Diodes Incorporated Reports Fourth Quarter and Fiscal 2017 Financial Results

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 first quarter of 2018, we expect revenue to range between $261 million and $277 million, or down 2.8 to up 3.2 percent sequentially; that we expect GAAP gross margin to be 36.0 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 23.2 percent of revenue, plus or minus 1 percent; that we expect interest expense to be approximately $3.0 million; that our income tax rate is expected to be 31.0 percent, plus or minus 3 percent; and that shares used to calculate diluted EPS for the first quarter are anticipated to be approximately 51.0 million. 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 Twelve Months Ended
December 31, December 31,
  2017       2016     2017       2016  
NET SALES $ 268,430 $ 232,085 $ 1,054,204 $ 942,162
 
COST OF GOODS SOLD   172,051     164,822     697,428     655,239  
 
Gross profit 96,379 67,263 356,776 286,923
 
OPERATING EXPENSES
Selling, general and administrative 44,727 39,091 167,639 158,256
Research and development 19,662 17,690 77,877 69,937
Amortization of acquisition-related intangible assets 4,700 5,099 18,798 20,478
Impairment of fixed assets 218 2,211
Restructuring 4,029 10,137
Other operating expenses   (415 )   12     (246 )   196  
Total operating expenses   72,921     61,892     276,416     248,867  
 
Income from operations 23,458 5,371 80,360 38,056
 
OTHER INCOME (EXPENSES)
Interest income 483 282 1,475 1,357
Interest expense (2,955 ) (3,377 ) (13,448 ) (13,257 )
Impairment on non-operating investment - (3,218 ) (3,218 )
Foreign currency loss, net (1,261 ) 4,216 (7,995 ) 2,171
Others   1,071     (625 )   2,199     (74 )
Total other expenses (2,662 ) (2,722 ) (17,769 ) (13,021 )
 
Income before income taxes and noncontrolling interest 20,796 2,649 62,591 25,035
 
INCOME TAX PROVISION   50,674     617     62,325     6,558  
 
NET (LOSS) INCOME (29,878 ) 2,032 266 18,477
 
Less: NET (LOSS) INCOME attributable to noncontrolling interest   (773 )   (764 )   (2,071 )   (2,542 )
 
NET (LOSS) INCOME attributable to common stockholders $ (30,651 ) $ 1,268   $ (1,805 ) $ 15,935  
 
(LOSS) EARNINGS PER SHARE attributable to common stockholders
Basic $ (0.62 ) $ 0.03   $ (0.04 ) $ 0.33  
Diluted $ (0.62 ) $ 0.03   $ (0.04 ) $ 0.32  
 
Number of shares used in computation
Basic   49,391     48,897     48,824     48,597  
Diluted   49,391     50,038     48,824     49,789  
 

Note: Throughout this release, we refer to “net income attributable to common stockholders” as “net income.”

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