Diodes Incorporated Reports Record Third Quarter 2018 Financial Results

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such statements include statements containing forward-looking words such as “expect,” “anticipate,” “aim,” “estimate,” and variations thereof, including without limitation statements, whether direct or implied, regarding expectations of revenue growth, market share gains, increase in gross margin and increase in gross profits in 2018 and beyond; that for the fourth quarter of 2018, we expect revenue to range between $315 million plus or minus 3 percent, which at the mid-point, is better than typical seasonality; 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; expect net interest expense to be approximately $2.0 million; expect tax rate to be 29.5 percent, plus or minus 3 percent; shares used to calculate diluted EPS for the fourth quarter are anticipated to be approximately 52.2 million; purchase accounting adjustments for Pericom and previous acquisitions of $3.5 million after tax are not included in these non-GAAP estimates; our expectation that we may be positioned to have our most profitable year in the Company’s history in 2018; and other statements identified by words such as “estimates,” “expects,” “projects,” “plans,” “will,” and similar expressions. Potential risks and uncertainties include, but are not limited to, such factors as: the risk that such expectations may not be met; the risk that the expected benefits of acquisitions may not be realized or that integration of acquired businesses may not continue as rapidly as we anticipate; the risk that we may not be able to maintain our current growth strategy or continue to maintain our current performance, costs, and loadings in our manufacturing facilities; the risk that we may not be able to increase our automotive, industrial, or other revenue and market share; risks of domestic and foreign operations, including excessive operating costs, labor shortages, higher tax rates, and our joint venture prospects; the risk that we may not continue our share repurchase program; the risks of cyclical downturns in the semiconductor industry and of changes in end-market demand or product mix that may affect gross margin or render inventory obsolete; the risk of unfavorable currency exchange rates; the risk that our future outlook or guidance may be incorrect; the risks of global economic weakness or instability in global financial markets; the risks of trade restrictions, tariffs, or embargoes; the risk of breaches of our information technology systems; and other information, including the “Risk Factors” detailed from time to time in Diodes’ filings with the United States Securities and Exchange Commission.

Recent news releases, annual reports and SEC filings are available at the company’s website: http://www.diodes.com. Written requests may be sent directly to the company, or they may be e-mailed to: diodes-fin@diodes.com.

           
 

DIODES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share data)

 
Three Months Ended Nine Months Ended
September 30, September 30,
2018     2017 2018   2017
NET SALES $ 320,946 $ 285,247 $ 899,543 $ 785,774
 
COST OF GOODS SOLD   205,732     188,900     578,466     525,377  
 
Gross profit 115,214 96,347 321,077 260,397
 
OPERATING EXPENSES
Selling, general and administrative 42,475 43,525 131,778 122,912
Research and development 22,549 20,379 64,799 58,215
Amortization of acquisition-related intangible assets 4,418 4,694 13,863 14,098
Restructuring - 2,039 206 6,108
Other operating (income) expense   (66 )   1,993     (191 )   2,162  
Total operating expenses   69,376     72,630     210,455     203,495  
 
Income from operations 45,838 23,717 110,622 56,902
 
OTHER INCOME (EXPENSES)
Interest income 474 389 1,431 992
Interest expense (2,318 ) (3,561 ) (7,619 ) (10,493 )
Foreign currency loss, net (655 ) (1,312 ) (3,384 ) (6,734 )
Others   1,061     597     6,073     1,128  
Total other expenses (1,438 ) (3,887 ) (3,499 ) (15,107 )
 
Income before income taxes and noncontrolling interest 44,400 19,830 107,123 41,795
 
INCOME TAX PROVISION   13,190     5,052     31,726     11,651  
 
NET INCOME 31,210 14,778 75,397 30,144
 
Less: NET INCOME attributable to noncontrolling interest   (302 )   (328 )   (895 )   (1,298 )
 
NET INCOME attributable to common stockholders $ 30,908   $ 14,450   $ 74,502   $ 28,846  
 
EARNINGS PER SHARE attributable to common stockholders
Basic $ 0.62   $ 0.29   $ 1.50   $ 0.59  
Diluted $ 0.61   $ 0.29   $ 1.46   $ 0.58  
 
Number of shares used in computation
Basic   50,115     49,057     49,713     48,633  
Diluted   51,077     50,416     50,883     50,061  
 

Note: Throughout this release, we refer to “net income attributable to common stockholders” as “net income.”

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