Form 8-K Amendment No. 1

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K/A

(Amendment No. 1)

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 24, 2015

 

 

DIODES INCORPORATED

(Exact name of Registrant as Specified in Its Charter)

 

 

 

Delaware   002-25577   95-2039518

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

4949 Hedgcoxe Road, Suite 200, Plano, TX   75024
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s Telephone Number, Including Area Code: (972) 987-3900

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


EXPLANATORY NOTE

This Form 8-K/A amends the Form 8-K filed by Diodes Incorporated (the “Company”) with the Securities and Exchange Commission (the “Commission”) on November 25, 2015 (the “Original 8-K”), regarding the acquisition (the “Acquisition”) of Pericom Semiconductor Corporation (“Pericom”).

As permitted under Item 9.01(a)(4) of Form 8-K, the Original 8-K did not include certain financial statements and pro forma financial information. The Company is filing this amendment to provide the historical audited financial information and unaudited pro forma financial information required to be filed under Item 9.01 of Form 8-K in connection with the Acquisition.

Item 9.01. Financial Statements and Exhibits.

 

  (a)

Financial statements of businesses acquired.

This Form 8-K/A incorporates by reference the historical audited consolidated balance sheets of Pericom as of June 27, 2015 and June 28, 2014, and the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity and cash flows for each of the three years in the period ended June 27, 2015 included in “Item 8. Financial Statements and Supplementary Data” from Pericom’s Annual Report on Form 10-K for the year ended June 27, 2015, filed with the Commission on September 1, 2015 (pages 50 through 79 only).*

This Form 8-K/A incorporates by reference the historical unaudited condensed consolidated balance sheets of Pericom as of September 26, 2015 and June 27, 2015, and the related unaudited condensed consolidated statements of operations, comprehensive income (loss), shareholders’ equity and cash flows for the three months ended September 26, 2015 and September 27, 2014, included in “Item 1. Condensed Consolidated Financial Statements Unaudited” from Pericom’s Quarterly Report on Form 10-Q for the three months ended September 26, 2015, filed with the Commission on November 2, 2015 (pages 3 through 19 only).**

 

  (b)

Pro forma financial information.

The following pro forma financial information and related notes are filed herewith as Exhibit 99.3:

 

 

Unaudited pro forma condensed combined balance sheet as of September 30, 2015 and accompanying explanatory notes;

 

 

Unaudited pro forma condensed combined statement of operations for the year ended December 31, 2014 and accompanying explanatory notes; and

 

 

Unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2015 and accompanying explanatory notes.

The unaudited pro forma condensed consolidated financial information is presented for informational purposes only. The pro forma data is not necessarily indicative of what the Company’s financial position or results of operations actually would have been had the Company completed the Acquisition as of the dates indicated. In addition, the unaudited pro forma condensed consolidated financial information does not purport to project the future financial position or operating results of the consolidated company.


(d) Exhibits

 

Exhibit
No.

  

Description

23.1   

Consent of Burr Pilger Mayer, Inc., Independent Auditors of Pericom Semiconductor Corporation and subsidiaries

99.1   

Consolidated balance sheet of Pericom as of June 27, 2015 and June 28, 2014, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended June 27, 2015 (incorporated by reference from “Item 8. Financial Statements and Supplementary Data” in Pericom’s Annual Report on Form 10-K for the year ended June 27, 2015, filed with the Securities and Exchange Commission (the “SEC”) on September 1, 2015 (pages 50 through 79 only).

99.2   

Condensed consolidated balance sheets of Pericom as of September 26, 2015 and June 27, 2015, and the related unaudited condensed consolidated statements of operations, comprehensive income (loss) and cash flows for the three months ended September 26, 2015 and September 27, 2014 (incorporated by reference from “Item 1. Condensed Consolidated Financial Statements (Unaudited)” from Pericom’s Quarterly Report on Form 10-Q for the three months ended September 26, 2015, filed with the SEC on November 2, 2015 (pages 3 through 19 only.)**

99.3   

Unaudited pro forma financial information

 

*

Financial statements required by Item 9.01(a) are for Pericom Semiconductor Corporation’s most recent fiscal year only. All other years are not required and are being presented for information purposes only.

