Revenue Increases 16.2% Year-Over-Year with Record Gross Profit
Dollars Increasing 33.4%; Expects Continued Strong Growth in the Second
Quarter
Company Website:
http://www.diodes.com
PLANO, Texas -- (Business Wire)
Diodes Incorporated (Nasdaq: DIOD), a leading global manufacturer and
supplier of high-quality application specific standard products within
the broad discrete, logic, analog and mixed-signal semiconductor
markets, today reported its financial results for the first quarter
ended March 31, 2018.
First Quarter Highlights
-
Revenue was $274.5 million, an increase of 16.2 percent from the
$236.3 million in the first quarter 2017 and an increase of 2.3
percent from the $268.4 million in the fourth quarter 2017;
-
GAAP gross profit was a record $98.6 million, compared to $73.9
million in the first quarter 2017 and $96.4 million in the fourth
quarter 2017;
-
GAAP gross profit margin was 35.9 percent, compared to 31.3 percent in
the first quarter 2017 and 35.9 percent in the fourth quarter 2017;
-
GAAP net income was $18.5 million, or $0.37 per diluted share,
compared to net income of $1.2 million, or $0.02 per diluted share, in
the first quarter 2017 and a net loss of ($30.7) million, or ($0.62)
per share, in the fourth quarter 2017;
-
Non-GAAP adjusted net income was $24.2 million, or $0.48 per diluted
share, compared to $7.0 million, or $0.14 per diluted share, in the
first quarter 2017 and $21.6 million, or $0.42 per diluted share, in
the fourth quarter 2017;
-
Excluding $5.0 million, net of tax, of non-cash share-based
compensation expense, both GAAP and non-GAAP earnings per share would
have increased by $0.10 per diluted share;
-
EBITDA was a record $54.2 million, or 20 percent of revenue, compared
to $28.6 million, or 12 percent of revenue, in the first quarter 2017
and $47.0 million, or 18 percent of revenue, in the fourth quarter
2017; and
-
Achieved cash flow from operations of $54.0 million and $22.3 million
free cash flow, including $31.6 million of capital expenditures. Net
cash flow was a negative $21.3 million, which includes the pay down of
$46.5 million of long-term debt.
Commenting on the results, Dr. Keh-Shew Lu, president and chief
executive officer, stated, “First quarter revenue was at the high-end of
guidance primarily driven by strong growth in the consumer, automotive
and industrial markets, complemented by revenue in Europe reaching
record levels. In fact, our automotive end market reached 9 percent of
revenue in the quarter as we continue to benefit from our successful
customer and content expansion efforts. Since implementing our
automotive strategy in 2013, we have achieved a compound annual growth
rate of 27 percent in this business, reflecting our expanded customer
base, increasing pipeline of design wins and growing content across
multiple applications.
“The quarter was also highlighted by gross profit dollars reaching a
record, growing 33 percent year-over-year -- twice the rate of our
revenue growth and contributing to an almost 3.5 times increase in
non-GAAP earnings per share over the same time period. Additionally,
EBITDA in the first quarter reached a record $54.2 million, or 20
percent of revenue. The operating leverage in our business model
positions Diodes to deliver increasing profits and cash flow in the
coming quarters, as revenue continues to increase at a faster rate than
operating expenses and approach our target model of 20 percent of
revenue.
“Looking to the second quarter, we expect to extend our growth momentum
with continued strength across our target geographies and end markets,
which we anticipate will result in the achievement of new quarterly
records for both revenue and gross profit.”
First Quarter 2018
Revenue for first quarter 2018 was $274.5 million, an increase of 16.2
percent from $236.3 million in first quarter 2017 and an increase of 2.3
percent from the $268.4 million in the fourth quarter 2017. Revenue
increased in the quarter due primarily to strength in the automotive and
industrial end markets, contributing to the achievement of record
revenue in Europe.
