Diodes Incorporated Reports First 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,” “sets the stage,” “continuing,” “working diligently to,” “position the company for,” “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 second quarter of 2018, we expect strong growth and revenue to range between $292 million and $308 million, or up 6.4 percent to 12.2 percent sequentially; that we expect GAAP gross margin to be 35.5 percent, plus or minus 1 percent; that non-GAAP operating expenses, which are GAAP operating expenses adjusted for retention costs and amortization of acquisition-related intangible assets, are expected to be approximately 22.0 percent of revenue, plus or minus 1 percent; that we expect interest expense to be approximately $2.5 million; that our income tax rate is expected to be 29.0 percent, plus or minus 3 percent; and that shares used to calculate diluted EPS for the second quarter are anticipated to be approximately 51.3 million. Purchase accounting adjustments are expected to be $3.8 million, after tax, for Pericom and previous acquisitions are not included in non-GAAP estimates. 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, such as Pericom, 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 or other revenue and market share; risks of domestic and foreign operations, including excessive operation 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
March 31,
  2018       2017  
NET SALES $ 274,512 $ 236,303
 
COST OF GOODS SOLD   175,917     162,392  
 
Gross profit 98,595 73,911
 
OPERATING EXPENSES
Selling, general and administrative 47,150 39,690
Research and development 20,200 18,040
Amortization of acquisition-related intangible assets 4,767 4,758
Restructuring (320 ) 2,231
Other operating expenses   (142 )   (165 )
Total operating expenses   71,655     64,554  
 
Income from operations 26,940 9,357
 
OTHER INCOME (EXPENSES)
Interest income 514 295
Interest expense (2,757 ) (3,485 )
Foreign currency loss, net (3,029 ) (3,794 )
Others   4,635     (271 )
Total other expenses (637 ) (7,255 )
 
Income before income taxes and noncontrolling interest 26,303 2,102
 
INCOME TAX PROVISION   7,783     560  
 
NET (LOSS) INCOME 18,520 1,542
 
Less: NET (LOSS) INCOME attributable to noncontrolling interest   6     (325 )
 
NET (LOSS) INCOME attributable to common stockholders $ 18,526   $ 1,217  
 
(LOSS) EARNINGS PER SHARE attributable to common stockholders
Basic $ 0.38   $ 0.03  
Diluted $ 0.37   $ 0.02  
 
Number of shares used in computation
Basic   49,337     48,316  
Diluted   50,622     49,663  
 

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

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