**

Financial statements required by Item 9.01(a) are for Pericom’s Semiconductor Corporation’s most recent quarterly period and the corresponding quarterly period of the preceding year (September 2015) only. All other periods are not required and are being presented for information purposes only.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: February 10, 2016

   

DIODES INCORPORATED

   

By

 

/s/ Richard D. White

     

Richard D. White

     

Chief Financial Officer

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-78716, 333-106775, 333-124809, 333-189298, and 333-189299) of Diodes Incorporated of our report dated September 1, 2015, relating to the consolidated financial statements of Pericom Semiconductor Corporation, which appears in the June 27, 2015 Annual Report on Form 10-K of Pericom Semiconductor Corporation which is incorporated by reference in the Current Report on Form 8-K/A of Diodes Incorporated, dated February 10, 2016.

/s/ Burr Pilger Mayer, Inc.

San Jose, California

February 10, 2016

EX-99.3

EXHIBIT 99.3

DIODES INCORPORATED (“DIODES”)

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

On November 24, 2015 Diodes Incorporated (“Diodes”, the “Company”, “we” or “our”) completed the acquisition (the “Acquisition”) of Pericom Semiconductor Corporation (“Pericom”) pursuant to an Agreement and Plan of Merger dated as of September 2, 2015, as amended by Amendment No. 1 dated as of November 6, 2015, by and among Diodes, PSI Merger Sub Inc., a California corporation and an indirect wholly owned subsidiary of Diodes (“Merger Sub”) and the Company (the “Merger Agreement”). Pursuant to the Merger Agreement, Merger Sub was merged with and into the Company, with the Company continuing as the surviving corporation and an indirect wholly owned subsidiary of Diodes. The following unaudited pro forma condensed combined financial statements are based upon the historical condensed consolidated financial statements and notes thereto of Diodes (as adjusted for the Pericom acquisition).

The unaudited pro forma condensed combined balance sheet gives pro forma effect to the Pericom acquisition as if it had been completed on September 30, 2015 and combines Diodes’ September 30, 2015 unaudited consolidated balance sheet with Pericom’s unaudited consolidated balance sheet as of September 26, 2015. The unaudited pro forma condensed combined statement of operations for the twelve months ended December 31, 2014, gives pro forma effect to the transactions as if they had been completed on January 1, 2014 and combines Diodes’ audited consolidated statement of operations for the year ended December 31, 2014 and Pericom’s unaudited consolidated statement of operations for the twelve months ended December 27, 2014. The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2015, gives pro forma effect to the transactions as if they had been completed on January 1, 2014 and combines Diodes’ unaudited condensed consolidated statement of operations for the nine months ended September 30, 2015 and Pericom’s unaudited condensed consolidated statement of operations for the nine months ended September 26, 2015.

The unaudited pro forma financial information is presented for informational purposes only. The historical condensed combined financial information has been adjusted to give effect to pro forma events that are: 1) directly attributable to the Acquisition; 2) factually supportable; and 3) with respect to the statement of income, expected to have a continuing impact on the combined results. It does not purport to indicate the results that would have actually been attained had the Acquisition occurred on the assumed dates or for the periods presented, or which may be realized in the future. The pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable under the circumstances. A final determination of fair values relating to the Acquisition may differ materially from the preliminary estimates and will include management’s final valuation of the fair value of assets acquired and liabilities assumed. This final valuation will be based on the actual net assets of Pericom that existed as of the date of the completion of the Acquisition. Any adjustments to the preliminary estimated fair value amounts could have a significant impact on the unaudited pro forma condensed combined financial information contained herein, and our future results of operations and financial position.

These unaudited pro forma condensed combined financial statements should be read in conjunction with the historical consolidated financial statements and related notes contained in the annual, quarterly and other reports filed by Diodes with the United States Securities and Exchange Commission (“SEC”) and with Pericom’s historical consolidated financial statements and related notes contained in the annual, quarterly and other reports Pericom had previously filed with the SEC.