GAAP gross profit for the first quarter 2018 was a record $98.6 million,
or 35.9 percent of revenue, compared to the first quarter 2017 of $73.9
million, or 31.3 percent of revenue and fourth quarter 2017 of $96.4
million, or 35.9 percent of revenue. The 460 basis point year-over-year
increase in gross margin was due primarily to favorable product mix,
increased contribution from the Pericom products as well as improved
capacity utilization.
GAAP operating expenses for first quarter 2018 were $71.7 million, or
26.1 percent of revenue, and $64.7 million, or 23.6 percent of revenue,
on a non-GAAP basis, which excluded $4.8 million of amortization of
acquisition-related intangible asset expenses, $2.6 million of expenses
related to officer retirement and a credit of $0.3 million related to
the KFAB restructuring. GAAP operating expenses in the first quarter
2017 were $64.6 million, or 27.3 percent of revenue, and in the fourth
quarter 2017 were $72.9 million, or 27.2 percent of revenue.
First quarter 2018 GAAP net income was $18.5 million, or $0.37 per
diluted share, compared to net income of $1.2 million, or $0.02 per
diluted share, in first quarter 2017 and a net loss of ($30.7) million,
or ($0.62) per share, in fourth quarter 2017 which includes $45.9
million tax expense associated with the tax law reform.
First quarter 2018 non-GAAP adjusted net income was $24.2 million, or
$0.48 per diluted share, which excluded, net of tax, $3.9 million of
non-cash acquisition-related intangible asset amortization costs and
$2.0 million of officer retirement expenses. This compares to non-GAAP
adjusted net income of $7.0 million, or $0.14 per diluted share, in the
first quarter 2017 and $21.6 million, or $0.42 per diluted share, in the
fourth quarter 2017.
The following is an unaudited summary reconciliation of GAAP net income
to non-GAAP adjusted net income and per share data, net of tax (in
thousands, except per share data):
|
| |
| Three Months Ended |
| | | | March 31, 2018 |
GAAP net income | | | | $ | 18,526 |
|
| | | |
|
GAAP diluted income per share | | | | $ | 0.37 |
|
| | | |
|
Adjustments to reconcile net income to non-GAAP net income: | | | | |
| | | |
|
M&A | | | | |
| | | |
|
Pericom | | | | | 2,574 | |
| | | |
|
Amortization of acquisition-related intangible assets | | 2,574 | | | |
| | | |
|
KFAB | | | | | (253 | ) |
| | | |
|
Restructuring | | (253 | ) | | |
| | | |
|
Others | | | | | 3,342 | |
| | | |
|
Amortization of acquisition-related intangible assets | | 1,328 | | | |
| | | |
|
Officer retirement | | 2,014 | | | |
| | | |
|
Non-GAAP net income | | | | $ | 24,189 |
|
| | | |
|
Non-GAAP diluted earnings per share | | | | $ | 0.48 |
|
(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 first quarter 2018 GAAP net income and non-GAAP adjusted net
income was approximately $5.0 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 $0.10 per diluted share for first quarter 2018,
$0.05 for first quarter 2017 and $0.06 for fourth quarter 2017.
EBITDA (a non-GAAP measure), which represents earnings before net
interest expense, income tax, depreciation and amortization, in the
first quarter 2018 was a record $54.2 million or 19.7 percent of
revenue, compared to $28.6 million or 12.1 percent of revenue in the
first quarter 2017 and $47.0 million or 17.5 percent of revenue in the
fourth quarter 2017. For a reconciliation of GAAP net income to EBITDA,
see the table near the end of this release for further details.
For first quarter 2018, net cash provided by operating activities was
$54.0 million. Net cash flow was a negative $21.3 million, including the
$46.5 million long-term debt pay down. Free cash flow (a non-GAAP
measure) was $22.3 million, which includes $31.6 million of capital
expenditures.
Balance Sheet
As of March 31, 2018, the Company had approximately $186.3 million in
cash, cash equivalents and short-term investments, long-term debt
(including the current portion) totaled approximately $221.8 million,
and working capital was approximately $393.9 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 March 31, 2018.
