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Diodes Incorporated Reports Third Quarter 2020 Financial Results

Revenue Exceeds Expectations, Increasing 7.2% Sequentially Driven by Record Revenue in Automotive, Computing and Consumer End Markets

PLANO, Texas--(BUSINESS WIRE)--Nov. 9, 2020-- Diodes Incorporated (Nasdaq: DIOD) today reported its financial results for the third quarter ended September 30, 2020. 

Third Quarter Highlights

  • Revenue was $309.5 million, an increase of 7.2 percent compared to $288.7 million in the second quarter 2020;
  • Gross profit was $111.1 million, an increase of 9.5 percent compared to $101.5 million in the second quarter 2020;
  • Gross profit margin increased 70 basis points to 35.9 percent from 35.2 percent in the second quarter 2020;
  • GAAP net income was $27.2 million, or $0.51 per diluted share, as compared to $21.0 million, or $0.40 per diluted share, in the second quarter 2020;
  • Non-GAAP adjusted net income was $32.8 million, or $0.62 per diluted share, as compared to $28.6 million, or $0.54 per diluted share, in the second quarter 2020;
  • Excluding $5.0 million, net of tax, of non-cash share-based compensation expense, both GAAP and non-GAAP earnings per share would have increased by $0.09 per diluted share;
  • EBITDA was $63.3 million, or 20.5 percent of revenue, compared to $55.3 million, or 19.2 percent of revenue, in the second quarter 2020; and
  • Achieved cash flow from operations of $39.7 million and $21.9 million free cash flow, including $17.8 million of capital expenditures. Net cash flow was a positive $85.2 million, which includes an additional draw-down of debt as a partial currency hedge associated with the anticipated close of the Lite-On acquisition at the end of November as well as a pay-down of long-term debt.

Commenting on the results, Dr. Keh-Shew Lu, Chairman, President and Chief Executive Officer, stated, “Third quarter results were better than expected due to a strong recovery in Asia followed by North America, contributing to record revenue in our automotive, consumer and computing end markets. Total worldwide point of sale (POS) revenue increased 19% sequentially and reached a record in the quarter, driven by record POS revenue in Asia at 20% and 16% growth in both Europe and North America. Our record sales in the automotive market grew 18% sequentially and over 5% year-over-year to 11% of total revenue, reflecting Diodes continued success in expanding application opportunities across new and existing customers while further increasing Diodes semiconductor content per vehicle. Additionally, we continued to gain strong momentum with our Pericom IC products in both the automotive and computing markets, and we also saw a resurgence in the consumer market, which has increased approximately 30% from the first quarter of this year.

“In fact, our total revenue has increased 10% from the first quarter of 2020 at the onset of the pandemic with net income increasing approximately 35%, demonstrating both the resiliency of our business as well as the solid leverage in our operating model. We expect to further extend our growth momentum as we continue to see broad-based improvements across our target end markets and geographies, which at the mid-point of our fourth quarter guidance represents the highest quarterly revenue in the Company’s history. These expectations exclude any contribution from our proposed acquisition of Lite-On Semiconductor that is expected to close at the end of November.”

Third Quarter 2020

Revenue for third quarter 2020 was $309.5 million, compared to $288.7 million in the second quarter 2020 and $323.7 million in the third quarter 2019.

GAAP gross profit for the third quarter 2020 was $111.1 million, or 35.9 percent of revenue, compared to the second quarter 2020 of $101.5 million, or 35.2 percent of revenue, and the third quarter 2019 of $122.0 million, or 37.7 percent of revenue.

GAAP operating expenses for third quarter 2020 were $73.2 million, or 23.7 percent of revenue, and on a non-GAAP basis were $68.9 million, or 22.3 percent of revenue, which excludes $4.0 million of amortization of acquisition-related intangible asset expenses and $0.3 million of acquisition-related costs. GAAP operating expenses in the second quarter 2020 were $70.6 million, or 24.5 percent of revenue and in the third quarter 2019 were $73.3 million, or 22.7 percent of revenue.

Third quarter 2020 GAAP net income was $27.2 million, or $0.51 per diluted share, compared to GAAP net income of $21.0 million, or $0.40 per diluted share, in second quarter 2020 and GAAP net income of $38.1 million, or $0.73 per diluted share, in third quarter 2019.

