid:59)(cid:56)(cid:57)(cid:59)(cid:56)(cid:44)(cid:46)(cid:60)(cid:60)(cid:56)(cid:59)(cid:60)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:42)(cid:45)(cid:63)(cid:42)(cid:55)(cid:44)(cid:46)(cid:45)(cid:1)(cid:48)(cid:59)(cid:42)(cid:57)(cid:49)(cid:50)(cid:44)(cid:60)(cid:1)(cid:28)(cid:22)(cid:60)(cid:9)(cid:1)(cid:1)(cid:34)(cid:66)(cid:59)(cid:42)(cid:54)(cid:50)(cid:45)(cid:1)(cid:53)(cid:50)(cid:54)(cid:50)(cid:61)(cid:60)(cid:1)(cid:61)(cid:46)(cid:54)(cid:57)(cid:46)(cid:59)(cid:42)(cid:61)(cid:62)(cid:59)(cid:46)
(cid:47)(cid:53)(cid:62)(cid:44)(cid:61)(cid:62)(cid:42)(cid:61)(cid:50)(cid:56)(cid:55)(cid:60)(cid:1)(cid:45)(cid:62)(cid:59)(cid:50)(cid:55)(cid:48)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:1)(cid:57)(cid:59)(cid:56)(cid:44)(cid:46)(cid:60)(cid:60)(cid:7)(cid:1)(cid:59)(cid:46)(cid:60)(cid:62)(cid:53)(cid:61)(cid:50)(cid:55)(cid:48)(cid:1)(cid:50)(cid:55)(cid:1)(cid:56)(cid:57)(cid:61)(cid:50)(cid:54)(cid:50)(cid:67)(cid:46)(cid:45)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:1)(cid:59)(cid:46)(cid:60)(cid:62)(cid:53)(cid:61)(cid:60)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:49)(cid:50)(cid:48)(cid:49)(cid:46)(cid:59)(cid:1)(cid:20)(cid:37)(cid:34)(cid:60)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:56)(cid:62)(cid:59)(cid:1)(cid:44)(cid:62)(cid:60)(cid:61)(cid:56)(cid:54)(cid:46)(cid:59)(cid:60)(cid:9)
(cid:37)(cid:46)(cid:44)(cid:56)(cid:55)(cid:45)(cid:7)(cid:1)(cid:56)(cid:62)(cid:59)(cid:1)(cid:64)(cid:50)(cid:45)(cid:46)(cid:59)(cid:1)(cid:57)(cid:59)(cid:56)(cid:45)(cid:62)(cid:44)(cid:61)(cid:1)(cid:57)(cid:56)(cid:59)(cid:61)(cid:47)(cid:56)(cid:53)(cid:50)(cid:56)(cid:1)(cid:47)(cid:56)(cid:53)(cid:53)(cid:56)(cid:64)(cid:50)(cid:55)(cid:48)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:12)(cid:10)(cid:10)(cid:18)(cid:1)(cid:42)(cid:44)(cid:58)(cid:62)(cid:50)(cid:60)(cid:50)(cid:61)(cid:50)(cid:56)(cid:55)(cid:1)(cid:56)(cid:47)(cid:1)(cid:36)(cid:42)(cid:60)(cid:44)(cid:56)(cid:7)(cid:1)(cid:61)(cid:49)(cid:42)(cid:61)(cid:1)(cid:55)(cid:56)(cid:64)(cid:1)(cid:60)(cid:57)(cid:42)(cid:55)(cid:60)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:1)(cid:49)(cid:42)(cid:55)(cid:45)(cid:53)(cid:46)(cid:59)(cid:60)
(cid:43)(cid:42)(cid:60)(cid:46)(cid:45)(cid:1)(cid:56)(cid:55)(cid:1)(cid:57)(cid:50)(cid:44)(cid:52)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:57)(cid:53)(cid:42)(cid:44)(cid:46)(cid:7)(cid:1)(cid:48)(cid:59)(cid:42)(cid:63)(cid:50)(cid:61)(cid:66)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:8)(cid:50)(cid:55)(cid:8)(cid:60)(cid:61)(cid:59)(cid:50)(cid:57)(cid:1)(cid:61)(cid:46)(cid:44)(cid:49)(cid:55)(cid:56)(cid:53)(cid:56)(cid:48)(cid:50)(cid:46)(cid:60)(cid:7)(cid:1)(cid:46)(cid:55)(cid:42)(cid:43)(cid:53)(cid:46)(cid:45)(cid:1)(cid:62)(cid:60)(cid:1)(cid:61)(cid:56)(cid:1)(cid:43)(cid:46)(cid:61)(cid:61)(cid:46)(cid:59)(cid:1)(cid:44)(cid:42)(cid:57)(cid:50)(cid:61)(cid:42)(cid:53)(cid:50)(cid:67)(cid:46)(cid:1)(cid:56)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)
(cid:53)(cid:50)(cid:54)(cid:50)(cid:61)(cid:46)(cid:45) (cid:56)(cid:57)(cid:57)(cid:56)(cid:59)(cid:61)(cid:62)(cid:55)(cid:50)(cid:61)(cid:50)(cid:46)(cid:60)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:46)(cid:58)(cid:62)(cid:50)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:1)(cid:60)(cid:42)(cid:53)(cid:46)(cid:60)(cid:1)(cid:50)(cid:55)(cid:1)(cid:12)(cid:10)(cid:11)(cid:11)(cid:9)(cid:1)(cid:1)(cid:38)(cid:49)(cid:50)(cid:59)(cid:45)(cid:7)(cid:1)(cid:64)(cid:46)(cid:1)(cid:49)(cid:42)(cid:63)(cid:46)(cid:1)(cid:42)(cid:1)(cid:60)(cid:56)(cid:53)(cid:50)(cid:45)(cid:1)(cid:47)(cid:56)(cid:62)(cid:55)(cid:45)(cid:42)(cid:61)(cid:50)(cid:56)(cid:55)(cid:1)(cid:56)(cid:47)(cid:1)(cid:59)(cid:46)(cid:44)(cid:62)(cid:59)(cid:59)(cid:50)(cid:55)(cid:48)
(cid:43)(cid:62)(cid:60)(cid:50)(cid:55)(cid:46)(cid:60)(cid:60)(cid:7)(cid:1)(cid:44)(cid:56)(cid:55)(cid:60)(cid:50)(cid:60)(cid:61)(cid:50)(cid:55)(cid:48)(cid:1)(cid:56)(cid:47)(cid:1)(cid:49)(cid:42)(cid:55)(cid:45)(cid:53)(cid:46)(cid:59)(cid:1)(cid:44)(cid:56)(cid:55)(cid:63)(cid:46)(cid:59)(cid:60)(cid:50)(cid:56)(cid:55)(cid:1)(cid:52)(cid:50)(cid:61)(cid:60)(cid:7)(cid:1)(cid:60)(cid:57)(cid:42)(cid:59)(cid:46)(cid:1)(cid:57)(cid:42)(cid:59)(cid:61)(cid:60)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:60)(cid:66)(cid:60)(cid:61)(cid:46)(cid:54)(cid:1)(cid:62)(cid:57)(cid:48)(cid:59)(cid:42)(cid:45)(cid:46)(cid:60)(cid:7)(cid:1)(cid:64)(cid:49)(cid:50)(cid:44)(cid:49)(cid:1)(cid:50)(cid:60)(cid:1)(cid:53)(cid:46)(cid:60)(cid:60)(cid:1)(cid:60)(cid:62)(cid:60)(cid:44)(cid:46)(cid:57)(cid:61)(cid:50)(cid:43)(cid:53)(cid:46)
(cid:61)(cid:56)(cid:1)(cid:61)(cid:49)(cid:46) (cid:57)(cid:46)(cid:59)(cid:50)(cid:56)(cid:45)(cid:50)(cid:44) (cid:60)(cid:64)(cid:50)(cid:55)(cid:48)(cid:60)(cid:1)(cid:56)(cid:47)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:46)(cid:58)(cid:62)(cid:50)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:1)(cid:57)(cid:62)(cid:59)(cid:44)(cid:49)(cid:42)(cid:60)(cid:50)(cid:55)(cid:48)(cid:1)(cid:44)(cid:66)(cid:44)(cid:53)(cid:46)(cid:9)(cid:1)(cid:1)(cid:25)(cid:50)(cid:55)(cid:42)(cid:53)(cid:53)(cid:66)(cid:7)(cid:1)(cid:64)(cid:46)(cid:1)(cid:49)(cid:42)(cid:63)(cid:46)(cid:1)(cid:48)(cid:42)(cid:50)(cid:55)(cid:46)(cid:45)(cid:1)(cid:54)(cid:42)(cid:59)(cid:52)(cid:46)(cid:61)(cid:1)(cid:60)(cid:49)(cid:42)(cid:59)(cid:46)(cid:7)(cid:1)(cid:42)(cid:60)
(cid:44)(cid:62)(cid:60)(cid:61)(cid:56)(cid:54)(cid:46)(cid:59)(cid:60)(cid:1)(cid:50)(cid:55)(cid:44)(cid:59)(cid:46)(cid:42)(cid:60)(cid:50)(cid:55)(cid:48)(cid:53)(cid:66)(cid:1)(cid:63)(cid:42)(cid:53)(cid:62)(cid:46)(cid:1)(cid:56)(cid:62)(cid:59)(cid:1)(cid:43)(cid:59)(cid:56)(cid:42)(cid:45)(cid:1)(cid:57)(cid:59)(cid:56)(cid:45)(cid:62)(cid:44)(cid:61)(cid:1)(cid:53)(cid:50)(cid:55)(cid:46)(cid:7)(cid:1)(cid:48)(cid:53)(cid:56)(cid:43)(cid:42)(cid:53)(cid:1)(cid:60)(cid:62)(cid:57)(cid:57)(cid:56)(cid:59)(cid:61)(cid:7)(cid:1)(cid:46)(cid:55)(cid:48)(cid:50)(cid:55)(cid:46)(cid:46)(cid:59)(cid:50)(cid:55)(cid:48)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:54)(cid:42)(cid:55)(cid:62)(cid:47)(cid:42)(cid:44)(cid:61)(cid:62)(cid:59)(cid:50)(cid:55)(cid:48)
(cid:44)(cid:42)(cid:57)(cid:42)(cid:43)(cid:50)(cid:53)(cid:50)(cid:61)(cid:50)(cid:46)(cid:60)(cid:9)
(cid:38)(cid:49)(cid:59)(cid:56)(cid:62)(cid:48)(cid:49)(cid:56)(cid:62)(cid:61)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:66)(cid:46)(cid:42)(cid:59)(cid:7)(cid:1)(cid:42)(cid:60)(cid:1)(cid:50)(cid:55)(cid:45)(cid:62)(cid:60)(cid:61)(cid:59)(cid:66)(cid:1)(cid:44)(cid:56)(cid:55)(cid:45)(cid:50)(cid:61)(cid:50)(cid:56)(cid:55)(cid:60)(cid:1)(cid:60)(cid:56)(cid:47)(cid:61)(cid:46)(cid:55)(cid:46)(cid:45)(cid:7)(cid:1)(cid:64)(cid:46)(cid:1)(cid:50)(cid:55)(cid:63)(cid:46)(cid:60)(cid:61)(cid:46)(cid:45)(cid:1)(cid:50)(cid:55)(cid:1)(cid:55)(cid:46)(cid:64)(cid:1)(cid:46)(cid:58)(cid:62)(cid:50)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:1)(cid:46)(cid:63)(cid:42)(cid:53)(cid:62)(cid:42)(cid:61)(cid:50)(cid:56)(cid:55)(cid:60)(cid:7)(cid:1)(cid:54)(cid:42)(cid:50)(cid:55)(cid:53)(cid:66)
(cid:42)(cid:61)(cid:1)(cid:44)(cid:62)(cid:60)(cid:61)(cid:56)(cid:54)(cid:46)(cid:59)(cid:60)(cid:1)(cid:64)(cid:49)(cid:56)(cid:1)(cid:49)(cid:42)(cid:63)(cid:46)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:57)(cid:56)(cid:61)(cid:46)(cid:55)(cid:61)(cid:50)(cid:42)(cid:53)(cid:1)(cid:61)(cid:56)(cid:1)(cid:42)(cid:45)(cid:45)(cid:1)(cid:60)(cid:50)(cid:48)(cid:55)(cid:50)(cid:47)(cid:50)(cid:44)(cid:42)(cid:55)(cid:61)(cid:1)(cid:44)(cid:42)(cid:57)(cid:42)(cid:44)(cid:50)(cid:61)(cid:66)(cid:1)(cid:45)(cid:62)(cid:59)(cid:50)(cid:55)(cid:48)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:55)(cid:46)(cid:65)(cid:61)(cid:1)(cid:62)(cid:57)(cid:61)(cid:62)(cid:59)(cid:55)(cid:9)(cid:1)(cid:1)(cid:23)(cid:62)(cid:59)(cid:50)(cid:55)(cid:48)(cid:1)(cid:57)(cid:59)(cid:56)(cid:45)(cid:62)(cid:44)(cid:61)(cid:50)(cid:56)(cid:55)
(cid:59)(cid:42)(cid:54)(cid:57)(cid:60)(cid:7)(cid:1)(cid:44)(cid:62)(cid:60)(cid:61)(cid:56)(cid:54)(cid:46)(cid:59)(cid:60)(cid:1)(cid:42)(cid:59)(cid:46)(cid:1)(cid:53)(cid:46)(cid:60)(cid:60)(cid:1)(cid:64)(cid:50)(cid:53)(cid:53)(cid:50)(cid:55)(cid:48)(cid:1)(cid:61)(cid:56)(cid:1)(cid:44)(cid:56)(cid:55)(cid:60)(cid:50)(cid:45)(cid:46)(cid:59)(cid:1)(cid:55)(cid:46)(cid:64)(cid:1)(cid:60)(cid:56)(cid:53)(cid:62)(cid:61)(cid:50)(cid:56)(cid:55)(cid:60)(cid:1)(cid:42)(cid:60)(cid:1)(cid:61)(cid:49)(cid:46)(cid:50)(cid:59)(cid:1)(cid:56)(cid:43)(cid:51)(cid:46)(cid:44)(cid:61)(cid:50)(cid:63)(cid:46)(cid:1)(cid:50)(cid:60)(cid:1)(cid:61)(cid:56)(cid:1)(cid:42)(cid:45)(cid:45)(cid:1)(cid:44)(cid:42)(cid:57)(cid:42)(cid:44)(cid:50)(cid:61)(cid:66)(cid:1)(cid:42)(cid:60)
(cid:60)(cid:46)(cid:42)(cid:54)(cid:53)(cid:46)(cid:60)(cid:60)(cid:53)(cid:66)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:57)(cid:59)(cid:46)(cid:45)(cid:50)(cid:44)(cid:61)(cid:42)(cid:43)(cid:53)(cid:66)(cid:1)(cid:42)(cid:60)(cid:1)(cid:57)(cid:56)(cid:60)(cid:60)(cid:50)(cid:43)(cid:53)(cid:46)(cid:7)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:61)(cid:49)(cid:42)(cid:61)(cid:1)(cid:47)(cid:42)(cid:63)(cid:56)(cid:59)(cid:60)(cid:1)(cid:50)(cid:55)(cid:44)(cid:62)(cid:54)(cid:43)(cid:46)(cid:55)(cid:61)(cid:1)(cid:60)(cid:56)(cid:53)(cid:62)(cid:61)(cid:50)(cid:56)(cid:55)(cid:60)(cid:9)(cid:1)(cid:1)(cid:28)(cid:61)(cid:68)(cid:60)(cid:1)(cid:50)(cid:54)(cid:57)(cid:56)(cid:59)(cid:61)(cid:42)(cid:55)(cid:61)(cid:1)(cid:61)(cid:56)(cid:1)(cid:61)(cid:42)(cid:52)(cid:46)
(cid:42)(cid:45)(cid:63)(cid:42)(cid:55)(cid:61)(cid:42)(cid:48)(cid:46)(cid:1)(cid:56)(cid:47)(cid:1)(cid:50)(cid:55)(cid:45)(cid:62)(cid:60)(cid:61)(cid:59)(cid:66)(cid:1)(cid:53)(cid:62)(cid:53)(cid:53)(cid:60)(cid:7)(cid:1)(cid:42)(cid:60)(cid:1)(cid:61)(cid:49)(cid:46)(cid:60)(cid:46)(cid:1)(cid:42)(cid:59)(cid:46)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:61)(cid:50)(cid:54)(cid:46)(cid:60)(cid:1)(cid:64)(cid:49)(cid:46)(cid:55)(cid:1)(cid:44)(cid:62)(cid:60)(cid:61)(cid:56)(cid:54)(cid:46)(cid:59)(cid:60)(cid:1)(cid:49)(cid:42)(cid:63)(cid:46)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:47)(cid:53)(cid:46)(cid:65)(cid:50)(cid:43)(cid:50)(cid:53)(cid:50)(cid:61)(cid:66)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:43)(cid:42)(cid:55)(cid:45)(cid:64)(cid:50)(cid:45)(cid:61)(cid:49) (cid:61)(cid:56)
(cid:5)(cid:50)(cid:6)
(cid:8)(cid:17)(cid:14)(cid:21)(cid:2)(cid:1)(cid:9)(cid:16)(cid:12)(cid:3)(cid:1)(cid:6)(cid:4)(cid:5)(cid:5) (cid:7)(cid:16)(cid:16)(cid:21)(cid:11)(cid:15)(cid:1)(cid:10)(cid:13)(cid:18)(cid:17)(cid:19)(cid:20)
(cid:46)(cid:63)(cid:42)(cid:53)(cid:62)(cid:42)(cid:61)(cid:46)(cid:1)(cid:55)(cid:46)(cid:64)(cid:1)(cid:46)(cid:58)(cid:62)(cid:50)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:9)(cid:1)(cid:1)(cid:33)(cid:62)(cid:59)(cid:1)(cid:61)(cid:59)(cid:42)(cid:44)(cid:52)(cid:1)(cid:59)(cid:46)(cid:44)(cid:56)(cid:59)(cid:45)(cid:1)(cid:56)(cid:47)(cid:1)(cid:60)(cid:62)(cid:44)(cid:44)(cid:46)(cid:60)(cid:60)(cid:47)(cid:62)(cid:53)(cid:1)(cid:46)(cid:58)(cid:62)(cid:50)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:1)(cid:46)(cid:63)(cid:42)(cid:53)(cid:62)(cid:42)(cid:61)(cid:50)(cid:56)(cid:55)(cid:60)(cid:7)(cid:1)(cid:54)(cid:42)(cid:55)(cid:66)(cid:1)(cid:42)(cid:61)(cid:1)(cid:55)(cid:46)(cid:64)(cid:1)(cid:44)(cid:62)(cid:60)(cid:61)(cid:56)(cid:54)(cid:46)(cid:59)(cid:60)(cid:7)
(cid:57)(cid:56)(cid:60)(cid:50)(cid:61)(cid:50)(cid:56)(cid:55)(cid:60)(cid:1)(cid:62)(cid:60)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:54)(cid:42)(cid:59)(cid:52)(cid:46)(cid:61)(cid:1)(cid:60)(cid:49)(cid:42)(cid:59)(cid:46)(cid:1)(cid:48)(cid:42)(cid:50)(cid:55)(cid:60)(cid:1)(cid:64)(cid:49)(cid:46)(cid:55)(cid:1)(cid:43)(cid:62)(cid:60)(cid:50)(cid:55)(cid:46)(cid:60)(cid:60)(cid:1)(cid:44)(cid:56)(cid:55)(cid:45)(cid:50)(cid:61)(cid:50)(cid:56)(cid:55)(cid:60)(cid:1)(cid:50)(cid:54)(cid:57)(cid:59)(cid:56)(cid:63)(cid:46)(cid:9)
(cid:41)(cid:46)(cid:68)(cid:63)(cid:46)(cid:1)(cid:47)(cid:56)(cid:44)(cid:62)(cid:60)(cid:46)(cid:45)(cid:1)(cid:56)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:59)(cid:42)(cid:57)(cid:50)(cid:45)(cid:53)(cid:66)(cid:1)(cid:48)(cid:59)(cid:56)(cid:64)(cid:50)(cid:55)(cid:48)(cid:1)(cid:54)(cid:42)(cid:59)(cid:52)(cid:46)(cid:61)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:31)(cid:24)(cid:31)(cid:37)(cid:1)(cid:45)(cid:46)(cid:63)(cid:50)(cid:44)(cid:46)(cid:60)(cid:1)(cid:45)(cid:59)(cid:50)(cid:63)(cid:46)(cid:55)(cid:1)(cid:43)(cid:66)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:46)(cid:65)(cid:57)(cid:53)(cid:56)(cid:60)(cid:50)(cid:63)(cid:46)(cid:1)(cid:48)(cid:59)(cid:56)(cid:64)(cid:61)(cid:49)(cid:1)(cid:56)(cid:47)(cid:1)(cid:60)(cid:54)(cid:42)(cid:59)(cid:61)
(cid:57)(cid:49)(cid:56)(cid:55)(cid:46)(cid:60)(cid:7)(cid:1)(cid:61)(cid:42)(cid:43)(cid:53)(cid:46)(cid:61)(cid:60)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:56)(cid:61)(cid:49)(cid:46)(cid:59)(cid:1)(cid:44)(cid:56)(cid:55)(cid:60)(cid:62)(cid:54)(cid:46)(cid:59)(cid:1)(cid:46)(cid:53)(cid:46)(cid:44)(cid:61)(cid:59)(cid:56)(cid:55)(cid:50)(cid:44)(cid:60)(cid:1)(cid:57)(cid:59)(cid:56)(cid:45)(cid:62)(cid:44)(cid:61)(cid:60)(cid:9)(cid:1)(cid:1)(cid:20)(cid:57)(cid:57)(cid:53)(cid:50)(cid:44)(cid:42)(cid:61)(cid:50)(cid:56)(cid:55)(cid:60)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:31)(cid:24)(cid:31)(cid:37)(cid:1)(cid:45)(cid:46)(cid:63)(cid:50)(cid:44)(cid:46)(cid:60)(cid:1)(cid:42)(cid:59)(cid:46)(cid:1)(cid:42)(cid:53)(cid:60)(cid:56)
(cid:50)(cid:55)(cid:44)(cid:59)(cid:46)(cid:42)(cid:60)(cid:50)(cid:55)(cid:48)(cid:1)(cid:50)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:42)(cid:62)(cid:61)(cid:56)(cid:54)(cid:56)(cid:61)(cid:50)(cid:63)(cid:46)(cid:1)(cid:54)(cid:42)(cid:59)(cid:52)(cid:46)(cid:61)(cid:7)(cid:1)(cid:64)(cid:49)(cid:46)(cid:59)(cid:46)(cid:1)(cid:28)(cid:22)(cid:1)(cid:44)(cid:56)(cid:55)(cid:61)(cid:46)(cid:55)(cid:61)(cid:1)(cid:44)(cid:56)(cid:55)(cid:61)(cid:50)(cid:55)(cid:62)(cid:46)(cid:60)(cid:1)(cid:61)(cid:56)(cid:1)(cid:48)(cid:59)(cid:56)(cid:64)(cid:9)(cid:1)(cid:1)(cid:37)(cid:50)(cid:55)(cid:44)(cid:46)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:42)(cid:44)(cid:58)(cid:62)(cid:50)(cid:60)(cid:50)(cid:61)(cid:50)(cid:56)(cid:55)(cid:1)(cid:56)(cid:47)(cid:1)(cid:36)(cid:42)(cid:60)(cid:44)(cid:56)(cid:7)
(cid:64)(cid:46)(cid:1)(cid:49)(cid:42)(cid:63)(cid:46)(cid:1)(cid:46)(cid:65)(cid:57)(cid:42)(cid:55)(cid:45)(cid:46)(cid:45)(cid:1)(cid:56)(cid:62)(cid:59)(cid:1)(cid:31)(cid:24)(cid:31)(cid:37)(cid:1)(cid:42)(cid:57)(cid:57)(cid:53)(cid:50)(cid:44)(cid:42)(cid:61)(cid:50)(cid:56)(cid:55)(cid:60)(cid:1)(cid:53)(cid:50)(cid:43)(cid:59)(cid:42)(cid:59)(cid:66)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:55)(cid:56)(cid:64)(cid:1)(cid:57)(cid:59)(cid:56)(cid:63)(cid:50)(cid:45)(cid:46)(cid:1)(cid:31)(cid:24)(cid:31)(cid:37)(cid:1)(cid:60)(cid:56)(cid:53)(cid:62)(cid:61)(cid:50)(cid:56)(cid:55)(cid:60)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:56)(cid:62)(cid:59)(cid:1)(cid:44)(cid:56)(cid:54)(cid:57)(cid:53)(cid:46)(cid:61)(cid:46)
(cid:57)(cid:59)(cid:56)(cid:45)(cid:62)(cid:44)(cid:61)(cid:1)(cid:53)(cid:50)(cid:55)(cid:46)(cid:1)(cid:56)(cid:47)(cid:1)(cid:57)(cid:50)(cid:44)(cid:52)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:57)(cid:53)(cid:42)(cid:44)(cid:46)(cid:7)(cid:1)(cid:48)(cid:59)(cid:42)(cid:63)(cid:50)(cid:61)(cid:66)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:8)(cid:50)(cid:55)(cid:8)(cid:60)(cid:61)(cid:59)(cid:50)(cid:57)(cid:1)(cid:49)(cid:42)(cid:55)(cid:45)(cid:53)(cid:46)(cid:59)(cid:60)(cid:9)(cid:1)(cid:1)(cid:21)(cid:66)(cid:1)(cid:45)(cid:46)(cid:63)(cid:46)(cid:53)(cid:56)(cid:57)(cid:50)(cid:55)(cid:48)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:1)(cid:54)(cid:56)(cid:45)(cid:62)(cid:53)(cid:46)(cid:60)(cid:7)(cid:1)(cid:64)(cid:46)(cid:1)(cid:57)(cid:59)(cid:56)(cid:63)(cid:50)(cid:45)(cid:46)
(cid:44)(cid:62)(cid:60)(cid:61)(cid:56)(cid:54)(cid:46)(cid:59)(cid:60)(cid:1)(cid:64)(cid:50)(cid:61)(cid:49)(cid:1)(cid:42)(cid:1)(cid:44)(cid:56)(cid:54)(cid:57)(cid:53)(cid:46)(cid:61)(cid:46)(cid:1)(cid:31)(cid:24)(cid:31)(cid:37)(cid:1)(cid:50)(cid:55)(cid:61)(cid:46)(cid:48)(cid:59)(cid:42)(cid:61)(cid:46)(cid:45)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:1)(cid:44)(cid:46)(cid:53)(cid:53)(cid:9)(cid:1)(cid:1)(cid:28)(cid:55)(cid:1)(cid:42)(cid:45)(cid:45)(cid:50)(cid:61)(cid:50)(cid:56)(cid:55)(cid:1)(cid:61)(cid:56)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:31)(cid:24)(cid:31)(cid:37)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:1)(cid:54)(cid:56)(cid:45)(cid:62)(cid:53)(cid:46)(cid:1)(cid:43)(cid:62)(cid:60)(cid:50)(cid:55)(cid:46)(cid:60)(cid:60)
(cid:61)(cid:49)(cid:42)(cid:61)(cid:1)(cid:50)(cid:60)(cid:1)(cid:42)(cid:61)(cid:61)(cid:59)(cid:42)(cid:44)(cid:61)(cid:50)(cid:63)(cid:46)(cid:1)(cid:50)(cid:55)(cid:1)(cid:50)(cid:61)(cid:60)(cid:1)(cid:56)(cid:64)(cid:55)(cid:1)(cid:59)(cid:50)(cid:48)(cid:49)(cid:61)(cid:7)(cid:1)(cid:64)(cid:46)(cid:1)(cid:59)(cid:46)(cid:42)(cid:53)(cid:50)(cid:67)(cid:46)(cid:1)(cid:50)(cid:55)(cid:44)(cid:59)(cid:46)(cid:54)(cid:46)(cid:55)(cid:61)(cid:42)(cid:53)(cid:1)(cid:60)(cid:42)(cid:53)(cid:46)(cid:60)(cid:1)(cid:56)(cid:47)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:1)(cid:49)(cid:42)(cid:55)(cid:45)(cid:53)(cid:46)(cid:59)(cid:60)(cid:9)(cid:1)(cid:1)(cid:41)(cid:46)(cid:1)(cid:42)(cid:59)(cid:46)(cid:1)(cid:53)(cid:46)(cid:63)(cid:46)(cid:59)(cid:42)(cid:48)(cid:50)(cid:55)(cid:48)(cid:1)(cid:56)(cid:62)(cid:59)
(cid:48)(cid:53)(cid:56)(cid:43)(cid:42)(cid:53)(cid:1)(cid:36)(cid:4)(cid:23)(cid:1)(cid:59)(cid:46)(cid:60)(cid:56)(cid:62)(cid:59)(cid:44)(cid:46)(cid:60)(cid:1)(cid:61)(cid:56)(cid:1)(cid:46)(cid:47)(cid:47)(cid:50)(cid:44)(cid:50)(cid:46)(cid:55)(cid:61)(cid:53)(cid:66)(cid:1)(cid:54)(cid:46)(cid:46)(cid:61)(cid:1)(cid:44)(cid:62)(cid:60)(cid:61)(cid:56)(cid:54)(cid:46)(cid:59)(cid:1)(cid:59)(cid:46)(cid:58)(cid:62)(cid:50)(cid:59)(cid:46)(cid:54)(cid:46)(cid:55)(cid:61)(cid:60)(cid:9)(cid:1)(cid:1)(cid:25)(cid:56)(cid:59)(cid:1)(cid:46)(cid:65)(cid:42)(cid:54)(cid:57)(cid:53)(cid:46)(cid:7)(cid:1)(cid:42)(cid:1)(cid:31)(cid:24)(cid:31)(cid:37)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:1)(cid:54)(cid:56)(cid:45)(cid:62)(cid:53)(cid:46)
(cid:45)(cid:46)(cid:63)(cid:46)(cid:53)(cid:56)(cid:57)(cid:46)(cid:45)(cid:1)(cid:50)(cid:55)(cid:1)(cid:56)(cid:62)(cid:59)(cid:1)(cid:26)(cid:46)(cid:59)(cid:54)(cid:42)(cid:55)(cid:1)(cid:47)(cid:42)(cid:44)(cid:61)(cid:56)(cid:59)(cid:66)(cid:1)(cid:54)(cid:42)(cid:66)(cid:1)(cid:43)(cid:46) (cid:50)(cid:55)(cid:61)(cid:46)(cid:48)(cid:59)(cid:42)(cid:61)(cid:46)(cid:45)(cid:1)(cid:64)(cid:50)(cid:61)(cid:49)(cid:1)(cid:42)(cid:1)(cid:57)(cid:50)(cid:44)(cid:52)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:57)(cid:53)(cid:42)(cid:44)(cid:46)(cid:1)(cid:49)(cid:42)(cid:55)(cid:45)(cid:53)(cid:46)(cid:59)(cid:1)(cid:54)(cid:42)(cid:55)(cid:62)(cid:47)(cid:42)(cid:44)(cid:61)(cid:62)(cid:59)(cid:46)(cid:45)(cid:1)(cid:50)(cid:55)
(cid:22)(cid:42)(cid:53)(cid:50)(cid:47)(cid:56)(cid:59)(cid:55)(cid:50)(cid:42)(cid:1)(cid:56)(cid:59)(cid:1)(cid:20)(cid:60)(cid:50)(cid:42)(cid:9)
(cid:28)(cid:55)(cid:1)(cid:42)(cid:45)(cid:45)(cid:50)(cid:61)(cid:50)(cid:56)(cid:55)(cid:1)(cid:61)(cid:56)(cid:1)(cid:56)(cid:62)(cid:59)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:1)(cid:49)(cid:42)(cid:55)(cid:45)(cid:53)(cid:46)(cid:59)(cid:1)(cid:43)(cid:62)(cid:60)(cid:50)(cid:55)(cid:46)(cid:60)(cid:60)(cid:7)(cid:1)(cid:64)(cid:46)(cid:1)(cid:50)(cid:55)(cid:63)(cid:46)(cid:60)(cid:61)(cid:1)(cid:50)(cid:55)(cid:1)(cid:52)(cid:46)(cid:66)(cid:1)(cid:61)(cid:46)(cid:44)(cid:49)(cid:55)(cid:56)(cid:53)(cid:56)(cid:48)(cid:50)(cid:46)(cid:60)(cid:7)(cid:1)(cid:53)(cid:50)(cid:52)(cid:46)(cid:1)(cid:40)(cid:8)(cid:44)(cid:56)(cid:59)(cid:46)(cid:7)(cid:1)(cid:56)(cid:62)(cid:59)(cid:1)(cid:57)(cid:59)(cid:56)(cid:57)(cid:59)(cid:50)(cid:46)(cid:61)(cid:42)(cid:59)(cid:66)(cid:1)(cid:63)(cid:50)(cid:60)(cid:50)(cid:56)(cid:55)