Business Outlook
Dr. Lu concluded, “For the second quarter of 2018, we expect continued
strong growth with revenue increasing to a range between $292 million
and $308 million, or up 6.4 to 12.2 percent sequentially. We expect GAAP
gross margin to be 35.5 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 22.0 percent of revenue, plus or minus 1 percent. We
expect interest expense to be approximately $2.5 million. Our income tax
rate is expected to be 29.0 percent, plus or minus 3 percent, and shares
used to calculate diluted EPS for the second quarter are anticipated to
be approximately 51.3 million.” Please note that purchase accounting
adjustments of $3.8 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, May 8, 2018 at 4:00 p.m.
Central Time (5:00 p.m. Eastern Time) to discuss its first quarter 2018
financial results. Investors and analysts may join the conference call
by dialing 1-855-232-8957 and providing the confirmation code 4494787.
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 May 15, 2018 at
midnight Central Time. The replay number is 1-855-859-2056 with a pass
code of 4494787. 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 60 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 devices, 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’ 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 facilities are located in Manchester and Shanghai, China.
Diodes has assembly and test facilities located in Neuhaus, Shanghai,
Jinan, Chengdu, and Yangzhou, China. Additional engineering, sales,
warehouse, and logistics offices are located in Taipei; Hong Kong;
Manchester; Shanghai; Shenzhen, China; Seongnam-si, South Korea; and
Munich, Germany, with support offices throughout the world.
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.”
|
|
| |
| |
| |
| |
DIODES INCORPORATED AND SUBSIDIARIES |
RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME |
(in thousands, except per share data) |
(unaudited) |
|
For the three months ended March 31, 2018: |
| | | | | | | | |
|
| | | COGS | | Operating Expenses | | Income Tax Provision | | Net Income |
| | | | | | | | |
|
Per-GAAP | | | | | | | | | $ | 18,526 |
|
| | | | | | | | |
|
Earnings per share (Per-GAAP) | | | | | | | | | |
Diluted
| | | | | | | | | $ | 0.37 |
|
| | | | | | | | |
|
Adjustments to reconcile net income to non-GAAP net income: | | | | | | | | | |
| | | | | | | | |
|
M&A | | | | | | | | | |
| | | | | | | | |
|
Pericom | | | | | | | | | | 2,574 | |
| | | | | | | | |
|
Amortization of acquisition-related intangible assets | | | | |
3,139
| | |
(565
|
)
| | |
| | | | | | | | |
|
KFAB | | | | | | | | | | (253 | ) |
| | | | | | | | |
|
Restructuring | | | | |
(320
|
)
| |
67
| | | |
| | | | | | | | |
|
Others | | | | | | | | | | 3,342 | |
| | | | | | | | |
|
Amortization of acquisition-related intangible assets | | | | |
1,628
| | |
(300
|
)
| | |
| | | | | | | | |
|
Officer retirement | | | | |
2,550
| | |
(536
|
)
| | |
| | | | | | | | |
|
Non-GAAP | | | | | | | | | $ | 24,189 |
|
| | | | | | | | |
|
Diluted shares used in computing earnings per share
| | | | | | | | |
| 50,622 |
|
| | | | | | | | |
|
Non-GAAP earnings per share | | | | | | | | | |
Diluted
| | | | | | | | | $ | 0.48 |
|
| | | | | | | | | | |
|
Note: Included in GAAP and non-GAAP net (loss) income was approximately
$5.0 million, net of tax, non-cash share-based compensation expense.