Unaudited Pro Forma Condensed Combined Balance Sheet

As of September 30, 2015

 

     Diodes
September 30,
2015
    Pericom
September 26,
2015
     Total
Pro Forma
Adjustments
    Pro Forma
Combined
 

Assets

         

Current assets:

         

Cash and cash equivalents

   $ 188,755      $ 41,544       $ (15,524 )(10)    $ 214,775   

Short-term investments

     24,586        78,958         —          103,544   

Accounts receivable, net

     202,467        26,756         —          229,223   

Other receivables

     —          2,727         —          2,727   

Inventories

     197,698        15,183         7,317 (3)      220,198   

Deferred income taxes, current

     11,193        3,387         —          14,580   

Prepaid expenses and other

     38,389        311         112 (9)      38,812   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total current assets

     663,088        168,866         (8,095     823,859   
  

 

 

   

 

 

    

 

 

   

 

 

 

Property, plant and equipment, net

     371,036        55,947         23,777 (3)      450,760   

Deferred income tax, non-current

     32,259        2,594         7,107 (7)      41,960   

Goodwill

     79,389        —           64,427 (1)      143,816   

Intangible assets, net

     42,841        3,234         153,466 (3)      199,541   

Investments in unconsolidated subsidiaries

     —          2,289         —          2,289   

Other

     24,580        7,739         6,054 (3)      38,373   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total assets

   $ 1,213,193      $ 240,669       $ 246,736      $ 1,700,598   
  

 

 

   

 

 

    

 

 

   

 

 

 

Liabilities

         

Current liabilities:

         

Lines of credit and short-term debt

   $ 261      $ —         $ 10,000 (4)    $ 10,261   

Accounts payable

     86,388        10,763         418 (8)      97,569   

Accrued liabilities

     91,868        7,935         4,320 (5)      104,123   

Income tax payable

     9,106        2,207         —          11,313   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total current liabilities

     187,623        20,905         14,738        223,266   
  

 

 

   

 

 

    

 

 

   

 

 

 

Long-term debt, net of current portion

     93,510        —           381,123 (4)      474,633   

Industrial development subsidy

     —          5,010         —          5,010   

Deferred tax liabilities

     —          4,756         38,298 (7)      43,054   

Noncurrent tax liabilities

     —          1,424         —          1,424   

Other long-term liabilities

     74,591        426         6,060 (6)      81,077   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total liabilities

     355,724        32,521         440,219        828,464   
  

 

 

   

 

 

    

 

 

   

 

 

 

Stockholders’ equity

         

Preferred stock

     —          —             —     

Common stock

     32,394        87,206         (87,206 )(2)      32,394   

Additional paid-in capital

     335,835        22,249         (7,252 )(2)      350,832   

Retained earnings

     519,053        94,574         (94,906 )(2)      518,721   

Accumulated other comprehensive loss

     (77,564     4,119         (4,119 )(2)      (77,564
  

 

 

   

 

 

    

 

 

   

 

 

 

Total stockholders’ equity

     809,718        208,148         (193,483     824,383   

Noncontrolling interest

     47,751        —           —          47,751   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total equity

     857,469        208,148         (193,483     872,134   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 1,213,193      $ 240,669       $ 246,736      $ 1,700,598   
  

 

 

   

 

 

    

 

 

   

 

 

 


Unaudited Pro Forma Condensed Combined Balance Sheet

Explanations

 

1. Calculation of goodwill

    

Calculation paid:

    

Cash consideration for shares outstanding

     $ 391,123   

Cash consideration for vested stock awards including taxes of $88.

       7,371   

Value of Diodes stock to be issued in exchange of vested Pericom employee stock awards.

       14,997   

Change-in-control payments to be made, including taxes of $99.

