Attached files
| file | filename |
|---|---|
| EX-99.1 - EX-99.1 - DIODES INC /DEL/ | d539481dex991.htm |
| EX-23.1 - EX-23.1 - DIODES INC /DEL/ | d539481dex231.htm |
| 8-K/A - FORM 8-K/A NO.1 - DIODES INC /DEL/ | d539481d8ka.htm |
Exhibit 99.2
DIODES INCORPORATED (“DIODES”)
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined financial statements are presented to illustrate the estimated effects of our acquisition of BCD Semiconductor Manufacturing Limited and subsidiaries (“BCD”) in March 2013 on our consolidated financial statements. The following unaudited pro forma condensed combined financial statements are based upon the historical condensed consolidated financial statements and notes thereto of Diodes (as adjusted for the BCD acquisition), which is included herein.
The unaudited pro forma condensed combined balance sheet gives pro forma effect to the BCD acquisition as if it had been completed on December 31, 2012 and combines Diodes audited consolidated balance sheet with BCD’s audited consolidated balance sheet as of December 31, 2012. The unaudited pro forma condensed combined statement of operations gives pro forma effect to the transactions as if they had been completed on January 1, 2012 and combines Diodes audited consolidated statement of operations and BCD’s audited consolidated statement of operations for the fiscal year ended December 31, 2012.
The pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable under the circumstances. A final determination of fair values relating to the acquisition may differ materially from the preliminary estimates and will include management’s final valuation of the fair value of assets acquired and liabilities assumed. This final valuation will be based on the actual net assets of BCD that existed as of the date of the completion of the acquisition. The final valuation may change the allocations of the purchase price, which could affect the fair value assigned to the assets and liabilities and could result in a change to the unaudited pro forma condensed combined financial statements data.
These unaudited pro forma condensed combined financial statements should be read in conjunction with the historical consolidated financial statements and related notes contained in the annual, quarterly and other reports filed by Diodes with the United States Securities and Exchange Commission and with BCD historical consolidated financial statements which are included herein as Exhibit 99.1.
Diodes Incorporated
Unaudited Pro Forma Condensed Combined Balance Sheet
As of December 31, 2012
(in thousands)
| Historical | Historical | Pro Forma | Pro Forma | |||||||||||||
| Diodes | BCD | Adjustments | Combined | |||||||||||||
| CURRENT ASSETS |
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| Cash and cash equivalents |
$ | 157,121 | $ | 36,553 | $ | 152,534 | (2)(6) | $ | 346,208 | |||||||
| (154,735 | )(1) | (154,735 | ) | |||||||||||||
| Accounts receivable, net |
152,073 | 22,743 | — | 174,816 | ||||||||||||
| Inventories |
153,293 | 34,294 | — | 187,587 | ||||||||||||
| Deferred income taxes, current |
9,995 | 1,067 | 2,615 | (7) | 13,677 | |||||||||||
| Prepaid expenses and others |
18,928 | 19,339 | — | 38,267 | ||||||||||||
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| Total Current Assets |
491,410 | 113,996 | 414 | 605,820 | ||||||||||||
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| PROPERTY, PLANT AND EQUIPMENT, net |
243,296 | 92,167 | 9,234 | (1)(4) | 344,697 | |||||||||||
| DEFERRED INCOME TAXES, non-current |
36,819 | 543 | (5,054 | )(1) | 32,308 | |||||||||||
| OTHER ASSETS |
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| Intangible assets, net |
87,359 | 1,575 | 12,846 | (1)(3) | 101,780 | |||||||||||
| Goodwill |
44,337 | 295 | 2,192 | (1) | 46,824 | |||||||||||
| Other |
16,842 | 11,567 | 798 | (1)(2) | 29,207 | |||||||||||
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| Total Assets |
$ | 920,063 | $ | 220,143 | $ | 20,430 | $ | 1,160,636 | ||||||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| CURRENT LIABILITIES |
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| Line of credit |