(cid:60)(cid:66)(cid:60)(cid:61)(cid:46)(cid:54)(cid:7)(cid:1)(cid:61)(cid:49)(cid:42)(cid:61)(cid:1)(cid:57)(cid:59)(cid:56)(cid:63)(cid:50)(cid:45)(cid:46)(cid:60)(cid:1)(cid:44)(cid:59)(cid:50)(cid:61)(cid:50)(cid:44)(cid:42)(cid:53)(cid:1)(cid:44)(cid:42)(cid:57)(cid:42)(cid:43)(cid:50)(cid:53)(cid:50)(cid:61)(cid:50)(cid:46)(cid:60)(cid:1)(cid:61)(cid:56)(cid:1)(cid:45)(cid:46)(cid:61)(cid:46)(cid:44)(cid:61)(cid:1)(cid:28)(cid:22)(cid:1)(cid:57)(cid:42)(cid:44)(cid:52)(cid:42)(cid:48)(cid:46)(cid:1)(cid:45)(cid:46)(cid:47)(cid:46)(cid:44)(cid:61)(cid:60)(cid:1)(cid:45)(cid:62)(cid:59)(cid:50)(cid:55)(cid:48)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:7)(cid:1)(cid:43)(cid:62)(cid:61)(cid:1)(cid:42)(cid:53)(cid:60)(cid:56)(cid:1)(cid:49)(cid:42)(cid:60)(cid:1)(cid:61)(cid:49)(cid:46)
(cid:57)(cid:56)(cid:61)(cid:46)(cid:55)(cid:61)(cid:50)(cid:42)(cid:53)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:60)(cid:61)(cid:42)(cid:55)(cid:45)(cid:1)(cid:42)(cid:53)(cid:56)(cid:55)(cid:46)(cid:1)(cid:60)(cid:62)(cid:43)(cid:60)(cid:66)(cid:60)(cid:61)(cid:46)(cid:54)(cid:1)(cid:60)(cid:42)(cid:53)(cid:46)(cid:60)(cid:9)(cid:1)(cid:1)(cid:30)(cid:42)(cid:60)(cid:61)(cid:1)(cid:66)(cid:46)(cid:42)(cid:59)(cid:7)(cid:1)(cid:64)(cid:46)(cid:1)(cid:42)(cid:55)(cid:55)(cid:56)(cid:62)(cid:55)(cid:44)(cid:46)(cid:45)(cid:1)(cid:56)(cid:62)(cid:59)(cid:1)(cid:55)(cid:46)(cid:64)(cid:1)(cid:38)(cid:8)(cid:44)(cid:56)(cid:59)(cid:46)(cid:1)(cid:61)(cid:49)(cid:46)(cid:59)(cid:54)(cid:42)(cid:53)(cid:1)(cid:44)(cid:56)(cid:55)(cid:61)(cid:59)(cid:56)(cid:53)
(cid:57)(cid:59)(cid:56)(cid:45)(cid:62)(cid:44)(cid:61)(cid:1)(cid:53)(cid:50)(cid:55)(cid:46)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:50)(cid:55)(cid:48)(cid:1)(cid:56)(cid:47)(cid:1)(cid:57)(cid:56)(cid:64)(cid:46)(cid:59)(cid:1)(cid:45)(cid:50)(cid:60)(cid:60)(cid:50)(cid:57)(cid:42)(cid:61)(cid:50)(cid:63)(cid:46)(cid:1)(cid:28)(cid:22)(cid:60)(cid:9)(cid:1)(cid:1)(cid:38)(cid:49)(cid:50)(cid:60)(cid:1)(cid:61)(cid:49)(cid:46)(cid:59)(cid:54)(cid:42)(cid:53)(cid:1)(cid:60)(cid:66)(cid:60)(cid:61)(cid:46)(cid:54)(cid:1)(cid:62)(cid:61)(cid:50)(cid:53)(cid:50)(cid:67)(cid:46)(cid:60)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:60)(cid:42)(cid:54)(cid:46)(cid:1)(cid:61)(cid:49)(cid:46)(cid:59)(cid:54)(cid:42)(cid:53)(cid:1)(cid:46)(cid:55)(cid:48)(cid:50)(cid:55)(cid:46)
(cid:50)(cid:55)(cid:60)(cid:61)(cid:42)(cid:53)(cid:53)(cid:46)(cid:45)(cid:1)(cid:50)(cid:55)(cid:1)(cid:56)(cid:62)(cid:59) (cid:50)(cid:55)(cid:45)(cid:62)(cid:60)(cid:61)(cid:59)(cid:66)(cid:8)(cid:53)(cid:46)(cid:42)(cid:45)(cid:50)(cid:55)(cid:48)(cid:1)(cid:34)(cid:66)(cid:59)(cid:42)(cid:54)(cid:50)(cid:45)(cid:1)(cid:49)(cid:42)(cid:55)(cid:45)(cid:53)(cid:46)(cid:59)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:57)(cid:59)(cid:56)(cid:63)(cid:50)(cid:45)(cid:46)(cid:60)(cid:1)(cid:44)(cid:62)(cid:60)(cid:61)(cid:56)(cid:54)(cid:46)(cid:59)(cid:60)(cid:1)(cid:64)(cid:50)(cid:61)(cid:49)(cid:1)(cid:42)(cid:1)(cid:60)(cid:50)(cid:55)(cid:48)(cid:53)(cid:46)(cid:1)(cid:61)(cid:49)(cid:46)(cid:59)(cid:54)(cid:42)(cid:53)(cid:1)(cid:60)(cid:66)(cid:60)(cid:61)(cid:46)(cid:54)
(cid:60)(cid:56)(cid:53)(cid:62)(cid:61)(cid:50)(cid:56)(cid:55)(cid:7)(cid:1)(cid:47)(cid:59)(cid:56)(cid:54)(cid:1)(cid:57)(cid:59)(cid:56)(cid:45)(cid:62)(cid:44)(cid:61)(cid:1)(cid:45)(cid:46)(cid:63)(cid:46)(cid:53)(cid:56)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:1)(cid:61)(cid:56)(cid:1)(cid:63)(cid:56)(cid:53)(cid:62)(cid:54)(cid:46)(cid:1)(cid:57)(cid:59)(cid:56)(cid:45)(cid:62)(cid:44)(cid:61)(cid:50)(cid:56)(cid:55)(cid:9)(cid:1)(cid:1)(cid:38)(cid:8)(cid:44)(cid:56)(cid:59)(cid:46)(cid:68)(cid:60)(cid:1)(cid:54)(cid:56)(cid:45)(cid:62)(cid:53)(cid:42)(cid:59)(cid:50)(cid:61)(cid:66)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:60)(cid:54)(cid:42)(cid:53)(cid:53)(cid:1)(cid:47)(cid:56)(cid:59)(cid:54)(cid:1)(cid:47)(cid:42)(cid:44)(cid:61)(cid:56)(cid:59)
(cid:46)(cid:55)(cid:42)(cid:43)(cid:53)(cid:46)(cid:1)(cid:44)(cid:56)(cid:60)(cid:61)(cid:8)(cid:46)(cid:47)(cid:47)(cid:46)(cid:44)(cid:61)(cid:50)(cid:63)(cid:46)(cid:7)(cid:1)(cid:60)(cid:46)(cid:42)(cid:54)(cid:53)(cid:46)(cid:60)(cid:60)(cid:1)(cid:50)(cid:55)(cid:61)(cid:46)(cid:48)(cid:59)(cid:42)(cid:61)(cid:50)(cid:56)(cid:55)(cid:1)(cid:50)(cid:55)(cid:61)(cid:56)(cid:1)(cid:56)(cid:62)(cid:59)(cid:1)(cid:57)(cid:50)(cid:44)(cid:52)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:57)(cid:53)(cid:42)(cid:44)(cid:46)(cid:1)(cid:49)(cid:42)(cid:55)(cid:45)(cid:53)(cid:46)(cid:59)(cid:60)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:42)(cid:53)(cid:60)(cid:56)(cid:1)(cid:50)(cid:55)(cid:61)(cid:56)(cid:1)(cid:61)(cid:49)(cid:50)(cid:59)(cid:45)(cid:1)(cid:57)(cid:42)(cid:59)(cid:61)(cid:66)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)
(cid:57)(cid:53)(cid:42)(cid:61)(cid:47)(cid:56)(cid:59)(cid:54)(cid:60)(cid:9)
(cid:30)(cid:42)(cid:61)(cid:46)(cid:1)(cid:53)(cid:42)(cid:60)(cid:61)(cid:1)(cid:66)(cid:46)(cid:42)(cid:59)(cid:1)(cid:64)(cid:46)(cid:1)(cid:43)(cid:46)(cid:48)(cid:42)(cid:55)(cid:1)(cid:47)(cid:50)(cid:46)(cid:53)(cid:45)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:50)(cid:55)(cid:48)(cid:1)(cid:56)(cid:47)(cid:1)(cid:56)(cid:62)(cid:59)(cid:1)(cid:55)(cid:46)(cid:64)(cid:1)(cid:49)(cid:50)(cid:48)(cid:49)(cid:1)(cid:60)(cid:57)(cid:46)(cid:46)(cid:45)(cid:1)(cid:48)(cid:59)(cid:42)(cid:63)(cid:50)(cid:61)(cid:66)(cid:1)(cid:49)(cid:42)(cid:55)(cid:45)(cid:53)(cid:46)(cid:59)(cid:1)(cid:42)(cid:61)(cid:1)(cid:42) (cid:55)(cid:46)(cid:64) (cid:44)(cid:62)(cid:60)(cid:61)(cid:56)(cid:54)(cid:46)(cid:59)(cid:9)(cid:1)(cid:1)(cid:41)(cid:46)(cid:1)(cid:42)(cid:59)(cid:46)
(cid:46)(cid:65)(cid:44)(cid:50)(cid:61)(cid:46)(cid:45)(cid:1)(cid:42)(cid:43)(cid:56)(cid:62)(cid:61)(cid:1)(cid:61)(cid:49)(cid:50)(cid:60)(cid:1)(cid:55)(cid:46)(cid:64)(cid:1)(cid:60)(cid:66)(cid:60)(cid:61)(cid:46)(cid:54)(cid:1)(cid:61)(cid:49)(cid:42)(cid:61)(cid:1)(cid:44)(cid:56)(cid:54)(cid:46)(cid:60)(cid:1)(cid:61)(cid:56)(cid:1)(cid:54)(cid:42)(cid:59)(cid:52)(cid:46)(cid:61)(cid:1)(cid:64)(cid:50)(cid:61)(cid:49)(cid:1)(cid:42)(cid:1)(cid:47)(cid:42)(cid:60)(cid:61)(cid:46)(cid:59)(cid:1)(cid:50)(cid:55)(cid:45)(cid:46)(cid:65)(cid:1)(cid:61)(cid:50)(cid:54)(cid:46)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:49)(cid:50)(cid:48)(cid:49)(cid:46)(cid:59)(cid:1)(cid:57)(cid:42)(cid:59)(cid:42)(cid:53)(cid:53)(cid:46)(cid:53)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)
(cid:44)(cid:42)(cid:57)(cid:42)(cid:43)(cid:50)(cid:53)(cid:50)(cid:61)(cid:66)(cid:1)(cid:61)(cid:49)(cid:42)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:53)(cid:46)(cid:48)(cid:42)(cid:44)(cid:66)(cid:1)(cid:48)(cid:59)(cid:42)(cid:63)(cid:50)(cid:61)(cid:66)(cid:1)(cid:49)(cid:42)(cid:55)(cid:45)(cid:53)(cid:46)(cid:59)(cid:60)(cid:1)(cid:61)(cid:49)(cid:42)(cid:61)(cid:1)(cid:42)(cid:59)(cid:46)(cid:1)(cid:50)(cid:55)(cid:1)(cid:62)(cid:60)(cid:46)(cid:1)(cid:61)(cid:49)(cid:59)(cid:56)(cid:62)(cid:48)(cid:49)(cid:56)(cid:62)(cid:61)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:50)(cid:55)(cid:45)(cid:62)(cid:60)(cid:61)(cid:59)(cid:66)(cid:9)(cid:1)(cid:1)(cid:20)(cid:55)(cid:1)(cid:50)(cid:54)(cid:57)(cid:56)(cid:59)(cid:61)(cid:42)(cid:55)(cid:61)
(cid:54)(cid:50)(cid:53)(cid:46)(cid:60)(cid:61)(cid:56)(cid:55)(cid:46)(cid:1)(cid:64)(cid:42)(cid:60)(cid:1)(cid:42)(cid:44)(cid:49)(cid:50)(cid:46)(cid:63)(cid:46)(cid:45)(cid:1)(cid:50)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:47)(cid:56)(cid:62)(cid:59)(cid:61)(cid:49)(cid:1)(cid:58)(cid:62)(cid:42)(cid:59)(cid:61)(cid:46)(cid:59)(cid:1)(cid:64)(cid:50)(cid:61)(cid:49)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:47)(cid:50)(cid:59)(cid:60)(cid:61)(cid:1)(cid:56)(cid:59)(cid:45)(cid:46)(cid:59)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:61)(cid:49)(cid:50)(cid:60)(cid:1)(cid:55)(cid:46)(cid:65)(cid:61)(cid:8)(cid:48)(cid:46)(cid:55)(cid:46)(cid:59)(cid:42)(cid:61)(cid:50)(cid:56)(cid:55)(cid:1)(cid:48)(cid:59)(cid:42)(cid:63)(cid:50)(cid:61)(cid:66)(cid:1)(cid:49)(cid:42)(cid:55)(cid:45)(cid:53)(cid:46)(cid:59)(cid:9)
(cid:23)(cid:46)(cid:53)(cid:50)(cid:63)(cid:46)(cid:59)(cid:66)(cid:1)(cid:50)(cid:60)(cid:1)(cid:60)(cid:44)(cid:49)(cid:46)(cid:45)(cid:62)(cid:53)(cid:46)(cid:45)(cid:1)(cid:50)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:60)(cid:46)(cid:44)(cid:56)(cid:55)(cid:45)(cid:1)(cid:49)(cid:42)(cid:53)(cid:47)(cid:1)(cid:56)(cid:47)(cid:1)(cid:12)(cid:10)(cid:11)(cid:12)(cid:9)
(cid:4)(cid:20)(cid:11)(cid:10)(cid:18)(cid:1)(cid:2)(cid:21)(cid:19)(cid:12)(cid:16)(cid:10)(cid:19)(cid:19)(cid:10)(cid:19)
(cid:22)(cid:56)(cid:49)(cid:62)(cid:68)(cid:60)(cid:1)(cid:24)(cid:53)(cid:46)(cid:44)(cid:61)(cid:59)(cid:56)(cid:55)(cid:50)(cid:44)(cid:60)(cid:1)(cid:23)(cid:50)(cid:63)(cid:50)(cid:60)(cid:50)(cid:56)(cid:55)(cid:1)(cid:57)(cid:59)(cid:56)(cid:45)(cid:62)(cid:44)(cid:46)(cid:60)(cid:1)(cid:63)(cid:50)(cid:45)(cid:46)(cid:56)(cid:1)(cid:44)(cid:42)(cid:54)(cid:46)(cid:59)(cid:42)(cid:60)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:46)(cid:58)(cid:62)(cid:50)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:50)(cid:60)(cid:1)(cid:42)(cid:1)(cid:53)(cid:46)(cid:42)(cid:45)(cid:46)(cid:59)(cid:1)(cid:50)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:39)(cid:9)(cid:37)(cid:9)(cid:1)(cid:61)(cid:59)(cid:42)(cid:47)(cid:47)(cid:50)(cid:44)
(cid:50)(cid:55)(cid:44)(cid:50)(cid:45)(cid:46)(cid:55)(cid:61)(cid:1)(cid:54)(cid:42)(cid:55)(cid:42)(cid:48)(cid:46)(cid:54)(cid:46)(cid:55)(cid:61)(cid:1)(cid:54)(cid:42)(cid:59)(cid:52)(cid:46)(cid:61)(cid:9)(cid:1)(cid:1)(cid:23)(cid:62)(cid:59)(cid:50)(cid:55)(cid:48)(cid:1)(cid:12)(cid:10)(cid:11)(cid:11)(cid:7)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:23)(cid:50)(cid:63)(cid:50)(cid:60)(cid:50)(cid:56)(cid:55)(cid:1)(cid:44)(cid:56)(cid:55)(cid:61)(cid:50)(cid:55)(cid:62)(cid:46)(cid:45)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:59)(cid:56)(cid:53)(cid:53)(cid:56)(cid:62)(cid:61)(cid:1)(cid:56)(cid:47)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:55)(cid:46)(cid:64)(cid:1)(cid:27)(cid:46)(cid:53)(cid:50)(cid:56)(cid:60)(cid:1)(cid:57)(cid:59)(cid:56)(cid:45)(cid:62)(cid:44)(cid:61)
(cid:53)(cid:50)(cid:55)(cid:46)(cid:1)(cid:42)(cid:60)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:44)(cid:56)(cid:54)(cid:57)(cid:42)(cid:55)(cid:66)(cid:1)(cid:61)(cid:59)(cid:42)(cid:55)(cid:60)(cid:50)(cid:61)(cid:50)(cid:56)(cid:55)(cid:60)(cid:1)(cid:57)(cid:59)(cid:56)(cid:45)(cid:62)(cid:44)(cid:61)(cid:60)(cid:1)(cid:61)(cid:56)(cid:1)(cid:28)(cid:34)(cid:1)(cid:43)(cid:42)(cid:60)(cid:46)(cid:45)(cid:7)(cid:1)(cid:60)(cid:61)(cid:42)(cid:55)(cid:45)(cid:42)(cid:59)(cid:45)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:49)(cid:50)(cid:48)(cid:49)(cid:1)(cid:45)(cid:46)(cid:47)(cid:50)(cid:55)(cid:50)(cid:61)(cid:50)(cid:56)(cid:55)(cid:1)(cid:47)(cid:56)(cid:59)(cid:54)(cid:42)(cid:61)(cid:60)(cid:9)(cid:1)(cid:1)(cid:38)(cid:49)(cid:46)(cid:1)(cid:50)(cid:55)(cid:50)(cid:61)(cid:50)(cid:42)(cid:53)
(cid:47)(cid:56)(cid:44)(cid:62)(cid:60)(cid:1)(cid:49)(cid:42)(cid:60)(cid:1)(cid:43)(cid:46)(cid:46)(cid:55)(cid:1)(cid:56)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:61)(cid:59)(cid:42)(cid:47)(cid:47)(cid:50)(cid:44)(cid:1)(cid:54)(cid:42)(cid:59)(cid:52)(cid:46)(cid:61)(cid:7)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:45)(cid:62)(cid:59)(cid:50)(cid:55)(cid:48)(cid:1)(cid:12)(cid:10)(cid:11)(cid:12)(cid:1)(cid:64)(cid:46)(cid:1)(cid:57)(cid:53)(cid:42)(cid:55)(cid:1)(cid:61)(cid:56)(cid:1)(cid:53)(cid:42)(cid:62)(cid:55)(cid:44)(cid:49)(cid:1)(cid:55)(cid:46)(cid:64)(cid:1)(cid:57)(cid:59)(cid:56)(cid:45)(cid:62)(cid:44)(cid:61)(cid:60)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:48)(cid:53)(cid:56)(cid:43)(cid:42)(cid:53)
(cid:60)(cid:46)(cid:44)(cid:62)(cid:59)(cid:50)(cid:61)(cid:66)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:60)(cid:62)(cid:59)(cid:63)(cid:46)(cid:50)(cid:53)(cid:53)(cid:42)(cid:55)(cid:44)(cid:46)(cid:1)(cid:54)(cid:42)(cid:59)(cid:52)(cid:46)(cid:61)(cid:9)
(cid:21)(cid:59)(cid:56)(cid:42)(cid:45)(cid:44)(cid:42)(cid:60)(cid:61)(cid:1)(cid:31)(cid:50)(cid:44)(cid:59)(cid:56)(cid:64)(cid:42)(cid:63)(cid:46)(cid:1)(cid:37)(cid:46)(cid:59)(cid:63)(cid:50)(cid:44)(cid:46)(cid:60)(cid:1)(cid:45)(cid:46)(cid:60)(cid:50)(cid:48)(cid:55)(cid:60)(cid:7)(cid:1)(cid:45)(cid:46)(cid:63)(cid:46)(cid:53)(cid:56)(cid:57)(cid:60)(cid:1)(cid:42)(cid:55)(cid:45) (cid:54)(cid:42)(cid:55)(cid:62)(cid:47)(cid:42)(cid:44)(cid:61)(cid:62)(cid:59)(cid:46)(cid:60)(cid:1)(cid:42)(cid:1)(cid:43)(cid:59)(cid:56)(cid:42)(cid:45)(cid:1)(cid:53)(cid:50)(cid:55)(cid:46)(cid:1)(cid:56)(cid:47)(cid:1)(cid:54)(cid:56)(cid:43)(cid:50)(cid:53)(cid:46)(cid:1)(cid:54)(cid:50)(cid:44)(cid:59)(cid:56)(cid:64)(cid:42)(cid:63)(cid:46)
(cid:61)(cid:59)(cid:42)(cid:55)(cid:60)(cid:54)(cid:50)(cid:61)(cid:61)(cid:46)(cid:59)(cid:60)(cid:7)(cid:1)(cid:59)(cid:46)(cid:44)(cid:46)(cid:50)(cid:63)(cid:46)(cid:59)(cid:60)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:61)(cid:62)(cid:59)(cid:55)(cid:52)(cid:46)(cid:66)(cid:1)(cid:60)(cid:66)(cid:60)(cid:61)(cid:46)(cid:54)(cid:60)(cid:9)(cid:1)(cid:1)(cid:38)(cid:49)(cid:46)(cid:1)(cid:44)(cid:56)(cid:54)(cid:57)(cid:42)(cid:55)(cid:66)(cid:1)(cid:50)(cid:60)(cid:1)(cid:44)(cid:42)(cid:57)(cid:50)(cid:61)(cid:42)(cid:53)(cid:50)(cid:67)(cid:50)(cid:55)(cid:48)(cid:1)(cid:56)(cid:55)(cid:1)(cid:50)(cid:61)(cid:60)(cid:1)(cid:47)(cid:56)(cid:44)(cid:62)(cid:60)(cid:1)(cid:56)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:48)(cid:56)(cid:63)(cid:46)(cid:59)(cid:55)(cid:54)(cid:46)(cid:55)(cid:61)
(cid:60)(cid:62)(cid:59)(cid:63)(cid:46)(cid:50)(cid:53)(cid:53)(cid:42)(cid:55)(cid:44)(cid:46)(cid:7)(cid:1)(cid:62)(cid:55)(cid:54)(cid:42)(cid:55)(cid:55)(cid:46)(cid:45)(cid:1)(cid:42)(cid:46)(cid:59)(cid:50)(cid:42)(cid:53) (cid:63)(cid:46)(cid:49)(cid:50)(cid:44)(cid:53)(cid:46)(cid:60)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:53)(cid:42)(cid:64)(cid:1)(cid:46)(cid:55)(cid:47)(cid:56)(cid:59)(cid:44)(cid:46)(cid:54)(cid:46)(cid:55)(cid:61)(cid:1)(cid:54)(cid:42)(cid:59)(cid:52)(cid:46)(cid:61)(cid:60)(cid:9)(cid:1)(cid:1)(cid:21)(cid:62)(cid:60)(cid:50)(cid:55)(cid:46)(cid:60)(cid:60)(cid:1)(cid:56)(cid:57)(cid:57)(cid:56)(cid:59)(cid:61)(cid:62)(cid:55)(cid:50)(cid:61)(cid:50)(cid:46)(cid:60)(cid:1)(cid:42)(cid:59)(cid:46)
(cid:46)(cid:65)(cid:57)(cid:42)(cid:55)(cid:45)(cid:50)(cid:55)(cid:48)(cid:7)(cid:1)(cid:57)(cid:42)(cid:59)(cid:61)(cid:50)(cid:44)(cid:62)(cid:53)(cid:42)(cid:59)(cid:53)(cid:66)(cid:1)(cid:50)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:31)(cid:50)(cid:45)(cid:45)(cid:53)(cid:46)(cid:1)(cid:24)(cid:42)(cid:60)(cid:61)(cid:7)(cid:1)(cid:64)(cid:49)(cid:46)(cid:59)(cid:46)(cid:1)(cid:21)(cid:31)(cid:37)(cid:1)(cid:49)(cid:42)(cid:60)(cid:1)(cid:42)(cid:1)(cid:60)(cid:50)(cid:67)(cid:46)(cid:42)(cid:43)(cid:53)(cid:46)(cid:1)(cid:50)(cid:55)(cid:60)(cid:61)(cid:42)(cid:53)(cid:53)(cid:46)(cid:45)(cid:1)(cid:43)(cid:42)(cid:60)(cid:46)(cid:1)(cid:56)(cid:47)(cid:1)(cid:46)(cid:58)(cid:62)(cid:50)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:9)(cid:1)(cid:1)(cid:38)(cid:49)(cid:46)
(cid:62)(cid:55)(cid:59)(cid:46)(cid:60)(cid:61)(cid:1)(cid:50)(cid:55)(cid:1)(cid:61)(cid:49)(cid:42)(cid:61)(cid:1)(cid:59)(cid:46)(cid:48)(cid:50)(cid:56)(cid:55)(cid:1)(cid:42)(cid:47)(cid:47)(cid:46)(cid:44)(cid:61)(cid:46)(cid:45)(cid:1)(cid:43)(cid:62)(cid:60)(cid:50)(cid:55)(cid:46)(cid:60)(cid:60)(cid:1)(cid:45)(cid:62)(cid:59)(cid:50)(cid:55)(cid:48)(cid:1)(cid:12)(cid:10)(cid:11)(cid:11)(cid:7)(cid:1)(cid:42)(cid:60)(cid:1)(cid:42)(cid:1)(cid:55)(cid:62)(cid:54)(cid:43)(cid:46)(cid:59)(cid:1)(cid:56)(cid:47)(cid:1)(cid:44)(cid:56)(cid:62)(cid:55)(cid:61)(cid:59)(cid:50)(cid:46)(cid:60)(cid:1)(cid:45)(cid:46)(cid:53)(cid:42)(cid:66)(cid:46)(cid:45)(cid:1)(cid:56)(cid:59)(cid:1)(cid:60)(cid:62)(cid:60)(cid:57)(cid:46)(cid:55)(cid:45)(cid:46)(cid:45)(cid:1)(cid:59)(cid:56)(cid:62)(cid:61)(cid:50)(cid:55)(cid:46)
(cid:44)(cid:56)(cid:54)(cid:54)(cid:46)(cid:59)(cid:44)(cid:50)(cid:42)(cid:53)(cid:1)(cid:42)(cid:44)(cid:61)(cid:50)(cid:63)(cid:50)(cid:61)(cid:50)(cid:46)(cid:60)(cid:9)(cid:1)(cid:1)(cid:20)(cid:60)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:66)(cid:46)(cid:42)(cid:59)(cid:1)(cid:46)(cid:55)(cid:45)(cid:46)(cid:45)(cid:7)(cid:1)(cid:64)(cid:46)(cid:1)(cid:43)(cid:46)(cid:48)(cid:42)(cid:55)(cid:1)(cid:61)(cid:56) (cid:60)(cid:46)(cid:46)(cid:1)(cid:59)(cid:46)(cid:55)(cid:46)(cid:64)(cid:46)(cid:45)(cid:1)(cid:42)(cid:44)(cid:61)(cid:50)(cid:63)(cid:50)(cid:61)(cid:66)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:64)(cid:46)(cid:1)(cid:46)(cid:65)(cid:57)(cid:46)(cid:44)(cid:61)(cid:1)(cid:21)(cid:31)(cid:37)(cid:1)(cid:61)(cid:56)(cid:1)(cid:49)(cid:42)(cid:63)(cid:46)(cid:1)(cid:42)
(cid:60)(cid:61)(cid:59)(cid:56)(cid:55)(cid:48)(cid:1)(cid:12)(cid:10)(cid:11)(cid:12)(cid:9)
(cid:4)(cid:21)(cid:20)(cid:14)(cid:17)(cid:17)(cid:13)
(cid:38)(cid:49)(cid:46)(cid:1)(cid:47)(cid:50)(cid:59)(cid:60)(cid:61)(cid:1)(cid:57)(cid:42)(cid:59)(cid:61)(cid:1)(cid:56)(cid:47)(cid:1)(cid:12)(cid:10)(cid:11)(cid:12)(cid:1)(cid:64)(cid:50)(cid:53)(cid:53)(cid:1)(cid:43)(cid:46)(cid:1)(cid:50)(cid:54)(cid:57)(cid:42)(cid:44)(cid:61)(cid:46)(cid:45)(cid:1)(cid:43)(cid:66)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:60)(cid:53)(cid:56)(cid:64)(cid:45)(cid:56)(cid:64)(cid:55)(cid:1)(cid:50)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:60)(cid:46)(cid:54)(cid:50)(cid:44)(cid:56)(cid:55)(cid:45)(cid:62)(cid:44)(cid:61)(cid:56)(cid:59)(cid:1)(cid:46)(cid:58)(cid:62)(cid:50)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:1)(cid:50)(cid:55)(cid:45)(cid:62)(cid:60)(cid:61)(cid:59)(cid:66)(cid:1)(cid:61)(cid:49)(cid:42)(cid:61)
(cid:59)(cid:46)(cid:60)(cid:62)(cid:53)(cid:61)(cid:46)(cid:45)(cid:1)(cid:50)(cid:55)(cid:1)(cid:53)(cid:56)(cid:64)(cid:46)(cid:59)(cid:1)(cid:56)(cid:59)(cid:45)(cid:46)(cid:59)(cid:60)(cid:1)(cid:45)(cid:62)(cid:59)(cid:50)(cid:55)(cid:48)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:60)(cid:46)(cid:44)(cid:56)(cid:55)(cid:45)(cid:1)(cid:49)(cid:42)(cid:53)(cid:47)(cid:1)(cid:56)(cid:47)(cid:1)(cid:12)(cid:10)(cid:11)(cid:11)(cid:9)(cid:1)(cid:1)(cid:22)(cid:46)(cid:59)(cid:61)(cid:42)(cid:50)(cid:55)(cid:1)(cid:60)(cid:46)(cid:48)(cid:54)(cid:46)(cid:55)(cid:61)(cid:60)(cid:1)(cid:56)(cid:47)(cid:1)(cid:61)(cid:49)(cid:46) (cid:46)(cid:53)(cid:46)(cid:44)(cid:61)(cid:59)(cid:56)(cid:55)(cid:50)(cid:44)(cid:60)(cid:1)(cid:54)(cid:42)(cid:59)(cid:52)(cid:46)(cid:61)(cid:7)
(cid:57)(cid:42)(cid:59)(cid:61)(cid:50)(cid:44)(cid:62)(cid:53)(cid:42)(cid:59)(cid:53)(cid:66)(cid:1)(cid:44)(cid:56)(cid:55)(cid:60)(cid:62)(cid:54)(cid:46)(cid:59)(cid:1)(cid:54)(cid:56)(cid:43)(cid:50)(cid:53)(cid:50)(cid:61)(cid:66)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:42)(cid:62)(cid:61)(cid:56)(cid:54)(cid:56)(cid:61)(cid:50)(cid:63)(cid:46)(cid:7)(cid:1)(cid:49)(cid:42)(cid:63)(cid:46)(cid:1)(cid:50)(cid:54)(cid:57)(cid:59)(cid:56)(cid:63)(cid:46)(cid:45)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:44)(cid:56)(cid:55)(cid:60)(cid:46)(cid:55)(cid:60)(cid:62)(cid:60)(cid:1)(cid:49)(cid:42)(cid:60)(cid:1)(cid:43)(cid:46)(cid:46)(cid:55)(cid:1)(cid:43)(cid:62)(cid:50)(cid:53)(cid:45)(cid:50)(cid:55)(cid:48)(cid:1)(cid:61)(cid:49)(cid:42)(cid:61)(cid:1)(cid:35)(cid:14)(cid:8)
