XML 21 R10.htm IDEA: XBRL DOCUMENT
v3.24.2.u1

Note 2 - Business Acquisition, Goodwill and Purchased Intangible Assets | 6 Months Ended
--- | ---
Jun. 29, 2024
Notes to Financial Statements |
Business Combination, Goodwill, and Intangible Assets Disclosure [Text Block] |
2. | Business Acquisitions, Goodwill and Purchased Intangible Assets
EQT On October 2, 2023, we completed the acquisition of Equiptest Engineering Pte. Ltd. (“EQT”), a provider of semiconductor test contactors and other consumables. (“the EQT Acquisition”). EQT is a Singapore-based company with its principal manufacturing site located there. EQT provides test interface products including high performance thermal, MEMS, Infrared, Coaxial and Kelvin Contactors that expand our interface products in mid- to high-power contactors. The EQT Acquisition was a cash-free debt-free transaction and was subject to a working capital adjustment for the difference between the actual and estimated net working capital. We made a cash payment of SGD 66.0 million ($48.3 million) on October 2, 2023, and set up a retention sum liability for potential adjustments to working capital, future tax or insurance claims in the amount of SGD 2.2 million ($1.6 million) resulting in an initial purchase price of SGD 68.3 million ($49.9 million). The working capital adjustment was finalized in January 2024 and an additional cash payment was made to EQT owners of SGD 0.8 million (approximately $0.6 million) resulting in a purchase price of SGD 68.8 million ($50.3 million). The retention liability for remaining tax, insurance and other claims as of June 29, 2024, was SGD 1.7 million ($1.3 million) and is accrued in long term other liabilities on our condensed consolidated balance sheet. The EQT Acquisition has been accounted for in conformity with ASC 805. The acquired assets and liabilities of EQT were recorded at their respective fair values including an amount for goodwill representing the difference between the consideration paid and the fair value of the identifiable net assets. The purchase price allocation was finalized during the second quarter of 2024. The table below summarizes the assets acquired and liabilities assumed as of October 2, 2023 (in thousands):
Current assets, including cash received |  | $ | 10,135 |
Property, plant and equipment |  |  | 538 |
Intangible assets |  |  | 34,500 |
Goodwill |  |  | 15,377 |
Total assets acquired |  |  | 60,550 |
Liabilities assumed |  |  | (10,203 | )
Net assets acquired |  | $ | 50,347 |
The allocation of the intangible assets subject to amortization is as follows (in thousands):
|  | Estimated Fair Value |  |  | Weighted Average Useful Life (years) |
Developed technology |  | $ | 20,600 |  |  |  | 8.0 |
Customer relationships |  |  | 12,900 |  |  |  | 10.0 |
Product backlog |  |  | 100 |  |  |  | 1.0 |
Trademarks and trade names |  |  | 900 |  |  |  | 5.0 |
Total intangible assets |  | $ | 34,500 |  |  |  |  |
Acquired intangible assets reported above are being amortized using the straight-line method over their estimated useful lives which approximates the pattern of how the economic benefit is expected to be used. This includes amounts allocated to customer relationships because of anticipated high customer retention rates that are common in the semiconductor capital equipment industry. The value assigned to developed technology was determined by using the relief from royalty method under the income approach, which included assumptions related to revenue growth rates, royalty rates, and discount rates. Developed technology, which comprises products that have reached technological feasibility, includes the products in EQT’s product line. The revenue estimates used to value the developed technology were based on estimates of relevant market sizes and growth factors, expected trends in technology and the nature and expected timing of new product introductions by EQT and competitors. The estimated after-tax cash flows were based on a hypothetical royalty rate applied to the revenues for the developed technology. The discount rate utilized to discount the net cash flows of the developed technology to present value was based on the risk associated with the respective cash flows taking into consideration the perceived risk of the technology relative to the other acquired assets, the weighted average cost of capital, the internal rate of return, and the weighted average return on assets. The value assigned to customer relationships was determined by using the multi-period excess earnings method under the income approach. The estimated cash flows were based on revenues from the existing customers net of operating expenses and net of contributory asset charges. The discount rate utilized to discount the net cash flows of the customer relationships to present value was based on the respective cash flows taking into consideration the perceived risks. The value assigned to backlog acquired was estimated based upon the contractual nature of the backlog as of October 2, 2023, using the multi-period excess earnings method under the income approach to discount back to present value the cash flows attributable to the backlog at a discount rate commensurate with the expected risks of the backlog cash flows. The value assigned to trademarks and trade names acquired was determined by using the relief from royalty method under the income approach, which included assumptions related to revenue growth rates, royalty rates, and discount rates. EQT’s results of operations have been included starting October 2, 2023. The impact of EQT on our condensed consolidated statements of operations and comprehensive income (loss) was not material. Goodwill and Intangible Assets Changes in the carrying value of goodwill during the year ended December 30, 2023, and the six-month period ended June 29, 2024, were as follows (in thousands):
|  | Goodwill |
Balance December 31, 2022 |  | $ | 213,539 |
Additions |  |  | 24,132 |
Impact of currency exchange |  |  | 3,987 |
Balance, December 30, 2023 |  |  | 241,658 |
Impact of currency exchange |  |  | (4,182 | )
Balance, June 29, 2024 |  | $ | 237,476 |
Purchased intangible assets subject to amortization are as follows (in thousands):
|  | June 29, 2024 |  |  | December 30, 2023 |
|  |  |  |  |  |  |  |  |  | Remaining |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  | Weighted |  |  |  |  |  |  |  |  |
|  | Gross |  |  |  |  |  |  | Average |  |  | Gross |  |  |  |  |
|  | Carrying |  |  | Accum. |  |  | Amort. |  |  | Carrying |  |  | Accum. |
|  | Amount |  |  | Amort. |  |  | Period (years) |  |  | Amount |  |  | Amort. |
Developed technology |  | $ | 231,036 |  |  | $ | 150,332 |  |  |  | 3.9 |  |  | $ | 233,623 |  |  | $ | 137,168 |
Customer relationships |  |  | 73,132 |  |  |  | 32,092 |  |  |  | 6.6 |  |  |  | 73,759 |  |  |  | 28,932 |
Trade names |  |  | 21,110 |  |  |  | 12,012 |  |  |  | 5 |  |  |  | 21,569 |  |  |  | 11,231 |
Product backlog |  |  | 100 |  |  |  | 75 |  |  |  | 0.3 |  |  |  | 100 |  |  |  | 25 |
Covenant not-to-compete |  |  | 219 |  |  |  | 164 |  |  |  | 2.5 |  |  |  | 250 |  |  |  | 175 |
Total intangible assets |  | $ | 325,597 |  |  | $ | 194,675 |  |  |  |  |  |  | $ | 329,301 |  |  | $ | 177,531 |
Changes in the carrying values of purchased intangible assets presented above are a result of the impact of fluctuations in currency exchange rates. Amortization expense related to intangible assets was approximately $9.7 million in the second quarter of fiscal 2024 and $19.5 million in the first six months of fiscal 2024. Amortization expense related to intangible assets was approximately $9.0 million in the second quarter of fiscal 2023 and $17.8 million in the first six months of fiscal 2023.

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities and the entire disclosure for the aggregate amount of goodwill and a description of intangible assets. + References No definition available. + Details
Name: | cohu_BusinessCombinationGoodwillAndIntangibleAssetsDisclosureTextBlock
Namespace Prefix: | cohu_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration