Diodes Incorporated Reports Second Quarter 2016 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 regarding our expectation that: revenue from our automotive market also had another solid quarter of growth as this end market continues to outpace the average growth rate of the Company; as we look to the third quarter, we expect revenue to grow 5.6 percent sequentially at the mid-point, representing $250 million in a quarterly revenue run rate, which is an important milestone toward achieving our goal of $1 billion in annual revenue; additionally, gross margin is expected to improve another 90 basis points at the mid-point of our guidance range of 32.5 percent, with operating expenses decreasing further as a percentage of sales; we are beginning to see improvements in the general market environment and anticipate a more typical seasonal cycle going into the quarter; for the third quarter of 2016, we expect to grow revenue to a range between $242 million and $258 million, or up 2.3 to 9.0 percent sequentially; we expect GAAP and non-GAAP gross margin to be 32.5 percent, plus or minus 1 percent; non-GAAP operating expenses are expected to be approximately 24 percent of revenue, plus or minus 1 percent; we expect interest expense to be approximately $3.0 million, and our income tax rate to be 28 percent, plus or minus 3 percent; shares used to calculate diluted EPS for the third quarter are anticipated to be approximately 50 million; and please note that purchase accounting adjustments for Pericom and previous acquisitions of $4.4 million after tax are not included in these non-GAAP estimates. 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; 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; risks of domestic and foreign operations, including excessive operation costs, labor shortages, higher tax rates and our joint venture prospects; the risk of unfavorable currency exchange rates; our future guidance may be incorrect; the global economic weakness may be more severe or last longer than we currently anticipated; 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						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
NET SALES	$	236,645		$	219,453		$	459,383		$	425,634

COST OF GOODS SOLD		161,828			150,016			320,346			292,284

Gross profit		74,817			69,437			139,037			133,350

OPERATING EXPENSES
Selling, general and administrative		41,390			31,882			80,844			63,613
Research and development		17,010			13,590			35,159			26,899
Amortization of acquisition-related intangible assets		5,131			1,880			10,262			3,802
Others		9			87			40			135
Total operating expenses		63,540			47,439			126,305			94,449

Income from operations		11,277			21,998			12,732			38,901

OTHER INCOME (EXPENSES)
Interest income		298			244			754			542
Interest expense		(3,684	)		(757	)		(6,196	)		(1,821	)
Loss on securities carried at fair value		-			(125	)		-			(54	)
Other		901			(103	)		(535	)		(348	)
Total other expenses		(2,485	)		(741	)		(5,977	)		(1,681	)

Income before income taxes and noncontrolling interest		8,792			21,257			6,755			37,220

INCOME TAX PROVISION		2,396			5,399			1,844			9,586

NET INCOME		6,396			15,858			4,911			27,634

Less: NET INCOME attributable to noncontrolling interest		(644	)		(780	)		(892	)		(1,424	)

NET INCOME attributable to common stockholders	$	5,752		$	15,078		$	4,019		$	26,210

EARNINGS PER SHARE attributable to common stockholders
Basic	$	0.12		$	0.31		$	0.08		$	0.55
Diluted	$	0.12		$	0.31		$	0.08		$	0.53

Number of shares used in computation
Basic		48,383			48,076			48,336			47,872
Diluted		49,500			49,250			49,380			49,091

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