(cid:35)(cid:11)(cid:1)(cid:64)(cid:50)(cid:53)(cid:53)(cid:1)(cid:57)(cid:59)(cid:56)(cid:63)(cid:46)(cid:1)(cid:61)(cid:56)(cid:1)(cid:43)(cid:46)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:43)(cid:56)(cid:61)(cid:61)(cid:56)(cid:54)(cid:1)(cid:56)(cid:47)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:44)(cid:62)(cid:59)(cid:59)(cid:46)(cid:55)(cid:61)(cid:1)(cid:44)(cid:66)(cid:44)(cid:53)(cid:46)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:61)(cid:49)(cid:42)(cid:61)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:60)(cid:46)(cid:44)(cid:56)(cid:55)(cid:45)(cid:1)(cid:49)(cid:42)(cid:53)(cid:47)(cid:1)(cid:56)(cid:47)(cid:1)(cid:12)(cid:10)(cid:11)(cid:12)(cid:1)(cid:64)(cid:50)(cid:53)(cid:53)(cid:1)(cid:43)(cid:46)(cid:1)(cid:60)(cid:61)(cid:59)(cid:56)(cid:55)(cid:48)(cid:46)(cid:59)(cid:9)
(cid:5)(cid:50)(cid:50)(cid:6)
(cid:8)(cid:17)(cid:14)(cid:21)(cid:2)(cid:1)(cid:9)(cid:16)(cid:12)(cid:3)(cid:1)(cid:6)(cid:4)(cid:5)(cid:5) (cid:7)(cid:16)(cid:16)(cid:21)(cid:11)(cid:15)(cid:1)(cid:10)(cid:13)(cid:18)(cid:17)(cid:19)(cid:20)
(cid:27)(cid:56)(cid:64)(cid:46)(cid:63)(cid:46)(cid:59)(cid:7)(cid:1)(cid:50)(cid:61)(cid:1)(cid:50)(cid:60)(cid:1)(cid:62)(cid:55)(cid:44)(cid:53)(cid:46)(cid:42)(cid:59)(cid:1)(cid:64)(cid:49)(cid:42)(cid:61)(cid:1)(cid:42)(cid:47)(cid:47)(cid:46)(cid:44)(cid:61)(cid:1)(cid:54)(cid:42)(cid:44)(cid:59)(cid:56)(cid:46)(cid:44)(cid:56)(cid:55)(cid:56)(cid:54)(cid:50)(cid:44)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:57)(cid:56)(cid:53)(cid:50)(cid:61)(cid:50)(cid:44)(cid:42)(cid:53)(cid:1)(cid:47)(cid:42)(cid:44)(cid:61)(cid:56)(cid:59)(cid:60)(cid:1)(cid:64)(cid:50)(cid:53)(cid:53)(cid:1)(cid:49)(cid:42)(cid:63)(cid:46)(cid:1)(cid:56)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:59)(cid:46)(cid:44)(cid:56)(cid:63)(cid:46)(cid:59)(cid:66)(cid:9)(cid:1)(cid:1)(cid:28)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)
(cid:44)(cid:62)(cid:59)(cid:59)(cid:46)(cid:55)(cid:61)(cid:1)(cid:43)(cid:62)(cid:60)(cid:50)(cid:55)(cid:46)(cid:60)(cid:60)(cid:1)(cid:46)(cid:55)(cid:63)(cid:50)(cid:59)(cid:56)(cid:55)(cid:54)(cid:46)(cid:55)(cid:61)(cid:7)(cid:1)(cid:64)(cid:46)(cid:1)(cid:49)(cid:42)(cid:63)(cid:46)(cid:1)(cid:61)(cid:42)(cid:52)(cid:46)(cid:55)(cid:1)(cid:42)(cid:44)(cid:61)(cid:50)(cid:56)(cid:55)(cid:60)(cid:1)(cid:61)(cid:56)(cid:1)(cid:44)(cid:56)(cid:55)(cid:61)(cid:59)(cid:56)(cid:53)(cid:1)(cid:44)(cid:56)(cid:60)(cid:61)(cid:60)(cid:7)(cid:1)(cid:43)(cid:62)(cid:61)(cid:1)(cid:64)(cid:50)(cid:61)(cid:49)(cid:56)(cid:62)(cid:61)(cid:1)(cid:44)(cid:56)(cid:54)(cid:57)(cid:59)(cid:56)(cid:54)(cid:50)(cid:60)(cid:50)(cid:55)(cid:48)(cid:1)(cid:52)(cid:46)(cid:66)
(cid:57)(cid:59)(cid:56)(cid:45)(cid:62)(cid:44)(cid:61)(cid:1)(cid:45)(cid:46)(cid:63)(cid:46)(cid:53)(cid:56)(cid:57)(cid:54)(cid:46)(cid:55)(cid:61)(cid:1)(cid:57)(cid:59)(cid:56)(cid:48)(cid:59)(cid:42)(cid:54)(cid:60)(cid:9)(cid:1)(cid:1)(cid:41)(cid:49)(cid:50)(cid:53)(cid:46)(cid:1)(cid:57)(cid:59)(cid:46)(cid:45)(cid:50)(cid:44)(cid:61)(cid:50)(cid:55)(cid:48)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:55)(cid:46)(cid:42)(cid:59)(cid:1)(cid:61)(cid:46)(cid:59)(cid:54)(cid:1)(cid:50)(cid:60)(cid:1)(cid:42)(cid:53)(cid:64)(cid:42)(cid:66)(cid:60)(cid:1)(cid:45)(cid:50)(cid:47)(cid:47)(cid:50)(cid:44)(cid:62)(cid:53)(cid:61) (cid:50)(cid:55)(cid:1)(cid:61)(cid:49)(cid:50)(cid:60)(cid:1)(cid:43)(cid:62)(cid:60)(cid:50)(cid:55)(cid:46)(cid:60)(cid:60)(cid:7)(cid:1)(cid:28)(cid:1)(cid:49)(cid:42)(cid:63)(cid:46)
(cid:55)(cid:46)(cid:63)(cid:46)(cid:59)(cid:1)(cid:43)(cid:46)(cid:46)(cid:55)(cid:1)(cid:54)(cid:56)(cid:59)(cid:46)(cid:1)(cid:56)(cid:57)(cid:61)(cid:50)(cid:54)(cid:50)(cid:60)(cid:61)(cid:50)(cid:44)(cid:1)(cid:42)(cid:43)(cid:56)(cid:62)(cid:61)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:53)(cid:56)(cid:55)(cid:48)(cid:1)(cid:61)(cid:46)(cid:59)(cid:54)(cid:1)(cid:57)(cid:59)(cid:56)(cid:60)(cid:57)(cid:46)(cid:44)(cid:61)(cid:60)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:60)(cid:46)(cid:54)(cid:50)(cid:44)(cid:56)(cid:55)(cid:45)(cid:62)(cid:44)(cid:61)(cid:56)(cid:59)(cid:1)(cid:50)(cid:55)(cid:45)(cid:62)(cid:60)(cid:61)(cid:59)(cid:66)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:22)(cid:56)(cid:49)(cid:62)(cid:68)(cid:60)
(cid:44)(cid:56)(cid:54)(cid:57)(cid:46)(cid:61)(cid:50)(cid:61)(cid:50)(cid:63)(cid:46)(cid:1)(cid:57)(cid:56)(cid:60)(cid:50)(cid:61)(cid:50)(cid:56)(cid:55)(cid:1)(cid:50)(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:28)(cid:22)(cid:1)(cid:61)(cid:46)(cid:60)(cid:61)(cid:1)(cid:49)(cid:42)(cid:55)(cid:45)(cid:53)(cid:46)(cid:59)(cid:1)(cid:54)(cid:42)(cid:59)(cid:52)(cid:46)(cid:61)(cid:9)
(cid:28)(cid:1)(cid:64)(cid:42)(cid:55)(cid:61)(cid:1)(cid:61)(cid:56)(cid:1)(cid:61)(cid:49)(cid:42)(cid:55)(cid:52)(cid:1)(cid:56)(cid:62)(cid:59)(cid:1)(cid:46)(cid:54)(cid:57)(cid:53)(cid:56)(cid:66)(cid:46)(cid:46)(cid:60)(cid:7)(cid:1)(cid:44)(cid:62)(cid:60)(cid:61)(cid:56)(cid:54)(cid:46)(cid:59)(cid:60)(cid:7)(cid:1)(cid:60)(cid:49)(cid:42)(cid:59)(cid:46)(cid:49)(cid:56)(cid:53)(cid:45)(cid:46)(cid:59)(cid:60)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:60)(cid:62)(cid:57)(cid:57)(cid:53)(cid:50)(cid:46)(cid:59)(cid:60)(cid:1)(cid:47)(cid:56)(cid:59)(cid:1)(cid:66)(cid:56)(cid:62)(cid:59) (cid:60)(cid:62)(cid:57)(cid:57)(cid:56)(cid:59)(cid:61)(cid:1)(cid:50)(cid:55)(cid:1)(cid:12)(cid:10)(cid:11)(cid:11)(cid:9)(cid:1)(cid:1)(cid:41)(cid:46)(cid:1)(cid:53)(cid:56)(cid:56)(cid:52)
(cid:47)(cid:56)(cid:59)(cid:64)(cid:42)(cid:59)(cid:45)(cid:1)(cid:61)(cid:56)(cid:1)(cid:48)(cid:59)(cid:56)(cid:64)(cid:50)(cid:55)(cid:48)(cid:1)(cid:22)(cid:56)(cid:49)(cid:62)(cid:1)(cid:57)(cid:59)(cid:56)(cid:47)(cid:50)(cid:61)(cid:42)(cid:43)(cid:53)(cid:66)(cid:1)(cid:50)(cid:55)(cid:1)(cid:12)(cid:10)(cid:11)(cid:12)(cid:9)
(cid:37)(cid:50)(cid:55)(cid:44)(cid:46)(cid:59)(cid:46)(cid:53)(cid:66)(cid:7)
(cid:29)(cid:42)(cid:54)(cid:46)(cid:60)(cid:1)(cid:20)(cid:9)(cid:1)(cid:23)(cid:56)(cid:55)(cid:42)(cid:49)(cid:62)(cid:46)
(cid:22)(cid:49)(cid:42)(cid:50)(cid:59)(cid:54)(cid:42)(cid:55)(cid:1)(cid:56)(cid:47)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:21)(cid:56)(cid:42)(cid:59)(cid:45)(cid:7)
(cid:34)(cid:59)(cid:46)(cid:60)(cid:50)(cid:45)(cid:46)(cid:55)(cid:61)(cid:1)(cid:42)(cid:55)(cid:45)(cid:1)(cid:22)(cid:49)(cid:50)(cid:46)(cid:47)(cid:1)(cid:24)(cid:65)(cid:46)(cid:44)(cid:62)(cid:61)(cid:50)(cid:63)(cid:46)(cid:1)(cid:33)(cid:47)(cid:47)(cid:50)(cid:44)(cid:46)(cid:59)
(cid:31)(cid:42)(cid:59)(cid:44)(cid:49) (cid:18)(cid:7)(cid:1)(cid:12)(cid:10)(cid:11)(cid:12)
(cid:5)(cid:50)(cid:50)(cid:50)(cid:6)
(cid:8)(cid:17)(cid:14)(cid:21)(cid:2)(cid:1)(cid:9)(cid:16)(cid:12)(cid:3)(cid:1)(cid:6)(cid:4)(cid:5)(cid:5) (cid:7)(cid:16)(cid:16)(cid:21)(cid:11)(cid:15)(cid:1)(cid:10)(cid:13)(cid:18)(cid:17)(cid:19)(cid:20)
(cid:5)(cid:38)(cid:49)(cid:50)(cid:60)(cid:1)(cid:57)(cid:42)(cid:48)(cid:46)(cid:1)(cid:50)(cid:55)(cid:61)(cid:46)(cid:55)(cid:61)(cid:50)(cid:56)(cid:55)(cid:42)(cid:53)(cid:53)(cid:66)(cid:1)(cid:53)(cid:46)(cid:47)(cid:61)(cid:1)(cid:43)(cid:53)(cid:42)(cid:55)(cid:52)(cid:6)
(cid:5)(cid:50)(cid:63)(cid:6)
(cid:8)(cid:17)(cid:14)(cid:21)(cid:2)(cid:1)(cid:9)(cid:16)(cid:12)(cid:3)(cid:1)(cid:6)(cid:4)(cid:5)(cid:5) (cid:7)(cid:16)(cid:16)(cid:21)(cid:11)(cid:15)(cid:1)(cid:10)(cid:13)(cid:18)(cid:17)(cid:19)(cid:20)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark One)
[(cid:165)]
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2011
OR
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-4298
COHU, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
Incorporation or Organization)
12367 Crosthwaite Circle, Poway, California
(Address of principal executive offices)
95-1934119
(I.R.S. Employer Identification No.)
92064-6817
(Zip Code)
Registrant’s telephone number, including area code: (858) 848-8100
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Common Stock, $1.00 par value
Preferred Share Purchase Rights, $1.00 par value
Name of Exchange on Which Registered
The NASDAQ Stock Market LLC
The NASDAQ Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:134) No (cid:59)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes (cid:134) No (cid:59)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes (cid:59) No (cid:134)
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files). Yes (cid:59) No (cid:134)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. (cid:59)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):
Large accelerated filer (cid:134) Accelerated filer (cid:59) Non-accelerated filer (cid:134) Smaller reporting company (cid:134)
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes (cid:134) No (cid:59)
The aggregate market value of voting stock held by nonaffiliates of the registrant was approximately $164,000,000 based on the closing stock
price as reported by the NASDAQ Stock Market LLC as of June 24, 2011. Shares of common stock held by each officer and director and by each
person or group who owns 5% or more of the outstanding common stock have been excluded in that such persons or groups may be deemed to be
affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
As of February 10, 2012 the Registrant had 24,355,295 shares of its $1.00 par value common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for Cohu, Inc.’s 2012 Annual Meeting of Stockholders to be held on May 9, 2012, and to be filed pursuant to
Regulation 14A within 120 days after registrant’s fiscal year ended December 31, 2011, are incorporated by reference into Part III of this Report.
(This page intentionally left blank)
COHU, INC.
FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011
TABLE OF CONTENTS
PART I
Page
Item 1. Business ................................................................................................................................................... 1
Item 1A. Risk Factors ............................................................................................................................................. 9
Item 1B. Unresolved Staff Comments ................................................................................................................. 14
Item 2.
Properties ............................................................................................................................................... 15
Item 3.
Legal Proceedings ................................................................................................................................. 15
Item 4. Mine Safety Disclosures ....................................................................................................................... 15
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities ............................................................................................................. 16
Item 6. Selected Financial Data ........................................................................................................................ 18
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ............. 19
Item 7A. Quantitative and Qualitative Disclosures About Market Risk ............................................................ 26
Item 8. Financial Statements and Supplementary Data .................................................................................... 27
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ............ 27
Item 9A. Controls and Procedures ....................................................................................................................... 27
Item 9B. Other Information ................................................................................................................................. 29
PART III
Item 10. Directors, Executive Officers and Corporate Governance .................................................................. 29
Item 11. Executive Compensation ...................................................................................................................... 29
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters .............................................................................................................................. 29
Item 13. Certain Relationships and Related Transactions, and Director Independence .................................... 29
Item 14. Principal Accounting Fees and Services .............................................................................................. 29
PART IV
Item 15. Exhibits, Financial Statement Schedules ............................................................................................. 30
Signatures ............................................................................................................................................................... 55
(This page intentionally left blank)
The following discussion should be read in conjunction with the consolidated financial statements and notes
thereto included elsewhere in this Annual Report on Form 10-K. This Annual Report on Form 10-K contains
certain forward-looking statements including expectations of market conditions, challenges and plans, within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is subject
to the Safe Harbor provisions created by that statute. These forward-looking statements are based on
management’s current expectations and beliefs, including estimates and projections about our industries.
Statements concerning financial position, business strategy, and plans or objectives for future operations are
forward-looking statements. These statements are not guarantees of future performance and are subject to
certain risks, uncertainties, and assumptions that are difficult to predict and may cause actual results to differ
materially from management’s current expectations. Such risks and uncertainties include those set forth in this
Annual Report on Form 10-K under the heading “Item 1A. Risk Factors”. The forward-looking statements in
this report speak only as of the time they are made and do not necessarily reflect management’s outlook at any
other point in time. We undertake no obligation to update publicly any forward-looking statements, whether as a
result of new information, future events, or for any other reason. However, readers should carefully review the
risk factors set forth in other reports or documents we file from time to time with the Securities and Exchange
Commission (“SEC”) after the date of this Annual Report.
Item 1. Business.
PART I
Cohu, Inc. (“Cohu”, “we”, “our” and “us”) was incorporated under the laws of California in 1947, as Kalbfell
Lab, Inc. and commenced active operations in the same year. Our name was changed to Kay Lab in 1954. In
1957, Cohu was reincorporated under the laws of the State of Delaware as Cohu Electronics, Inc. and in 1972,
our name was changed to Cohu, Inc.
We have three reportable segments: semiconductor equipment, mobile microwave communication systems and
video cameras. Our semiconductor equipment segment is comprised of our wholly owned subsidiaries Delta
Design, Inc. (“Delta”) and Rasco GmbH (“Rasco”). Delta develops, manufactures and sells pick-and-place
semiconductor test handlers, burn-in related equipment and thermal sub-systems to semiconductor manufacturers
and semiconductor test subcontractors throughout the world. Rasco develops, manufactures and sells gravity-
feed and test-in-strip semiconductor test handling equipment and micro electro mechanical systems (“MEMS”)
test modules used in final test operations by semiconductor manufacturers and test subcontractors. Our
microwave communication systems segment is comprised of our wholly owned subsidiary Broadcast Microwave
Services, Inc. (“BMS”). BMS develops, manufactures and sells microwave communications equipment to
government agencies, law enforcement and public safety organizations, unmanned air vehicle program
contractors, television broadcasters, entertainment companies, professional sports teams and other commercial
entities. Our video camera segment (“Electronics Division”) develops, manufactures and sells a wide selection of
video cameras and related products, specializing in video solutions for security, surveillance and traffic
monitoring. Customers for these products are distributed among security, surveillance, traffic
control/management, scientific imaging and machine vision.
Sales by reportable segment, expressed as a percentage of total consolidated net sales, for the last three years
were as follows:
Semiconductor equipment
Microwave communications
Video cameras
2011
84 %
10 %
6 %
100 %
2010
85 %
10 %
5 %
100 %
2009
70 %
20 %
10 %
100 %
Additional financial information on our reportable segments for each of the last three years is included in Note 7,
“Segment and Related Information” in part IV, Item 15(a) of this Form 10-K.
1
Semiconductor Equipment
We are a worldwide supplier of semiconductor test handling systems, MEMS test modules, burn-in equipment
and thermal sub-systems. Our semiconductor equipment companies develop, manufacture, sell and service a
broad line of equipment capable of handling a wide range of integrated circuit packages. Test handlers are
electromechanical systems used to automate testing of the packaged integrated circuit in the “backend” of the
semiconductor manufacturing process. Testing determines the quality and performance of the integrated circuit
prior to shipment to customers. Testers are designed to verify the performance of the integrated circuit, such as
microprocessors, logic, DRAM or mixed signal devices. Handlers are engineered to thermally condition and
present for testing the packages that protect the integrated circuit. The majority of test handlers use either pick-
and-place, gravity-feed or test-in-strip technologies. The integrated circuit package type normally determines the
appropriate handling approach. Gravity-feed handling is the predominant solution for temperature testing of
small outline leaded and non-leaded packages, as well as for packages with leads on only two sides. In gravity-
feed handlers, integrated circuits are unloaded from plastic tubes, metal magazines or a bowl at the top of the
machine and flow through the system, from top to bottom, propelled by the force of gravity. After testing, the
integrated circuits are sorted and reloaded into tubes, magazines, bulk or tape for additional process steps or for
shipment.
Integrated circuits with leads on all four sides, such as the quad flat pack, or with balls or pads on the bottom or
sides of the package, such as ball grid array packages, and quad flat no-lead packages as well as certain low
profile integrated circuits with leads on two sides, such as the thin small outline package, are predominately
handled in pick-and-place systems. Pick-and-place handlers use robotic mechanisms to move integrated circuits
from waffle-like trays and place them in precision transport boats or carriers for processing through the system.
After testing, integrated circuits are sorted and reloaded into designated trays, based on test results.
Test-in-strip handlers accommodate integrated circuits in strips or panels prior to the final singulation step in the
semiconductor manufacturing process flow and are typically used for high-parallel testing applications. MEMS
test modules are independent physical stimuli units for testing sensor integrated circuits typically used in the
automotive and consumer electronics industries. These MEMS modules can be integrated to our gravity-feed, pick
& place, or test-in-strip handlers for testing a variety of integrated circuits, including pressure sensors, acoustic
sensors, magnetic field hall effect sensors, optical sensors and others.