Excluding share-based compensation expense, both GAAP and non-GAAP
diluted earnings per share would have improved by $0.10 per share.
|
|
| |
| |
| |
| |
DIODES INCORPORATED AND SUBSIDIARIES |
CONSOLIDATED RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME
– Cont. |
(in thousands, except per share data) |
(unaudited) |
|
For the three months ended March 31, 2017: |
| | | | | | | | |
|
| | | COGS | | Operating Expenses | | Income Tax Provision | | Net Income |
| | | | | | | | |
|
Per-GAAP | | | | | | | | | $ | 1,217 |
| | | | | | | | |
|
Earnings per share (Per-GAAP) | | | | | | | | | |
Diluted
| | | | | | | | | $ | 0.02 |
| | | | | | | | |
|
Adjustments to reconcile net income to non-GAAP net income: | | | | | | | | | |
| | | | | | | | |
|
M&A | | | | | | | | | |
| | | | | | | | |
|
Pericom | | | | | | | | | | 2,623 |
| | | | | | | | |
|
Retention costs | | | | |
194
| |
(68
|
)
| | |
| | | | | | | | |
|
Amortization of acquisition-related intangible assets | | | | |
3,045
| |
(548
|
)
| | |
| | | | | | | | |
|
Others | | | | | | | | | | 1,354 |
| | | | | | | | |
|
Amortization of acquisition-related intangible assets | | | | |
1,713
| |
(359
|
)
| | |
| | | | | | | | |
|
KFAB - Restructuring | | |
490
| |
2,336
| |
(989
|
)
| | | 1,837 |
| | | | | | | | |
|
Non-GAAP | | | | | | | | | $ | 7,031 |
| | | | | | | | |
|
Diluted shares used in computing earnings per share
| | | | | | | | |
| 49,663 |
| | | | | | | | |
|
Non-GAAP earnings per share | | | | | | | | | |
Diluted
| | | | | | | | | $ | 0.14 |
| | | | | | | | | |
|
Note: Included in GAAP and non-GAAP adjusted net income was
approximately $2.7 million, net of tax, non-cash share-based
compensation expense. Excluding share-based compensation expense, both
GAAP and non-GAAP adjusted diluted earnings per share would have
improved by $0.05 per share.
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER
SHARE
The Company adjusts United States generally accepted accounting
principles (“GAAP”) net income and earnings per share attributable to
common stockholders to provide investors a better depiction of the
Company’s operating results, allow for a more accurate comparison
between the Company’s current and historical operating results and
provide a baseline for more informed modeling of future earnings. The
Company makes adjustments for inventory acquired, transaction costs,
retention costs, amortization of acquisition-related intangible assets
and restructuring costs. The Company also excludes these items to
evaluate the Company’s operating performance, develop budgets, determine
incentive compensation awards and manage cash expenditure.
The presentation of the above non-GAAP measures allows investors to
review the Company’s results of operations from the same viewpoint as
the Company’s management and Board of Directors. The Company has
historically provided similar non-GAAP financial measures to provide
investors an enhanced understanding of its operations, facilitate
investors’ analyses and comparisons of its current and past results of
operations and provide insight into the prospects of its future
performance. The Company also believes the non-GAAP measures are useful
to investors because they provide additional information that research
analysts use to evaluate semiconductor companies. These non-GAAP
measures should be considered in addition to results prepared in
accordance with GAAP, but should not be considered a substitute for or
superior to GAAP results and may differ from measures used by other
companies. For example, we do not adjust for any amounts attributable to
noncontrolling interest except for one-time non-cash items outside the
course of ordinary business, such as impairment of goodwill. The
Company recommends a review of net income on both a GAAP basis and
non-GAAP basis be performed to get a comprehensive view of the Company’s
results and provides a reconciliation of GAAP net income to non-GAAP
adjusted net income.
Detail of non-GAAP adjustments
Retention costs– The
Company excluded costs related to employee retention in connection with
the Pericom acquisition. Although these retention costs will be
recurring every quarter until the final retention payment has been made,
they are not part of the employees’ normal annual salaries and therefore
are being excluded. The Company believes the exclusion of retention
costs related to acquisitions provides investors with a more accurate
reflection of costs likely to be incurred in the absence of an unusual
event such as an acquisition and facilitates comparisons with the
results of other periods that may not reflect such costs.
