Attached files

file filename
8-K/A - AMENDMENT NO. 2 TO FORM 8-K - DIODES INC /DEL/d285447d8ka.htm
EX-99.3 - EX-99.3 - DIODES INC /DEL/d285447dex993.htm
EX-99.2 - EX-99.2 - DIODES INC /DEL/d285447dex992.htm

EXHIBIT 99.1

Diodes Incorporated Reports Revised Fourth Quarter 2015 GAAP EPS of ($0.10)

Previously Reported Non-GAAP EPS of $0.14 Remains Unchanged

Plano, Texas—March 11, 2016—(BUSINESS WIRE)—Diodes Incorporated (NASDAQ: DIOD), a leading global manufacturer and supplier of high-quality application specific standard products within the broad discrete, logic and analog semiconductor markets, today announced a revision to its unaudited financial results for its fiscal fourth quarter and fiscal year ended December 31, 2015, as originally reported on February 16, 2016.

In March 2016, subsequent to the Company’s February 16, 2016 unaudited fiscal fourth quarter 2015 earnings release but prior to the filing of its audited Annual Report on Form 10-K for the fiscal year ended December 31, 2015, the Company revised its initial acquisition accounting related to the stock awards and change-in-control agreements for Pericom employees. The effect was to reduce amounts previously included in the purchase price of Pericom and goodwill in the balance sheet by approximately $12 million and reduce fourth quarter 2015 net income as reported under U.S. generally accepted accounting principles (“GAAP”) by approximately $5.5 million. For the fourth quarter, GAAP net income per diluted share was initially reported at $0.01 per share. GAAP net income has been revised to a net loss of $0.10 per share. Non-GAAP net income did not change, remaining at $0.14 per diluted share.

We have included a reconciliation between revised GAAP net income and non-GAAP net income in the supplemental financial data attached below. The adjustment to reconcile the previously released GAAP net income to non-GAAP net income for the affected periods is shown in the line item titled, “Employee award costs.”

The revised unaudited financial statements reflecting the changes are also attached to this press release. The Company’s previously released first quarter 2016 non-GAAP guidance is not affected by this change.

About Diodes Incorporated

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’ corporate headquarters and Americas’ sales office are located in Plano, Texas and Milpitas, California. Design, marketing, and engineering centers are located in Plano; Milpitas, California; Taipei, Taiwan; Taoyuan City, Taiwan; Zhubei City, Taiwan; Manchester, England; and Neuhaus, Germany. Diodes’ wafer


fabrication facilities are located in Kansas City, Missouri and 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 in Taipei. 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.

On November 24, 2015, Diodes Incorporated acquired Pericom Semiconductor Corporation with headquarters in Milpitas, California, and with design centers and technical sales and support offices globally. Pericom enables serial connectivity with the industry’s most complete solutions for the computing, communications, consumer and embedded market segments. Pericom’s analog, digital and mixed-signal integrated circuits, along with its frequency control products are essential in the timing, switching, bridging and conditioning of high-speed signals required by today’s ever-increasing speed and bandwidth demanding applications.

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 regarding our expectation that the first quarter 2016 non-GAAP guidance is not affected by this the revision to our financial results for the fourth fiscal quarter and fiscal year ended December 31, 2015. 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 our disclosure controls and procedures and internal control over financial reporting may not be effective; the risk that the expected benefits of acquisitions may not be realized; 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; risks of domestic and foreign operations, including excessive operation costs, labor shortages, higher tax rates and our joint venture prospects; the risk of unfavorable currency exchange rates; our future guidance may be incorrect; the global economic weakness may be more severe or last longer than we currently anticipated; breaches of our information technology systems; the possibility that no shares will be repurchased; the risk that the expected benefits of share repurchases will not be realized; 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.

 

Company Contact:    Investor Relations Contact:
Diodes Incorporated    Shelton Group
Laura Mehrl    Leanne Sievers
Director of Investor Relations    EVP, Investor Relations
P: 972-987-3959    P: 949-224-3874
E: laura_mehrl@diodes.com    E: lsievers@sheltongroup.com

 

2


The following is a summary reconciliation of GAAP net income to non-GAAP net income and per share data, net of tax (in thousands, except per share data):

 

            Three Months Ended  
            December 31, 2015  

GAAP net loss

      $ (4,773
     

 

 

 

GAAP loss per share

      $ (0.10
     

 

 

 

Adjustments to reconcile net loss to Non-GAAP net income:

     

M&A Activities

     

Pericom

        9,610   

Inventory adjustment

     2,907      

Transaction costs

     216      

Retention costs

     86      

Amortization of acquisition related intangible assets

     903      

Employee award costs

     5,498      

Others

        1,478   

Amortization of acquisition related intangible assets

     1,478      

Severance

        419   
     

 

 

 

Non-GAAP net income

      $ 6,734   
     

 

 

 

Non-GAAP diluted earnings per share

      $ 0.14   
     

 

 

 

 

3


The following is a summary reconciliation of GAAP net income to non-GAAP net income and per share data, net of tax (in thousands, except per share data):

 

            Twelve Months Ended  
            December 31, 2015  

GAAP net income

      $ 24,274   
     

 

