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Diodes Incorporated Reports First Quarter 2009 Financial Results
Financial and Business Highlights:
-
Revenue was
$78.1 million , which exceeded guidance of$71 to $75 million ; - Gross margin was 18.6 percent, which was within the guidance range of 16 to 20 percent;
-
GAAP net loss was
$10.8 million , or($0.26) per share; -
GAAP net loss adjusted for the change in accounting principle effected
by FSP APB 14-1 was
$9.5 million , or($0.23) per share; -
Achieved
$6.8 million cash flow from operations and$2.5 million free cash flow; -
Reduced inventory by
$16 million , 16.4 percent from fourth quarter of 2008; -
Reduced capital expenditures to
$4.3 million from 2008 quarterly run rate of$13 million ; -
Repurchased
$9.6 million of the Convertible Senior Notes for$6.6 million in cash; and - Completed implementation of previously announced cost reduction initiatives.
Revenue for the first quarter of 2009 was
Gross profit for the first quarter of 2009 was
First quarter GAAP net loss was
GAAP net loss adjusted for the change in accounting principle effected
by FSP APB 14-1, which we adopted during the first quarter of 2009 was
As of
Commenting on the quarter, Dr.
Business Outlook
Dr. Lu further commented, “For the second quarter of 2009, we expect our
business will further benefit from increasing demand in
Dr. Lu concluded, “I believe that we have taken the right steps to decisively respond to current market conditions by aggressively reducing operating expenses, inventory levels, debt and capital expenditures in order to sustain our positive cash flow. Additionally, our continued focus on new product development and design wins is proving successful as a strong contributor to our increasing revenue. These accomplishments serve as a strong testament to the scalability of our business model and our ability to execute in all business environments.”
Conference Call
Diodes will host a conference call on
About
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 regarding our expectation that: for the second quarter of
2009, we expect our business will further benefit from increasing demand
in
Recent news releases, annual reports, and
CONSOLIDATED CONDENSED INCOME STATEMENT and BALANCE SHEET FOLLOW
DIODES INCORPORATED AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) |
||||||||||
Three months ended | ||||||||||
March 31, | ||||||||||
2008 | 2009 | |||||||||
(As Adjusted) | ||||||||||
NET SALES | $ | 95,580 | $ | 78,050 | ||||||
COST OF GOODS SOLD | 63,664 | 63,557 | ||||||||
Gross profit | 31,916 | 14,493 | ||||||||
OPERATING EXPENSES | ||||||||||
Selling, general and administrative (1) | 14,542 | 16,056 | ||||||||
Research and development (2) | 3,574 | 5,275 | ||||||||
Amortization of acquisition related intangible assets (3) | 234 | 1,091 | ||||||||
Restructuring charge | - | 99 | ||||||||
Total operating expenses | 18,350 | 22,521 | ||||||||
Income (loss) from operations | 13,566 | (8,028 | ) | |||||||
OTHER INCOME (EXPENSES) | ||||||||||
Interest income | 5,448 | 1,757 | ||||||||
Interest expense | (1,621 | ) | (2,048 | ) | ||||||
Amortization of debt discount (4) | (2,634 | ) | (2,209 | ) | ||||||
Other (5) | (294 | ) | 263 | |||||||
Total other income (expenses) | 899 | (2,237 | ) | |||||||
Income (loss) before income taxes and noncontrolling interest | 14,465 | (10,265 | ) | |||||||
INCOME TAX PROVISION | 1,218 | 397 | ||||||||
NET INCOME (LOSS) | 13,247 | (10,662 | ) | |||||||
Less: NET INCOME attributable to noncontrolling interest | (604 | ) | (104 | ) | ||||||
NET INCOME (LOSS) attributable to common stockholders | $ | 12,643 | $ | (10,766 | ) | |||||
EARNINGS (LOSS) PER SHARE attributable to common stockholders | ||||||||||
Basic | $ | 0.31 | $ | (0.26 | ) | |||||
Diluted | $ | 0.30 | $ | (0.26 | ) | |||||
Number of shares used in computation | ||||||||||
Basic | 40,245 | 41,146 | ||||||||
Diluted | 42,534 | 41,146 |
(1) | Includes $0.6 million and $1.1 million for the three months ended March 31, 2009 and 2008, respectively, of SFAS 123R stock option expense. | |
(2) | Includes $0.1 million for the three months ended March 31, 2009 and 2008 of SFAS 123R stock option expense. | |
(3) | Amortization of acquisition related intangible assets related to recent acquisitions, including Zetex. | |