Amortization of acquisition-related intangible
assets – The Company excluded this item, including
amortization of developed technologies and customer relationships. The
fair value of the acquisition-related intangible assets, which was
recognized through purchase accounting, is amortized using straight-line
methods which approximate the proportion of future cash flows estimated
to be generated each period over the estimated useful life of the
applicable assets. The Company believes that exclusion of this item is
appropriate because a significant portion of the purchase price for its
acquisitions was allocated to the intangible assets that have short
lives and exclusion of the amortization expense allows comparisons of
operating results that are consistent over time for both the Company’s
newly acquired and long-held businesses. In addition, the Company
excluded this item because there is significant variability and
unpredictability among companies with respect to this expense.
KFAB restructuring - The Company has
recorded restructuring charges related to the shutdown and relocation of
its wafer fabrication facility located in Lee’s Summit, MO (“KFAB”).
These restructuring charges are excluded from management’s assessment of
the Company’s operating performance. The Company believes the exclusion
of the restructuring charges provides investors an enhanced view of the
cost structure of the Company’s operations and facilitates comparisons
with the results of other periods that may not reflect such charges or
may reflect different levels of such charges.
Officer Retirement – The Company has
recorded increased expense related to the retirement of two corporate
officers. The officer retirement expense has been excluded from
management’s assessment of the Company’s current period operating
performance in order to facilitate comparisons with previously presented
periods that do not reflect such expense.
CASH FLOW ITEMS
Free cash flow (FCF) (Non-GAAP)
FCF for the first quarter of 2018 is a non-GAAP financial measure, which
is calculated by subtracting capital expenditures from cash flow from
operations. For the first quarter of 2018, FCF was a $22.3 million
($54.0 million less $31.6 million). FCF represents the cash and cash
equivalents that we are able to generate after taking into account cash
outlays required to maintain or expand property, plant and equipment.
FCF is important because it allows us to pursue opportunities to develop
new products, make acquisitions and reduce debt.
CONSOLIDATED RECONCILIATION OF NET INCOME TO
EBITDA
EBITDA represents earnings before net interest expense, income tax
provision, depreciation and amortization. Management believes EBITDA is
useful to investors because it is frequently used by securities
analysts, investors and other interested parties, such as financial
institutions in extending credit, in evaluating companies in our
industry and provides further clarity on our profitability. In addition,
management uses EBITDA, along with other GAAP and non-GAAP measures, in
evaluating our operating performance compared to that of other companies
in our industry. The calculation of EBITDA generally eliminates the
effects of financing, operating in different income tax jurisdictions,
and accounting effects of capital spending, including the impact of our
asset base, which can differ depending on the book value of assets and
the accounting methods used to compute depreciation and amortization
expense. EBITDA is not a recognized measurement under GAAP, and when
analyzing our operating performance, investors should use EBITDA in
addition to, and not as an alternative for, income from operations and
net income, each as determined in accordance with GAAP. Because not all
companies use identical calculations, our presentation of EBITDA may not
be comparable to similarly titled measures used by other companies. For
example, our EBITDA takes into account all net interest expense, income
tax provision, depreciation and amortization without taking into account
any amounts attributable to noncontrolling interest. Furthermore,
EBITDA is not intended to be a measure of free cash flow for
management’s discretionary use, as it does not consider certain cash
requirements such as tax and debt service payments.