To ensure quality, semiconductor manufacturers typically test integrated circuits at hot and/or cold temperatures,
which can accelerate failures. Our test handler products are designed to provide a precisely controlled test
environment, often over the range of -60 degrees Celsius to +175 degrees Celsius. As the speed and power of
certain integrated circuits, such as microprocessors has increased, the amount of heat that is generated within
these high performance integrated circuits during the test process has also increased. This heat is capable of
damaging or destroying the integrated circuit and can result in speed downgrading, when devices self-heat and
fail to successfully test at their maximum possible speed. Device yields are extremely important and speed
grading directly affects the selling price of the integrated circuit and the profitability of the semiconductor
manufacturer. In addition to temperature capability, other key factors in the design of test handlers are handling
speed, flexibility, parallel test capability, system size, reliability and cost.
Delta provides thermal sub-systems for use in advanced burn-in applications. These thermal sub-systems
maintain and control the temperature of the integrated circuit during the burn-in testing process. Burn-in
stresses devices for detection of early failures (infant mortality) prior to distribution. The burn-in process is also
used by semiconductor manufacturers to develop reliability models of newly introduced devices. The objective
of reliability testing is to determine a device’s fault-free operation and estimated useful life by exposing the
device to various electrical and thermal conditions that impact its performance.
Our products are complex electromechanical systems that are used in high-volume production environments and
many are in service twenty-four hours per day, seven days a week. Customers continuously strive to increase the
utilization of their production test equipment and expect high reliability from test handling and burn-in
equipment. The availability of trained technical support personnel is an important competitive factor in the
marketplace. Our semiconductor equipment companies deploy service engineers worldwide, often within
customer production facilities, who work with customer personnel to maintain, repair and continuously improve
the performance of our equipment.
2
Our Semiconductor Equipment Products
We offer products for the pick-and-place, gravity-feed, and test-in-strip semiconductor test handler and burn-in
markets. We currently sell the following products in the semiconductor equipment market:
Pick-and-place
The Delta EDGE is a pick-and-place handler that combines an economical design with a small footprint and fast
index time (processing speed of the contactor placement mechanism). The EDGE handler is designed to meet the
needs of integrated circuit manufacturers and subcontractors who test at ambient and hot temperatures.
The Delta MATRiX is a high performance pick-and-place handler capable of thermally conditioning devices
from -60 degrees Celsius to +175 degrees Celsius. It provides increased productivity in several dimensions of
performance: up to three times higher throughput and four times higher parallelism than our previous generation
products, and active thermal control per test site. With an adjustable test site configuration, customers can reuse
existing load-boards, including those made for gravity handlers. The system also provides flexibility with field
upgradeable options including a chamberless tri-temperature test site and auto contactor cleaning.
The Delta Castle is a pick-and-place test handler capable of thermally conditioning devices from -60 degrees
Celsius to +160 degrees Celsius. The Castle can position from one to nine devices for testing. Its large thermal
soak chamber provides a continuous flow of thermally conditioned devices to the test site allowing the handler to
process parts at high speed when running at temperature. The Castle incorporates an innovative vertical tray
storage system that saves space on the test floor by minimizing the handler’s footprint.
The Delta Pyramid is our next generation thermal handler providing high throughput / high parallel test
capabilities for microprocessors and graphics processors. The Pyramid incorporated Delta’s proprietary thermal
technology. The system is highly configurable and is capable of adapting to various customer requirements
ranging from small tablet microprocessor testing to high-end server product testing.
Delta’s Summit series of pick-and-place thermal handlers are designed to meet the requirements of manufacturers
of microprocessors, graphic processors and other high speed, high power integrated circuits. The Summit handlers
incorporate Delta’s proprietary thermal control technology. The Summit PTC, or Passive Thermal Control, and
ATC, or Active Thermal Control, models dissipate the heat generated during test enabling the integrated circuit to
be tested successfully at its maximum speed and performance.
Gravity-Feed
Rasco’s SO1x00 is a high throughput gravity-feed platform that provides an economical solution for testing up to
8 devices in parallel. These handlers can be configured for tube-to-tube or metal magazine input and output,
ambient-hot or tri-temperature testing and are easily kit-able for a wide range of integrated circuit packages.
Rasco’s SO2x00 is a modular platform that offers a reliable solution for testing small integrated circuit packages
and up to 8 devices in parallel. The base platform can be configured with various input and output modules: tube,
metal magazine, bowl, bulk, tape and reel, and an optional laser marking unit. These handlers can be configured
for ambient-hot or tri-temperature testing.
Test-in-strip
Rasco’s SO3000, test-in-strip handler, can process an entire strip at once or index the strip for single/multiple
device testing. The system has tri-temperature capability, accommodates either stacked or slotted input/output
media and can be configured with optional, automated vision alignment.
Micro Electro Mechanical Systems (“MEMS”)
Rasco's MEMS series are modules that generate a physical stimuli for testing of sensor integrated circuits
typically used in the automotive (tire pressure, airbag sensors) and consumer electronics (tilt, motion, microphone
and light sensors) industries. The MEMS modules are stand-alone units that can be integrated into Delta’s or
Rasco’s pick-and-place, test-in-strip, or gravity-feed handlers.
Burn-in
Delta’s VTS300, is an automated burn-in system that supports asynchronous loading and unloading of devices
without system interruption, transforming the burn-in process from a traditional batch-oriented approach to a
more efficient continuous-flow process.
3
Thermal Sub-Systems
Delta adapted its proprietary thermal control technology for use by integrated circuit manufacturers in high
performance burn-in and system level test. The T-Core thermal sub-systems feature fast and accurate thermal
control of the integrated circuit during the testing process using the same technology available in the Pyramid
handler. T-Core is also used in engineering and device characterization applications.
Spares
Delta and Rasco provide consumable and non-consumable items that are used to maintain, sustain or otherwise
enable its equipment to meet its performance, availability and production requirements.
Tooling (kits)
Delta and Rasco design and manufacture a wide range of device dedication kits that enable their handler
products to process different semiconductor packages.
Sales by Product Line
During the last three years, sales of our semiconductor equipment products were distributed as follows:
Semiconductor test handler systems
Thermal sub-systems and burn-in equipment
Spares, tooling (kits) and service
Microwave Communications
2011
57 %
3 %
40 %
2010
64 %
1 %
35 %
2009
24 %
8 %
68 %
BMS develops, manufactures and sells microwave communications equipment, antenna systems and associated
equipment. These products are used in the transmission of video, audio and telemetry data. Applications for
these microwave data-links include unmanned aerial vehicles (UAVs), law enforcement, security and
surveillance and electronic news gathering. Customers include government agencies, law enforcement and
public safety organizations, unmanned air vehicle program contractors, television broadcasters, entertainment
companies, professional sports teams and other commercial entities.
Video Cameras
The Electronics Division has developed, manufactured and sold closed circuit video or CCTV cameras,
equipment and systems for over 50 years. The customer base for these products is distributed among traffic
control and management, scientific imaging, security/surveillance and machine vision. The product line consists
of a wide selection of video cameras and related products, specializing in video solutions for security,
surveillance and traffic monitoring. Its products are high-performance, high-resolution cameras that meet the
most demanding performance requirements and are resistant to harsh environments. To support its camera
products, the Electronics Division also offers accessories including monitors, lenses and camera test equipment.
Customers
Semiconductor Equipment
Our customers include semiconductor manufacturers and subcontractors that perform test services for semiconductor
manufacturers. Repeat sales to existing customers represent a significant portion of our sales. We rely on a limited
number of customers for a substantial percentage of our net sales. During the last three years, customers from our
semiconductor equipment segment that have comprised 10% or greater of our consolidated net sales are as follows:
Intel
Texas Instruments
Advanced Micro Devices
* Less than 10% of net sales
2011
2010
2009
36 %
11 %
*
26 %
14 %
*
30 %
*
11 %
4
The loss of, or a significant reduction in, orders by these or other significant customers, including reductions due to
market, economic or competitive conditions or the outsourcing of final integrated circuit test to subcontractors that
are not our customers would adversely affect our financial condition and results of operations and as a result, we
believe that our customer concentration is a significant business risk.
Additional financial information on revenues from external customers by geographic area for each of the last
three years is included in Note 7, “Segment and Related Information” in part IV, Item 15(a) of this Form 10-K.
Microwave Communications
Our customer base for microwave communications equipment is diverse and includes government agencies, law
enforcement and public safety organizations, unmanned air vehicle program contractors, television broadcasters,
entertainment companies, professional sports teams and other commercial entities throughout the world. No single
customer of this segment accounted for 10% or more of our consolidated net sales in 2011, 2010 or 2009.
Video Cameras
Our customer base in the video camera industry segment is also diverse and includes end-users, government
agencies, original equipment manufacturers, system integrators and value-added resellers. No single customer of
this segment accounted for 10% or more of our consolidated net sales in 2011, 2010 or 2009.
Sales and Marketing
We market our products worldwide through a combination of a direct sales force and independent sales
representatives. In geographic areas where we believe there is sufficient sales potential, we generally employ our
own personnel. The U.S. sales office for our semiconductor equipment businesses is located at Delta’s Poway,
California facility. A foreign subsidiary was formed in Singapore to handle the sales and service of our test
handling products to customers located in Southeast Asia. A branch of the Singapore sales and service subsidiary
was opened in Taipei, Taiwan. As a result of our acquisition of Rasco in December 2008 we have a direct sales
force in Europe. Sales in Japan and Korea are made primarily through independent sales representatives.
Competition
Semiconductor Equipment
The semiconductor equipment industry is intensely competitive and is characterized by rapid technological change
and demanding worldwide service requirements. Significant competitive factors include product performance,
price, reliability, customer support and installed base of products. While we are a leading worldwide supplier of
semiconductor test handling equipment, we face substantial competition and there are a large number of
competitors for a relatively small worldwide market. The Japanese and Korean markets for test handling equipment
are large and represent a significant percentage of the worldwide market. During each of the last three years our
sales to Japanese and Korean customers, who have historically purchased test handling equipment from Asian
suppliers, have represented less than 10% of our total sales. Some of our current and potential competitors have
substantially greater financial, engineering, manufacturing and customer support capabilities and offer more
extensive product offerings than Cohu. To remain competitive we believe we will require significant financial
resources to offer a broad range of products, maintain customer support and service centers worldwide and to invest
in research and development of new products. Failure to introduce new products in a timely manner or the
introduction by competitors of products with actual or perceived advantages could result in a loss of competitive
position and reduced sales of existing products. No assurance can be given that we will continue to compete
successfully in the U.S. or throughout the world.
Microwave Communications and Video Camera
Our products in the microwave communications and video camera segments are sold in highly competitive
markets throughout the world, where we compete on the basis of product performance and integration with
customer requirements, service, product quality, reliability and price. Many of our competitors are divisions or
segments of large, diversified companies with substantially greater financial, engineering, marketing,
manufacturing and customer support capabilities than Cohu. No assurance can be given that we will continue to
compete successfully in these market segments.
5
Backlog
Our backlog of unfilled orders for products, by segment, at December 31, 2011 and December 25, 2010, was as
follows:
(in millions)
Semiconductor equipment
Microwave communications
Video cameras
Total consolidated backlog
2011
2010
$
$
38.2 $
11.1
2.6
51.9 $
86.8
9.9
2.9
99.6
Backlog is generally expected to be shipped within the next twelve months. Our backlog at any point in time may
not be representative of actual sales in any future period due to the possibility of customer changes in delivery
schedules, cancellation of orders, potential delays in product shipments, difficulties in obtaining parts from
suppliers, failure to satisfy customer acceptance requirements and the inability to recognize revenue under
accounting requirements. Furthermore, many orders are subject to cancellation or rescheduling by the customer
with limited or no penalty. A reduction in backlog during any particular period could have a material adverse
effect on our business, financial condition and results of operations. There is no significant seasonal aspect to our
business. The decrease in our backlog at December 31, 2011 is a result of the downturn in the global
semiconductor equipment industry which led to decreased orders for our semiconductor test handling systems in
the second half of 2011.
Manufacturing and Raw Materials
Our manufacturing operations are currently located in Poway, California (Delta, BMS and Electronics Division);
Laguna, the Philippines (Delta); Kolbermoor, Germany (Rasco); and Kemel, Germany (BMS). Our microwave
communications and video camera businesses perform internal assembly, final integration and test. Rasco relies
on contract manufacturers for sub-assemblies while performing final integration and test in its Kolbermoor
facility and Delta is in the process of transitioning certain portions of its handler manufacturing model to an
outsourced model that utilizes contract manufacturers.
Many of the components and subassemblies we utilize are standard products, although some items are made to
our specifications. Certain components, particularly in our semiconductor equipment businesses, are obtained or
are available from a limited number of suppliers. We seek to reduce our dependence on sole and limited source
suppliers, however in some cases the complete or partial loss of certain of these sources could have a material
adverse effect on our operations while we attempt to locate and qualify replacement suppliers.
Patents and Trademarks
Our proprietary technology is protected by various intellectual property laws including patents, licenses,
trademarks, copyrights and trade secrets. In addition, we believe that, due to the rapid pace of technological
change in the semiconductor equipment industry and our other business segments, the successful manufacture
and sale of our products also depends upon our experience, technological know-how, manufacturing and
marketing skills and speed of response to sales opportunities. In the absence of patent protection, we would be
vulnerable to competitors who attempt to copy or imitate our products or processes. We believe our intellectual
property has value and we have in the past and will in the future take actions we deem appropriate to protect such
property from misappropriation. However, there can be no assurance such actions will provide meaningful
protection from competition. Protecting our intellectual property rights or defending against claims brought by
other holders of such rights, either directly against us or against customers we have agreed to indemnify, would
likely be expensive and time consuming and could have a material adverse effect on our operations.
Research and Development
Certain of the markets in which we compete, particularly the semiconductor equipment industry, are
characterized by rapid technological change. Research and development activities are carried on in our various
subsidiaries and division and are directed toward development of new products and equipment, as well as
enhancements to existing products and equipment. Our total research and development expense was $36.2
million in 2011, $36.2 million in 2010 and $32.0 million in 2009.
6
We work closely with our customers to make improvements to our existing products and in the development of
new products. We expect to continue to invest heavily in research and development and must manage product
transitions successfully as introductions of new products could adversely impact sales of existing products.
Environmental Laws
Our business is subject to numerous federal, state, local and international environmental laws. On occasion, we
have been notified by local authorities of instances of noncompliance with local and/or state environmental laws.
We believe we are in compliance with applicable federal, state, local and international regulations. Compliance
with foreign, federal, state and local laws which have been enacted or adopted regulating the discharge of materials
into the environment or otherwise relating to the protection of the environment and the prevention of climate
change have not had a material effect and is not expected to have a material effect upon the capital expenditures,
results of operations or our competitive position. However, future changes in regulations may require expenditures
that could adversely impact earnings in future years.
Executive Officers of the Registrant
The following sets forth the names, ages, positions and offices held by all executive officers of Cohu as of
February 10, 2012. Executive Officers serve at the discretion of the Board of Directors, until their successors are
appointed.
Name
Cohu:
James A. Donahue
Jeffrey D. Jones
John H. Allen
Cohu wholly owned subsidiaries:
Luis A. Müller
James G. McFarlane
Shay Torton
Roger J. Hopkins
Age
Position
63
50
60
42
61
50
62
Chairman, President and Chief Executive Officer
Vice President, Finance and Chief Financial Officer
Vice President, Administration
President – Cohu Semiconductor Equipment Group
Senior Vice President – Delta Design
Senior Vice President, Operations – Delta Design
Vice President, Sales and Service – Delta – Rasco
Mr. Donahue has been employed by Delta since 1978 and was President of Delta from May, 1983 until
December, 2010. In October, 1999, Mr. Donahue was named to the position of President and Chief Operating
Officer of Cohu and was appointed to Cohu’s Board of Directors. In June, 2000, Mr. Donahue was promoted to
Chief Executive Officer and was appointed Chairman of the Board in March, 2010.
Mr. Jones joined Delta in 2005 as Vice President Finance. In November 2007, Mr. Jones was named to the
position of Vice President, Finance and Chief Financial Officer of Cohu. Prior to joining Delta, Mr. Jones, was
a consultant from 2004 to 2005 and Vice President and General Manager of the Systems Group at SBS
Technologies, Inc., a designer and manufacturer of embedded computer products, from 1998 to 2003.
Mr. Allen has been employed by Cohu since June, 1995. He was Director of Finance until September, 1995,
became Vice President, Finance in September, 1995, and was appointed Chief Financial Officer in October,
1995. In November 2007, Mr. Allen was made Vice President, Administration. Prior to joining Cohu, Mr. Allen
held various positions with Ernst & Young LLP from 1976 until June, 1995 and had been a partner with that firm
since 1987.
Mr. Müller joined Delta in 2005 as Director of Engineering. In July 2008, Mr. Müller was promoted to the
position of Vice President of the High Speed Handling Group for Delta and in January 2009 he was named
Managing Director of Rasco. In January 2011, Mr. Müller was appointed President of Cohu’s newly-formed
Semiconductor Equipment Group which encompasses Cohu subsidiaries Delta Design, Inc. and Rasco GmbH.
Mr. McFarlane has been employed by Delta since 1989. He was Director of Engineering from 1992 to 1998 and
was promoted to Vice President of Engineering in 1998. In 2000, Mr. McFarlane was promoted to Senior Vice
President.
7
Mr. Torton has been employed by Delta since August 2011 as Senior Vice President, Operations. Prior to
joining Delta, from 1991 to 2011 Mr. Torton held various positions with Kulicke & Soffa Industries, Inc. a
designer and manufacturer of semiconductor assembly equipment most recently serving as Senior Vice
President, Worldwide Operations from 2009 to 2011, Vice President, Worldwide Operations and Supply Chain
from 2005 to 2009 and Vice President, China Operations from 2002 to 2005.
Mr. Hopkins has been employed by Delta since April 2008 as Vice President, Sales and Service. Prior to
joining Delta, from 2003 to 2008 Mr. Hopkins was the Asian and Western Regional Manager at Aetrium,
Incorporated, a supplier of semiconductor test handlers and reliability test systems. Additionally, Mr. Hopkins
worked as Delta’s Director of Sales from April, 2001 until December, 2002.
Employees
At December 31, 2011, we had approximately 1,200 employees. Our employee headcount has fluctuated in the
last five years primarily due to the volatile business conditions in the semiconductor equipment industry. None of
our employees are covered by collective bargaining agreements. We believe that a great part of our future
success will depend on our continued ability to attract and retain qualified employees. Competition for the
services of certain personnel, particularly those with technical skills, is intense. There can be no assurance that
we will be able to attract, hire, assimilate and retain a sufficient number of qualified employees.
Available Information
Our web site address is www.cohu.com. We make available free of charge, on or through our web site, our
annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments
to those reports, as soon as reasonably practicable after such material is electronically filed with the Securities
and Exchange Commission. Our Code of Business Conduct and Ethics and other documents related to our
corporate governance is also posted on our web site at www.cohu.com/investors/corporategovernance.
Information contained on our web site is not deemed part of this report.
8
Item 1A. Risk Factors.
Set forth below and elsewhere in this report on Form 10-K and in other documents we file with the SEC, are risks
and uncertainties that could cause actual results to differ materially from the results expressed or implied by the
forward-looking statements contained in this Annual Report. Before deciding to purchase, hold or sell our
common stock, you should carefully consider the risks described below in addition to the other cautionary
statements and risks described elsewhere, and the other information contained, in this Annual Report on Form
10-K. The risks and uncertainties described below are not the only ones we face. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial may also affect our business. If any
of these known or unknown risks or uncertainties actually occurs with material adverse effects on Cohu, our
business, financial condition and results of operations could be seriously harmed. The trading price of our
common stock could decline due to any of these risks, and you may lose all or part of your investment.
The semiconductor industry we serve is highly volatile and unpredictable.
Visibility into our markets is limited. Our operating results are substantially dependent on our semiconductor
equipment business. This capital equipment business is in turn highly dependent on the overall strength of the
semiconductor industry. Historically, the semiconductor industry has been highly cyclical with recurring periods
of oversupply and excess capacity, which often have had a significant effect on the semiconductor industry’s
demand for capital equipment, including equipment of the type we manufacture and market. We anticipate that
the markets for newer generations of semiconductors and semiconductor equipment may also be subject to
similar cycles and severe downturns. Any significant reductions in capital equipment investment by
semiconductor manufacturers and semiconductor test subcontractors will materially and adversely affect our
business, financial position and results of operations. In addition, the volatile and unpredictable nature of
semiconductor equipment demand has in the past and may in the future expose us to significant excess and
obsolete and lower of cost or market inventory write-offs and reserve requirements. In 2011, 2010 and 2009, we
recorded pre-tax inventory-related charges of approximately $5.8 million, $1.7 million, and $4.4 million,
respectively, primarily as a result of changes in customer forecasts.
The semiconductor equipment industry in general and the test handler market in particular, is highly
competitive.
The semiconductor test handler industry is intensely competitive and we face substantial competition from
numerous companies throughout the world. The test handler industry, while relatively small in terms of
worldwide market size compared to other segments of the semiconductor equipment industry, has an inordinately
large number of participants resulting in intense competitive pricing pressures. Future competition may include
companies that do not currently supply test handlers. Some of our competitors have substantially greater
financial, engineering, manufacturing and customer support capabilities and provide more extensive product
offerings. In addition, there are emerging semiconductor equipment companies that provide or may provide
innovative technology incorporated in products that may compete successfully against our products. We expect
our competitors to continue to improve the design and performance of their current products and introduce new
products with improved performance capabilities. Our failure to introduce new products in a timely manner, the
introduction by our competitors of products with perceived or actual advantages, or disputes over rights to use
certain intellectual property or technology could result in a loss of our competitive position and reduced sales of,
or margins on our existing products. We believe that competitive conditions in the semiconductor test handler
market have intensified over the last several years. This intense competition has adversely impacted our product
average selling prices and gross margins on certain products. If we are unable to reduce the cost of our existing
products and successfully introduce new lower cost products we expect these competitive conditions to
negatively impact our gross margin and operating results in the foreseeable future.
Semiconductor equipment is subject to rapid technological change, product introductions and transitions may
result in inventory write-offs and our new product development involves numerous risks and uncertainties.
Semiconductor equipment and processes are subject to rapid technological change. We believe that our future
success will depend in part on our ability to enhance existing products and develop new products with improved
performance capabilities. We expect to continue to invest heavily in research and development and must manage
product transitions successfully, as introductions of new products, including the products obtained in our
acquisitions, may adversely impact sales and/or margins of existing products. In addition, the introduction of
new products by us or by our competitors, the concentration of our revenues in a limited number of large
customers, the migration to new semiconductor testing methodologies and the custom nature of our inventory
parts increases the risk that our established products and related inventory may become obsolete, resulting in
significant excess and obsolete inventory exposure. This increased exposure resulted in significant charges to
9
operations during each of the years in the three-year period ended December 31, 2011. Future inventory write-
offs and increased inventory reserve requirements could have a material adverse impact on our results of
operations and financial condition.
The design, development, commercial introduction and manufacture of new semiconductor equipment is an
inherently complex process that involves a number of risks and uncertainties. These risks include potential
problems in meeting customer acceptance and performance requirements, integration of the equipment with other
suppliers’ equipment and the customers’ manufacturing processes, transitioning from product development to
volume manufacturing and the ability of the equipment to satisfy the semiconductor industry’s constantly
evolving needs and achieve commercial acceptance at prices that produce satisfactory profit margins. The design
and development of new semiconductor equipment is heavily influenced by changes in integrated circuit
assembly, test and final manufacturing processes and integrated circuit package design changes. We believe that
the rate of change in such processes and integrated circuit packages is accelerating. As a result of these changes
and other factors, assessing the market potential and commercial viability of handling and burn-in test equipment
is extremely difficult and subject to a great deal of risk. In addition, not all integrated circuit manufacturers
employ the same manufacturing processes. Differences in such processes make it difficult to design standard test
products that are capable of achieving broad market acceptance. As a result, we might not accurately assess the
semiconductor industry’s future equipment requirements and fail to design and develop products that meet such
requirements and achieve market acceptance. Failure to accurately assess customer requirements and market
trends for new semiconductor test products may have a material adverse impact on our operations, financial
condition and results of operations.
The transition from product development to the manufacture of new semiconductor equipment is a difficult
process and delays in product introductions and problems in manufacturing such equipment are common. We
have in the past and may in the future experience difficulties in manufacturing and volume production of our
new equipment. In addition, as is common with semiconductor equipment, our after sale support and warranty
costs have typically been significantly higher with new products than with our established products. Future
technologies, processes and product developments may render our current or future product offerings obsolete
and we might not be able to develop, introduce and successfully manufacture new products or make
enhancements to our existing products in a timely manner to satisfy customer requirements or achieve market
acceptance. Furthermore, we might not realize acceptable profit margins on such products.
Global economic conditions may have an impact on our business and financial condition in ways that we
currently cannot predict.
Our operations and financial results depend on worldwide economic conditions and their impact on levels of
business spending, which have deteriorated significantly in many countries and regions and may remain
depressed for the foreseeable future. Continued uncertainties may reduce future sales of our products and
services. While we believe we have a strong customer base and have experienced strong collections in the past, if
the current market conditions deteriorate, we may experience increased collection times and greater write-offs,
either of which could have a material adverse effect on our cash flow.
In addition, the tightening of credit markets and concerns regarding the availability of credit may make it more
difficult for our customers to raise capital, whether debt or equity, to finance their purchases of capital equipment,
including the products we sell. Delays in our customers’ ability to obtain such financing, or the unavailability of
such financing, would adversely affect our product sales and revenues and therefore harm our business and
operating results. We cannot predict the timing, duration of or effect on our business of the economic slowdown
or the timing or strength of a subsequent recovery.
A limited number of customers account for a substantial percentage of our net sales.
A small number of customers of our semiconductor equipment segment have been responsible for a significant
portion of our net sales. During the past five years, the percentage of our sales derived from these significant
customers has varied greatly. Such variations are due to changes in the customers’ business and their purchase of
products from our competitors. It is common in the semiconductor test handler industry for customers to
purchase equipment from more than one equipment supplier, increasing the risk that our competitive position
with a specific customer may deteriorate. No assurance can be given that we will continue to maintain our
competitive position with these or other significant customers. Furthermore, we expect the percentage of our
revenues derived from significant customers will vary greatly in future periods. The loss of, or a significant
reduction in, orders by these or other significant customers as a result of competitive products, market conditions,
outsourcing final semiconductor test to test subcontractors that are not our customers or other factors, would have
10
a material adverse impact on our business, financial condition and results of operations. Furthermore, the
concentration of our revenues in a limited number of large customers is likely to cause significant fluctuations in
our future annual and quarterly operating results.
We do not participate in the DRAM test handler market.
Pick-and-place handlers used in DRAM applications account for a significant portion of the worldwide test
handler market. We do not participate in the DRAM market segment; therefore our total available sales market is
limited.
If we cannot continue to develop, manufacture and market products and services that meet customer
requirements for innovation and quality, our revenue and gross margin may suffer.
The process of developing new high technology products and services and enhancing existing products and
services is complex, costly and uncertain, and any failure by us to anticipate customers’ changing needs and
emerging technological trends accurately could significantly harm our market share and results of operations. In
addition, in the course of conducting our business, we must adequately address quality issues associated with our
products and services, including defects in our engineering, design and manufacturing processes, as well as defects
in third-party components included in our products. In order to address quality issues, we work extensively with
our customers and suppliers and engage in product testing to determine the cause of quality problems and to
determine appropriate solutions. Finding solutions to quality issues can be expensive and may result in additional
warranty, replacement and other costs, adversely affecting our profits. In addition, quality issues can impair our
relationships with new or existing customers and adversely affect our reputation, which could lead to a material
adverse effect on our operating results.
The cyclical nature of the semiconductor equipment industry places enormous demands on our employees,
operations and infrastructure.
The semiconductor equipment industry is characterized by dramatic and sometimes volatile changes in demand
for its products. Changes in product demand result from a number of factors including the semiconductor
industry’s continually changing and unpredictable capacity requirements and changes in integrated circuit
design and packaging. Sudden changes in demand for semiconductor equipment have a significant impact on
our operations. Typically, we reduce and increase our workforce, particularly in manufacturing, based on
customer demand for our products. These changes in workforce levels place enormous demands on our
employees, operations and infrastructure since newly hired personnel rarely possess the expertise and level of
experience of current employees. Additionally, these transitions divert management time and attention from
other activities and adversely impact employee morale. We have in the past and may in the future experience
difficulties, particularly in manufacturing, in training and recruiting the large number of additions to our
workforce. The volatility in headcount and business levels, combined with the cyclical nature of the
semiconductor industry, may require that we invest substantial amounts in new operational and financial
systems, procedures and controls. We may not be able to successfully adjust our systems, facilities and
production capacity to meet our customers’ changing requirements. The inability to meet such requirements
will have an adverse impact on our business, financial position and results of operations.
We utilize contract manufacturers and changes to those relationships, expected or unexpected, may result in
delays or disruptions that could cause us to lose revenue and damage our customer relationships.
