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 2019 and beyond; that for the second quarter of 2019, we expect revenue to be approximately $322 million plus or minus 2.0 percent; we expect GAAP gross margin to be 38.0 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; we expect net interest expense to be approximately $2 million; we expect tax rate to be 24.5 percent, plus or minus 3 percent; shares used to calculate diluted EPS for the first quarter are anticipated to be approximately 52.0 million; purchase accounting adjustments for Pericom and previous acquisitions of $3.7 million after tax are not included in these non-GAAP estimates; we expect GFAB to not only add to our existing global footprint, but also provide expanded wafer capacity to support our product group, in particular for the automotive market; 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 the pending acquisition of GFAB will not close successfully (due to failure to obtain any required approvals or other reasons); 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.
DIODES INCORPORATED AND SUBSIDIARIES | ||||||||
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | ||||||||
(unaudited) |
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(in thousands, except per share data) |
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|
Three Months Ended | |||||||
March 31, | ||||||||
2019 | 2018 | |||||||
Net sales | $ | 302,293 | $ | 274,512 | ||||
Cost of goods sold | 189,882 | 175,917 | ||||||
Gross profit | 112,411 | 98,595 | ||||||
Operating expenses | ||||||||
Selling, general and administrative | 43,688 | 47,150 | ||||||
Research and development | 22,170 | 20,200 | ||||||
Amortization of acquisition related intangible assets | 4,484 | 4,767 | ||||||
Other operating (income) expense | (54 | ) | (462 | ) | ||||
Total operating expense | 70,288 | 71,655 | ||||||
Income from operations | 42,123 | 26,940 | ||||||
Other income (expense) | ||||||||
Interest income | 875 | 514 | ||||||
Interest expense | (2,145 | ) | (2,757 | ) | ||||
Foreign currency loss, net | (64 | ) | (3,029 | ) | ||||
Other income | 1,245 | 4,635 | ||||||
Total other expense | (89 | ) | (637 | ) | ||||
Income before income taxes and noncontrolling interest | 42,034 | 26,303 | ||||||
Income tax provision | 10,298 | 7,783 | ||||||
Net income | 31,736 | 18,520 | ||||||
Less net (income) loss attributable to noncontrolling interest | (20 | ) | 6 | |||||
Net income attributable to common stockholders | $ | 31,716 | $ | 18,526 | ||||
Earnings per share attributable to common stockholders: | ||||||||
Basic | $ | 0.63 | $ | 0.38 | ||||
Diluted | $ | 0.62 | $ | 0.37 | ||||
Number of shares used in earnings per share computation: | ||||||||
Basic | 50,398 | 49,337 | ||||||
Diluted | 51,462 | 50,622 |
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, 2019: |
||||||||
Operating
|
Income Tax
|
Net Income | ||||||
Per-GAAP | $ | 31,716 | ||||||
Diluted earnings per share (Per-GAAP) | $ | 0.62 | ||||||
Adjustments to reconcile net income to non-GAAP net income: | ||||||||
Amortization of acquisition-related intangible assets | 4,484 | 810 | 3,674 | |||||
Non-GAAP | $ | 35,390 | ||||||
Diluted shares used in computing earnings per share | 51,462 | |||||||
Non-GAAP diluted earnings per share | $ | 0.69 |
Note: Included in GAAP and non-GAAP net income was approximately $3.5 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 $0.07 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, 2018: |
|||||||||||
Operating Expenses |
Income Tax
|
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 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. |
ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER
SHARE