Note 17 - Subsequent Events

12 Months Ended

Dec. 28, 2024

Notes to Financial Statements

Subsequent Events [Text Block]

17. Subsequent Events

Purchase of Leased Facility in Malaysia

On December 30, 2024, we completed the purchase of our leased facility in Melaka Malaysia. The purchase price of the facility was MYR 41.8 million of which a 10% deposit was paid at initiation of the purchase agreement in January 2024 and the remaining portion MYR 37.6 million was paid upon completion of the transaction on December 30, 2024. The transaction was financed with cash on hand as well as proceeds from our Malaysian subsidiary’s new revolving credit facility. The revolving line of credit provides up to MYR 40 million, bears interest at 4.24% and renews every month. The transaction is a fiscal 2025 event and will result in a reduction in our finance lease assets and current lease liabilities of $9.5 million and $8.4 million, respectively.

Acquisition of Tignis, Inc.

On January 7, 2025, we completed the acquisition of Tignis, Inc. (“Tignis”), a provider of artificial intelligence (AI) process control and analytics-based monitoring software. The acquisition was not material to our consolidated financial statements. The preliminary cash purchase price was $35.1 million, exclusive of a potential $5.0 million earnout based on achieving certain revenue and expense targets through the period ending December 31, 2025, and is subject to a working capital adjustment and was funded by cash on hand. This strategic acquisition enables us to expand our analytics offerings to the semiconductor process control market targeted by Tignis’ PAICe Monitor and PAICe Maker solutions. Tignis is also expected to deepen Cohu’s expertise in data science while adding advanced analytics to our DI-Core software.

2025 Strategic Restructuring

On February 19, 2025, we approved and began executing a strategic restructuring program designed to reposition our organization and improve our cost structure (“2025 Restructuring Program”). As part of the 2025 Restructuring Program we plan on consolidating certain operations that are currently based in La Chaux-de-Fonds, Switzerland, and in Kolbermoor, Germany, respectively, into other lower cost locations owned by the Company. As part of the 2025 Restructuring Program, we also anticipate making headcount reductions in the U.S. and throughout Asia. Relating to the operations consolidation actions, we notified certain impacted employees of the corresponding reduction in force program at those locations which will require negotiation with the microtechnology and Swiss watch trade union and the German labor organization which represent certain of the employees at their respective locations. The 2025 Restructuring Program will reduce headcount, enable us to optimize the facilities of our operations, as well as transition certain manufacturing to other lower cost regions. The 2025 Restructuring Program is being implemented as part of a comprehensive review of our operations with the goal of reducing costs during the extended downturn in the semiconductor test and inspection equipment industry.

As a result of the activities described above, we expect to recognize total pretax charges, consisting primarily of severance and other termination benefits, to be in the range of $6.1 million to $7.2 million, that are within the scope of ASC 420 and will be paid predominantly in cash. We anticipate that these charges will be recognized throughout fiscal 2025 and all costs will be incurred by our Semiconductor Test & Inspection segment.