Greetings, and welcome to the Cohu's First Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jeff Jones, Vice President, Finance and Chief Financial Officer. Thank you, sir. You may begin.

Thank you. Good afternoon and welcome to our discussion of Cohu’s most recent financial results. I am joined today by our President and CEO, Luis Müller. Following our opening remarks, we’ll provide details of our performance for first quarter of 2016 as well as our outlook for the second quarter of the year. If you need a copy of our earnings release, you may obtain one from our website cohu.com or by contacting Cohu Investor Relations. Before we begin, you should all be aware that during the course of this conference call, we will make forward-looking statements reflecting management’s current expectations concerning the company’s future business. These statements are based on current information that we have assessed, but which by its nature is subject to rapid and even abrupt changes. Forward-looking statements include our comments regarding the company’s expectations for industry conditions, future operations, financial results, market share gains, expansion into new markets, and any comments we make about the company’s future in response to your questions. Our comments speak only as of today, April 29, 2016 and the company assumes no obligation to update these comments. We encourage you to review the forward-looking statement section of our earnings release as well as Cohu’s filings with the Securities and Exchange Commission, including the most recently filed Form 10-K and Form 10-Q. Cohu assumes no obligation to update these statements as a result of developments occurring after this call. Further, our comments and responses to any questions will not make reference to any specific customers, as we are precluded from disclosing such information by our non-disclosure agreements. Now I’ll turn it over to Luis. Luis Müller: Thanks, Jeff and good afternoon everyone. In the first quarter of 2016 Cohu again delivered solid financial results and better than forecasted profitability. While semi…

Thanks, Luis. Overall our results for the quarter were either in line or better than forecasted and Q1 represents Cohu's ninth consecutive quarter of non-GAAP profitability. During the quarter we continue to make progress in reducing costs by shipping our first eclipse unit produced in normal laser factory and we restructured our handler sub-assembly operation in the Philippines. Consistent with our operational strategy, we are reducing the number of -- the amount of vertical manufacturing activities within Cohu by outsourcing sub-assemblies to local contract manufacturers and converting approximately $700,000 of annual fixed cost into variable cost. Additionally, this move will focus the Philippines operation on our strategy to grow our contractors and other recurring business. Now moving into the Q1 financial details, the GAAP to non-GAAP adjustments included approximately of stock-based compensation, $1.8 million of purchase intangible amortization expense and $140,000 of restructuring costs. My comments are based on Cohu's non-GAAP results which exclude of these the items and a reconciliation of non-GAAP measures to equivalent gap measures can be found in our earnings release located on the investor information section of Cohu's website. Bit of reminder, on June 10, 2015 we sold our microwave communications business. The operating results for this is presented as discontinued operations with all prior period amount being reclassified. And unless, otherwise noted, at all amounts discussed on this call are from continuing operations. Sales for the quarter were $65.8 million and higher than guidance as we see achieved. The customer acceptance of new products sooner than originally anticipated. Few customers each represented 10% or more of sales, one in automotive and one in the computing market. Q1 gross margin was in line with forecast at 31.6% which includes the impact of the initial eclipse handler's manufactured in San Diego as we discussed during our…

[Operator Instructions] Our first question is coming from the line of [indiscernible] with Stifel. Please proceed with your question.

This is Bryan on for Patrick. ATE company orders, so kind of your adjacent equipment vendor there in the test. So it's leveled off or even declined some here in Q1 after an expectedly perhaps strong initial uptick. Can you discuss the sustainability of test handler shipment growth given these dynamics and maybe your confidence level in company specific initiatives be it share or product and market momentum etcetera that could allow your trajectory maybe to prove more durable.

I can't comment on the ATE orders or what happened there but speaking from our side and we have as we mentioned in the past about our quarters' visibility, his good visibility in the business and it's very difficult to predict what's going to happen beyond this near term. Nevertheless we do see strong momentum for handlers and in the automotive space as well as for products went too RF test in mobile and the IOT markets and I was just going to say perhaps the most important thing to remember here is that the business today is balanced across several end markets and we’re specifically tied to one big customer perhaps like what happened in ATE side in the mobile specific segment of the market.

Maybe one quick follow up, appreciate the commentary on the utilization trending up a little bit low 80%, 81%, not getting too granular but from an end market standpoint or IDM versus subcontractor standpoint, do you see a little stronger uptick in any those areas and maybe mainly markets that are hiding behind a little bit?

If you think in terms of IDMs and those test they are running in about the same utilization right now. I think the [indiscernible] may have picked up a little stronger quarter-on-quarter than the IDM on this two point gain, but they are both about equal at this point.

Okay. And anything on the end market side?

Well on the end market it's like what I mentioned here in my in remarks. We were seeing really good strengthen on the RF side particularly which applies both to mobile and IOT, we have seen a pickup in the automotive market it's particularly in Q1, we have seen stronger than anticipated computing market. I would say industrial is still the market that hasn’t come out strong as we would have expected. LED markets continue to do well and as I've mentioned we picked up one new large customer for our spare [ph] equipment.