Third quarter 2020 non-GAAP adjusted net income was $32.8 million, or $0.62 per diluted share, which excluded, net of tax, $3.3 million of non-cash acquisition-related intangible asset amortization costs of acquisition-related costs and $2.4 million of acquisition-related financing and other costs. This compares to non-GAAP adjusted net income of $28.6 million, or $0.54 per diluted share, in the second quarter 2020 and $41.9 million, or $0.81 per diluted share, in the third quarter 2019

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

       

Three Months Ended

       

September 30, 2020

GAAP net income      

$

27,152

         
GAAP diluted earnings per share      

$

0.51

         
Adjustments to reconcile net income to non-GAAP net income:        
         
Amortization of acquisition-related intangible assets      

 

3,266

         
Acquisition-related financing costs      

 

2,130

         
Acquisition-related costs      

 

238

         
Non-GAAP net income      

$

32,786

         
Non-GAAP diluted earnings per share      

$

0.62

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

(See the reconciliation tables of GAAP net income to non-GAAP adjusted net income near the end of this release for further details.)

Included in third quarter 2020 GAAP net income and non-GAAP adjusted net income was approximately $5.0 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 $0.09 per diluted share for third quarter 2020, $0.09 for second quarter 2020 and $0.09 for third quarter 2019.

EBITDA (a non-GAAP measure), which represents earnings before net interest expense, income tax, depreciation and amortization, in the third quarter 2020 was $63.3 million, or 20.5 percent of revenue, compared to $55.3 million, or 19.2 percent of revenue, in the second quarter 2020 and $78.3 million, or 24.2 percent of revenue, in the third quarter 2019. For a reconciliation of GAAP net income to EBITDA, see the table near the end of this release for further details.

For third quarter 2020, net cash provided by operating activities was $39.7 million. Net cash flow was a positive $85.2 million, including $105 million of an additional draw-down of debt as a partial currency hedge associated with the anticipated close of the Lite-On acquisition and a pay-down of long-term debt in the amount of $49.7 million. Free cash flow (a non-GAAP measure) was $21.9 million, which includes $17.8 million of capital expenditures.

Balance Sheet

As of September 30, 2020, the Company had approximately $591 million in cash, cash equivalents and short-term investments. Long-term debt (including the current portion) totaled approximately $346 million and working capital was approximately $893 million.

The results announced today are preliminary and unaudited, 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, 2020.

Business Outlook

Dr. Lu concluded, “Building on our growth momentum in the third quarter and record POS results, we expect fourth quarter revenue to increase to a record of approximately $324 million, plus or minus 3 percent, which at the mid-point represents growth of 4.7 percent sequentially and 7.6 percent year-over-year, which is significantly above typical seasonal results over the past 5 years of down 4 percent. These revenue expectations exclude any contribution from the Lite-On Semiconductor acquisition, which is expected to close at the end of November. We expect GAAP gross margin to be 36 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 22.0 percent of revenue, plus or minus 1 percent. We expect non-GAAP net interest expense to be approximately $1.5 million. Our income tax rate is expected to be 18 percent, plus or minus 3 percent, and shares used to calculate diluted EPS for the fourth quarter are anticipated to be approximately 53.0 million.”

Purchase accounting adjustments related to amortization of acquisition-related intangible assets of $3.3 million, after tax, for Pericom and previous acquisitions is not included in these non-GAAP estimates. Also not included is $3.3 million of Lite-On acquisition-related financing costs.

Conference Call

Diodes will host a conference call on Monday, November 9, 2020 at 4:00 p.m. Central Time (5:00 p.m. Eastern Time) to discuss its third quarter 2020 financial results. Investors and analysts may join the conference call by dialing 1-855-232-8957 and providing the confirmation code 3088808. 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 16, 2020 at midnight Central Time. The replay number is 1-855-859-2056 with a pass code of 3088808. 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 90 days.