The following table provides a reconciliation of net income to EBITDA (in
thousands, unaudited):
|
| Three Months Ended |
| | March 31, |
| |
| 2018 |
|
| 2017 |
| | | |
|
Net (loss) income (per-GAAP)
| |
$
|
18,526
| |
$
|
1,217
|
Plus:
| | | | |
Interest expense, net
| | |
2,243
| | |
3,190
|
Income tax provision
| | |
7,783
| | |
560
|
Depreciation and amortization
| |
|
25,610
| |
|
23,664
|
EBITDA (non-GAAP) | | $ | 54,162 | | $ | 28,631 |
| | |
| |
DIODES INCORPORATED AND SUBSIDIARIES |
CONSOLIDATED CONDENSED BALANCE SHEETS |
(in thousands)
|
| | | |
|
| | March 31, | | December 31, |
| |
| 2018 |
| |
| 2017 |
|
| | (unaudited) | | (audited) |
CURRENT ASSETS | | | | |
Cash and cash equivalents
| |
$
|
182,411
| | |
$
|
203,820
| |
Short-term investments
| | |
3,851
| | | |
4,558
| |
Accounts receivable, net
| | |
174,141
| | | |
200,112
| |
Inventories
| | |
236,501
| | | |
216,506
| |
Prepaid expenses and other
| |
|
37,415
|
| |
|
37,328
|
|
Total current assets | |
|
634,319
|
| |
|
662,324
|
|
| | | |
|
PROPERTY, PLANT AND EQUIPMENT, net
| | |
469,654
| | | |
459,169
| |
| | | |
|
DEFERRED INCOME TAXES | | |
41,157
| | | |
40,580
| |
| | | |
|
OTHER ASSETS | | | | |
Goodwill
| | |
135,994
| | | |
134,187
| |
Intangible assets, net
| | |
151,810
| | | |
156,445
| |
Other
| |
|
38,428
|
| |
|
35,968
|
|
Total assets | |
$
|
1,471,362
|
| |
$
|
1,488,673
|
|
| | | |
|
| | | |
|
CURRENT LIABILITIES | | | | |
Line of Credit
| |
$
|
4,466
| | |
$
|
1,008
| |
Accounts payable
| | |
106,973
| | | |
108,001
| |
Accrued liabilities and other
| | |
86,027
| | | |
99,301
| |
Income tax payable
| | |
21,041
| | | |
18,216
| |
Current portion of long-term debt
| |
|
21,876
|
| |
|
20,636
|
|
Total current liabilities | |
|
240,383
|
| |
|
247,162
|
|
| | | |
|
LONG-TERM DEBT, net of current portion | | |
199,924
| | | |
247,492
| |
DEFERRED TAX LIABILITIES - non current | | |
26,321
| | | |
25,176
| |
OTHER LONG-TERM LIABILITIES | |
|
94,925
|
| |
|
94,925
|
|
Total liabilities | |
|
561,553
|
| |
|
614,755
|
|
| | | |
|
COMMITMENTS AND CONTINGENCIES | | | | |
| | | |
|
EQUITY | | | | |
Diodes Incorporated stockholders' equity | | | | |
Preferred stock - par value $1.00 per share; 1,000,000 shares
authorized; no shares issued or outstanding
| |
—
| | | |
—
| |
Common stock - par value $0.66 2/3 per share; 70,000,000 shares
authorized; 49,571,038 and 49,130,090, issued and outstanding at
March 31, 2018 and December 31, 2017, respectively
| |
34,021
| | | |
33,727
| |
Additional paid-in capital
| | |
385,928
| | | |
386,338
| |
Retained earnings
| | |
551,213
| | | |
532,687
| |
Treasury stock, at cost, 1,457,206 and 1,457,206 shares held at
March 31, 2018 and December 31,2017, respectively
| |
(37,768
|
)
| | |
(37,768
|
)
|
Accumulated other comprehensive loss
| |
|
(64,841
|
)
| |
|
(83,480
|
)
|
Total Diodes Incorporated stockholders' equity | | |
868,553
| | | |
831,504
| |
Noncontrolling interest | |
|
41,256
|
| |
|
42,414
|
|
Total equity | |
|
909,809
|
| |
|
873,918
|
|
Total liabilities and equity | |
$
|
1,471,362
|
| |
$
|
1,488,673
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180508006418/en/
Contacts:
Company Contact:
Diodes Inc.
Laura Mehrl
Director
of Investor Relations
P: 972-987-3959
E: laura_mehrl@diodes.com
or
Investor
Relations Contact:
Shelton Group
Leanne Sievers
President,
Investor Relations
P: 949-224-3874
E: lsievers@sheltongroup.com
Source: Diodes Incorporated
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