 

 

GAAP diluted earnings per share

      $ 0.49   
     

 

 

 

Adjustments to reconcile net income to Non-GAAP net income:

     

M&A Activities

     

Pericom

        10,365   

Inventory adjustment

     2,907      

Transaction costs

     971      

Retention costs

     86      

Amortization of acquisition related intangible assets

     903      

Employee award costs

     5,498      

Others

        6,037   

Retention costs

     70      

Amortization of acquisition related intangible assets

     5,967      

Impairment loss on long-lived assets

        1,250   

Severance

        419   
     

 

 

 

Non-GAAP net income

      $ 42,345   
     

 

 

 

Non-GAAP diluted earnings per share

      $ 0.86   
     

 

 

 

 

4


DIODES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share data)

 

     Three Months Ended     Twelve Months Ended  
     December 31,     December 31,  
     2015     2014     2015     2014  

NET SALES

   $ 214,381      $ 223,671      $ 848,904      $ 890,651   

COST OF GOODS SOLD

     160,784        153,009        600,321        613,372   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     53,597        70,662        248,583        277,279   

OPERATING EXPENSES

        

Selling, general and administrative

     40,963        34,183        139,245        133,701   

Research and development

     16,383        12,571        57,027        52,136   

Amortization of acquisition related intangible assets

     2,966        1,954        8,596        7,914   

Loss (gain) on fixed assets

     57        (67     1,613        (983
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     60,369        48,641        206,481        192,768   
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations

     (6,772     22,021        42,102        84,511   

OTHER INCOME (EXPENSES)

        

Interest income

     311        312        1,006        1,470   

Interest expense

     (1,630     (843     (4,232     (4,332

Gain (loss) on securities carried at fair value

     545        (410     400        1,364   

Other

     693        2,113        1,319        2,979   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other expenses

     (81     1,172        (1,507     1,481   

(Loss) income before income taxes and noncontrolling interest

     (6,853     23,193        40,595        85,992   

INCOME TAX PROVISION

     (2,097     5,988        14,082        20,359   
  

 

 

   

 

 

   

 

 

   

 

 

 

NET (LOSS) INCOME

     (4,756     17,205        26,513        65,633   

Less: NET INCOME attributable to noncontrolling interest

     (17     (540     (2,239     (1,955
  

 

 

   

 

 

   

 

 

   

 

 

 

NET (LOSS) INCOME attributable to common stockholders

   $ (4,773   $ 16,665      $ 24,274      $ 63,678   
  

 

 

   

 

 

   

 

 

   

 

 

 

(LOSS) EARNINGS PER SHARE attributable to common stockholders

        

Basic

   $ (0.10   $ 0.35      $ 0.50      $ 1.35   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ (0.10   $ 0.34      $ 0.49      $ 1.31   
  

 

 

   

 

 

   

 

 

   

 

 

 

Number of shares used in computation

        

Basic

     48,495        47,587        48,210        47,184   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     48,495        48,739        49,500        48,594   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

5


DIODES INCORPORATED AND SUBSIDIARIES

RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME

(in thousands, except per share data)

(unaudited)

For the three months ended December 31, 2015:

 

     COGS      Operating
Expenses
     Income Tax
Provision
    Net (Loss)
Income
 

Per-GAAP

           $ (4,773
          

 

 

 

Loss per share (Per-GAAP)

           $ (0.10
          

 

 

 

Adjustments to reconcile net income to Non-GAAP net income:

          

M&A Activities

          

Pericom

             9,610   

Inventory adjustment

     3,060            (153     2,907   

Transaction costs

        332         (116     216   

Retention costs

        132         (46     86   

Amortization of acquisition related intangible assets

        1,101         (198     903   

Employee award costs

     253         7,613         (2,368     5,498   

Others

             1,478   

Amortization of acquisition related intangible assets

        1,866         (388     1,478   

Severance

        645         (226     419   

Non-GAAP

           $ 6,734   
          

 

 

 

Diluted shares used in computing earnings per share

             49,518   
          

 

 

 

Non-GAAP earnings per share

          

Diluted

           $ 0.14   
          

 

 

 

Note: Included in GAAP and Non-GAAP net (loss) income was approximately $2.5 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 $0.05 per share.

 

6


DIODES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME – Cont.

(in thousands, except per share data)

(unaudited)

For the three months ended December 31, 2014:

 

     Operating
Expenses
     Income Tax
Provision
    Net Income  

Per-GAAP

        $ 16,665   
       

 

 

 

Earnings per share (Per-GAAP)

       

Diluted

        $ 0.34   
       

 

 

 

Adjustments to reconcile net income to Non-GAAP net income:

       

Retention costs

     125         (19     106   

Amortization of acquisition related intangible assets

     1,954         (392     1,562   

Non-GAAP

        $ 18,333   
       

 

 

 

Diluted shares used in computing earnings per share

          48,739   
       

 

 

 

Non-GAAP earnings per share

       

Diluted

        $ 0.38   
       

 

 

 

 

7


DIODES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME – Cont.