       4,320   
    

 

 

 

Total consideration

       417,811   

Transaction costs incurred by Pericom

       8,127   
    

 

 

 

Total consideration including transaction costs incurred by Pericom

       425,938   

Historical book value of Pericom net assets

       208,148   

Adjustments of acquired Pericom assets and liabilities to fair value:

    

Inventory acquired (See note 3 below)

       7,317   

Depreciable property, plant and equipment acquired (See note 3 below)

     15,583     

Land

     8,194     
  

 

 

   

Total property, plant and equipment

       23,777   

Land use rights classified as other assets

       7,277   

Intangible assets acquired (See note 3 below)

       153,466   

Cost based investments held by Pericom (See note 3 below)

       (1,223

Contingent liabilities

       (6,060

Deferred taxes, net (long-term asset - $7,107; long-term liability - $38,298)

       (31,191
    

 

 

 

Adjusted book value of Pericom’s net assets

       361,511   
    

 

 

 

Goodwill

     $ 64,427   
    

 

 

 

2. Change in capital accounts:

    

Eliminate Pericom historical capital accounts

    

Common stock

   $ (87,206  

Additional paid-in capital

     (22,249  

Retained earnings

     (94,574  

Accumulated other comprehensive loss

     (4,119  
  

 

 

   

Total Pericom historical capital accounts eliminated

     $ (208,148

At the time of the transaction all unvested Pericom equity awards became fully vested as a result of the change in control provisions of the equity awards. In accordance with the merger agreement, all equity awards converted to fully vested Diodes restricted stock units, and the fair value of these equity awards, approximately $15 million, is a component of purchase accounting. While the equity awards are vested, meaning no additional performance is required, the shares will be released to the employee under the original Pericom vesting schedule, unless the employee leaves the company, then the all remaining owed shares will be issued. This exchange will result in approximately 724 thousand Diodes shares being issued.

        

    14,997   

The number of share issues is based on the following exchange rate:

  

 

.83 Diodes restricted stock award for each vested Pericom restricted stock award and performance based unit

   

 

.45 Diodes restricted stock award for each vested Pericom stock option

  

 

Non recurring costs expensed after September 30, 2015. This includes costs, for attorney’s, tax, advice, printing, and other outside consultants and services provided.

       (332
    

 

 

 

Total

     $ (193,483
    

 

 

 

3. To reflect the fair value of inventory, property, plant and equipment, land use rights, cost based investments and intangible assets acquired:

    

Inventory acquired (integrated circuits and frequency control products)

       7,317   

Depreciable property, plant and equipment acquired (personal property, real property; average weighted life 32 years

     15,583     

Land

     8,194     
  

 

 

   

Total Property, plant and equipment

       23,777   

Land use rights (Other assets)

       7,277   

Intangible assets acquired (order backlog, customer relationships, developed technology, in-process technology, trade name; average weighted life 11.6 years.)

       153,466   

Cost based investments held by Pericom (Other assets)

       (1,223
    

 

 

 

Total

     $ 23,777   
    

 

 

 

 


Unaudited Pro Forma Condensed Combined Balance Sheet

Explanations (continued)

 

4.

  

Incremental debt incurred to affect the transaction.

     
  

Lines of credit and short-term debt

     10,000      
  

Long-term debt, net of current portion

     381,123      
     

 

 

    
  

Total

      $ 391,123   
  

The incremental debt was funded under an amendment to our existing credit facility (the “Amendment”). The Amendment increases the Company’s existing senior credit facilities to a $400 million revolving senior credit facility (the “Revolver”), which includes a $10 million swing line sublimit, a $10 million letter of credit sublimit, and a $20 million alternative currency sublimit, and a $100 million term loan facility (the “Term Loan Facility”). The interest rate is subject to change based on Diodes consolidated leverage ratio. A 1/8 percent increase in the rate of the initial debt level of $391 million would increase Diodes annual interest expense approximately $500,000, on a pretax basis.

     

5.

  

Amounts due under change in control agreements.

      $ 4,320   

6.

  

Adjust for liabilities assumed in the transaction for uncertain tax positions and potential legal exposure.

      $ 6,060   

7.

  

Deferred taxes, net (long-term asset—$7,107; long-term liability—$38,288)

      $ 31,191   

8.

  

Transaction costs expensed but not paid after September 30, 2015. This includes costs, for attorney’s, tax, advice, printing, and other outside consultants and services provided.