Our reliance on contract manufacturers gives us less control over the manufacturing process and exposes us to
significant risks, including limited control over capacity, late delivery, quality and costs. In addition, it is time
consuming and costly to qualify and implement additional contract manufacturer relationships. Therefore, if we
should fail to effectively manage our contract manufacturer relationships or if one or more of them should
experience delays, disruptions or quality control problems, or if we had to change or add additional contract
manufacturers or contract manufacturing sites, our ability to ship products to our customers could be delayed.
Also, the addition of manufacturing locations or contract manufacturers may increase the complexity of our supply
chain management. We cannot be certain that existing or future contract manufacturers will be able to manufacture
our products on a timely and cost-effective basis, or to our quality and performance specifications. If our contract
manufacturers are unable to meet our manufacturing requirements in a timely manner, our ability to ship products
and to realize the related revenues when anticipated could be materially affected.
The loss of key personnel could adversely impact our business.
Certain key personnel are critical to our business. Our future operating results depend substantially upon the
continued service of our key personnel, many of whom are not bound by employment or non-competition
agreements. Our future operating results also depend in significant part upon our ability to attract and retain
11
qualified management, manufacturing, technical, engineering, marketing, sales and support personnel.
Competition for qualified personnel, particularly those with technical skills, is intense, and we cannot ensure
success in attracting or retaining qualified personnel. In addition, the cost of living in the San Diego, California
area, where the majority of our personnel are located, is very high and we have had difficulty in recruiting
prospective employees from other locations. There may be only a limited number of persons with the requisite
skills and relevant industry experience to serve in these positions and it may become increasingly difficult for us
to hire personnel over time. Our business, financial condition and results of operations could be materially
adversely affected by the loss of any of our key employees, by the failure of any key employee to perform in his
or her current position, or by our inability to attract and retain skilled employees.
We are exposed to the risks of operating a global business.
We are a global corporation with offices and subsidiaries in certain foreign locations to support our sales and
services to the global semiconductor industry and, as such, we face risks in doing business abroad that we do not
face domestically. Certain aspects inherent in transacting business internationally could negatively impact our
operating results, including:
• costs and difficulties in staffing and managing international operations;
• unexpected changes in regulatory requirements;
• difficulties in enforcing contractual and intellectual property rights;
•
•
• potentially adverse tax consequences, including restrictions on repatriating earnings and the threat of
longer payment cycles;
local political and economic conditions;
“double taxation”; and
fluctuations in currency exchange rates, which can affect demand and increase our costs.
•
Additionally, managing geographically dispersed operations presents difficult challenges associated with
organizational alignment and infrastructure, communications and information technology, inventory control,
customer relationship management, terrorist threats and related security matters and cultural diversities. If we are
unsuccessful in managing such operations effectively, our business and results of operations will be adversely
affected.
Failure of critical suppliers to deliver sufficient quantities of parts in a timely and cost-effective manner could
adversely impact our operations.
We use numerous vendors to supply parts, components and subassemblies for the manufacture of our products. It
is not always possible to maintain multiple qualified suppliers for all of our parts, components and subassemblies.
As a result, certain key parts may be available only from a single supplier or a limited number of suppliers. In
addition, suppliers may cease manufacturing certain components that are difficult to replace without significant
reengineering of our products. On occasion, we have experienced problems in obtaining adequate and reliable
quantities of various parts and components from certain key suppliers. Our results of operations may be
materially and adversely impacted if we do not receive sufficient parts to meet our requirements in a timely and
cost effective manner.
We are exposed to risks associated with acquisitions, investments and divestitures.
We have made, and may in the future make, acquisitions of, or significant investments in, businesses with
complementary products, services and/or technologies. Acquisitions and investments involve numerous risks,
including, but not limited to:
• difficulties and increased costs in connection with integration of the personnel, operations, technologies
and products of acquired businesses;
• diversion of management’s attention from other operational matters;
•
•
•
•
the potential loss of key employees of acquired businesses;
lack of synergy, or the inability to realize expected synergies, resulting from the acquisition;
failure to commercialize purchased technology; and
the impairment of acquired intangible assets and goodwill that could result in significant charges to
operating results in future periods.
We may be required to finance future acquisitions and investments through a combination of borrowings,
proceeds from equity or debt offerings and the use of cash, cash equivalents and short term investments.
12
With respect to divestitures, we may divest businesses that do not meet our strategic objectives, or do not meet
our growth or profitability targets and may not be able to complete proposed divestitures on terms commercially
favorable to us.
Mergers, acquisitions and investments are inherently risky and the inability to effectively manage these risks
could materially and adversely affect our business, financial condition and results of operations. At December
31, 2011 we had goodwill and net purchased intangible assets balances of $58.1 million and $21.8 million,
respectively.
Third parties may violate our proprietary rights or accuse us of infringing upon their proprietary rights.
We rely on patent, copyright, trademark and trade secret laws to establish and maintain proprietary rights in our
technology and products. Any of our proprietary rights may expire due to patent life, or be challenged, invalidated
or circumvented. In addition, from time to time, we receive notices from third parties regarding patent or
copyright claims. Any such claims, with or without merit, could be time-consuming to defend, result in costly
litigation, divert management’s attention and resources and cause us to incur significant expenses. In the event of
a successful claim of infringement against us and our failure or inability to license the infringed technology or to
substitute similar non-infringing technology, our business, financial condition and results of operations could be
adversely affected.
A majority of our revenues are generated from exports to foreign countries, primarily in Asia, that are subject
to economic and political instability and we compete against a number of Asian test handling equipment
suppliers.
The majority of our export sales are made to destinations in Asia. Political or economic instability, particularly in
Asia, may adversely impact the demand for capital equipment, including equipment of the type we manufacture
and market. In addition, we face intense competition from a number of Asian suppliers that have certain
advantages over U.S. suppliers, including us. These advantages include, among other things, proximity to
customers, favorable tariffs and affiliation with significantly larger organizations. In addition, changes in the
amount or price of semiconductors produced in Asia could impact the profitability or capital equipment spending
programs of our foreign and domestic customers.
The occurrence of natural disasters in Asia and geopolitical instability caused by terrorist attacks and other
threats may adversely impact our operations and sales.
Our Asian sales and service headquarters is located in Singapore and the majority of our sales are made to
destinations in Asia. In addition, we have a location in the Philippines which fabricates certain component parts
used in our products. These regions are known for being vulnerable to natural disasters and other risks, such as
earthquakes, tsunamis, fires, and floods, which at times have disrupted the local economies. A significant
earthquake or tsunami could materially affect operating results. We are not insured for most losses and business
interruptions of this kind, and do not presently have redundant, multiple site capacity in the event of a natural
disaster. In the event of such disaster, our business would suffer. Furthermore, we have customers throughout
the Middle East and terrorist attacks, protests or other threats in this region may cause geopolitical instability
which may have an adverse impact on our business, results of operations and financial condition.
Compliance with regulations may impact sales to foreign customers.
Certain products and services that we offer require compliance with United States export and other regulations.
Compliance with complex U.S. laws and regulations that apply to our international sales activities increases our
cost of doing business in international jurisdictions and could expose us or our employees to fines and penalties.
These laws and regulations include import and export requirements, the U.S. State Department International
Traffic in Arms Regulations (ITAR) and U.S. laws such as the Foreign Corrupt Practices Act (FCPA), and local
laws prohibiting corrupt payments to governmental officials. Violations of these laws and regulations could
result in fines, criminal sanctions against us, our officers or our employees, prohibitions on the conduct of our
business and damage to our reputation. Although we have implemented policies and procedures designed to
ensure compliance with these laws, there can be no assurance that our employees, contractors or agents will not
violate our policies, or that our policies will be effective in preventing all potential violations. Any such violations
could include prohibitions on our ability to offer our products and services to one or more countries, and could
also materially damage our reputation, our brand, our international expansion efforts, our ability to attract and
retain employees, our business and our operating results. Further, defending against claims of violations of
these laws and regulations, even if we are successful, could be time-consuming, result in costly litigation,
divert management’s attention and resources and cause us to incur significant expenses.
13
Our business and operations could suffer in the event of security breaches.
Attempts by others to gain unauthorized access to information technology systems are becoming more
sophisticated and are sometimes successful. These attempts, which might be related to industrial or other
espionage, include covertly introducing malware to our computers and networks and impersonating authorized
users, among others. We seek to detect and investigate all security incidents and to prevent their recurrence, but in
some cases, we might be unaware of an incident or its magnitude and effects. The theft, unauthorized use or
publication of our intellectual property and/or confidential business information could harm our competitive
position, reduce the value of our investment in research and development and other strategic initiatives or
otherwise adversely affect our business. To the extent that any security breach results in inappropriate disclosure
of our customers' or licensees' confidential information, we may incur liability as a result. In addition, we may be
required to devote additional resources to the security of our information technology systems.
Our financial and operating results may vary and may fall below analysts’ estimates, which may cause the
price of our common stock to decline.
Our operating results may fluctuate from quarter to quarter due to a variety of factors including, but not limited
to:
•
•
•
•
•
timing and amount of orders from customers and shipments to customers;
inability to recognize revenue due to accounting requirements;
inventory writedowns;
inability to deliver solutions as expected by our customers; and
intangible and deferred tax asset writedowns.
Due to these factors or other unanticipated events, quarter-to-quarter comparisons of our operating results may
not be reliable indicators of our future performance. In addition, from time to time our quarterly financial results
may fall below the expectations of the securities and industry analysts who publish reports on our company or of
investors in general. This could cause the market price of our stock to decline, perhaps significantly.
We have experienced significant volatility in our stock price.
A variety of factors may cause the price of our stock to be volatile. In recent years, the stock market in general,
and the market for shares of high-technology companies in particular, including ours, have experienced extreme
price fluctuations, which have often been unrelated to the operating performance of affected companies. During
the last three years the price of our common stock has ranged from $7.00 to $17.35. The price of our stock may
be more volatile than the stock of other companies due to, among other factors, the unpredictable and cyclical
nature of the semiconductor industry, our significant customer concentration, intense competition in the test
handler industry, our limited backlog making earnings predictability difficult and our relatively low daily stock
trading volume. The market price of our common stock is likely to continue to fluctuate significantly in the
future, including fluctuations related and unrelated to our performance.
Item 1B. Unresolved Staff Comments.
None.
14
Item 2. Properties.
Certain information concerning our principal properties at December 31, 2011, identified by business segment is
set forth below:
Location
Poway, California (1) (2) (3) (4)
Kolbermoor, Germany (1)
Calamba City, Laguna, Philippines (1)
Singapore (1)
Heidenrod – Kemel, Germany (3)
(1) Semiconductor equipment
(2) Video cameras
(3) Microwave Communications
(4) Cohu Corporate offices
Approximate
Sq. Footage
338,000
40,000
39,000
24,000
5,000
Ownership
Owned
Owned
Leased
Leased
Leased
In addition to the locations listed above, we lease other properties primarily for sales and service offices in
various locations. We believe our facilities are suitable for their respective uses and are adequate for our present
needs.
Item 3. Legal Proceedings.
From time-to-time we are involved in various legal proceedings, examinations by various tax authorities and
claims that have arisen in the ordinary course of our businesses. Although the outcome of such legal proceedings,
claims and examinations cannot be predicted with certainty, we do not believe any such matters exist at this time
that will have a material adverse effect on our financial position or results of our operations.
Item 4. Mine Safety Disclosures
Not applicable.
15
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
(a) Market Information
Cohu, Inc. stock is traded on the NASDAQ Global Select Market under the symbol "COHU". The following table
sets forth the high and low sales prices as reported on the NASDAQ Global Select Market during the last two
years.
Fiscal 2011
High
First Quarter
$
Second Quarter $
$
Third Quarter
$
Fourth Quarter
17.35 $
15.72 $
13.65 $
12.42 $
Low
13.10 $
11.94 $
9.67 $
8.99 $
Fiscal 2010
High
Low
14.89 $
17.11 $
16.00 $
16.30 $
11.85
12.56
11.16
11.86
Holders
At February 10, 2012, Cohu had 614 stockholders of record.
Dividends
We have paid consecutive quarterly dividends since 1977 and, as discussed below, expect to continue doing so.
Cash dividends, per share, declared in 2011 and 2010 were as follows:
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Total
Fiscal 2011 Fiscal 2010
0.06
0.06 $
$
0.06
0.06 $
$
0.06
0.06 $
$
0.06
0.06 $
$
0.24
0.24 $
$
We intend to continue to pay quarterly dividends subject to capital availability and periodic determinations by our
Board of Directors that cash dividends are in the best interests of our stockholders. Our dividend policy may be
affected by, among other items, our views on potential future capital requirements, including those related to
research and development, investments and acquisitions, legal risks and stock repurchases.
Equity Compensation Plan Information
The following table summarizes information with respect to equity awards under Cohu’s equity compensation
plans at December 31, 2011 (in thousands, except per share amounts):
Plan category
Equity compensation plans
approved by security holders
Equity compensation plans not
approved by security holders
Weighted average
exercise price of
Number of securities
to be issued upon
exercise of outstanding outstanding options,
warrants and rights
options, warrants and
(b) (2)
rights (a) (1)
Number of securities
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (a)) (c)
3,411
-
3,411
$
13.01
1,796 (3)
-
13.01
$
-
1,796
(1) Includes options and restricted stock units (RSUs) outstanding under Cohu’s equity incentive plans, as no stock warrants or
other rights were outstanding as of December 31, 2011.
(2) The weighted average exercise price of outstanding options, warrants and rights does not take RSUs into account as RSUs
have a de minimus purchase price.
(3) Includes 637,354 shares of common stock reserved for future issuance under the Cohu 1997 Employee Stock Purchase Plan.
For further details regarding Cohu’s equity compensation plans, see Note 5, “Employee Benefit Plans”, included
in Part IV, Item 15(a) of this Form 10-K.
16
Comparative Stock Performance Graph
The information contained in this Stock Performance Graph section shall not be deemed to be “soliciting
material” or “filed” with the SEC or subject to the liabilities of Section 18 of the Exchange Act except to the
extent that Cohu specifically incorporates it by reference into a document filed under the Securities Act or the
Exchange Act.
The graph below compares the cumulative total stockholder return on the common stock of Cohu for the last five
fiscal years with the cumulative total return on a Peer Group Index and a NASDAQ Market Index over the same
period (assuming the investment of $100 in Cohu’s common stock, Peer Group Index and NASDAQ Market
Index on January 1, 2007 and reinvestment of all dividends). The Peer Group Index set forth on the Performance
Graph is the Morningstar Semiconductor and Equipment Materials Index. The Morningstar Semiconductor and
Equipment Materials Index is comprised of approximately 40 publicly-held semiconductor equipment and other
related companies. Historical stock price performance is not necessarily indicative of future stock price
performance.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN AMONG COHU INC.,
NASDAQ MARKET INDEX, SEMICONDUCTOR EQUIPMENT & MATERIALS
2006
2007
2008
2009
2010
2011
62
113
71
85 $
115 $
80 $
Cohu, Inc.
NASDAQ Index
Peer Group
$
$
$
100 $
100 $
100 $
78 $
112 $
95 $
62 $
65 $
50 $
73 $
97 $
73 $
17
Item 6. Selected Financial Data.
The following selected financial data should be read in conjunction with Cohu’s Consolidated Financial
Statements and Notes thereto included in Part IV, Item 15(a) and with Management’s Discussion and Analysis of
Financial Condition and Results of Operations, included in Part II, Item 7. In December, 2008, we purchased
Rasco. The results of Rasco’s operations have been included in our consolidated financial statements since that
date. In March, 2007, we purchased Tandberg Television AVS GmbH (“AVS”). The results of AVS’ operations
have been included in our consolidated financial statements since that date.
Years Ended,
(in thousands, except per share data)
Consolidated Statement of Operations Data:
Net sales
Net income (loss) (2)
$
Net income (loss) per common share – basic $
Net income (loss) per common share – diluted $
Cash dividends per share, paid quarterly
$
Consolidated Balance Sheet Data:
Total consolidated assets
Working Capital
$
$
$
Dec. 31
2011 (1)
Dec. 25
2010
Dec. 26
2009
Dec. 27
2008
Dec. 29
2007
308,968 $
15,719 $
0.65 $
0.64 $
0.24 $
322,667 $
24,644 $
1.04 $
1.02 $
0.24 $
171,261 $
(28,168) $
(1.20) $
(1.20) $
0.24 $
199,659 $
(5,443) $
(0.23) $
(0.23) $
0.24 $
241,389
7,978
0.35
0.34
0.24
361,608 $
191,945 $
366,043 $
168,683 $
330,118 $
139,597 $
344,169 $
155,589 $
340,379
234,345
(1) The year ended December 31, 2011 consists of 53 weeks.
(2) The year ended December 26, 2009 includes a charge of $19.6 million for an increase in the valuation allowance against our
deferred tax assets.
18
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
OVERVIEW
Cohu operates in three business segments. Our primary business is the development, manufacture, sale and
servicing of test handling, burn-in, thermal sub-systems and MEMS test solutions for the global semiconductor
industry through our wholly-owned subsidiaries, Delta Design, Inc. and Rasco GmbH. This business is
significantly dependent on capital expenditures by semiconductor manufacturers and test subcontractors, which in
turn is dependent on the current and anticipated market demand for semiconductors that is subject to cyclical
trends. We expect that the semiconductor equipment industry will continue to be cyclical and volatile in part
because consumer electronics, the principal end market for integrated circuits, is a highly dynamic industry and
demand is difficult to accurately predict. Our other businesses produce mobile microwave communications
equipment (Broadcast Microwave Services, Inc.) and video cameras and accessories (Cohu Electronics Division).
Industry analyst Gartner, Inc. said that the worldwide semiconductor market has slowed throughout 2011 and that
three key factors are shaping the short-term outlook for semiconductor equipment: excess inventory,
manufacturing overcapacity and slowing demand due to economic weakness. Orders for semiconductor test and
assembly equipment as reported by Semiconductor Equipment and Materials International (SEMI) decreased
during the second half of 2011 and were essentially flat from August through December, indicating order levels
may have reached the bottom. Over the long-term, we are optimistic about the prospects for the semiconductor
equipment industry due to expanding applications and growing integrated circuit content in consumer, industrial
and automotive applications. However, near-term business conditions are more uncertain as some of our
customers are being cautious due in part to uncertainties in the macro-economic environment that are affecting
consumer confidence and spending. Recently, we have seen increased customer activity, particularly in
automotive and consumer applications, which is an encouraging sign. However, we will continue to take prudent
steps to control costs without compromising the funding of key product development programs.
Our non-semiconductor equipment businesses comprised approximately 19% of our consolidated revenues
during the three-year period ended December 31, 2011 and were approximately 16% for the year ended
December 31, 2011. Our microwave communications equipment business develops, manufactures and sells
mobile microwave communications equipment, antenna systems and associated equipment. These products
are used in the transmission of video, audio, and telemetry data. Applications for these microwave data-links
include unmanned aerial vehicles (“UAVs”), public safety, security, surveillance, and electronic news
gathering. Customers for these products are government agencies, public safety organizations, UAV program
contractors, television broadcasters, and other commercial entities. Our microwave communications
equipment business continues to capitalize on its focus on the surveillance, UAV and law enforcement
markets.
Our video camera segment develops, manufactures and sells a wide variety of video cameras and related
products, specializing in video solutions for security, surveillance and traffic monitoring. Customers for these
products are distributed among security, surveillance, traffic control/management, scientific imaging and
machine vision. During fiscal 2011, sales and operating income for our video camera operation benefitted
from demand for our new Helios product line.
Application of Critical Accounting Estimates and Policies
Our discussion and analysis of our financial condition and results of operations is based upon our consolidated
financial statements, which have been prepared in accordance with accounting principles generally accepted in
the United States of America. The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. We base our estimates on historical experience, forecasts and on various other
assumptions that are believed to be reasonable under the circumstances, however actual results may differ from
those estimates under different assumptions or conditions. The methods, estimates and judgments we use in
applying our accounting policies have a significant impact on the results we report in our financial statements.
Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the
need to make estimates of matters that are inherently uncertain. Our most critical accounting estimates that we
believe are the most important to an investor’s understanding of our financial results and condition and require
complex management judgment include:
19
•
revenue recognition, including the deferral of revenue on sales to customers, which impacts our results of
operations;
• estimation of valuation allowances and accrued liabilities, specifically product warranty, inventory reserves
•
•
•
and allowance for bad debts, which impact gross margin or operating expenses;
the recognition and measurement of current and deferred income tax assets and liabilities, unrecognized tax
benefits and the valuation allowance on deferred tax assets, which impact our tax provision;
the assessment of recoverability of long-lived assets including goodwill and other intangible assets, which
primarily impacts gross margin or operating expenses if we are required to record impairments of assets or
accelerate their depreciation; and
the valuation and recognition of share-based compensation, which impacts gross margin, research and
development expense, and selling, general and administrative expense.
Below, we discuss these policies further, as well as the estimates and judgments involved. We also have other
policies that we consider key accounting policies; however, these policies typically do not require us to make
estimates or judgments that are difficult or subjective.
Revenue Recognition: We generally recognize revenue upon shipment and title passage for established
products (i.e., those that have previously satisfied customer acceptance requirements) that provide for full
payment tied to shipment. Revenue for products that have not previously satisfied customer acceptance
requirements or from sales where customer payment dates are not determinable is recognized upon customer
acceptance. For arrangements containing multiple elements initiated prior to December 26, 2010, the first day
of our fiscal 2011, the revenue relating to the undelivered elements is deferred at their estimated relative fair
values until delivery of the deferred elements. For arrangements initiated or materially modified subsequent to
December 26, 2010 containing multiple elements, the revenue relating to the undelivered elements is deferred
using the relative selling price method utilizing estimated sales prices until delivery of the deferred elements.
We limit the amount of revenue recognition for delivered elements to the amount that is not contingent on the
future delivery of products or services, future performance obligations or subject to customer-specified return
or adjustment.
Accounts Receivable: We maintain an allowance for doubtful accounts for estimated losses resulting from the
inability of our customers to make required payments. If the financial condition of our customers deteriorates,
resulting in an impairment of their ability to make payments, additional allowances may be required.
Warranty: We provide for the estimated costs of product warranties in the period sales are recognized. Our
warranty obligation estimates are affected by historical product shipment levels, product performance, and
material and labor costs incurred in correcting product performance problems. Should product performance,
material usage or labor repair costs differ from our estimates, revisions to the estimated warranty liability would
be required.
Inventory: The valuation of inventory requires us to estimate obsolete or excess inventory as well as inventory
that is not of saleable quality. The determination of obsolete or excess inventory requires us to estimate the future
demand for our products. The demand forecast is a direct input in the development of our short-term
manufacturing plans. We record valuation reserves on our inventory for estimated excess and obsolete inventory
and lower of cost or market concerns equal to the difference between the cost of inventory and the estimated
market value based upon assumptions about future product demand, market conditions and product selling prices.
If future product demand, market conditions or product selling prices are less than those projected by
management or if continued modifications to products are required to meet specifications or other customer
requirements, increases to inventory reserves may be required which would have a negative impact on our gross
margin.
Income Taxes: We estimate our liability for income taxes based on the various jurisdictions where we conduct
business. This requires us to estimate our (i) current taxes; (ii) temporary differences that result from differing
treatment of certain items for tax and accounting purposes and (iii) unrecognized tax benefits. Temporary
differences result in deferred tax assets and liabilities that are reflected in the consolidated balance sheet. The
deferred tax assets are reduced by a valuation allowance if, based upon all available evidence, it is more likely
than not that some or all of the deferred tax assets will not be realized. Establishing, reducing or increasing a
valuation allowance in an accounting period generally results in an increase or decrease in tax expense in the
statement of operations. We must make significant judgments to determine the provision for income taxes,
deferred tax assets and liabilities, unrecognized tax benefits and any valuation allowance to be recorded against
20
deferred tax assets. Our gross deferred tax asset balance as of December 31, 2011 was approximately
$29.1 million, with a valuation allowance of approximately $22.4 million. Our deferred tax assets consist
primarily of reserves and accruals that are not yet deductible for tax and tax credit and net operating loss
carryforwards.
Goodwill, Purchased Intangible Assets and Other Long-lived Assets: We evaluate goodwill for impairment
annually and when an event occurs or circumstances change that indicate that the carrying value may not be
recoverable. We test goodwill for impairment by first comparing the book value of net assets to the fair value of
the reporting units. If the fair value is determined to be less than the book value, a second step is performed to
compute the amount of impairment as the difference between the estimated fair value of goodwill and the
carrying value. We estimated the fair values of our reporting units primarily using the income approach valuation
methodology that includes the discounted cash flow method, taking into consideration the market approach and
certain market multiples as a validation of the values derived using the discounted cash flow methodology.
Forecasts of future cash flows are based on our best estimate of future net sales and operating expenses, based
primarily on customer forecasts, industry trade organization data and general economic conditions.
We conduct our annual impairment test as of October 1 of each year, and have determined there is no impairment
as of October 1, 2011. Other events and changes in circumstances may also require goodwill to be tested for
impairment between annual measurement dates. While a decline in stock price and market capitalization is not
specifically cited as a goodwill impairment indicator, a company’s stock price and market capitalization should
be considered in determining whether it is more likely than not that the fair value of a reporting unit is less that its
carrying value. Additionally, a significant decline in a company’s stock price may suggest that an adverse change
in the business climate may have caused the fair value of one or more reporting units to fall below their carrying
value. The financial and credit market volatility directly impacts our fair value measurement through our stock
price that we use to determine our market capitalization. During times of volatility, significant judgment must be
applied to determine whether credit or stock price changes are a short-term swing or a longer-term trend. As of
December 31, 2011 we do not believe there have been any events or circumstances that would require us to
perform an interim goodwill impairment review, however, a sustained decline in Cohu’s market capitalization
below its book value could lead us to determine, in a future period, that an interim goodwill impairment review is
required and may result in an impairment charge which would have a negative impact on our results of
operations.
Long-lived assets, other than goodwill, are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would
necessitate an impairment assessment include a significant decline in the observable market value of an asset, a
significant change in the extent or manner in which an asset is used, or any other significant adverse change that
would indicate that the carrying amount of an asset or group of assets may not be recoverable. For long-lived
assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its
undiscounted, probability-weighted future cash flows. We measure the impairment loss based on the difference
between the carrying amount and estimated fair value.
Contingencies: We are subject to certain contingencies that arise in the ordinary course of our businesses which
require us to assess the likelihood that future events will confirm the existence of a loss or an impairment of an
asset. If a loss or asset impairment is probable and the amount of the loss or impairment is reasonably estimable,
we accrue a charge to operations in the period such conditions become known.
Share-based Compensation: Share-based compensation expense related to stock options is recorded based on
the fair value of the award on its grant date which we estimate using the Black-Scholes valuation model. Share-
based compensation expense related to restricted stock unit awards is calculated based on the market price of our
common stock on the grant date, reduced by the present value of dividends expected to be paid on our common
stock prior to vesting of the restricted stock unit.
Recent Accounting Pronouncements
For a description of accounting changes and recent accounting pronouncements, including the expected dates of
adoption and estimated effects, if any, on our consolidated financial statements, see Note 1, "Recent Accounting
Pronouncements" in Part IV, Item 15(a) of this Form 10-K.
21
RESULTS OF OPERATIONS
The following table summarizes certain operating data from continuing operations as a percentage of net sales in
each of the last three years.
Net sales
Cost of sales
Gross margin
Research and development
Selling, general and administrative
Income (loss) from operations
2011 Compared to 2010
Net Sales
2011
100.0 %
(67.6)%
32.4 %
(11.7)%
(15.1)%
5.6 %
2010
100.0 %
(65.9)%
34.1 %
(11.2)%
(13.7)%
9.2 %
2009
100.0 %
(69.4)%
30.6 %
(18.7)%
(20.7)%
(8.8)%
During 2011, our consolidated net sales were approximately $309.0 million, a decrease of 4.2% from the prior
year. Sales of semiconductor equipment decreased 4.7% from $273.6 million to $260.6 million and accounted
for 84.4% of consolidated net sales in 2011 versus 84.8% in 2010. During 2011, sales of our semiconductor
equipment business were impacted by excess semiconductor inventory, manufacturing overcapacity and slowing
semiconductor demand due to continued economic weakness that resulted in lower equipment utilization and
reduced orders during the second half of the year. Conversely, in 2010 our sales of semiconductor equipment
benefitted from high rates of equipment utilization which required our customers to invest in additional capacity.
Our sales in 2010 also benefitted from market share gains and capacity additions on new test floors.
Sales of microwave communications equipment accounted for approximately $30.0 million or 9.7% of
consolidated net sales in 2011 and decreased 5.5% when compared to 2010. The sales decrease during 2011 was
due to lower sales of antenna systems to customers in the government surveillance market resulting primarily
from a delay in the receipt of certain customer orders that were delayed to fiscal 2012.