About Diodes Incorporated

Diodes Incorporated (Nasdaq: DIOD), a Standard and Poor’s SmallCap 600 and Russell 3000 Index company, delivers high-quality semiconductor products to the world’s leading companies in the consumer electronics, computing, communications, industrial, and automotive markets. We leverage our expanded product portfolio of discrete, analog, and mixed-signal products and leading-edge packaging technology to meet customers’ needs. Our broad range of application-specific solutions and solutions-focused sales, coupled with worldwide operations of 28 sites, including engineering, testing, manufacturing, and customer service, enables us to be a premier provider for high-volume, high-growth markets. For more information visit www.Diodes.com

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 2020 and beyond; that for the fourth quarter of 2020, we expect revenue to be a record and increase to approximately $324 million plus or minus 3 percent; we expect GAAP gross margin to be 36 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 22.0 percent of revenue, plus or minus 1 percent; we expect non-GAAP net interest expense to be approximately $1.5 million; we expect our income tax rate to be 18 percent, plus or minus 3 percent; shares used to calculate diluted EPS for the fourth quarter are anticipated to be approximately 53.0 million. Potential risks and uncertainties include, but are not limited to, such factors as: the risk that the COVID-19 pandemic may continue and have a material adverse effect on customer demand and staffing of our production, sales and administration facilities; 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 we may not be able to consummate our previously announced acquisition of Lite-On Semiconductor Corporation (“LSC”) on the terms and in the time frame currently contemplated; the risk that the cost, expense, and diversion of management attention associated with the LSC acquisition may be greater than we currently expect; 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 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 that the coronavirus outbreak or other similar epidemics may harm our domestic or international business operations to a greater extent than we currently anticipate; 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)

(in thousands, except per share data)

 
   

Three Months Ended

 

 

Nine Months Ended

   

September 30

 

 

September 30

   

 

2020

 

 

 

2019

 

 

 

 

2020

 

 

 

2019

 

Net sales  

$

309,459

 

 

$

323,674

 

   

$

878,845

 

 

$

947,973

 

Cost of goods sold  

 

198,369

 

 

 

201,628

 

   

 

570,421

 

 

 

591,528

 

Gross profit  

 

111,090

 

 

 

122,046

 

   

 

308,424

 

 

 

356,445

 

                   
Operating expenses                  
Selling, general and administrative  

 

44,651

 

 

 

46,123

 

   

 

132,238

 

 

 

137,143

 

Research and development  

 

24,469

 

 

 

22,689

 

   

 

69,469

 

 

 

66,566

 

Amortization of acquisition related intangible assets  

 

4,007

 

 

 

4,519

 

   

 

12,249

 

 

 

13,539

 

Other operating income  

 

108

 

 

 

-

 

   

 

(108

)

 

 

(158

)

Total operating expense  

 

73,235

 

 

 

73,331

 

   

 

213,848

 

 

 

217,090

 

                   
Income from operations  

 

37,855

 

 

 

48,715

 

   

 

94,576

 

 

 

139,355

 

                   
Other income (expense)                  
Interest income  

 

138

 

 

 

272

 

   

 

579

 

 

 

1,780

 

Interest expense  

 

(3,745

)

 

 

(2,007

)

   

 

(7,643

)

 

 

(6,163

)

Foreign currency loss, net  

 

(2,618

)

 

 

(822

)

   

 

(6,143

)

 

 

(1,382

)

Other income  

 

1,627

 

 

 

2,577

 

   

 

2,902

 

 

 

5,056

 

(Expense) Income  

 

(4,598

)

 

 

20

 

   

 

(10,305

)

 

 

(709

)

                   
Income before income taxes and noncontrolling interest  

 

33,257

 

 

 

48,735

 

   

 

84,271

 

 

 

138,646

 

Income tax provision  

 

5,871

 

 

 

10,613

 

   

 

15,097

 

 

 

32,085

 

Net income  

 

27,386

 

 

 

38,122

 

   

 

69,174

 

 

 

106,561

 

Less net income attributable to noncontrolling interest  

 

(234

)

 

 

(62

)

   

 

(821

)

 

 

(501

)

Net income attributable to common stockholders  

$

27,152

 

 

$

38,060

 

   

$

68,353

 

 

$

106,060

 

                   
Earnings per share attributable to common stockholders:                  
Basic  

$

0.52

 

 

$

0.75

 

   

$

1.33

 

 

$

2.09

 

Diluted  

$

0.51

 

 

$

0.73

 

   

$

1.30

 

 

$

2.05

 

Number of shares used in earnings per share computation:                  
Basic  

 

51,825

 

 

 

50,998

 

   

 

51,563

 

 

 

50,687

 

Diluted  

 

52,729

 

 

 

51,869

 

   

 

52,612

 

 

 

51,699

 

 

 

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 September 30, 2020:

   

Operating
Expenses

 

Other
Income
(Expense)

 

Income Tax
Provision

 

Net Income

Per-GAAP              

$

27,152

                 
Diluted earnings per share (Per-GAAP)              