      $ 418   

9.

  

Debt issuance costs incurred after September 30, 2015, for incremental borrowings.

      $ 112   

10.

  

Cash used and borrowed to affect transaction:

     
  

Debt incurred

      $ 391,123   
  

Cash paid for shares outstanding

        (391,123
  

Cash consideration for vested stock awards including taxes of $88.

        (7,371
  

Cash paid by Diodes after September 30, 2015, for debt issuance costs

        (43
  

Cash paid after September 30, 2015, for transaction costs

        (8,110
        

 

 

 
  

Change in cash

      $ (15,524
        

 

 

 


     Unaudited Pro Forma Condensed Combined Statement of Operations  
     Nine Months Ended  
     Diodes     Pericom *      Pro Forma     Pro Forma  
     September 30, 2015     September 26, 2015      Adjustments     Consolidated  

Net sales

   $ 634,522      $ 93,891       $ —        $ 728,413   

Cost of goods sold

     439,536        50,644         —          490,180   
  

 

 

   

 

 

    

 

 

   

 

 

 

Gross profit

     194,986        43,247         —          238,233   

Operating expenses

         

Selling, general and administrative

     98,282        24,082         (2,192 )(1)(4)      120,172   

Research and development

     40,644        13,327         —          53,971   

Amortization of acquisition related intangible assets

     5,630        —           9,007 (2)      14,637   

Loss (gain) on fixed assets

     1,556        —           —          1,556   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total operating expenses

     146,112        37,409         6,815        190,336   

Income from operations

     48,874        5,838         (6,815     47,897   

Other income (expense)

     (1,426     4,487         (8,967 )(3)      (5,906

Income before income taxes and noncontrolling interest

     47,448        10,325         (15,782     41,991   

Income tax provision

     16,179        1,177         (3,729 )(5)      13,627   

Equity in net income of unconsolidated affiliates

     —          88         —          88   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income

     31,269        9,236         (12,053     28,452   

Less net income attributable to noncontrolling interest

     2,222        —           (856     1,366   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income attributable to common stockholders

   $ 29,047      $ 9,236       $ (11,197   $ 27,086   
  

 

 

   

 

 

    

 

 

   

 

 

 

Earnings per share attributable to common stockholders:

         

Basic

   $ 0.60           $ 0.55   
  

 

 

        

 

 

 

Diluted

   $ 0.59           $ 0.54   
  

 

 

        

 

 

 

Number of shares used in earnings per share computation:

         

Basic

     48,144           724 (6)      48,868   
  

 

 

      

 

 

   

 

 

 

Diluted

     49,351           724 (6)      50,075   
  

 

 

      

 

 

   

 

 

 


Unaudited Pro Forma Condensed Combined Statement of Operations

For the Nine Months Ended September 30, 2015

Explanations

 

1.

  

Incremental depreciation expense and amortization related to fair value adjustments to the acquired property, plant and equipment and land use rights. The estimated depreciable life of this incremental property, plant and equipment and land use rights is approximately 28 years and based on straight line attribution method.

    

2.

  

Incremental amortization expense related to the fair value adjustment of the acquired intangible assets. The incremental intangible assets will be amortized over the weighted average useful lives of approximately 11.6 years.

   

3.

  

Interest expense computed at 3%, the current rate in effect, and amortization of debt issuance costs on the incremental borrowing to affect the transaction.

   

4.

  

Reverse nonrecurring transaction costs, $2,812. Includes costs for attorney’s, tax advice and other consultants.

  

5.

  

Tax benefit of related to the expenses directly related to the transaction resulting in an effective tax rate on the adjustments of 21%.

   
   Tax benefit of incremental expenses and reversal of tax benefit on transaction costs at 34%.      (2,093
   Reversal of deferred taxes on fair value adjustments at 17%. Rate is based on original rate used to record deferred tax at the acquisition date.      (1,637
     

 

 

 
   Total      (3,729
     

 

 

 

6.

  

Diodes shares to be issued for replacement of Pericom equity awards.

  

*

  

Information for the nine months ended September 26, 2015 for Pericom was derived from Pericom’s previous filings with the Securities and Exchange Commission.