(in thousands, except per share data)

(unaudited)

For the twelve months ended December 31, 2015:

 

     COGS      Operating
Expenses
     Income Tax
Provision
    Net
Income
 

Per-GAAP

           $ 24,274   
          

 

 

 

Earnings per share (Per-GAAP)

          

Diluted

           $ 0.49   
          

 

 

 

Adjustments to reconcile net income to Non-GAAP net income:

          

M&A Activities

          

Pericom

             10,365   

Inventory adjustment

     3,060            (153     2,907   

Transaction costs

        1,493         (522     971   

Retention costs

        132         (46     86   

Amortization of acquisition related intangible assets

        1,101         (198     903   

Employee award costs

     253         7,613         (2,368     5,498   

Others

             6,037   

Retention costs

        83         (13     70   

Amortization of acquisition related intangible assets

        7,496         (1,529     5,967   

Impairment loss on long-lived assets

        1,470         (220     1,250   

Severance

        645         (226     419   

Non-GAAP

           $ 42,345   
          

 

 

 

Diluted shares used in computing earnings per share

             49,500   
          

 

 

 

Non-GAAP earnings per share

          

Diluted

           $ 0.86   
          

 

 

 

Note: Included in GAAP and non-GAAP adjusted net income was approximately $10.1 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 $0.20 per share.

 

8


DIODES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME – Cont.

(in thousands, except per share data)

(unaudited)

For the twelve months ended December 31, 2014:

 

     Operating
Expenses
    Income Tax
Provision
    Net Income  

Per-GAAP

       $ 63,678   
      

 

 

 

Earnings per share (Per-GAAP)

      

Diluted

       $ 1.31   
      

 

 

 

Adjustments to reconcile net income to Non-GAAP net income:

      

Retention costs

     1,286        (193     1,093   

Gain on sale of assets

     (1,176     200        (976

Amortization of acquisition related intangible assets

     7,914        (1,627     6,287   

Non-GAAP

       $ 70,082   
      

 

 

 

Diluted shares used in computing earnings per share

         48,594   
      

 

 

 

Non-GAAP earnings per share

      

Diluted

       $ 1.44   
      

 

 

 

 

9


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 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
December 31,
     Twelve Months Ended
December 31,
 
     2015      2014      2015      2014  

Net (loss) income (per-GAAP)

   $ (4,773    $ 16,665       $ 24,274       $ 63,678   

Plus:

           

Interest expense, net

     1,319         531         3,226         2,862   

Income tax provision

     (2,097      5,988         14,082         20,359   

Depreciation and amortization

     22,131         19,517         80,100         76,771   
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA (Non-GAAP)

   $ 16,580       $ 42,701       $ 121,682       $ 163,670   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

10


DIODES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands, except share data)

 

     December 31,
2015
    December 31,
2014
 
     (unaudited)        

CURRENT ASSETS

    

Cash and cash equivalents

   $ 218,435      $ 243,000   

Short-term investments

     64,685        11,726   

Accounts receivable, net

     218,496        188,248   

Inventories

     202,832        182,026   

Prepaid expenses and other

     46,103        50,510   
  

 

 

   

 

 

 

Total current assets

     750,551        675,510   
  

 

 

   

 

 

 

PROPERTY, PLANT AND EQUIPMENT, net

     439,340        309,931   

DEFERRED INCOME TAXES, non-current

     45,120        43,845   

OTHER ASSETS

    

Goodwill

     132,913        81,229   

Intangible assets, net

     196,409        45,028   

Other

     36,697        23,614   
  

 

 

   

 

 

 

Total assets

   $ 1,601,030      $ 1,179,157   
  

 

 

   

 

 

 
     December 31,
2015
    December 31,
2014
 
     (unaudited)        

CURRENT LIABILITIES

    

Lines of credit

   $ —        $ 1,064   

Accounts payable

     86,463        79,390   

Accrued liabilities

     77,801        60,149   

Income tax payable

     5,117        8,381   

Current portion of long-term debt

     10,282        287   
  

 

 

   

 

 

 

Total current liabilities

     179,663        149,271   
  

 

 

   

 

 

 

LONG-TERM DEBT, net of current portion

     455,941        140,787   

DEFERRED TAX LIABILITIES—non current

     32,276        —     

OTHER LONG-TERM LIABILITIES

     90,153        78,932   
  

 

 

   

 

 

 

Total liabilities

     758,033        368,990   
  

 

 

   

 

 

 

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; 48,148,077 and 47,591,092 issued and outstanding at December 31, 2015 and December 31, 2014, respectively

     32,404        31,729   

Additional paid-in capital

     344,086        314,942   

Retained earnings

     514,280        490,006   

Treasury stock

     (11,009     —     

Accumulated other comprehensive loss

     (84,416     (68,402
  

 

 

   

 

 

 

Total Diodes Incorporated stockholders’ equity

     795,345        768,275   

Noncontrolling interest

     47,652        41,892   
  

 

 

   

 

 

 

Total equity

     842,997        810,167   
  

 

 

   

 

 

 

Total liabilities and equity

   $ 1,601,030      $ 1,179,157   
  

 

 

   

 

 

 

 

11