Sales of video cameras accounted for 5.9% of consolidated net sales in 2011 and increased $1.0 million or 5.5%
when compared to 2010. The increase in 2011 sales resulted from increased demand for high definition traffic
monitoring products.
Gross Margin
Gross margin consists of net sales less cost of sales. Cost of sales consists primarily of the cost of materials,
assembly and test labor and overhead from operations. Our gross margin can fluctuate due to a number of factors,
including, but not limited to, the mix of products sold, product support costs, inventory reserve adjustments and
utilization of manufacturing capacity. Our gross margin, as a percentage of net sales, decreased to 32.4% in 2011
from 34.1% in 2010, due to unfavorable product mix and lower sales volume.
Our gross margin has been impacted by charges to cost of sales related to excess, obsolete and lower of cost or
market inventory issues. We compute the majority of our excess and obsolete inventory reserve requirements
using a one-year inventory usage forecast. During 2011 and 2010, we recorded net charges to cost of sales of
approximately $5.8 million and $1.7 million, respectively, for excess and obsolete inventory. While we believe
our reserves for excess and obsolete inventory and lower of cost or market concerns are adequate to cover known
exposures at December 31, 2011, reductions in customer forecasts or continued modifications to products, as a
result of our failure to meet specifications or other customer requirements, may result in additional charges to
operations that could negatively impact our gross margin in future periods. Conversely, if our actual inventory
usage is greater than our forecasted usage, our gross margin in future periods may be favorably impacted.
Research and Development Expense (“R&D Expense”)
R&D expense consists primarily of salaries and related costs of employees engaged in ongoing research, product
design and development activities, costs of engineering materials and supplies and professional consulting
expenses. During both 2011 and 2010 R&D expense was $36.2 million and represented 11.7% of net sales in
2011 compared to 11.2% in 2010.
22
Selling, General and Administrative Expense (“SG&A Expense)
SG&A expense consists primarily of salaries and benefit costs of employees, commission expense for
independent sales representatives, product promotion and costs of professional services. SG&A expense as a
percentage of net sales increased to 15.1% in 2011, from 13.7% in 2010, increasing to $46.6 million in 2011 from
$44.1 million in 2010 due primarily to higher labor costs across our business segments.
Interest and other, net
Interest and other, net was approximately $0.4 million and $0.6 million in 2011 and 2010, respectively. Our
interest income was lower in 2011 due to lower interest rates.
Income Taxes
The provision for income taxes expressed as a percentage of pre-tax income or loss was 11.6% in 2011 and
18.5% in 2010. The provision for income taxes for the years ended December 31, 2011 and December 25, 2010
differs from the U.S. federal statutory rate primarily due to decreases in the valuation allowance on our deferred
tax assets, foreign income taxed at different rates and other factors.
Companies are required to assess whether a valuation allowance should be recorded against their deferred tax
assets (“DTAs”) based on the consideration of all available evidence, using a “more likely than not” realization
standard. The four sources of taxable income that must be considered in determining whether DTAs will be
realized are, (1) future reversals of existing taxable temporary differences (i.e. offset of gross deferred tax
assets against gross deferred tax liabilities); (2) taxable income in prior carryback years, if carryback is
permitted under the tax law; (3) tax planning strategies and (4) future taxable income exclusive of reversing
temporary differences and carryforwards.
In assessing whether a valuation allowance is required, significant weight is to be given to evidence that can be
objectively verified. We have evaluated our DTAs each reporting period, including an assessment of our
cumulative income or loss over the prior three-year period and future periods, to determine if a valuation
allowance was required. A significant negative factor in our assessment was Cohu's three-year cumulative U.S.
loss history at the end of the 2009 and 2010 fiscal year periods.
Notwithstanding our 36-month domestic, cumulative GAAP pretax income of approximately $7.0 million at
the end of 2011, with (i) the weak semiconductor equipment industry business conditions we have experienced
in the second half of 2011, (ii) global economic uncertainty and (iii) our significant gross deferred tax assets
we were unable to conclude at December 31, 2011 that it was “more likely than not” that our DTAs would be
realized and, consistent with 2010 and 2011, will only reverse the valuation allowance and reinstate DTAs to
the extent we accrue taxes on future income. We will evaluate the realizability of our DTAs at the end of each
quarterly reporting period in 2012 and should circumstances change it is possible the remaining valuation
allowance, or a portion thereof, will be reversed during 2012.
Our valuation allowance on DTAs at December 31, 2011 and December 25, 2010 was approximately
$22.4 million and $23.3 million, respectively. The remaining gross DTAs for which a valuation allowance
was not recorded are realizable through future reversals of existing taxable temporary differences or loss
carryback. As the realization of DTAs is determined by tax jurisdiction, the significant deferred tax liability
recorded as part of the 2008 acquisition of Rasco, a German corporation, was not a source of taxable income in
assessing the realization of our DTAs in the U.S.
For a full reconciliation of our effective tax rate to the U.S. federal statutory rate and further explanation of our
provision for income taxes, see Note 6, “Income Taxes”, included in Part IV, Item 15(a) of this Form 10-K,
which is incorporated herein by reference.
As a result of the factors set forth above, our net income was $15.7 million in 2011, compared to net income of
$24.6 million in 2010.
23
2010 Compared to 2009
Net Sales
During 2010, our consolidated net sales were approximately $322.7 million, an increase of 88.4% from the prior
year. Sales of semiconductor equipment increased 128.0% to $273.6 million and accounted for 84.8% of
consolidated net sales in 2010 versus 70.1% in 2009. During fiscal 2010 the sales of our semiconductor
equipment business improved significantly as a result of high rates of equipment utilization on customer test
floors that required investment in additional capacity, market share gains, and the sales synergies of our broad
product line.
Sales of microwave communications equipment accounted for approximately $31.7 million or 9.8% of
consolidated net sales in 2010, a decrease of 7.0% when compared to 2009. The decrease during 2010 was
primarily a result of lower sales to customers in the government surveillance market. Additionally, 2009 sales
included approximately $4.6 million of revenue previously deferred compared to approximately $3.1 million of
revenue deferred from 2010 to a future year, in accordance with our revenue recognition policy.
Sales of video cameras accounted for 5.4% of consolidated net sales in 2010 and increased $0.2 million or 1.3%
when compared 2009.
Gross Margin
Our gross margin, as a percentage of net sales, increased to 34.1% in 2010 from 30.6% in 2009. While higher
than 2009, due to the leverage generated by increased business volume and lower charges for excess and obsolete
inventory, our gross margin in 2010 was impacted by higher costs due to the unforecasted production of our new
test handlers in our Poway plant, rather than at lower cost subcontractors, to meet customer delivery requirements
and other new product start-up costs.
During 2010 and 2009, we recorded net charges to cost of sales of approximately $1.7 million and $4.4 million,
respectively, for excess and obsolete inventory.
Research and Development Expense
During 2010 R&D expense as a percentage of net sales was 11.2% compared to 18.7% in 2009, increasing in
absolute dollars from $32.0 million in 2009 to $36.2 million in 2010. During 2010, R&D spending increased,
primarily within our semiconductor equipment business, as a result of reinstating employee pay cuts that were in
effect during 2009 and increased material costs related to product development.
Selling, General and Administrative Expense
SG&A expense as a percentage of net sales decreased to 13.7% in 2010, from 20.7% in 2009, increasing in
absolute dollars to $44.1 million in 2010 from $35.5 million in 2009 due primarily to higher variable selling
expenses as a result of increased sales within our semiconductor equipment segment and reinstating employee
pay cuts that were in effect through 2009. During 2009 SG&A spending across all our segments was reduced as
a result of lower business volume and through cost control measures implemented in response to the global
economic crisis which included head count and pay reductions.
Interest and other, net
Interest and other, net was approximately $0.6 million and $1.3 million in 2010 and 2009, respectively. Our
interest income was lower in 2010 due to lower short-term interest rates.
Income Taxes
The provision for income taxes expressed as a percentage of pre-tax income or loss was 18.5% in 2010 and
104.2% in 2009. The provision for income taxes for the year ended December 25, 2010 differs from the U.S.
federal statutory rate primarily due to a decrease in the valuation allowance on our deferred tax assets, foreign
income taxed at different rates and other factors. The provision for income taxes for the year ended December 26,
2009 differs from the U.S. federal statutory rate primarily due to an increase in the valuation allowance on our
deferred tax assets.
As a result of the factors set forth above, our net income was $24.6 million in 2010, compared to a net loss of
$28.2 million in 2009.
24
LIQUIDITY AND CAPITAL RESOURCES
Our business is dependent on capital expenditures by semiconductor manufacturers and test subcontractors that
are, in turn, dependent on the current and anticipated market demand for semiconductors. The cyclical and
volatile nature of demand for semiconductor equipment, our primary industry, makes estimates of future
revenues, results of operations and net cash flows difficult.
Our primary historical source of liquidity and capital resources has been cash flow generated by our operations
and we manage our businesses to maximize operating cash flows as our primary source of liquidity. We use
cash to fund growth in our operating assets and to fund new products and product enhancements primarily
through research and development. As of December 31, 2011, $32.1 million of our cash and cash equivalents
was held by our foreign subsidiaries. If these funds are needed for our operations in the U.S., we may be
required to accrue and pay U.S. taxes if we repatriate these funds. Our intent is to indefinitely reinvest these
funds in our foreign operations and we have no current plans that would require us to repatriate these funds to
the U.S.
Liquidity
Working Capital: The following summarizes our cash, cash equivalents, short-term investments and working
capital at December 31, 2011 and December 25, 2010:
(in thousands)
Cash, cash equivalents and short-term investments
Working capital
2011
2010
Increase
Percentage
Change
$ 105,002 $ 98,175 $
$ 191,945 $ 168,683 $
6,827
23,262
7 %
14 %
Cash Flows
Operating Activities: Cash generated from operating activities consists of net income or loss, adjusted for non-
cash expenses and changes in operating assets and liabilities. Non-cash items include depreciation and
amortization, share-based compensation expense and deferred income taxes. Our net cash flows provided from
operating activities in 2011 totaled $12.2 million compared to $19.5 million in 2010. The decrease in cash
provided by operating activities was primarily due to a decrease in profitability, primarily within our
semiconductor equipment and microwave communication equipment segments, in 2011. Cash provided by
operating activities was also impacted by changes in current assets and liabilities and included decreases in:
accounts receivable of $24.9 million; deferred profit of $12.0 million and income tax payable of $6.5 million and
an increase in inventories of $20.9 million. The decreases in accounts receivable and deferred profit were
primarily due to lower sales including the recognition of revenue related to certain semiconductor test handlers
and microwave communication equipment in accordance with our revenue recognition policy. The decrease in
income taxes payable is a result of decreased profitability and the timing of tax payments. The increase in
inventories was driven primarily by our semiconductor equipment and microwave communications equipment
segments and resulted from inventory purchases made to support production requirements for products which are
expected to ship primarily in the first and second quarters of 2012.
Investing Activities: Investing cash flows consist primarily of cash used for capital expenditures in support of our
businesses, proceeds from investment maturities and cash used for purchases of investments and business
acquisitions. Our net cash used for investing activities in 2011 totaled $0.8 million and was primarily the result of
$75.7 million in net proceeds from sales and maturities of short-term investments, offset by $75.1 million in cash
used for purchases of short-term investments. We invest our excess cash, in an attempt to seek the highest
available return while preserving capital, in short-term investments since excess cash is only temporarily
available and may be required for a business-related purpose. Other expenditures in 2011 included purchases of
property, plant and equipment of $1.4 million. The purchases of property, plant and equipment were primarily
made to support activities in our semiconductor equipment and microwave communications equipment
businesses and consisted primarily of equipment used in engineering, manufacturing and related functions.
Financing Activities: Cash provided by financing activities consisted of net proceeds from the issuance of
common stock under our equity incentive and employee stock purchase plans, which totaled $1.9 million during
2011. We issue stock options and maintain an employee stock purchase plan as components of our overall
employee compensation. Cash used in financing activities consisted of amounts distributed to our stockholders in
the form of cash dividends. We declared and paid dividends totaling $5.8 million, or $0.24 per common share,
during 2011. On February 1, 2012, we announced a cash dividend of $0.06 per share on our common stock,
payable on, April 20, 2012 to stockholders of record as of March 6, 2012. We intend to continue to pay quarterly
25
dividends subject to capital availability and periodic determinations by our Board of Directors that cash dividends
are in the best interests of our stockholders.
Capital Resources
We have a secured letter of credit facility (the “Secured Facility”) under which Bank of America, N.A., has
agreed to administer the issuance of letters of credit on behalf of Cohu and our subsidiaries. The Secured Facility
requires us to maintain deposits of cash or other approved investments, which serve as collateral, in amounts that
approximate our outstanding standby letters of credit. As of December 31, 2011, we had approximately
$0.6 million of standby letters of credit outstanding.
We expect that we will continue to make capital expenditures to support our business and we anticipate that
present working capital will be sufficient to meet our operating requirements for at least the next twelve months.
Contractual Obligations
The following table summarizes our significant contractual obligations at December 31, 2011, and the effect such
obligations are expected to have on our liquidity and cash flows in future periods. This table excludes amounts
already recorded on our balance sheet as current liabilities at December 31, 2011. Amounts excluded include our
liability for unrecognized tax benefits that totaled approximately $5.4 million at December 31, 2011. We are
currently unable to provide a reasonably reliable estimate of the amount or periods cash settlement of this liability
may occur.
(in thousands)
Non-cancelable
operating leases $
2012
2013
2014
2015
2016
Thereafter Total
819 $
772 $ 517 $
-
$
-
$
-
$ 2,108
Commitments to contract manufacturers and suppliers. From time to time, we enter into commitments with our
suppliers to purchase inventory and contract manufacturers to provide manufacturing services for our products at
fixed prices or in guaranteed quantities. During the normal course of business, we issue purchase orders with
estimates of our requirements several months ahead of the delivery dates. However, our agreements with these
suppliers usually allow us the option to reschedule or adjust our requirements based on our business needs.
Typically purchase orders outstanding with delivery dates within 30 days are non-cancelable. We are not able to
determine the aggregate amount of such purchase orders that represent contractual obligations, as purchase orders
may represent authorizations to purchase rather than binding agreements. We typically do not have significant
agreements for the purchase of raw materials or other goods specifying minimum quantities or set prices that
exceed our expected requirements for the next six to twelve months.
Off-Balance Sheet Arrangements. During the ordinary course of business, we provide standby letters of credit
instruments to certain parties as required. As of December 31, 2011, the maximum potential amount of future
payments that we could be required to make under these standby letters of credit was approximately $0.6 million.
No liability has been recorded in connection with these arrangements beyond those required to appropriately
account for the underlying transaction being guaranteed. Based on historical experience and information
currently available, we do not believe it is probable that any amounts will be required to be paid under these
arrangements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Investment and Interest Rate Risk.
At December 31, 2011, our investment portfolio included short-term, fixed-income investment securities with
a fair value of approximately $51.7 million. These securities are subject to interest rate risk and will likely
decline in value if interest rates increase. Our future investment income may fall short of expectations due to
changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in
market value due to changes in interest rates. As we classify our short-term securities as available-for-sale, no
gains or losses are recognized due to changes in interest rates unless such securities are sold prior to maturity
or declines in fair value are determined to be other-than-temporary. Due to the relatively short duration of our
investment portfolio, an immediate ten percent change in interest rates would have no material impact on our
financial condition or results of operations.
26
We evaluate our investments periodically for possible other-than-temporary impairment by reviewing factors
such as the length of time and extent to which fair value has been below cost basis, the financial condition of
the issuer and our ability and intent to hold the investment for a period of time sufficient for anticipated
recovery of market value. As of December 31, 2011 we evaluated our investments with loss positions and
determined that these losses were temporary.
Foreign Currency Exchange Risk.
We conduct business on a global basis in a number of major international currencies. As such, we are exposed to
adverse as well as beneficial movements in foreign currency exchange rates. The majority of our sales are
denominated in U.S. dollars except for certain of our revenues that are denominated in Euros. Certain expenses
incurred by our non-U.S. operations, such as employee payroll and benefits as well as some raw materials
purchases and other expenses are denominated and paid in local currency.
We considered a hypothetical ten percent adverse movement in foreign exchange rates to the underlying
exposures described above and believe that these hypothetical market movements would not have a material
effect on our consolidated financial position, results of operations or cash flows.
Item 8. Financial Statements and Supplementary Data.
The information required by this Item is included in Part IV, Item 15(a).
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures - Under the supervision and
with the participation of our management, including our principal executive officer and principal financial officer,
we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rules 13a-
15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Based on this evaluation, our principal executive officer and our principal financial officer concluded that our
disclosure controls and procedures were effective as of December 31, 2011, the end of the period covered by this
annual report.
Management’s Annual Report on Internal Control Over Financial Reporting - Our management is
responsible for establishing and maintaining adequate internal control over financial reporting, as such term is
defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our
management, including our principal executive officer and principal financial officer, we conducted an evaluation
of the effectiveness of our internal control over financial reporting based on the framework in Internal Control -
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on our evaluation under the framework in Internal Control - Integrated Framework, our management
concluded that our internal control over financial reporting was effective as of December 31, 2011.
Ernst & Young LLP, the independent registered public accounting firm that audited the consolidated financial
statements included in this Annual Report on Form 10-K, has also audited the effectiveness of our internal control
over financial reporting as of December 31, 2011, as stated in their report which is included herein.
27
Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Cohu, Inc.
We have audited Cohu, Inc.’s internal control over financial reporting as of December 31, 2011, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (the COSO criteria). Cohu, Inc.’s management is responsible for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over
financial reporting included in the accompanying Management’s Annual Report on Internal Control over
Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial
reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
In our opinion, Cohu, Inc. maintained, in all material respects, effective internal control over financial reporting
as of December 31, 2011, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidated balance sheets of Cohu, Inc. as of December 31, 2011 and December 25, 2010,
and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three
years in the period ended December 31, 2011 of Cohu, Inc. and our report dated February 29, 2012 expressed an
unqualified opinion thereon.
/s/ ERNST & YOUNG LLP
San Diego, California
February 29, 2012
28
Changes in Internal Control Over Financial Reporting - There have been no changes in our internal control
over financial reporting that occurred during the fourth quarter of 2011 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
None.
Item 10. Directors, Executive Officers and Corporate Governance.
PART III
The information under the heading “Executive Officers of the Registrant” in Part I, Item 1 of this Form 10-K is
incorporated by reference in this section.
The other information required by this item is hereby incorporated by reference to the Company’s definitive
proxy statement, which will be filed with the Securities and Exchange Commission ("SEC") within 120 days after
the close of fiscal 2011.
Code of Business Conduct and Code of Ethics
Cohu has adopted a code of business conduct and ethics for directors, officers and employees. The code is
available on the Investor Relations section of our website at www.cohu.com.
We intend to make all required disclosures concerning any amendments to, or waivers from, our code of ethics on
our website.
Corporate Governance Guidelines and Certain Committee Charters
Cohu has adopted Corporate Governance Guidelines as well as charters for its Audit, Compensation and
Nominating and Governance Committees. These documents are available on the Investor Relations section of our
website at www.cohu.com.
The information on our website is not incorporated by reference in or considered to be a part of this Annual
Report on Form 10-K.
Item 11. Executive Compensation.
Information regarding Executive Compensation is hereby incorporated by reference to the Company’s definitive
proxy statement, which will be filed with the SEC within 120 days after the close of fiscal 2011.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
Information regarding Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters is hereby incorporated by reference to the Company’s definitive proxy statement, which
will be filed with the SEC within 120 days after the close of fiscal 2011.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Information regarding Certain Relationships and Related Transactions is hereby incorporated by reference to the
Company’s definitive proxy statement, which will be filed with the SEC within 120 days after the close of fiscal
2011.
Item 14. Principal Accounting Fees and Services.
Information regarding the Principal Accounting Fees and Services is hereby incorporated by reference to the
Company’s definitive proxy statement, which will be filed with the SEC within 120 days after the close of fiscal
2011.
29
Item 15. Exhibits, Financial Statement Schedules.
PART IV
(a) The following documents are filed as part of, or incorporated by reference into, this Annual Report on Form
10-K.
(1) Financial Statements
The following Consolidated Financial Statements of Cohu, Inc., including the report thereon of
Ernst & Young LLP, are included in this Annual Report on Form 10-K beginning on page 31:
Description
Form 10-K
Page Number
Consolidated balance sheets at
December 31, 2011 and December 25, 2010 ......................................................................... 31
Consolidated statements of operations for each of the three
years in the period ended December 31, 2011 ........................................................................ 32
Consolidated statements of stockholders’ equity for each of
the three years in the period ended December 31, 2011 ........................................................ 33
Consolidated statements of cash flows for each of the three
years in the period ended December 31, 2011 ........................................................................ 34
Notes to consolidated financial statements ................................................................................ 35
Report of Independent Registered Public Accounting Firm ..................................................... 52
(2) Financial Statement Schedule
Schedule II – Valuation and Qualifying Accounts .................................................................... 56
All other financial statement schedules have been omitted because the required information is not
applicable or not present in amounts sufficient to require submission of the schedule, or because the
information required is included in the consolidated financial statements or the notes thereto.
(3) Exhibits
The exhibits listed under Item 15(b) hereof are filed with, or incorporated by reference into, this
Annual Report on Form 10-K.
30
COHU, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
ASSETS
Current assets:
Cash and cash equivalents
Short-term investments
Accounts receivable, net
Inventories:
Raw materials and purchased parts
Work in process
Finished goods
Deferred income taxes
Other current assets
Total current assets
Property, plant and equipment, at cost:
Land and land improvements
Buildings and building improvements
Machinery and equipment
Less accumulated depreciation and amortization
Net property, plant and equipment
Goodwill
Intangible assets, net
Other assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
Accrued compensation and benefits
Accrued warranty
Deferred profit
Income taxes payable
Other accrued liabilities
Total current liabilities
Other accrued liabilities
Deferred income taxes
Commitments and contingencies
Stockholders' equity:
Preferred stock, $1 par value; 1,000 shares authorized, none issued
Common stock, $1 par value; 60,000 shares authorized, 24,330
shares issued and outstanding in 2011 and 23,989 shares in 2010
Paid-in capital
Retained earnings
Accumulated other comprehensive loss
Total stockholders' equity
The accompanying notes are an integral part of these statements.
31
December 31,
2011
December 25,
2010
$
$
53,262
51,740
41,922
45,921
52,254
66,801
47,186
15,504
19,999
82,689
6,646
7,557
243,816
12,002
31,190
38,007
81,199
(44,218)
36,981
58,060
21,828
923
361,608
18,625
12,652
6,801
2,821
2,518
8,454
51,871
5,964
12,742
$
$
34,922
17,470
10,832
63,224
5,991
6,026
240,217
12,057
31,117
41,630
84,804
(45,000)
39,804
58,498
26,523
1,001
366,043
18,198
16,944
5,016
14,834
8,802
7,740
71,534
5,931
13,853
$
$
-
-
24,330
77,658
189,055
(12)
291,031
361,608
$
23,989
71,799
179,134
(197)
274,725
366,043
$
COHU, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Net sales
Cost and expenses:
Cost of sales
Research and development
Selling, general and administrative
Income (loss) from operations
Interest and other income
Income (loss) before income taxes
Income tax provision
Net income (loss)
Income (loss) per share:
Basic
Diluted
Weighted average shares used in computing
income (loss) per share:
Basic
Diluted
December 31,
2011
Years ended
December 25,
2010
December 26,
2009
$
308,968
$
322,667
$
171,261
208,839
36,230
46,563
291,632
17,336
442
17,778
2,059
15,719
$
212,672
36,201
44,117
292,990
29,677
561
30,238
5,594
24,644
$
118,873
31,964
35,519
186,356
(15,095)
1,300
(13,795)
14,373
(28,168)
0.65
0.64
$
$
1.04
1.02
$
$
(1.20)
(1.20)
$
$
$
24,134
24,501
23,732
24,097
23,412
23,412
The accompanying notes are an integral part of these statements.
32
COHU, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except par value and per share amounts)
Balance at December 27, 2008
Components of comprehensive income (loss):
Net loss
Changes in cumulative translation adjustment
Adjustments related to postretirement
benefits, net of income taxes
Changes in unrealized gains and losses on
investments, net of income taxes
Comprehensive loss
Cash dividends - $0.24 per share
Shares issued under employee stock purchase plan
Shares issued for restricted stock units vested
Repurchase and retirement of stock
Share-based compensation expense
Tax deficiency from equity awards
Balance at December 26, 2009
Components of comprehensive income (loss):
Net income
Changes in cumulative translation adjustment
Adjustments related to postretirement
benefits, net of income taxes
Changes in unrealized gains and losses on
investments, net of income taxes
Comprehensive income
Cash dividends - $0.24 per share
Exercise of stock options
Shares issued under employee stock purchase plan
Shares issued for restricted stock units vested
Repurchase and retirement of stock
Share-based compensation expense
Tax benefit from equity awards
Balance at December 25, 2010
Components of comprehensive income (loss):
Net income
Changes in cumulative translation adjustment
Adjustments related to postretirement
benefits, net of income taxes
Changes in unrealized gains and losses on
investments, net of income taxes
Comprehensive income
Cash dividends - $0.24 per share
Exercise of stock options
Shares issued under employee stock purchase plan
Shares issued for restricted stock units vested
Repurchase and retirement of stock
Share-based compensation expense
Tax benefit from equity awards
Balance at December 31, 2011
$
The accompanying notes are an integral part of these statements.
Common
stock
$1 par value
$
23,344 $
Paid-in
capital
Retained
earnings
Accumulated
other
comprehensive
income (loss)
61,076 $
193,985 $
7,134 $
Total
285,539
(28,168)
-
-
1,538
(28,168)
1,538
-
(444)
(444)
-
434
(5,624)
-
-
-
-
-
160,193
-
-
-
-
-
-
8,662
434
(26,640)
(5,624)
1,128
-
(419)
3,378
(113)
257,249
24,644
-
-
(7,270)
24,644
(7,270)
-
(1,506)
(1,506)
-
(83)
(5,703)
-
-
-
-
-
-
179,134
-
-
-
-
-
-
(197)
(83)
15,785
(5,703)
2,869
1,213
-
(465)
3,543
234
274,725
15,719
-
-
(1,076)
15,719
(1,076)
-
1,267
1,267
-
(6)
(5,798)
-
-
-
-
-
-
189,055 $
-
-
-
-
-
-
-
(12) $
(6)
15,904
(5,798)
1,111
1,262
-
(462)
4,287
2
291,031
-
-
-
-
-
-
-
-
-
136
102
(35)
-
-
23,547
-
992
(102)
(384)
3,378
(113)
64,847
-
-
-
-
263
112
101
(34)
-
-
23,989
-
-
-
-
-
123
120
139
(41)
-
-
-
-
-
-
2,606
1,101
(101)
(431)
3,543
234
71,799
-
-
-
-
-
988
1,142
(139)
(421)
4,287
2
24,330 $
77,658 $
33
December 31,
2011
Years ended
December 25,
2010
December 26,
2009
$
15,719 $
24,644 $
(28,168)
10,067
4,287
(1,676)
381
(2)
-
24,877
(20,865)
427
(1,549)
(6,462)
(121)
(12,013)
(832)
12,238
(75,128)
75,657
(1,413)
78
(806)
1,911
2
(5,777)
(3,864)
(227)
7,341
45,921
53,262 $
10,988
3,543
(1,971)
(222)
(234)
-
(23,434)
(13,866)
(4,402)
2,958
7,334
(279)
9,512
4,944
19,515
(52,491)
46,979
(4,579)
314
(9,777)
3,617
234
(5,679)
(1,828)
(236)
7,674
38,247
45,921 $
11,029
3,378
17,360
348
-
79
(11,226)
708
10,757
(522)
(514)
(1,590)
888
235
2,762
(44,562)
56,458
(2,507)
42
9,431
709
-
(5,610)
(4,901)
761
8,053
30,194
38,247
10,203 $
1,380 $
1,455 $
(2,138) $
2,990 $
1,434 $
(4,201)
578
1,410
$
$
$
$
COHU, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Cash flows from operating activities:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash
provided from operating activities:
Depreciation and amortization
Share-based compensation expense
Deferred income taxes
Accrued retiree benefits
Excess tax benefit from stock options exercised
Loss on investment write-down
Changes in current assets and liabilities:
Accounts receivable
Inventories
Accounts payable
Other current assets
Income taxes payable, including excess stock option
exercise benefits
Customer advances
Deferred profit
Accrued compensation, warranty and other liabilities
Net cash provided from operating activities
Cash flows from investing activities:
Purchases of short-term investments
Sales and maturities of short-term investments
Purchases of property, plant and equipment
Other assets
Net cash (used for) provided from investing activities
Cash flows from financing activities:
Issuance of stock, net
Excess tax benefit from stock options exercised
Cash dividends paid
Net cash used for financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Supplemental disclosure of cash flow information:
Cash paid (refunded) during the year for:
Income taxes
Inventory capitalized as capital assets
Dividends declared but not yet paid
The accompanying notes are an integral part of these statements.