Our next question is coming from the line Edwin Mok with Needham & Company. Please proceed with your question.

So first question on the new product, [indiscernible] you said that you’re talking from $10 million to $20 million for 2017, I was wondering is that number just from the first order you guys proceed to disclosed or is it from incremental order that you expect to secure as sought them [indiscernible].

There would be as we start to get volume orders for volume production for this product line and yes it is associated with the initial customer but that first order was for $20 million.

And then on to kind of new systems product you guys were talking for the RFs, you guys are developing, can you give us some color on that -- is that maybe color used case for that and I know that you saw sold system levels test [indiscernible] maybe more color on where that product fits in terms in the test basically?

Look at this way, as the market move towards greater silicon integration, major semiconductor manufacturers that deliver products that integrate processor, memory, RF, our management ICs, need to test these so called system in a package. As you pointed out we have been in this market supplying thermal subsystems but we saw an opportunity here to develop a full automation platform leveraging on our core competencies So that's what this is about the integration of the automation that we’re capable of doing our handlers with the thermal subsystems that we have been supplying each of this space creating a new platform that we think will be quite disruptive and a very interesting proposition to where semiconductor technology is going with system in a package.

On the order front I think you mentioned that mobile was very strong in the first quarter, but I think on February and March you talk about potentially to come down a little in second quarter on the thermal subsystem side, did I hit it correctly and is that mostly related to other processes side? Can you clarify that?

Sure. I mean that’s not exactly how I characterized it, what I did mention is that the thermal subsystem business is inherently lumpy and we had forecasted or expected a weaker demand for thermal subsystems for the next few quarters. Nevertheless we have received a multi-unit order in the first quarter and have received an order already in the beginning of the second quarter for these thermal subsystems. That’s essentially what I said.

Just I know you guys obviously don’t stop providing order data, but is it fair to say that on the first quarter your book to bill was extremely was over 1.0 given obviously given through your guidance and do you think that is sustainable as you go into 2Q?

Yes, you’re right we don’t provide orders and we also provide book to bill but I think what fair to say is orders were up in Q1 from Q4, so we had another sequential increase in orders in the first quarter. As far as what's going to ahead that’s a very tough to answer your question, difficult to forecast these things.

Our next question is coming from the line of David Duley with Steelhead Securities. Please proceed with your question.

I guess just off the top, do you guys think the handler market will increase in size this year?

That will be an even more difficult question to answer than trying to predict Q3 at this point because you will be including fourth quarter so again I don’t know where the handler market is going to do this year and we potentially focus more on how can we drive growth organically through share gains and the opportunities we’re pursuing with new products including WOP probe, system level test and the test contractor market that we’re going after.

Okay, for the segments of the market that you serve, you ravel 4 to 5 of them here in your prepared remarks which one of those do you think might grow here in the near term?

The RF semiconductor is going really strong for us right now and I think that’s a combination of steel RF is going into mobile as well as internet of things.

Okay, and what are the I guess do you’ve market share data from 2015 and do you’ve a guess as to what your market share was at the market last year? Perhaps either in the gravity or in [indiscernible] area?

We will have that data for the next call, in fact that third party data should be coming out available in a matter of weeks and then we have to do some intelligence and review and adjustments to that data. So by the end of Q2 we should have our accurate view of the market share for 2015 but no I don’t have this specifics by segment yet.

And what's currently are your lead times for pick and place and gravity?

It will vary from on the order of nine weeks to all the way up to probably 14 weeks at this time. It depends on the configuration of the system. We have simpler and more complex configuration products.

[Operator Instructions]. Our next question is coming from the line of Dick Ryan with Dougherty. Please proceed with your question.

Jeff, what was the impact from eclipse on margins in Q1?

Rough impact I guess.

The impact to Q1 was a couple of 100 basis points.

Okay, so that will be completely gone for Q2 and it's the volume getting into the mid-70s to get it there to 36, 37 anything else in there?

No that’s really, we got over the hump on eclipse as I mentioned that’s transition from Malaysia and so now it's sort of back to achieving that financial model that we have been talking about. So it's really the eclipse impact and back to the revenue level of 74 million.

Just to refresh is everything being transitioned over to Asian production or is there still something's yet to know?

There is still some gravity feed, we do have the first handle that -- gravity handle that’s been transitioned and actually we’re shipping volume out of Malaysia on that handler. So we’re working on subsequent gravity handler. We’re also transitioning spares business out of San Diego into Malaysia but that’s still to come and pick and place for the most part we will have additional configurations but as I’ve said we have already transitioned the metrics and the eclipse pick and place handlers.

Thank you. It appears we have no additional questions at this time. I would like to turn the floor back over to Mr. Jones for any additional concluding comments.

All right thank you for joining us on today's call. We look forward to speaking with you at the upcoming B. Riley Investor Conference in Los Angeles on May 25 or the Stifle Conference in San Francisco on June 7th or when we report our second quarter 2016 results. Have a good day.

Thank you. Ladies and gentlemen this does conclude today's teleconference. We thank you for your participation and you may disconnect your lines at this time.