(See the reconciliation tables of GAAP net income to non-GAAP adjusted net income near the end of this release for further details.)
Included in third quarter 2018 GAAP net income and non-GAAP adjusted net income was approximately $3.8 million, net of tax, of non-cash share-based compensation expense. Excluding share-based compensation expense, both GAAP earnings per share (“EPS”) and non-GAAP adjusted EPS would have increased by $0.07 per diluted share for third quarter 2018, $0.06 for third quarter 2017 and $0.07 for second quarter 2018.
EBITDA (a non-GAAP measure), which represents earnings before net interest expense, income tax, depreciation and amortization, in the third quarter 2018 was a record $72.0 million, or 22.4 percent of revenue, compared to $46.8 million, or 16.4 percent of revenue, in the third quarter 2017 and $64.5 million, or 21.2 percent of revenue in the second quarter 2018. For a reconciliation of GAAP net income to EBITDA, see the table near the end of this release for further details.
For third quarter 2018, net cash provided by operating activities was $35.5 million. Net cash flow was a negative $2.7 million, including the $21.7 million long-term debt pay down. Free cash flow (a non-GAAP measure) was $16.4 million, which includes $19.2 million of capital expenditures.
Balance Sheet
As of September 30, 2018, the Company had approximately $157.6 million in cash, cash equivalents and short-term investments, long-term debt (including the current portion) totaled approximately $166.3 million, and working capital was approximately $385.7 million.
The results announced today are preliminary, as they are subject to the Company finalizing its closing procedures and customary quarterly review by the Company's independent registered public accounting firm. As such, these results are subject to revision until the Company files its Form 10-Q for the quarter ending September 30, 2018.
Business Outlook
Dr. Lu concluded, “We expect revenue in the fourth quarter of 2018 to be approximately $315 million, plus or minus 3 percent. At the mid-point, this represents growth of 17.3 percent over the prior year period and down 1.9 percent sequentially, which is better than typical seasonality. We expect GAAP gross margin to be 36.0 percent, plus or minus 1 percent. Non-GAAP operating expenses, which are GAAP operating expenses adjusted for amortization of acquisition-related intangible assets, are expected to be approximately 21.0 percent of revenue, plus or minus 1 percent. We expect net interest expense to be approximately $2.0 million. Our income tax rate is expected to be 29.5 percent, plus or minus 3 percent, and shares used to calculate diluted EPS for the fourth quarter are anticipated to be approximately 52.2 million.”
Purchase accounting adjustments of $3.5 million, after tax, for Pericom and previous acquisitions are not included in these non-GAAP estimates.
Conference Call
Diodes will host a conference call on Tuesday, November 6, 2018, at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its third quarter 2018 financial results. Investors and analysts may join the conference call by dialing 1-855-232-8957 and providing the confirmation code 8186099. International callers may join the teleconference by dialing 1-315-625-6979 and entering the same confirmation code at the prompt. A telephone replay of the call will be made available approximately two hours after the call and will remain available until November 13, 2018 at midnight Central Time. The replay number is 1-855-859-2056 with a pass code of 8186099. International callers should dial 1-404-537-3406 and enter the same pass code at the prompt. Additionally, this conference call will be broadcast live over the Internet and can be accessed by all interested parties on the Investors’ section of Diodes' website at http://www.diodes.com. To listen to the live call, please go to the Investors’ section of Diodes’ website and click on the conference call link at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. For those unable to participate during the live broadcast, a replay will be available shortly after the call on Diodes' website for approximately 90 days.
About Diodes Inc.
Diodes Incorporated (Nasdaq:
DIOD), a Standard and Poor’s SmallCap 600
and Russell 3000 Index company, is a leading global manufacturer and
supplier of high-quality application specific standard products within
the broad discrete, logic, analog, and mixed-signal semiconductor
markets. Diodes serves the consumer electronics, computing,
communications, industrial, and automotive markets. Diodes’ products
include diodes, rectifiers, transistors, MOSFETs, protection devices,
function-specific arrays, single gate logic, amplifiers and comparators,
Hall-effect and temperature sensors, power management devices, including
LED drivers, AC-DC converters and controllers, DC-DC switching and
linear voltage regulators, and voltage references along with special
function devices, such as USB power switches, load switches, voltage
supervisors, and motor controllers. Diodes also has timing,
connectivity, switching, and signal integrity solutions for high-speed
signals. Diodes’ corporate headquarters and Americas’ sales office are
located in Plano, Texas and Milpitas, California. Design, marketing, and
engineering centers are located in Plano; Milpitas; Taipei, Taiwan;
Taoyuan City, Taiwan; Zhubei City, Taiwan; Manchester, England; and
Neuhaus, Germany. Diodes’ wafer fabrication facility is located in
Manchester, with an additional facility located in Shanghai, China.
Diodes has assembly and test facilities located in Shanghai, Jinan,
Chengdu, and Yangzhou, China, as well as in Hong Kong, Neuhaus, and
Taipei. Additional engineering, sales, warehouse, and logistics offices
are located in Taipei; Hong Kong; Manchester; Shanghai; Shenzhen, China;
Seongnam-si, South Korea; Munich, Germany; and Tokyo, Japan, with
support offices throughout the world.