$

0.51

                 
Adjustments to reconcile net income to non-GAAP net income:                
                 
Amortization of acquisition-related intangible assets  

4,007

     

(741

)

 

 

3,266

                 
Acquisition-related financing costs      

2,698

 

(568

)

 

 

2,130

                 
Acquisition-related costs  

300

     

(62

)

 

 

238

                 
Non-GAAP              

$

32,786

                 
Diluted shares used in computing earnings per share              

 

52,729

                 
Non-GAAP diluted earnings per share              

$

0.62

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 $0.09 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 September 30, 2019:

     

Operating
Expenses

 

Income Tax
Provision

 

Net Income

Per-GAAP            

$

38,060

 

               
Diluted earnings per share (Per-GAAP)            

$

0.73

 

               
Adjustments to reconcile net income to non-GAAP net income:              
               
Amortization of acquisition-related intangible assets    

4,518

 

 

(818

)

 

 

3,700

 

               
Acquisition related costs    

471

 

 

(95

)

 

 

376

 

               
Land sale inspection extension fee    

(300

)

 

63

 

 

 

(237

)

               
Non-GAAP            

$

41,899

 

               
Diluted shares used in computing earnings per share            

 

51,869

 

               
Non-GAAP diluted earnings per share            

$

0.81

 

Note: Included in GAAP and non-GAAP net income was approximately $4.4 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 $0.09 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 nine months ended September 30, 2020:

        Operating
Expenses
  Other Income
(Expense)
  Income
Tax
Provision
  Net Income
Per-GAAP                  

$

68,353

                     
Diluted earnings per share (Per-GAAP)                  

$

1.30

                     
Adjustments to reconcile net income to non-GAAP net income:                    
                     
Amortization of acquisition-related intangible assets      

12,249

     

(2,249

)

 

 

10,000

                     
Acquisition-related financing costs          

6,118

 

(1,343

)

 

 

4,775

                     
Acquisition-related costs      

1,124

     

(230

)

 

 

894

                     
Board-member retirement costs      

1,705

     

(358

)

 

 

1,347

                     
Non-GAAP                  

$

85,369

                     
Diluted shares used in computing earnings per share                  

 

52,612

                     
Non-GAAP diluted earnings per share                  

$

1.62

Note: Included in GAAP and non-GAAP net income was approximately $13.4 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 $0.25 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 nine months ended September 30, 2019:

   

Operating
Expenses

 

Income Tax
Provision

 

Net Income

Per-GAAP          

$

106,060

 

             
Diluted earnings per share (Per-GAAP)          

$

2.05

 

             
Adjustments to reconcile net income to non-GAAP net income:            
             
Amortization of acquisition-related intangible assets  

13,538

 

 

(2,448

)

 

 

11,090

 

             
Acquisition related costs  

471

 

 

(95

)

 

 

376

 

             
Land sale inspection extension fee  

(300

)

 

63

 

 

 

(237

)

             
Non-GAAP          

$

117,289

 

             
Diluted shares used in computing earnings per share          

 

51,699

 

             
Non-GAAP diluted earnings per share          

$

2.27

 

Note: Included in GAAP and non-GAAP net income was approximately $12.1 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 $0.23 per share.

ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE

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 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.

Acquisition related financing costs – The Company excluded expenses associated with a new credit facility and refinance of existing debt to prepare for the acquisition of Lite-On Semiconductor. The Company believes the exclusion of the acquisition related financing costs provides investors with a more accurate reflection of costs likely to be incurred in the absence of an unusual event such as an acquisition and facilitates comparisons with the results of other periods that may not reflect such costs.

Acquisition related costs – The Company excluded expenses associated with the acquisition of Lite-On Semiconductor, which consisted of advisory, legal and other professional and consulting fees. These costs were expensed as they were incurred and as services were received, and in which the corresponding tax adjustments were made for the non-deductible portions of these expenses. The Company believes the exclusion of the acquisition related costs provides investors with a more accurate reflection of costs likely to be incurred in the absence of an unusual event such as an acquisition and facilitates comparisons with the results of other periods that may not reflect such costs.

Board member retirement costs – The Company excluded expenses in connection with the retirement of a member of the Company’s board of directors. The Company modified that director’s unvested RSU grants to vest upon his retirement. The shares subject to the modified grants will be released that board member as if they were vesting under the original vesting timeline. In connection with this modification the Company recorded additional expense of approximately $1.7 million.