$ | 7,629 | $ | 17,800 | $ | (17,800 | )(2) | $ | 7,629 | |||||||
| Accounts payable |
64,072 | 35,984 | — | 100,056 | ||||||||||||
| Accrued liabilities |
41,139 | 14,157 | 8,346 | (1)(5) | 63,642 | |||||||||||
| Income tax payable |
678 | 1,097 | — | 1,775 | ||||||||||||
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| Total Current Liabilities |
113,518 | 69,038 | (9,454 | ) | 173,102 | |||||||||||
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| LONG-TERM DEBT, net of current portion |
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| Long-term borrowings |
44,131 | — | 180,000 | (2) | 224,131 | |||||||||||
| CAPITAL LEASE OBLIGATION, net of current portion |
789 | 116 | — | 905 | ||||||||||||
| OTHER LONG-TERM LIABILITIES |
41,185 | 4,060 | 13,970 | (1) | 59,215 | |||||||||||
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| Total Liabilities |
199,623 | 73,214 | 184,516 | 457,353 | ||||||||||||
| EQUITY |
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| Diodes Incorporated Stockholders’ equity |
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| Common stock |
30,674 | 107 | (107 | )(8) | 30,674 | |||||||||||
| Additional paid-in capital |
280,571 | 159,072 | (159,072 | )(8) | 280,571 | |||||||||||
| Retained earnings |
399,796 | (25,089 | ) | 7,932 | (6)(7)(8) | 382,639 | ||||||||||
| Accumulated other comprehensive gain (loss) |
(33,856 | ) | 12,839 | (12,839 | )(8) | (33,856 | ) | |||||||||
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| Total Diodes Incorporated Stockholders’ equity |
677,185 | 146,929 | (164,086 | ) | 660,028 | |||||||||||
| Noncontrolling interest |
43,255 | — | — | 43,255 | ||||||||||||
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| Total equity |
720,440 | 146,929 | (164,086 | ) | 703,283 | |||||||||||
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| Total Liabilities and Stockholders’ Equity |
$ | 920,063 | $ | 220,143 | $ | 20,430 | $ | 1,160,636 | ||||||||
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Notes to Unaudited Pro Forma Condensed Combined Balance Sheet for the 12 Months Ended December 31, 2012:
| (1) | The adjustment reflects the purchase method of accounting, the total consideration is allocated to BCD’s assets and liabilities based on their estimated fair value as of the date of acquisition. |
The preliminary estimated consideration is allocated as follows:
| Calculation of consideration: |
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| Cash consideration to BCD shareholders from financing arrangement included in footnote 2 |
$ | 154,735 | ||
| -Based upon approximately 19 million BCD American Depository Share (ADS) outstanding as of March 5, 2013 at $8 per ADS. |
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| Preliminary allocation of consideration: |
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| Book value of BCD net assets |
142,253 | |||
| Adjustment to historical net book value: |
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| Intangible assets (see footnote 3) |
17,200 | |||
| Fixed assets (see footnote 4) |
11,542 | |||
| Inventory |
5,485 | |||
| Accrued liabilities |
(4,010 | ) | ||
| Other long-term liabilities |
(19,024 | ) | ||
| Other |
(903 | ) | ||
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| Adjusted book value of BCD net assets |
152,543 | |||
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| Goodwill |
$ | 2,192 | ||
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A final determination, which is expected to be finalized by the end of the third quarter of fiscal 2013, of fair values may differ materially from the preliminary estimates and will include management’s final valuation of the fair values of assets acquired and liabilities assumed. This final valuation will be based on the actual net assets of BCD that existed as of the date of the completion of the merger. The final valuation may change the allocations of purchase price, which could affect the fair value assigned to the assets and liabilities and could result in a change to the unaudited pro forma condensed combined financial statements data.