(4) | Amortization of debt discount is a non-cash interest expense related to the adoption of FSP APB 14-1. | |
(5) | Includes $1.5 million gain related to the repurchase of Convertible Senior Notes in accordance with APB 14-1 for the three months ended March 31, 2009. | |
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA
EBITDA represents earnings before net interest expense, income tax provision, depreciation and amortization. Our 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, our management uses EBITDA, along with other generally accepted accounting principles, or GAAP measures, in evaluating our operating performance compared to that of other companies in our industry because 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 of other companies. Furthermore, EBITDA is not intended to be a measure of free cash flow for our 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 (loss) to EBITDA (in thousands, unaudited):
Three Months Ended | ||||||||||
March 31, | ||||||||||
2008 | 2009 | |||||||||
Net income (loss) (per-GAAP) | $ | 12,643 | $ | (10,766 | ) | |||||
Plus: | ||||||||||
Interest expense (income), net (1) | (1,194 | ) | 2,500 | |||||||
Income tax provision | 1,218 | 397 | ||||||||
Depreciation and amortization | 7,656 | 11,355 | ||||||||
EBITDA (Non-GAAP) | $ | 20,323 | $ | 3,486 |
(1) | Includes $2.2 million and $2.6 million for the three months ended March 31, 2009 and 2008, respectively, for amortization of debt discount related to the adoption of FSP APB 14-1. |
DIODES INCORPORATED AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
ASSETS (in thousands) (unaudited) |
||||||||
December 31, | March 31, | |||||||
2008 | 2009 | |||||||
(As Adjusted) | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 103,496 | $ | 93,208 | ||||
Accounts receivable, net | 74,574 | 68,174 | ||||||
Inventories | 99,118 | 82,835 | ||||||
Deferred income taxes, current | 6,761 | 7,810 | ||||||
Prepaid expenses and other | 15,578 | 13,468 | ||||||
Total current assets | 299,527 | 265,495 | ||||||
LONG-TERM INVESTMENT SECURITIES | 320,625 | 320,625 | ||||||
PROPERTY, PLANT AND EQUIPMENT, net | 174,667 | 168,432 | ||||||
OTHER ASSETS | ||||||||
Goodwill | 56,791 | 63,672 | ||||||
Intangible assets, net | 35,928 | 34,899 | ||||||
Other | 5,907 | 5,964 | ||||||
Total assets | $ | 893,445 | $ | 859,087 |
DIODES INCORPORATED AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS’ EQUITY (in thousands, except share data) (unaudited) |
||||||||||
December 31, | March 31, | |||||||||
2008 | 2009 | |||||||||
(As Adjusted) | ||||||||||
CURRENT LIABILITIES | ||||||||||
Lines of credit | $ | 6,098 | $ | 4,129 | ||||||
Accounts payable | 47,561 | 30,709 | ||||||||
Accrued liabilities | 31,195 | 28,286 | ||||||||
Income tax payable | 358 | 1,553 | ||||||||
Current portion of long-term debt | 1,339 | 348 | ||||||||
Current portion of capital lease obligations | 377 | 350 | ||||||||
Total current liabilities | 86,928 | 65,375 | ||||||||
LONG-TERM DEBT, net of current portion | ||||||||||
2.25% convertible senior notes due 2026 | 155,451 | 149,497 | ||||||||
Long-term borrowings | 217,146 | 216,111 | ||||||||
CAPITAL LEASE OBLIGATIONS, net of current portion | 1,854 | 1,776 | ||||||||
DEFERRED INCOME TAXES, non-current | 10,753 | 16,982 | ||||||||
OTHER LONG-TERM LIABILITIES | 22,935 | 28,766 | ||||||||
Total liabilities | 495,067 | 478,507 | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||
EQUITY | ||||||||||
Diodes Incorporated 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; 41,378,816 and 41,395,815 issued and outstanding at December 31, 2008 and |
||||||||||
March 31, 2009, respectively | 27,586 | 27,597 | ||||||||
Additional paid-in capital | 167,964 | 170,416 | ||||||||
Retained earnings | 241,814 | 231,048 | ||||||||
Accumulated other comprehensive loss | (48,439 | ) | (56,536 | ) | ||||||
Total Diodes Incorporated stockholders' equity | 388,925 | 372,525 | ||||||||
Noncontrolling interest | 9,453 | 8,055 | ||||||||
Total equity | 398,378 | 380,580 | ||||||||
Total liabilities and equity | 893,445 | 859,087 |
Source:
Diodes Incorporated
Carl Wertz, 805-446-4800
Chief
Financial Officer
Carl_Wertz@diodes.com
or
Investor
Contact:
Shelton Group
Leanne K. Sievers,
949-224-3874
EVP, Investor Relations
LSievers@sheltongroup.com