34
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Basis of Presentation – Cohu, Inc. (“Cohu”, “we”, “our” and “us”), through our wholly owned subsidiaries, is a
provider of semiconductor test equipment, microwave communication systems and video cameras. Our
Consolidated Financial Statements include the accounts of Cohu and our wholly owned subsidiaries. All
significant intercompany balances and transactions have been eliminated in consolidation. The preparation of
financial statements in conformity with accounting principles generally accepted in the United States of America
(“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from these estimates.
Our fiscal years are based on a 52- or 53-week period ending on the last Saturday in December. Our current fiscal
year ended on December 31, 2011 consisted of 53 weeks. Our fiscal years ended December 25, 2010 and
December 26, 2009 consisted of 52 weeks.
Risks and Uncertainties – We are subject to a number of risks and uncertainties that may significantly impact
our future operating results. These risks and uncertainties are discussed under Part I, Item 1A. “Risk Factors”
included in this Annual Report on Form 10-K. Understanding these risks and uncertainties is integral to the
review of our consolidated financial statements.
Income (Loss) Per Share – Basic income (loss) per common share is computed by dividing net income (loss) by
the weighted-average number of common shares outstanding during the reporting period. Diluted income (loss)
per share includes the dilutive effect of common shares potentially issuable upon the exercise of stock options,
vesting of outstanding restricted stock units and issuance of stock under our employee stock purchase plan using
the treasury stock method. In loss periods, potentially dilutive securities are excluded from the per share
computations due to their anti-dilutive effect. For purposes of computing diluted income per share, stock options
with exercise prices that exceed the average fair market value of our common stock for the period are excluded.
For the years ended December 31, 2011 and December 25, 2010 approximately 1,956,000 and 1,724,000 shares
of our common stock were excluded from the computation, respectively.
The following table reconciles the denominators used in computing basic and diluted income (loss) per share:
(in thousands)
Weighted average common shares outstanding
Effect of dilutive stock options and restricted stock units
2011
24,134
367
24,501
2010
23,732
365
24,097
2009
23,412
-
23,412
Cash, Cash Equivalents and Short-term Investments – Highly liquid investments with insignificant interest
rate risk and original maturities of three months or less are classified as cash and cash equivalents. Investments
with maturities greater than three months are classified as short-term investments. All of our short-term
investments are classified as available-for-sale and are reported at fair value, with any unrealized gains and
losses, net of tax, recorded as a separate component of accumulated other comprehensive income in stockholders’
equity. We manage our cash equivalents and short-term investments as a single portfolio of highly marketable
securities. We have the ability and intent, if necessary, to liquidate any of our investments in order to meet the
liquidity needs of our current operations during the next 12 months. Accordingly, investments with contractual
maturities greater than one year from December 31, 2011 have been classified as current assets in the
accompanying consolidated balance sheets.
Fair Value of Financial Instruments – The carrying amounts of our financial instruments, including cash and
cash equivalents, short-term investments, accounts receivable, accounts payable and accrued expenses,
approximate fair value due to the short maturities of these financial instruments.
Concentration of Credit Risk – Financial instruments that potentially subject us to significant credit risk consist
principally of cash equivalents, short-term investments and trade accounts receivable. We invest in a variety of
financial instruments and, by policy, limit the amount of credit exposure with any one issuer.
Trade accounts receivable are presented net of allowance for doubtful accounts of $0.5 million at December 31,
2011 and $0.6 million at December 25, 2010. Our customers include semiconductor manufacturers and
semiconductor test subcontractors and other customers located throughout many areas of the world. While we
35
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
believe that our allowance for doubtful accounts is adequate and represents our best estimate at December 31,
2011, we will continue to monitor customer liquidity and other economic conditions, which may result in changes
to our estimates regarding collectability.
Inventories – Inventories are stated at the lower of cost, determined on a current average or first-in, first-out
basis, or market. Cost includes labor, material and overhead costs. Determining market value of inventories
involves numerous estimates and judgments including projecting average selling prices and sales volumes for
future periods and costs to complete and dispose of inventory. As a result of these analyses, we record a charge
to cost of sales in advance of the period when the inventory is sold when market values are below our costs.
Charges to cost of sales for excess and obsolete inventories aggregated $5.8 million, $1.7 million, and
$4.4 million in 2011, 2010 and 2009, respectively.
Property, Plant and Equipment – Depreciation and amortization of property, plant and equipment is calculated
principally on the straight-line method based on estimated useful lives of thirty to forty years for buildings, five to
fifteen years for building improvements and three to ten years for machinery, equipment and software.
Goodwill, Purchased Intangible Assets and Other Long-lived Assets – We evaluate goodwill for impairment
annually and when an event occurs or circumstances change that indicate that the carrying value may not be
recoverable. We test goodwill for impairment by first comparing the book value of net assets to the fair value of
the reporting units. If the fair value is determined to be less than the book value, a second step is performed to
compute the amount of impairment as the difference between the estimated fair value of goodwill and the
carrying value. We estimated the fair values of our reporting units primarily using the income approach valuation
methodology that includes the discounted cash flow method, taking into consideration the market approach and
certain market multiples as a validation of the values derived using the discounted cash flow methodology.
Forecasts of future cash flows are based on our best estimate of future net sales and operating expenses, based
primarily on customer forecasts, industry trade organization data and general economic conditions.
We conduct our annual impairment test as of October 1 of each year, and have determined there is no impairment
as of October 1, 2011. Other events and changes in circumstances may also require goodwill to be tested for
impairment between annual measurement dates. While a decline in stock price and market capitalization is not
specifically cited as a goodwill impairment indicator, a company’s stock price and market capitalization should
be considered in determining whether it is more likely than not that the fair value of a reporting unit is less that its
carrying value. Additionally, a significant decline in a company’s stock price may suggest that an adverse change
in the business climate may have caused the fair value of one or more reporting units to fall below their carrying
value. The financial and credit market volatility directly impacts our fair value measurement through our stock
price that we use to determine our market capitalization. During times of volatility, significant judgment must be
applied to determine whether credit or stock price changes are a short-term swing or a longer-term trend. As of
December 31, 2011 we do not believe there have been any events or circumstances that would require us to
perform an interim goodwill impairment review, however, a sustained decline in Cohu’s market capitalization
below its book value could lead us to determine, in a future period, that an interim goodwill impairment review is
required and may result in an impairment charge which would have a negative impact on our results of
operations.
Long-lived assets, other than goodwill, are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would
necessitate an impairment assessment include a significant decline in the observable market value of an asset, a
significant change in the extent or manner in which an asset is used, or any other significant adverse change that
would indicate that the carrying amount of an asset or group of assets may not be recoverable. For long-lived
assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its
undiscounted, probability-weighted future cash flows. We measure the impairment loss based on the difference
between the carrying amount and estimated fair value.
Product Warranty – Product warranty costs are accrued in the period sales are recognized. Our products are
generally sold with standard warranty periods, which differ by product, ranging from 12- to 36-months. Parts and
labor are typically covered under the terms of the warranty agreement. Our warranty expense accruals are based
on historical and estimated costs by product and configuration. From time-to-time we offer customers extended
36
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
warranties beyond the standard warranty period. In those situations the revenue relating to the extended warranty
is deferred at its estimated fair value and recognized on a straight-line basis over the contract period. Costs
associated with our extended warranty contracts are expensed as incurred.
Income Taxes – We assess our income tax positions and record tax benefits for all years subject to examination
based upon management’s evaluation of the facts, circumstances and information available at the reporting dates.
For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, we have recorded the
largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement
with a taxing authority that has full knowledge of all relevant information. For those income tax positions where
it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the
financial statements. Where applicable, associated interest has also been recognized and recorded, net of federal
and state tax benefits, in income tax expense.
Contingencies and Litigation – We assess the probability of adverse judgments in connection with current and
threatened litigation. We would accrue the cost of an adverse judgment if, in our estimation, the adverse outcome
is probable and we can reasonably estimate the ultimate cost.
Revenue Recognition – Our net sales are derived from the sale of products and services and are adjusted for
estimated returns and allowances, which historically have been insignificant. We recognize revenue when there is
persuasive evidence of an arrangement, title and risk of loss have passed, delivery has occurred or the services
have been rendered, the sales price is fixed or determinable and collection of the related receivable is reasonably
assured. Title and risk of loss generally pass to our customers upon shipment. In circumstances where either title
or risk of loss pass upon destination or acceptance, we defer revenue recognition until such events occur.
Revenue for established products that have previously satisfied a customer’s acceptance requirements and
provide for full payment tied to shipment is generally recognized upon shipment and passage of title. In certain
instances, customer payment terms may provide that a minority portion (e.g. 20%) of the equipment purchase
price be paid only upon customer acceptance. In those situations, the majority portion (e.g. 80%) of revenue
where payment is tied to shipment and the entire product cost of sale are recognized upon shipment and passage
of title and the minority portion of the purchase price related to customer acceptance is deferred and recognized
upon receipt of customer acceptance. In cases where a prior history of customer acceptance cannot be
demonstrated or from sales where customer payment dates are not determinable and in the case of new products,
revenue is deferred until customer acceptance has been received. Our post-shipment obligations typically include
installation and standard warranties. The estimated fair value of installation related revenue is recognized in the
period the installation is performed. Service revenue is recognized ratably over the period of the related contract.
Spares and kit revenue is generally recognized upon shipment.
Certain of our equipment sales are accounted for as multiple-element arrangements. A multiple-element
arrangement is a transaction which may involve the delivery or performance of multiple products, services, or
rights to use assets, and performance may occur at different points in time or over different periods of time. For
arrangements containing multiple elements initiated prior to December 26, 2010, the first day of our fiscal 2011,
the revenue relating to the undelivered elements is deferred at their estimated relative fair values until delivery of
the deferred elements. For arrangements initiated or materially modified subsequent to December 26, 2010
containing multiple elements, the revenue relating to the undelivered elements is deferred using the relative
selling price method utilizing estimated sales prices until delivery of the deferred elements. We limit the amount
of revenue recognition for delivered elements to the amount that is not contingent on the future delivery of
products or services, future performance obligations or subject to customer-specified return or adjustment.
On shipments where sales are not recognized, gross profit is generally recorded as deferred profit in our
consolidated balance sheet representing the difference between the receivable recorded and the inventory shipped.
In certain instances where customer payments are received prior to product shipment, the customer’s payments
are recorded as customer advances in our consolidated balance sheet. At December 31, 2011, we had total
deferred revenue of approximately $6.6 million and deferred profit of $2.8 million. At December 25, 2010, we
had total deferred revenue of approximately $36.9 million and deferred profit of $14.8 million.
Advertising Costs – Advertising costs are expensed as incurred and were not material for all periods presented.
37
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Share-based Compensation – We measure and recognize all share-based compensation under the fair value
method. Our estimate of share-based compensation expense requires a number of complex and subjective
assumptions including our stock price volatility, employee exercise patterns (expected life of the options), future
forfeitures and related tax effects. The assumptions used in calculating the fair value of share-based awards
represent our best estimates, but these estimates involve inherent uncertainties and the application of management
judgment. Although we believe the assumptions and estimates we have made are reasonable and appropriate,
changes in assumptions could materially impact our reported financial results.
Foreign Currency Translation – Assets and liabilities of those subsidiaries that use the U.S. dollar as their
functional currency are translated using exchange rates in effect at the end of the period, except for nonmonetary
assets, such as inventories and property, plant and equipment, which are translated using historical exchange
rates. Revenues and costs are translated using average exchange rates for the period, except for costs related to
those balance sheet items that are translated using historical exchange rates. Gains and losses on foreign currency
transactions are recognized as incurred. Our subsidiaries located in Germany, designated the Euro as their
functional currency and, as a result, their assets and liabilities are translated at the rate of exchange at the balance
sheet date, while revenue and expenses are translated using the average exchange rate for the period. Cumulative
translation adjustments resulting from the translation of the financial statements are included as a separate
component of stockholders’ equity. Foreign currency gains and losses were not significant in any period and are
included in the consolidated statements of operations.
Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements - In January 2010, the Financial Accounting Standards Board
(“FASB”) issued guidance to add additional disclosures about the different classes of assets and liabilities
measured at fair value, the valuation techniques and inputs used, and the activity in Level 3 fair value
measurements (as defined in Note 3 below). We adopted this guidance on December 26, 2010, the first day of our
2011 fiscal year. Adoption of this new guidance did not have a material impact on our financial statement
disclosures.
In October 2009, the FASB amended the guidance for allocating revenue to multiple deliverables in a contract.
This new guidance is effective as of the first day of our 2011 fiscal year. In accordance with the amendment,
companies can allocate consideration in a multiple element arrangement in a manner that better reflects the
transaction economics. When vendor specific objective evidence or third party evidence for deliverables in an
arrangement cannot be determined, companies will now be allowed to develop a best estimate of the selling
price to separate deliverables and allocate arrangement consideration using the relative selling price method.
Additionally, use of the residual method has been eliminated. We adopted this guidance on December 26,
2010, the first day of our 2011 fiscal year. Adoption of this new guidance did not have a material impact on our
consolidated financial position or results of operations.
In October 2009, the FASB issued new accounting guidance for the accounting for certain revenue
arrangements that include software elements. The new guidance amends the scope of pre-existing software
revenue guidance by removing from the guidance non-software components of tangible products and certain
software components of tangible products. The new guidance is effective prospectively for revenue
arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. We
adopted this guidance on December 26, 2010, the first day of our 2011 fiscal year. Adoption of this new
guidance did not have a material impact on our consolidated financial position or results of operations.
Recently Issued Accounting Pronouncements – In September 2011, the FASB issued guidance to amend and
simplify the rules related to testing goodwill for impairment. The revised guidance allows an entity to make an
initial qualitative evaluation, based on the entity’s events and circumstances, to determine whether it is more
likely than not that the fair value of a reporting unit is less than its carrying amount. The results of this
qualitative assessment determine whether it is necessary to perform the currently required two-step impairment
test. The new guidance is effective for annual and interim goodwill impairment tests performed for fiscal years
beginning after December 15, 2011. We do not believe our adoption of the new guidance in the first quarter of
fiscal 2012 will have a material impact on our consolidated financial position, results of operations or cash
flows.
38
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In June 2011, the FASB issued new guidance on the presentation of comprehensive income. Specifically, the
new guidance allows an entity to present components of net income and other comprehensive income in one
continuous statement, referred to as the statement of comprehensive income, or in two separate, but
consecutive statements. The new guidance eliminates the current option to report other comprehensive income
and its components in the statement of changes in equity. While the new guidance changes the presentation of
comprehensive income, there are no changes to the components that are recognized in net income or other
comprehensive income under current accounting guidance. This new guidance is effective for fiscal years and
interim periods beginning after December 15, 2011, however, the requirement to show the reclassification
from other comprehensive to net income by line item on the face of the financial statements has been deferred
until further notice from the FASB. We do not believe our adoption of the new guidance in the first quarter of
fiscal 2012 will have a material impact on our consolidated financial position, results of operations or cash
flows.
In May 2011, the FASB issued new guidance to achieve common fair value measurement and disclosure
requirements between GAAP and International Financial Reporting Standards. This new guidance amends
current fair value measurement and disclosure guidance to include increased transparency around valuation
inputs and investment categorization. This new guidance is effective for fiscal years and interim periods
beginning after December 15, 2011. We do not believe our adoption of the new guidance in the first quarter of
fiscal 2012 will have a material impact on our consolidated financial position, results of operations or cash
flows.
2. Goodwill and Purchased Intangible Assets
Goodwill and Purchased Intangible Assets
Changes in the carrying value of goodwill by reportable segment during the years ended December 31, 2011 and
December 25, 2010 were as follows (in thousands):
Balance, December 26, 2009
Impact of currency exchange
Balance, December 25, 2010
Impact of currency exchange
Balance, December 31, 2011
Semiconductor
Equipment
Microwave
Communications
Total
Goodwill
$
$
58,318 $
(3,038)
55,280
(408)
54,872 $
3,446 $
(228)
3,218
(30)
3,188 $
61,764
(3,266)
58,498
(438)
58,060
Our purchased intangible assets, subject to amortization, were as follows (in thousands):
December 31, 2011
Gross Carrying Accumulated
Amortization
Amount
Remaining
Useful Life
5.0 years
0 years
0 years
12,149
7,020
2,325
21,494
December 25, 2010
$
Amount
Gross Carrying Accumulated
Amortization
8,290
6,779
2,008
17,077
32,154 $
7,020
2,156
41,330 $
$
Rasco technology
Unigen technology
AVS technology
$
$
31,737 $
7,020
2,325
41,082 $
The amounts included in the table above for the years ended December 31, 2011 and December 25, 2010 exclude
approximately $2.2 million and $2.3 million, respectively, related to the Rasco trade name which has an
indefinite life and is not being amortized.
Expense related to purchased intangible assets, subject to amortization, was approximately $4.6 million,
$6.1 million and $6.3 million in 2011, 2010 and 2009, respectively. As of December 31, 2011, we expect
amortization expense in future periods to be as follows: 2012 – $4.0 million; 2013 - $4.0 million; 2014 -
$4.0 million; 2015 - $4.0 million; and 2016 - $3.6 million.
39
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Cash, Cash Equivalents and Short-term Investments
Our cash, cash equivalents, and short-term investments consisted primarily of cash, corporate debt securities,
government and government agency securities, state and municipal securities, money market funds and other
investment grade securities. We do not hold investment securities for trading purposes. All short-term
investments are classified as available-for-sale and recorded at fair value. Investment securities are exposed to
market risk due to changes in interest rates and credit risk and we monitor credit risk and attempt to mitigate
exposure by making high-quality investments and through investment diversification.
Gains and losses on investments are calculated using the specific-identification method and are recognized during
the period in which the investment is sold or when an investment experiences an other-than-temporary decline in
value. Factors that could indicate an impairment exists include, but are not limited to: earnings performance,
changes in credit rating or adverse changes in the regulatory or economic environment of the asset. Gross
realized gains and losses on sales of short-term investments are included in interest income. Realized gains and
losses for the periods presented were not significant.
Investments that we have classified as short-term, by security type, are as follows (in thousands):
U.S. Treasury securities
Corporate debt securities (2)
Municipal securities
Government-sponsored
enterprise securities
Bank certificates of deposit
U.S. Treasury securities
Corporate debt securities (2)
Municipal securities
Government-sponsored
enterprise securities
Bank certificates of deposit
Asset-backed securities
2011
Gross
Amortized Unrealized
Cost
Gains
Gross
Unrealized
Losses (1)
Estimated
Fair
Value
$
-
2
-
15
-
17 $
3,267
22,458
4,315
19,050
2,650
51,740
3,258 $
22,454
4,315
19,033
2,650
51,710 $
$
9
6
-
32
-
47 $
2010
Amortized Unrealized
Gross
Gross
Unrealized
Cost
Gains
Losses
Estimated
Fair
Value
6,778 $
18,010
11,102
15,105
1,000
236
52,231 $
$
9
28
1
8
-
1
47 $
$
-
4
-
20
-
-
24 $
6,787
18,034
11,103
15,093
1,000
237
52,254
$
$
$
$
(1) As of December 31, 2011, the cost and fair value of investments with loss positions were approximately $12.8 million. We
evaluated the nature of these investments, credit worthiness of the issuer and the duration of these impairments to determine
if an other-than-temporary decline in fair value had occurred and concluded that these losses were temporary and we have the
ability and intent to hold these investments to maturity.
(2) Corporate debt securities include investments in financial and other corporate institutions. No single issuer represents a
significant portion of the total corporate debt securities portfolio.
40
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Effective maturities of short-term investments at December 31, 2011, were as follows:
Amortized
(in thousands)
Due in one year or less
Due after one year through two years
$
$
Cost
44,034 $
7,676
51,710 $
Estimated
Fair Value
44,079
7,661
51,740
Our municipal securities include variable rate demand notes which can be put (sold at par) typically on a daily
basis with settlement periods ranging from the same day to one week and have varying contractual maturities
through 2037. These securities can be used for short-term liquidity needs and are held for limited periods of time.
At December 31, 2011 these securities had amortized cost and fair value of $1.9 million and are included in “Due
in one year or less” in the table above.
Accounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy, which
prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such
as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are
either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market
data exists, therefore requiring an entity to develop its own assumptions. When available, we use quoted market
prices to determine the fair value of our investments, and they are included in Level 1. When quoted market
prices are unobservable, we use quotes from independent pricing vendors based on recent trading activity and
other relevant information.
The following table summarizes, by major security type, our assets that are measured at fair value on a recurring
basis and are categorized using the fair value hierarchy (in thousands):
Cash
U.S. Treasury securities
Corporate debt securities
Municipal securities
Government-sponsored
enterprise securities
Money market funds
Bank certificates of deposit
Cash
U.S. Treasury securities
Corporate debt securities
Municipal securities
Government-sponsored
enterprise securities
Money market funds
Bank certificates of deposit
Asset-backed securities
$
$
$
$
Fair value measurements at December 31, 2011 using:
Level 1
Level 2
Level 3
25,359
3,267
-
-
-
-
-
28,626
$
$
-
-
27,208
4,315
19,050
22,753
3,050
76,376
$
$
Total estimated
fair value
-
-
-
-
-
-
-
-
$
$
25,359
3,267
27,208
4,315
19,050
22,753
3,050
105,002
Fair value measurements at December 25, 2010 using:
Level 1
Level 2
Level 3
Total estimated
fair value
-
-
21,432
11,852
15,093
22,932
1,000
237
72,546
$
$
-
-
-
-
-
-
-
-
$
$
18,842
6,787
21,432
11,852
15,093
22,932
1,000
237
98,175
18,842
6,787
-
-
-
-
-
25,629
$
$
41
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Comprehensive Income (Loss)
Our accumulated other comprehensive loss totaled approximately $12,000 and $0.2 million at December 31,
2011 and December 25, 2010, respectively, and was attributed to, net of income taxes where applicable,
foreign currency adjustments resulting from the translation of certain accounts into U.S. dollars where the
functional currency is the Euro, unrealized losses and gains on investments and adjustments to accumulated
postretirement benefit obligations.
Amounts included in accumulated other comprehensive income (loss) are as follows:
Unrealized
Investment
Gains and
Losses
Postretirement
Obligations
Foreign
Currency
Translation
Adjustments
(in thousands)
Balance, December 27, 2008 $
Fiscal 2009 activity
Balance, December 26, 2009
Fiscal 2010 activity
Balance, December 25, 2010
Fiscal 2011 activity
Balance, December 31, 2011 $
5. Employee Benefit Plans
(336) $
434
98
(83)
15
(6)
9 $
(159) $
(444)
(603)
(1,506)
(2,109)
1,267
(842) $
Accumulated
Other
Comprehensive
Income (Loss)
7,134
1,528
8,662
(8,859)
(197)
185
(12)
7,629 $
1,538
9,167
(7,270)
1,897
(1,076)
821 $
Retirement Plans – We have a voluntary defined contribution retirement 401(k) plan whereby we match
employee contributions. During 2009 and 2010, to control costs and preserve cash in response to the economic
uncertainty caused by the global economic crisis, we suspended the matching contribution to our employee
401(k) plan. In 2011 we re-started our matching contribution at 1.5% of eligible employee compensation and
made contributions to the plan of approximately $0.5 million. Certain of our foreign employees participate in
defined benefit pension plans. The related expense and benefit obligation of these plans were not significant for
any period presented.
Retiree Medical Benefits – We provide post-retirement health benefits to certain executives and directors under
a noncontributory plan. The net periodic benefit cost was $0.4 million, $0.3 million and $0.2 million in 2011,
2010 and 2009, respectively. We fund benefits as costs are incurred and as a result there are no plan assets.
The weighted average discount rate used in determining the accumulated post-retirement benefit obligation was
4.2% in 2011, 5.4% in 2010 and 5.8% in 2009. Annual rates of increase of the cost of health benefits were
assumed to be 9.5% in 2012. These rates were then assumed to decrease 0.5% per year to 5.0% in 2021 and
remain level thereafter. A one percent increase (decrease) in health care cost trend rates would increase
(decrease) the 2011 net periodic benefit cost by approximately $37,000 ($30,000) and the accumulated post-
retirement benefit obligation as of December 31, 2011, by approximately $393,000 ($328,000).
The following table sets forth the post-retirement benefit obligation to the funded status of the plan which
approximates the liability we have recorded in our consolidated balance sheets:
(in thousands)
Accumulated benefit obligation at beginning of year
Service cost
Interest cost
Actuarial (gain) loss
Benefits paid
Accumulated benefit obligation at end of year
Plan assets at end of year
Funded status
2011
2010
$
$
3,909
20
208
(1,137)
(91)
2,909
-
(2,909)
$
$
2,839
18
155
1,022
(125)
3,909
-
(3,909)
42
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The total unrecognized net actuarial loss that will be amortized over the future service period, excluding the effect
of income taxes, was approximately $0.8 million at December 31, 2011.
Deferred Compensation – The Cohu, Inc. Deferred Compensation Plan allows certain of our officers to defer
a portion of their current compensation. We have purchased life insurance policies on the participants with
Cohu as the named beneficiary. Participant contributions, distributions and investment earnings and losses are
accumulated in a separate account for each participant. At December 31, 2011 and December 25, 2010, the
payroll liability to participants, included in accrued compensation and benefits in the consolidated balance
sheet, was approximately $2.0 million and $2.1 million, respectively and the cash surrender value of the
related life insurance policies included in other current assets was approximately $1.6 million, for both periods
presented.
Employee Stock Purchase Plan – The Cohu, Inc. 1997 Employee Stock Purchase Plan (“the Plan”) provides
for the issuance of a maximum of 1,900,000 shares of our common stock. Under the Plan, eligible employees
may purchase shares of common stock through payroll deductions. The price paid for the common stock is
equal to 85% of the fair market value of our common stock on specified dates. In 2011, 2010, and 2009,
120,240, 112,745 and 136,228 shares, respectively, were issued under the Plan. At December 31, 2011, there
were 637,354 shares reserved for issuance under the Plan.
Stock Options – Under our equity incentive plans, stock options may be granted to employees, consultants and
outside directors to purchase a fixed number of shares of our common stock at prices not less than 100% of the
fair market value at the date of grant. Options generally vest and become exercisable after one year or in four
annual increments beginning one year after the grant date and expire five to ten years from the grant date. At
December 31, 2011, 1,158,160 shares were available for future equity grants under the Cohu, Inc. 2005 Equity
Incentive Plan. We have historically issued new shares of Cohu common stock upon share option exercise.
Stock option activity under our share-based compensation plans was as follows:
(in thousands, except per share data)
Outstanding, beginning of year
Granted
Exercised
Canceled
Outstanding, end of year
2011
2010
2009
Wt. Avg.
Shares Ex. Price
3,210 $ 12.89
157 $ 13.33
(123) $
9.03
(132) $ 14.24
3,112 $ 13.01
Wt. Avg.
Shares Ex. Price
3,221 $ 12.87
380 $ 13.77
(263) $ 10.92
(128) $ 19.06
3,210 $ 12.89
Shares
Wt. Avg.
Ex. Price
2,193 $ 15.91
7.45
1,229 $
-
- $
(201) $ 12.94
3,221 $ 12.87
Options exercisable at year end
2,112 $ 14.44
1,857 $ 15.26
1,766 $ 16.40
The aggregate intrinsic value of options exercised during 2011 and 2010 was approximately $0.6 million, and
$0.8 million, respectively. There were no options exercised during 2009. At December 31, 2011, the aggregate
intrinsic value of options outstanding, vested and expected to vest were each approximately $3.9 million and the
aggregate intrinsic value of options exercisable was approximately $1.6 million.
Information about stock options outstanding at December 31, 2011 is as follows (options in thousands):
Options Outstanding
Approximate
Wt. Avg.
Range of
Exercise Prices
7.32 - $ 10.83
10.84 - $ 16.26
16.27 - $ 24.41
24.42 - $ 36.63
$
$
$
$
Number Remaining Wt. Avg.
Outstanding Life (Years) Ex. Price
7.54
14.28
17.41
25.60
13.01
7.4 $
5.6 $
2.9 $
1.4 $
5.4 $
1,037
1,150
910
15
3,112
Options Exercisable
Wt. Avg.
