Included in third quarter 2017 GAAP net income and non-GAAP adjusted net income was approximately $3.2 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 $0.06 per share for third quarter 2017, $0.07 for second quarter 2017 and $0.06 for third quarter 2016.
EBITDA (a non-GAAP measure), which represents earnings before net interest expense, income tax, depreciation and amortization, for third quarter 2017, was $46.8 million, compared to $45.8 million for second quarter 2017 and $42.5 million for third quarter 2016. For a reconciliation of GAAP net income to EBITDA, see the table near the end of this release for further details.
For third quarter 2017, net cash provided by operating activities was $40.9 million. Net cash flow was a negative ($65.4) million, including the $75.2 million long-term debt pay down. Free cash flow (a non-GAAP measure) was $2.9 million, which includes $38.0 million of capital expenditures.
Balance Sheet
As of September 30, 2017, the Company had approximately $214 million in cash, cash equivalents and short-term investments, long-term debt (including the current portion) totaled approximately $326 million, and working capital was approximately $476 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 September 30, 2017.
Business Outlook
Dr. Lu concluded, “We expect typical seasonality for the fourth quarter of 2017 with revenue to range between $260 million and $280 million, or down 8.9 to 1.8 percent sequentially or up 12.0 to 20.6 percent year-over-year. We expect GAAP gross margin to be 34.9 percent, plus or minus 1 percent, and non-GAAP gross margin to be 35.0 percent, plus or minus 1 percent. Non-GAAP operating expenses, which are GAAP operating expenses adjusted for KFAB closure costs and retention costs and amortization of acquisition-related intangible assets, are expected to be approximately 23.5 percent of revenue, plus or minus 1 percent. We expect interest expense to be approximately $3.0 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 fourth quarter are anticipated to be approximately 50.8 million.” Please note that purchase accounting adjustments of $3.9 million, after tax, for Pericom and previous acquisitions plus KFAB closure costs of $3.8 million are not included in these non-GAAP estimates.
Conference Call
Diodes will host a conference call on Tuesday, November 7, 2017 at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its third quarter 2017 financial results. Investors and analysts may join the conference call by dialing 1-855-232-8957 and providing the confirmation code 1689671. 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 November 14, 2017 at midnight Central Time. The replay number is 1-855-859-2056 with a pass code of 1689671. 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 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; 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
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.