   
  

The Company has not included incremental transaction costs of approximately $8 million due to those costs being nonrecurring.

  


     Unaudited Pro Forma Condensed Combined Statement of Operations  
     Twelve Months Ended  
     Diodes
December 31, 2014
    Pericom *
December 27, 2014
     Pro Forma
Adjustments
    Pro Forma
Consolidated
 

Net sales

   $ 890,651      $ 129,934       $ —        $ 1,020,585   

Cost of goods sold

     613,372        74,969         —          688,341   
  

 

 

   

 

 

    

 

 

   

 

 

 

Gross profit

     277,279        54,965         —          332,244   

Operating expenses

         

Selling, general and administrative

     133,701        29,498         827 (1)      164,026   

Research and development

     52,136        18,454         —          70,590   

Amortization of acquisition related intangible assets

     7,914        991         12,010 (2)      20,915   

Loss (gain) on fixed assets

     (983     —           —          (983
  

 

 

   

 

 

    

 

 

   

 

 

 

Total operating expenses

     192,768        48,943         12,837        254,548   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income from operations

     84,511        6,022         (12,837     77,696   

Other income (expenses)

         

Interest income

     1,470        2,733         —          4,203   

Interest expense

     (4,332     —           (12,312 )(3)      (16,644

Gain on securities carried at fair value

     1,364        56         —          1,420   

Other

     2,979        1,678         —          4,657   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total other income (expense)

     1,481        4,467         (12,312     (6,364
  

 

 

   

 

 

    

 

 

   

 

 

 

Income before income taxes and noncontrolling interest

     85,992        10,489         (25,149     71,332   

Income tax provision

     20,359        1,993         (5,137 )(4)      17,215   

Equity in net income of unconsolidated affiliates

     —          176         —          176   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income

     65,633        8,672         (20,012     54,293   

Less net income attributable to noncontrolling interest

     1,955        —           (596     1,359   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income attributable to common stockholders

   $ 63,678      $ 8,672       $ (19,416   $ 52,934   
  

 

 

   

 

 

    

 

 

   

 

 

 

Earnings per share attributable to common stockholders:

         

Basic

   $ 1.35           $ 1.10   
  

 

 

        

 

 

 

Diluted

   $ 1.31           $ 1.07   
  

 

 

        

 

 

 

Number of shares used in earnings per share computation:

            —     

Basic

     47,184           724 (5)      47,908   
  

 

 

      

 

 

   

 

 

 

Diluted

     48,594           724 (5)      49,318   
  

 

 

      

 

 

   

 

 

 


Unaudited Pro Forma Condensed Combined Statement of Operations

For the Twelve Months Ended December 31, 2014

Explanations

 

1.

  

Incremental depreciation expense and amortization related to fair value adjustments to the acquired property, plant and equipment and land use rights. The estimated depreciable life of this incremental property, plant and equipment and land use rights is approximately 28 years and based on straight line attribution method.

    

2.

  

Incremental amortization expense related to the fair value adjustment of the acquired intangible assets. The incremental intangible assets will be amortized over the weighted average useful lives of approximately 11.6 years.

   

3.

  

Interest expense computed at 3%, the current rate in effect, and amortization of debt issuance costs on the incremental borrowing to affect the transaction.

   

4.

  

Tax benefit of related to the expenses directly related to the transaction resulting in an effective tax rate on the adjustments of 19%.

   
   Tax benefit of incremental expenses and reversal of tax benefit on transaction costs at 24%.      (2,955
   Reversal of deferred taxes on fair value adjustments at 17%. Rate is based on original rate used to record deferred tax at the acquisition date.      (2,182
     

 

 

 
   Total      (5,137
     

 

 

 

5.

  

Diodes shares to be issued for replacement of Pericom equity awards.

  

*

  

Information for the twelve months ended December 27, 2014 for Pericom was derived from Pericom’s previous filings with the Securities and Exchange Commission.

   
  

The Company has not included incremental transaction costs of approximately $8 million due to those costs being nonrecurring.