Land sale inspection extension fee – The Company excluded receipt of inspection extension fees related to the sale of the land located in Plano, TX. This fee is paid by the land purchaser for the right to extend the sale close date, and the fee is not applied to the purchase price. The Company feels it is appropriate to exclude these fees since they don’t represent ongoing operating income and their exclusion will present investors with a more accurate indication of our continuing operations.

CASH FLOW ITEMS

Free cash flow (FCF) (Non-GAAP)

FCF for the third quarter of 2020 is a non-GAAP financial measure, which is calculated by subtracting capital expenditures from cash flow from operations. For the third quarter of 2020, FCF was $21.9 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

 

Nine Months Ended

   

September 30

 

September 30

   

2020

 

2019

 

2020

 

2019

Net income (per-GAAP)  

$

27,152

 

$

38,060

 

$

68,353

 

$

106,060

Plus:                
Interest expense, net  

 

3,607

 

 

1,736

 

 

7,064

 

 

4,383

Income tax provision  

 

5,871

 

 

10,613

 

 

15,097

 

 

32,085

Depreciation and amortization  

 

26,699

 

 

27,888

 

 

81,043

 

 

82,805

EBITDA (non-GAAP)  

$

63,329

 

$

78,297

 

$

171,557

 

$

225,333

 

DIODES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands)

 
   

September 30

 

December 31,

   

 

2020

 

 

 

2019

 

   

(unaudited)

 

(audited)

Assets        
Current assets:        
Cash and cash equivalents  

$

587,643

 

 

$

258,390

 

Short-term investments  

 

3,014

 

 

 

4,825

 

Accounts receivable, net of allowances of $3,056 and $4,866 at
September 30, 2020 and December 31, 2019, respectively
 

 

261,782

 

 

 

260,322

 

Inventories  

 

260,289

 

 

 

236,472

 

Prepaid expenses and other  

 

101,961

 

 

 

49,950

 

Total current assets  

 

1,214,689

 

 

 

809,959

 

Property, plant and equipment, net  

 

453,487

 

 

 

469,574

 

Deferred income tax  

 

23,566

 

 

 

17,516

 

Goodwill  

 

155,492

 

 

 

141,318

 

Intangible assets, net  

 

114,306

 

 

 

119,523

 

Other  

 

71,112

 

 

 

81,494

 

Total assets  

$

2,032,652

 

 

$

1,639,384

 

         
Liabilities        
Current liabilities:        
Line of credit  

$

70,746

 

 

$

13,342

 

Accounts payable  

 

127,315

 

 

 

122,148

 

Accrued liabilities and other  

 

103,259

 

 

 

100,571

 

Income tax payable  

 

5,235

 

 

 

16,156

 

Current portion of long-term debt  

 

14,978

 

 

 

33,105

 

Total current liabilities  

 

321,533

 

 

 

285,322

 

Long-term debt, net of current portion  

 

330,766

 

 

 

64,401

 

Deferred tax liabilities  

 

14,445

 

 

 

16,333

 

Other long-term liabilities  

 

114,857

 

 

 

120,545

 

Total liabilities  

 

781,601

 

 

 

486,601

 

         
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;
51,945,299 and 51,206,969, issued and outstanding at September 30, 2020 and
December 31, 2019, respectively
 

 

35,628

 

 

 

35,111

 

Additional paid-in capital  

 

440,944

 

 

 

427,262

 

Retained earnings  

 

858,311

 

 

 

789,958

 

Treasury stock, at cost, 1,494,080 and 1,457,206 shares held as of September 30,
2020 and December 31, 2019, respectively
 

 

(39,205

)

 

 

(37,768

)

Accumulated other comprehensive loss  

 

(97,105

)

 

 

(108,139

)

Total stockholders' equity  

 

1,198,573

 

 

 

1,106,424

 

Noncontrolling interest  

 

52,478

 

 

 

46,359

 

Total equity  

 

1,251,051

 

 

 

1,152,783

 

Total liabilities and stockholders' equity  

$

2,032,652

 

 

$

1,639,384

 

 

Company Contact:
Diodes Inc.
Laura Mehrl
Director of Investor Relations
P: 972-987-3959
E: laura_mehrl@diodes.com

Investor Relations Contact:
Shelton Group
Leanne Sievers
President, Investor Relations
P: 949-224-3874
E: lsievers@sheltongroup.com

Source: Diodes Incorporated