| (2) | The adjustment reflects the new secured $180 million debt, approximately $3 million associated debt issuance cost and repayment of approximately $18 million BCD short-term loans. |
| (3) | The adjustment reflects the additional amortization of acquisition related intangible assets based on the estimated 6 year weighted-average useful lives. |
| (4) | The adjustment reflects the additional depreciation on the step-up of acquired BCD property, plant and equipment (“PP&E”) based on the estimated 5 year weighted-average useful lives. |
| (5) | The adjustment reflects the accrued retention bonus related to the acquisition. |
| (6) | The adjustment reflects approximately $4 million in transaction costs related to the acquisition. |
| (7) | The adjustment reflects the adjustments to the current year profits along with its tax effect on the pro forma adjustments. |
| (8) | The adjustment reflects the acquisition of 100% of the equity of BCD and the elimination of BCD’s historical equity accounts. |
Diodes Incorporated
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Year Ended December 31, 2012
(in thousands, except per share data)
| Historical | Historical | Pro Forma | Pro Forma | |||||||||||||
| Diodes | BCD | Adjustments | Combined | |||||||||||||
| Net sales |
$ | 633,806 | $ | 142,844 | $ | — | $ | 776,650 | ||||||||
| Cost of goods sold |
472,220 | 103,360 | 8,054 | (4)(5)(7)(8) | 583,634 | |||||||||||
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| Gross Profit |
161,586 | 39,484 | (8,054 | ) | 193,016 | |||||||||||
| Operating expenses: |
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| Selling, general and administrative |
101,363 | 20,680 | 2,320 | (5)(7) | 124,363 | |||||||||||
| Research and development |
33,761 | 10,713 | 378 | (5)(7) | 44,852 | |||||||||||
| Amortization of acquisition related intangible assets |
5,122 | 514 | 2,265 | (3)(6) | 7,901 | |||||||||||
| Loss ( gain) on fixed assets |
(3,556 | ) | — | — | (3,556 | ) | ||||||||||
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| Total operating expenses |
136,690 | 31,907 | 4,963 | 173,560 | ||||||||||||
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| Income from operations |
24,896 | 7,577 | (13,017 | ) | 19,456 | |||||||||||
| Other income (expenses): |
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| Interest income |
778 | 1,281 | — | 2,059 | ||||||||||||
| Interest expense |
(876 | ) | (508 | ) | (2,808 | )(1)(2) | (4,192 | ) | ||||||||
| Amortization of debt issuance cost |
— | — | (516 | )(1) | (516 | ) | ||||||||||
| Gain on securities carried on fair value |
7,100 | — | — | 7,100 | ||||||||||||
| Other—net |
(1,091 | ) | 1,016 | — | (75 | ) | ||||||||||
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| Total other income (expenses) |
5,911 | 1,789 | (3,324 | ) | 4,376 | |||||||||||
| Income before income taxes and noncontrolling interest |
30,807 | 9,366 | (16,341 | ) | 23,832 | |||||||||||
| Income tax provision |
(4,825 | ) | (984 | ) | 2,615 | (9) | (3,194 | ) | ||||||||
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| Net Income (loss) |
25,982 | 8,382 | (13,726 | ) | 20,638 | |||||||||||
| Less: net (income) loss attributed to noncontrolling interest |
(1,830 | ) | — | — | (1,830 | ) | ||||||||||
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| Net income (loss) attributed to common stockholders |
$ | 24,152 | $ | 8,382 | $ | (13,726 | ) | $ | 18,808 | |||||||
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| Earnings (loss) per share attributable to common stockholders |
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| Basic |
$ | 0.53 | $ | 0.18 | $ | (0.30 | ) | $ | 0.41 | |||||||
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| Diluted |
$ | 0.51 | $ | 0.18 | $ | (0.29 | ) | $ | 0.40 | |||||||
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| Number of shares used in computation |
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| Basic |
45,780 | 45,780 | ||||||||||||||
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| Diluted |
46,899 | 46,899 | ||||||||||||||
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Notes to Unaudited Pro Forma Condensed Combined Statement of Operations for the 12 Months Ended December 31, 2012:
| (1) | The adjustment reflects the new secured $180 million debt based on the current interest rate of 1.7% and approximately $3 million associated debt issuance cost. |
| (2) | The adjustment reflects the interest on the BCD’s short-term loan of approximately $18 million repaid upon acquisition. |
| (3) | The adjustment reflects the additional amortization of acquisition related intangible assets based on the estimated 6 year weighted-average useful lives. |
| (4) | The adjustment reflects the additional depreciation on the step-up of acquired BCD PP&E based on the estimated 5 year weighted-average useful lives. |
| (5) | The adjustment reflects the pre-acquisition BCD share-based compensation expense. |
| (6) | The adjustment reflects the pre-acquisition amortization of acquisition related intangible assets recorded by BCD. |
| (7) | The adjustment reflects the accrued retention bonus related to the acquisition. |
| (8) | The adjustment reflects the expensing of approximately $5 million related to the inventory acquired from BCD acquisition. The adjustment accounts for the reasonable profit allowance for the selling effort on finished goods inventory and the reasonable profit allowance for the completion and selling efforts on the work-in-process inventory. This adjustment was recorded against cost of goods sold. |
| (9) | The adjustment reflects the tax benefit of the net pro forma adjustment at the Company’s effective tax rate. |