The Company’s financial statements present net income and earnings per share that are calculated using accounting principles generally accepted in the United States (“GAAP”). The Company’s management makes adjustments to the GAAP measures that it feels are necessary to allow investors and other readers of the Company’s financial releases to view the Company’s operating results as viewed by the Company’s management, board of directors and research analysts in the semiconductor industry. These non-GAAP measures are not prepared in accordance with, and should not be considered alternatives or necessarily superior to, GAAP financial data and may be different from non-GAAP measures used by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures, even if they have similar names. The explanation of the adjustments made in the table above, are set forth below:

Detail of non-GAAP adjustments

Amortization of acquisition-related intangible assets – The Company excluded this item, including amortization of developed technologies and customer relationships. The fair value of the acquisition-related intangible assets, which was recognized through purchase accounting, is amortized using straight-line methods which approximate the proportion of future cash flows estimated to be generated each period over the estimated useful life of the applicable assets. The Company believes that exclusion of this item is appropriate because a significant portion of the purchase price for its acquisitions was allocated to the intangible assets that have short lives and exclusion of the amortization expense allows comparisons of operating results that are consistent over time for both the Company’s newly acquired and long-held businesses. In addition, the Company excluded this item because there is significant variability and unpredictability among companies with respect to this expense.

KFAB restructuring - The Company has recorded restructuring charges related to the shutdown and relocation of its wafer fabrication facility located in Lee’s Summit, MO (“KFAB”). These restructuring charges are excluded from management’s assessment of the Company’s operating performance. The Company believes the exclusion of the restructuring charges provides investors an enhanced view of the cost structure of the Company’s operations and facilitates comparisons with the results of other periods that may not reflect such charges or may reflect different levels of such charges.

Officer retirement – In 2018, the Company excluded costs related to the retirement of two executives. These costs represent cash payments and the accelerated vesting of previously issued stock awards. The Company feels it is appropriate to exclude these costs since they don’t represent ongoing operating expenses and will present investors with a more accurate indication of our continuing operations.

CASH FLOW ITEMS

Free cash flow (FCF) (Non-GAAP)

FCF for the first quarter of 2019 is a non-GAAP financial measure, which is calculated by subtracting capital expenditures from cash flow from operations. For the first quarter of 2019, FCF was $51.2 million, which represents the cash and cash equivalents that we are able to generate after taking into account cash outlays required to maintain or expand property, plant and equipment. FCF is important because it allows us to pursue opportunities to develop new products, make acquisitions and reduce debt.

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 amounts 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
		March 31,
			2019			2018
Net income (per-GAAP)		$	31,716		$	18,526
Plus:
Interest expense, net			1,270			2,243
Income tax provision			10,298			7,783
Depreciation and amortization			26,641			25,610
EBITDA (non-GAAP)		$	69,925		$	54,162

DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
		March 31,				December 31,
			2019				2018
		(unaudited)				(audited)
Assets
Current assets:
Cash and cash equivalents		$	301,167			$	241,053
Short-term investments			6,751				7,499
Accounts receivable, net of allowances of $4,258 and $4,102 at March 31, 2019 and December 31, 2018, respectively			215,229				228,405
Inventories			216,569				215,435
Prepaid expenses and other			41,274				42,446
Total current assets			780,990				734,838
Property, plant and equipment, net			441,215				446,835
Deferred income tax			31,830				31,652
Goodwill			135,669				132,437
Intangible assets, net			133,506				137,935
Other			89,788				42,674
Total assets		$	1,612,998			$	1,526,371
Liabilities
Current liabilities:
Line of credit		$	12,330			$	10,254
Accounts payable			107,078				117,808
Accrued liabilities and other			86,880				82,605
Income tax payable			21,452				15,744
Current portion of long-term debt			28,403				27,613
Total current liabilities			256,143				254,024
Long-term debt, net of current portion			187,378				186,143
Deferred tax liabilities			18,003				17,993
Other long-term liabilities			134,176				90,779
Total liabilities			595,700				548,939
Commitments and contingencies
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; 50,596,756 and 50,221,035, issued and outstanding at March 31, 2019 and December 31, 2018, respectively			34,704				34,454
Additional paid-in capital			410,163				399,915
Retained earnings			668,424				636,708
Treasury stock, at cost, 1,457,206 shares held at March 31, 2019 and December 31, 2018			(37,768	)			(37,768	)
Accumulated other comprehensive loss			(106,848	)			(101,846	)
Total stockholders' equity			968,675				931,463
Noncontrolling interest			48,623				45,969
Total equity			1,017,298				977,432
Total liabilities and stockholders' equity		$	1,612,998			$	1,526,371

« Previous Page 1 | 2 | 3 | 4 | 5 | 6  Next Page »