Number
Exercisable Ex. Price
$
411
7.40
$ 14.48
779
$ 17.41
907
$ 25.60
15
$ 14.44
2,112
43
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Restricted Stock Units – Under our equity incentive plans, restricted stock units may be granted to employees,
consultants and outside directors. Restricted stock units vest over either a one-year or a four-year period from
the date of grant. Prior to vesting, restricted stock units do not have dividend equivalent rights, do not have
voting rights and the shares underlying the restricted stock units are not considered issued and outstanding.
Shares of our common stock will be issued on the date the restricted stock units vest.
Restricted stock unit activity under our share-based compensation plans was as follows:
2011
2010
2009
(in thousands, except per share data)
Outstanding, beginning of year
Granted
Vested
Canceled
Outstanding, end of year
Wt. Avg.
Fair Value Units
Units
373 $
75 $
(139) $
(10) $
299 $
13.35
13.00
13.91
13.41
12.98
Wt. Avg.
Fair Value
14.60
12.90
14.68
15.40
13.35
155 $
323 $
(101) $
(4) $
373 $
Wt. Avg.
Units Fair Value
15.40
9.28
15.30
14.74
14.60
253 $
11 $
(102) $
(7) $
155 $
Share-based Compensation – We estimate the fair value of each share-based award on the grant date using
the Black-Scholes valuation model. Option valuation models, including Black-Scholes, require the input of
highly subjective assumptions, and changes in the assumptions used can materially affect the grant date fair
value of an award. These assumptions include the risk-free rate of interest, expected dividend yield, expected
volatility, and the expected life of the award. The risk-free rate of interest is based on the U.S. Treasury rates
appropriate for the expected term of the award as of the grant date. Expected dividends are based, primarily,
on historical factors related to our common stock. Expected volatility is based on historic, weekly stock price
observations of our common stock during the period immediately preceding the share-based award grant that is
equal in length to the award’s expected term. We believe that historical volatility is the best estimate of future
volatility. Expected life of the award is based on historical option exercise data. Estimated forfeitures are
required to be included as a part of the grant date expense estimate. We used historical data to estimate
expected employee behaviors related to option exercises and forfeitures.
Share-based compensation expense related to restricted stock unit awards is calculated based on the market
price of our common stock on the date of grant, reduced by the present value of dividends expected to be paid
on our common stock prior to vesting of the restricted stock unit.
The following weighted average assumptions were used to value share-based awards granted:
Employee Stock Purchase Plan
Dividend yield
Expected volatility
Risk-free interest rate
Expected term of options
Weighted-average grant date fair
value per share
Employee Stock Options
Dividend yield
Expected volatility
Risk-free interest rate
Expected term of options
Weighted-average grant date fair
value per share
2011
1.9 %
42.4 %
0.1 %
0.5 years
2010
1.8 %
48.2 %
0.2 %
0.5 years
2009
2.1 %
54.7 %
0.8 %
0.5 years
$
3.77 $
3.90 $
3.57
2011
2.0 %
45.8 %
1.9 %
6.0 years
2010
1.6 %
46.6 %
1.6 %
5.9 years
2009
3.1 %
45.0 %
1.8 %
5.5 years
$
5.06 $
5.39 $
2.41
Restricted Stock Units
Dividend yield
2011
1.8 %
2010
1.7 %
2009
2.5 %
44
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Reported share-based compensation is classified in the consolidated financial statements as follows:
(in thousands)
Cost of sales
Research and development
Selling, general and administrative
Total share-based compensation
Income tax benefit
Total share-based compensation, net of tax
2011
2010
2009
420 $
1,356
2,511
4,287
-
4,287 $
297 $
1,121
2,125
3,543
-
3,543 $
347
1,145
1,886
3,378
-
3,378
$
$
At December 31, 2011, excluding a reduction for forfeitures, we had approximately $2.9 million of pre-tax
unrecognized compensation cost related to unvested stock options which is expected to be recognized over a
weighted-average period of approximately 1.9 years.
At December 31, 2011, excluding a reduction for forfeitures, we had approximately $3.5 million of pre-tax
unrecognized compensation cost related to unvested restricted stock units which is expected to be recognized
over a weighted-average period of approximately 2.6 years.
6. Income Taxes
Significant components of the provision (benefit) for income taxes are as follows:
(in thousands)
Current:
U.S. Federal
U.S. State
Foreign
Total current
Deferred:
U.S. Federal
U.S. State
Foreign
Total deferred
2011
2010
2009
$
(90) $
(250)
4,075
3,735
1,239 $
(71)
6,397
7,565
(977)
(4)
(695)
(1,676)
2,059 $
(1,519)
(207)
(245)
(1,971)
5,594 $
$
(4,025)
47
991
(2,987)
17,285
2,590
(2,515)
17,360
14,373
Income (loss) before income taxes consisted of the following:
(in thousands)
U.S.
Foreign
Total
2011
$
$
8,154 $
9,624
17,778 $
2010
7,059 $
2009
(8,430)
23,179
(5,365)
30,238 $ (13,795)
45
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of
assets and liabilities for financial reporting and tax purposes. Significant components of our deferred tax assets
and liabilities were as follows:
(in thousands)
Deferred tax assets:
Inventory, receivable and warranty reserves
Net operating loss carryforwards
Tax credit carryforwards
Accrued employee benefits
Deferred profit
Stock-based compensation
Acquisition basis differences
Excess of book over tax depreciation
Capitalized research expenses, accrued interest and other
Gross deferred tax assets
Less valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Excess of tax over book depreciation
Gain on facilities sale
Acquisition basis differences
Prepaid and other
Total deferred tax liabilities
Net deferred tax liabilities
2011
2010
$
$
12,604
1,069
7,213
2,233
688
2,715
2,369
-
207
29,098
(22,352)
6,746
211
2,788
9,591
252
12,842
(6,096)
$
$
10,446
1,077
6,135
2,672
3,842
1,887
2,593
135
316
29,103
(23,295)
5,808
-
2,788
10,584
299
13,671
(7,863)
Companies are required to assess whether a valuation allowance should be recorded against their deferred tax
assets (“DTAs”) based on the consideration of all available evidence, using a “more likely than not” realization
standard. The four sources of taxable income that must be considered in determining whether DTAs will be
realized are, (1) future reversals of existing taxable temporary differences (i.e. offset of gross deferred tax
assets against gross deferred tax liabilities); (2) taxable income in prior carryback years, if carryback is
permitted under the tax law; (3) tax planning strategies and (4) future taxable income exclusive of reversing
temporary differences and carryforwards.
In assessing whether a valuation allowance is required, significant weight is to be given to evidence that can be
objectively verified. We have evaluated our DTAs each reporting period, including an assessment of our
cumulative income or loss over the prior three-year period and future periods, to determine if a valuation
allowance was required. A significant negative factor in our assessment was Cohu's three-year cumulative
U.S. loss history at the end of the 2009 and 2010 fiscal year periods.
After a review of the four sources of taxable income described above and in view of our three-year cumulative
U.S. loss, we recorded an increase in our valuation allowance on U.S. DTAs, with a corresponding charge to
our income tax provision, of approximately $19.6 million in the second quarter of fiscal 2009.
Notwithstanding our 36-month domestic, cumulative GAAP pretax income of approximately $7 million at the
end of 2011, with (i) the weak semiconductor equipment industry business conditions we have experienced in
the second half of 2011, (ii) global economic uncertainty and (iii) our significant gross deferred tax assets we
were unable to conclude at December 31, 2011 that it was “more likely than not” that our DTAs would be
realized and, consistent with 2010 and 2011, will only reverse the valuation allowance and reinstate DTAs to
the extent we accrue taxes on future income. We will evaluate the realizability of our DTAs at the end of each
quarterly reporting period in 2012 and should circumstances change it is possible the remaining valuation
allowance, or a portion thereof, will be reversed during 2012.
46
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Our valuation allowance on DTAs at December 31, 2011 and December 25, 2010 was approximately
$22.4 million and $23.3 million, respectively. The remaining gross DTAs for which a valuation allowance
was not recorded are realizable through future reversals of existing taxable temporary differences or loss
carryback. As the realization of DTAs is determined by tax jurisdiction, the significant deferred tax liability
recorded as part of the 2008 acquisition of Rasco, a German corporation, was not a source of taxable income in
assessing the realization of our DTAs in the U.S.
The reconciliation of income tax computed at the U.S. federal statutory tax rate to the provision (benefit) for
income taxes is as follows:
(in thousands)
Tax at U.S. 35% statutory rate
State income taxes, net of federal tax benefit
Settlements, adjustments and releases from statute expirations
Change in effective tax rate for deferred balances
Federal tax credits
Stock-based compensation on which no tax benefit provided
Change in valuation allowance
Foreign income taxed at different rates
Other, net
2011
6,223
(941)
(791)
-
(707)
202
(483)
(726)
(718)
2,059
2010
10,583
95
(712)
638
(688)
55
(2,027)
(1,740)
(610)
5,594
$
2009
(4,828)
(1,051)
(166)
-
(375)
157
20,562
(130)
204
$ 14,373
$
$
$
$
State income taxes, net of federal benefit, have been reduced by research tax credits totaling approximately
$0.6 million in all periods presented.
At December 31, 2011, we had state and foreign net operating loss carryforwards of approximately
$19.6 million and $0.1 million, respectively, that expire in various tax years through 2031. We also have
federal and state tax credit carryforwards at December 31, 2011 of approximately $2.0 million and $10.0
million, respectively, certain of which expire in various tax years beginning in 2014 through 2031 or have no
expiration date.
U.S. income taxes have not been provided on approximately $20.0 million of accumulated undistributed
earnings of certain foreign subsidiaries, as we currently intend to indefinitely reinvest these earnings in
operations outside the U.S. It is not practicable to estimate the amount of tax that might be payable if some or
all of such earnings were to be remitted. We have certain tax holidays or incentives with respect to our
operations in Singapore and the Philippines. These holidays or incentives require compliance with certain
conditions and expire at various dates through 2020. The impact of these holidays or incentives on net income
was not significant for fiscal years ended December 2011, 2010 and 2009.
A reconciliation of our gross unrecognized tax benefits is as follows:
(in thousands)
Balance at beginning of year
Gross additions for tax positions of current year
Gross additions (reductions) for tax positions of prior years
Reductions as a result of settlements with tax authorities
Reductions as a result of a lapse of the statute of limitations
Balance at end of year
2011
5,069
1,455
126
-
(1,269)
5,381
$
$
$
$
2010
4,886
578
(23)
-
(372)
5,069
$
$
2009
4,562
964
22
(135)
(527)
4,886
If the unrecognized tax benefits at December 31, 2011 are ultimately recognized, approximately $3.1 million
would result in a reduction in our income tax expense and effective tax rate. We are unable to estimate the
range of any reasonably possible increase or decrease in our gross unrecognized tax benefits over the next 12
months. However, we do not expect any such outcome will result in a material change to our financial
condition or results of operations.
47
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
We recognize interest and penalties related to unrecognized tax benefits in income tax expense. Cohu had
approximately $0.4 million and $0.6 million accrued for the payment of interest and penalties at December 31,
2011 and December 25, 2010, respectively. Interest expense recognized in 2011, 2010 and 2009 was
approximately $0.2 million, $0.1 million and $0.1 million, respectively.
In 2009 and 2010 we concluded routine examinations by the Internal Revenue Service of our 2005 to 2008
U.S. income tax returns without any material adjustments. In 2010 the Internal Revenue Service commenced a
routine examination of our 2009 U.S. income tax return as a result of our net operating loss carryback. This
examination was concluded in 2010 without any material adjustments.
Our U.S. federal and state income tax returns for years after 2007 and 2006, respectively, remain open to
examination, subject to the statute of limitations. The statute of limitations for the assessment and collection
of income taxes related to our foreign tax returns varies by country. In the foreign countries where we have
significant operations these time periods generally range from four to six years after the year for which the tax
is due.
7. Segment and Related Information
Our reportable segments are business units that offer different products and are managed separately because
each business requires different technology and marketing strategies. Our three segments are: semiconductor
equipment, microwave communications and video cameras.
The accounting policies of the reportable segments are the same as those described in the summary of
significant accounting policies. We allocate resources and evaluate the performance of segments based on
profit or loss from operations, excluding interest, corporate expenses and unusual gains or losses.
Intersegment sales were not significant for any period.
Financial information by industry segment is presented below:
(in thousands)
Net sales by segment:
Semiconductor equipment
Microwave communications
Video cameras
Total consolidated net sales and net sales for
reportable segments
Segment profit (loss):
Semiconductor equipment
Microwave communications
Video cameras
Profit (loss) for reportable segments
Other unallocated amounts:
Corporate expenses
Interest and other income
Income (loss) from operations before
income taxes
$
$
$
2011
2010
2009
260,648 $
29,967
18,353
273,566 $
31,705
17,396
119,998
34,093
17,170
308,968 $
322,667 $
171,261
20,040 $
1,510
807
22,357
29,654 $
3,679
561
33,894
(17,704)
5,868
773
(11,063)
(5,021)
442
(4,217)
561
(4,032)
1,300
$
17,778 $
30,238 $
(13,795)
48
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands)
Depreciation and amortization by segment deducted
in arriving at profit (loss):
Semiconductor equipment
Microwave communications
Video cameras
Intangible amortization
Total depreciation and amortization for
reportable segments
Capital expenditures by segment:
Semiconductor equipment
Microwave communications
Video cameras
Total consolidated capital expenditures
(in thousands)
Total assets by segment:
Semiconductor equipment
Microwave communications
Video cameras
Total assets for reportable segments
Corporate, principally cash and investments
and deferred taxes
Total consolidated assets
2011
2010
2009
$
$
$
$
$
4,313 $
893
216
5,422
4,645
3,596 $
1,096
237
4,929
6,059
3,248
1,299
227
4,774
6,255
10,067 $
10,988 $
11,029
991 $
313
109
1,413 $
3,973 $
440
166
4,579 $
1,911
454
142
2,507
2011
2010
2009
255,189 $
21,968
11,598
288,755
255,246 $
27,812
11,092
294,150
216,818
20,937
10,082
247,837
72,853
361,608 $
71,893
366,043 $
82,281
330,118
$
Customers from the semiconductor equipment segment comprising 10% or greater of our consolidated net sales
are summarized as follows:
Intel
Texas Instruments
Advanced Micro Devices
* Less than 10% of net sales
2011
2010
2009
36 %
11 %
*
26 %
14 %
*
30 %
*
11 %
Net sales to customers, attributed to countries based on product shipment destination, were as follows:
(in thousands)
United States
Malaysia
Philippines
China
Singapore
Rest of the World
Total
2011
2010
2009
77,563 $
48,624
40,368
37,824
16,666
87,923
308,968 $
64,992 $
52,539
51,659
50,454
21,186
81,837
322,667 $
57,935
22,099
10,617
21,076
18,148
41,386
171,261
$
$
49
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Geographic location of our property, plant and equipment and other long-lived assets was as follows:
(in thousands)
Property, plant and equipment:
United States
Germany
Asia (Singapore, Taiwan and the Philippines)
Total, net
Goodwill and other intangible assets:
Germany
United States
Singapore
Total, net
2011
2010
24,138
8,625
4,218
36,981
56,089
17,241
6,558
79,888
$
$
$
$
26,440
9,207
4,157
39,804
60,981
17,482
6,558
85,021
$
$
$
$
8. Stockholder Rights Plan
In November, 1996, we adopted a Stockholder Rights Plan (“Rights Plan”) and declared a dividend
distribution of one Preferred Stock Purchase Right (“Right”) for each share of common stock, payable to
holders of record on December 3, 1996. Under the Rights Plan, each stockholder received one Right for each
share of common stock owned. Each Right entitled the holder to buy one one-hundredth (1/100) of a share of
Cohu’s Series A Preferred Stock for $90. As a result of the two-for-one stock split in September, 1999, each
share of common stock was associated with one-half of a Right entitling the holder to purchase one two-
hundredth (1/200) of a share of Series A Preferred Stock for $45. In November, 2006, we amended and
restated our existing Rights Plan to extend its term to November 9, 2016 and make certain other changes.
Pursuant to the amendment, to reflect the increase in the price of our common stock since the adoption of the
Rights Plan, the exercise price of each Right was increased to $190. Consequently, each one-half of a Right
entitles the holder to purchase one two-hundredth (1/200) of a share of Series A Preferred Stock for $95. The
Rights are not presently exercisable and will only become exercisable following the occurrence of certain
specified events. If these specified events occur, each Right will be adjusted to entitle its holder to receive,
upon exercise, common stock having a value equal to two times the exercise price of the Right, or each Right
will be adjusted to entitle its holder to receive common stock of the acquiring company having a value equal to
two times the exercise price of the Right, depending on the circumstances. The Rights expire on November 9,
2016, and we may redeem them for $0.001 per Right. The Rights do not have voting or dividend rights and,
until they become exercisable, have no dilutive effect on our earnings per share.
9. Commitments and Contingencies
We lease certain of our facilities and equipment under non-cancelable operating leases. Rental expense for the
years 2011, 2010 and 2009 was approximately $1.1 million, $1.3 million and $1.1 million, respectively. Future
minimum lease payments at December 31, 2011 are as follows:
2012
2013
2014
2015
2016
Thereafter Total
(in thousands)
Non-cancelable
operating leases $
819 $
772 $ 517 $
-
$
-
$
-
$ 2,108
From time-to-time we are involved in various legal proceedings, examinations by various tax authorities and
claims that have arisen in the ordinary course of our businesses. Although the outcome of such legal
proceedings, claims and examinations cannot be predicted with certainty, we do not believe any such matters
exist at this time that will have a material adverse effect on our financial position or results of our operations.
50
COHU, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. Guarantees
Changes in accrued warranty during the three-year period ended December 31, 2011 were as follows:
(in thousands)
Beginning balance
Warranty accruals
Warranty payments
Ending balance
2011
2010
$
5,016 $
10,987
(9,202)
6,801 $
$
3,747 $
6,071
(4,802)
5,016 $
2009
4,924
3,383
(4,560)
3,747
During the ordinary course of business, we provide standby letters of credit instruments to certain parties as
required. At December 31, 2011, the maximum potential amount of future payments that we could be required
to make under these standby letters of credit was approximately $0.6 million. We have not recorded any
liability in connection with these arrangements beyond that required to appropriately account for the
underlying transaction being guaranteed. We do not believe, based on historical experience and information
currently available, that it is probable that any amounts will be required to be paid under these arrangements.
11. Related Party Transactions
James A. Donahue, Chairman, President and CEO of Cohu, and Steven J. Bilodeau, a member of the Cohu
Board of Directors, are both members of the Board of Directors of Standard Microsystems Corporation
(“SMSC”), a customer of our semiconductor equipment segment. During 2011, 2010 and 2009, total sales to
SMSC were approximately $0.5 million, $0.4 million, and $1.0 million, respectively. On December 8, 2011,
William E. Bendush was elected to Cohu’s Board of Directors. Mr. Bendush is a member of the Board of
Directors of Microsemi Corporation (“MSCC”), a customer of our semiconductor equipment segment. During
2011 total sales to MSCC were approximately $1.7 million.
12. Quarterly Financial Data (Unaudited)
Quarter
(in thousands, except per share data)
First (a)
Second (a)
Third (a)
Fourth (a)
Year
Net sales:
Gross profit:
Net income:
2011 $
2010 $
89,700 $
64,830 $
80,896 $
74,869 $
71,813 $
86,066 $
66,559 $
96,902 $
308,968
322,667
2011 $
2010 $
28,815 $
19,999 $
26,547 $
27,428 $
23,355 $
30,077 $
21,412 $
32,491 $
100,129
109,995
2011 $
2010 $
6,574 $
907 $
5,050 $
6,698 $
3,376 $
7,611 $
719 $
9,428 $
15,719
24,644
Net income per share (b):
Basic
Diluted
2011 $
2010 $
2011 $
2010 $
0.27 $
0.04 $
0.27 $
0.04 $
0.21 $
0.28 $
0.21 $
0.28 $
0.14 $
0.32 $
0.14 $
0.32 $
0.03 $
0.39 $
0.03 $
0.39 $
0.65
1.04
0.64
1.02
(a) All quarters presented above were comprised of 13 weeks except the fourth quarter of 2011 which was comprised of 14 weeks.
(b) The sum of the four quarters may not agree to the year total due to rounding within a quarter.
51
Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholders
Cohu, Inc.
We have audited the accompanying consolidated balance sheets of Cohu, Inc. as of December 31, 2011 and
December 25, 2010, and the related consolidated statements of operations, stockholders’ equity, and cash flows for
each of the three years in the period ended December 31, 2011. Our audits also included the financial statement
schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these financial statements and the schedule
based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Cohu, Inc. at December 31, 2011 and December 25, 2010, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended December 31, 2011, in conformity with
U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects the
information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), Cohu, Inc.’s internal control over financial reporting as of December 31, 2011, based on criteria established in
Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated February 29, 2012 expressed an unqualified opinion thereon.
/s/ ERNST & YOUNG LLP
San Diego, California
February 29, 2012
52
Index to Exhibits
15. (b)
The following exhibits are filed as part of, or incorporated into, the 2011 Cohu, Inc. Annual Report on
Form 10-K:
Exhibit No. Description
3.1
3.1(a)
3.2
4.1
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
Amended and Restated Certificate of Incorporation of Cohu, Inc. incorporated herein by reference to
Exhibit 3.1(a) from the Cohu, Inc. Form 10-Q for the quarterly period ended June 30, 1999
Certificate of Amendment of Amended and Restated Certificate of Incorporation of Cohu, Inc.
incorporated herein by reference from the Cohu, Inc. Form S-8 filed June 30, 2000, Exhibit 4.1(a)
Amended and Restated Bylaws of Cohu, Inc. incorporated herein by reference to Exhibit 3.2 from
the Cohu, Inc. Current Report on Form 8-K filed with the Securities and Exchange Commission on
December 12, 1996
Amended and Restated Rights Agreement dated November 10, 2006, between Cohu, Inc. and
Mellon Investor Services LLC, as Rights Agent, incorporated herein by reference from the Cohu,
Inc. Current Report on Form 8-K, filed with the Securities and Exchange Commission on November
13, 2006, Exhibit 99.1
Cohu, Inc. 2005 Equity Incentive Plan, incorporated herein by reference from the Cohu, Inc.
Current Report on Form 8-K filed with the Securities and Exchange Commission on May 13, 2009,
Exhibit 10.1*
Amended Cohu, Inc. 1997 Employee Stock Purchase Plan, incorporated herein by reference from
the Cohu, Inc. Current Report on Form 8-K filed with the Securities and Exchange Commission on
May 13, 2011, Exhibit 10.1*
Cohu, Inc. Deferred Compensation Plan (as amended and restated) incorporated herein by reference
from the Cohu, Inc. Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 29, 2008, Exhibit 10.1*
Form of stock option agreement for use with stock options granted pursuant to the Cohu, Inc. 2005
Equity Incentive Plan incorporated herein by reference from the Cohu, Inc. Current Report on Form
8-K filed with the Securities and Exchange Commission on August 7, 2006*
Restricted stock unit agreement for use with restricted stock units granted pursuant to the Cohu, Inc.
2005 Equity Incentive Plan incorporated herein by reference from the Cohu, Inc. Current Report on
Form 8-K filed with the Securities and Exchange Commission on April 20, 2006*
Capital Equipment, Goods and Services Agreement, dated January 10, 2007, by and between Delta
and Intel Corporation, incorporated by reference from the Cohu, Inc. Current Report on Form 8-K
filed April 25, 2007, Exhibit 99.1
Form of Indemnity Agreement, incorporated by reference from the Cohu, Inc. Current Report on
Form 8-K filed July 28, 2008, Exhibit 10.1*
Business Agreement and Addendum by and between Advanced Micro Devices, Inc. and Delta
Design, Inc. incorporated by reference from the Cohu, Inc. Current Report on Form 8-K filed
February 22, 2006, Exhibit 99.1
Cohu, Inc. Retiree Health Benefits Agreement (as amended) incorporated herein by reference from
the Cohu, Inc. Current Report on Form 8-K filed with the Securities and Exchange Commission on
December 29, 2008, Exhibit 10.2*
53
10.10
21
23
Cohu, Inc. Change in Control Agreement incorporated herein by reference from the Cohu, Inc.
Current Report on Form 8-K filed with the Securities and Exchange Commission on December 29,
2008, Exhibit 10.3*
Subsidiaries of Cohu, Inc.
Consent of Independent Registered Public Accounting Firm
31.1
Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 for James A. Donahue
31.2
Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 for Jeffrey D. Jones
32.1
32.2
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 for James A. Donahue
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 for Jeffrey D. Jones
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
* Management contract or compensatory plan or arrangement
54
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: February 29, 2012
COHU, INC.
By: /s/ James A. Donahue
James A. Donahue
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
/s/ James A. Donahue President and Chief Executive Officer, Director
James A. Donahue
(Principal Executive Officer)
Date
February 29, 2012
/s/ Jeffrey D. Jones
Jeffrey D. Jones
Vice President, Finance and Chief Financial Officer February 29, 2012
(Principal Financial and Accounting Officer)
/s/ William E. Bendush Director
William E, Bendush
/s/ Steven J. Bilodeau
Steven J. Bilodeau
Director
/s/ Harry L. Casari
Harry L. Casari
Director
/s/ Robert L. Ciardella Director
Robert L. Ciardella
/s/ Harold Harrigian Director
Harold Harrigian
February 29, 2012
February 29, 2012
February 29, 2012
February 29, 2012
February 29, 2012
55
COHU, INC.
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
Description
Balance at
Beginning
of Year
Additions
Not
Charged
to Expense (1)
Additions
(Reductions)
Charged
(Credited)
to Expense
Balance
Deductions/ at End
of Year
Write-offs
Allowance for doubtful accounts:
Year ended December 26, 2009 $
1,610 $
10
Year ended December 25, 2010 $
1,013 $
(22)
Year ended December 31, 2011 $
556 $
(2)
$
$
$
107
(429)
(25)
Reserve for excess and obsolete inventories:
Year ended December 26, 2009 $
30,293 $
129
$ 4,439
Year ended December 25, 2010 $
25,680 $
167
$ 1,743
Year ended December 31, 2011 $
23,783 $
88
$ 5,796
(1) Changes in reserve balances resulting from foreign currency impact.
$
$
$
$
$
$
714 $
1,013
6 $
66 $
556
463
9,181 $
25,680
3,807 $
23,783
4,092 $
25,575
56
COHU, INC.
COMPANY INFORMATION
Board Of Directors
James A. Donahue
Chairman of the Board,
President and Chief Executive Offi cer,
Cohu, Inc.
William E. Bendush (1)(2)
Retired Senior Vice President,
and Chief Financial Offi cer of
Applied Micro Circuits Corporation
Steven J. Bilodeau (1)(2)(3)
Non-Executive Chairman,
Retired President and Chief Executive Offi cer,
Standard Microsystems Corporation
Harry L. Casari (1)(2)
Retired Partner,
Ernst & Young LLP
Robert L. Ciardella (1)(3)(4)
Retired President, Asymtek
Harold Harrigian (1)(3)
Retired Partner and
Director of Corporate Finance,
Crowell, Weedon & Co.
(1) Member Audit Committee
(2) Member Compensation Committee
(3) Member Nominating and Governance Commitee
(4) Lead Independent Director
Corporate Executive Offi cers
James A. Donahue
Chairman of the Board,
President and
Chief Executive Offi cer
Jeffrey D. Jones
Vice President, Finance and
Chief Financial Offi cer,
Secretary
John H. Allen
Vice President, Administration
Stockholder Information
Corporate Headquarters
12367 Crosthwaite Circle
Poway, CA 92064-6817
(858) 848-8100
www.cohu.com
Legal Counsel
DLA Piper LLP (US)
San Diego, California
Independent Auditors
Ernst & Young LLP
San Diego, California
Transfer Agent and Registrar
Computershare
480 Washington Blvd.
Jersey City, NJ 07310-1900
(800) 676-0894
www.computershare.com
Annual Meeting
The Annual Meeting of Stockholders will be
held on Wednesday, May 9, 2012 at 8:00 a.m.
at Cohu’s Corporate headquarters.
SEC Filings
Copies of documents fi led by Cohu
with the Securities and Exchange
Commission, including our Annual Report
on Form 10-K for the year ended
December 31, 2011 and other information about
Cohu are available without charge by contacting
Cohu Investor Relations at (858) 848-8106
or by accessing our web site www.cohu.com
or the SEC’s Edgar web site www.sec.gov.
Current Press Releases
Cohu distributes press releases via
Business Wire. Releases can be
accessed via Cohu’s web site or through
fi nancial wires.
Share Information
Cohu, Inc. stock is traded on the
NASDAQ Global Select Market under
the symbol “COHU”.
Cohu, Inc. 2011 Annual Report
12367 Crosthwaite Circle, Poway, CA 92064-6817 | Phone: 858.848.8100
www.cohu.com
2
0
1
1
A
N
N
U
A
L
R
E
P
O
R
T