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Diodes Inc. Reports Operating Results (10-Q)

November 06, 2009 | About:
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10qk

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Diodes Inc. (DIOD) filed Quarterly Report for the period ended 2009-09-30.

Diodes Incorporated is a leading manufacturer and supplier of high-quality discrete and analog semiconductor products primarily to the communications computing industrial consumer electronics and automotive markets. The Company's corporate sales marketing engineering and logistics headquarters is located in Southern California with two manufacturing facilities in Shanghai China a wafer fabrication plant in Kansas City Missouri engineering sales warehouse and logistics offices in Taipei Taiwan and Hong Kong and sales and support offices throughout the world. Diodes Inc. recently acquired Anachip Corporation a fabless analog IC company in Hsinchu Science Park Taiwan. It's product focus is on subminiature surface-mount discrete devices analog power management ICs and Hall-effect sensors all of which are widely used in end-user equipment. Diodes Inc. has a market cap of $701 million; its shares were traded at around $16.5 with a P/E ratio of 126.9 and P/S ratio of 1.6. Diodes Inc. had an annual average earning growth of 28% over the past 5 years.

Highlight of Business Operations:

R&D for the three months ended September 30, 2009 was $6.3 million, a decrease of approximately $0.9 million from the same period last year due primarily to the decreases in overall expenses in connection with our previously announced cost reduction initiatives. R&D, as a percentage of sales, decreased to 5.1% for the three months ended September 30, 2009, compared 5.4% in the same period last year.

Amortization of acquisition-related intangibles decreased for the three months ended September 30, 2009 to $1.3 million, compared to $1.8 million in the same period last year, due to the strengthening of the U.S. Dollar versus the British Pound.

Interest income decreased for the three months ended September 30, 2009 to $0.8 million, compared to $1.8 million in the same period last year, due primarily to a decrease in interest income earned on our short-term investment securities. Interest income for the three months ended September 30, 2009 has been impacted by the continued interruption in the auction rate securities (ARS)

Interest expense for the three months ended September 30, 2009 was approximately $1.8 million, compared to $3.2 million in the same period last year. The $1.4 million decrease in interest expense is due primarily to the reduced interest paid due to the repurchase and retirement of $90.9 million par value of Notes during the fourth quarter of 2008 and the first, second and third quarters of 2009. The decrease in interest expense was partially offset by the interest expense charged in connection with our no net cost loan with the offsetting interest earned being recorded in interest income.

Amortization of debt discount for the three months ended September 30, 2009 was $2.0 million, compared to $2.7 million in the same period last year. The $0.8 million decreased in amortization of debt discount was due primarily to the repurchase and retirement of $90.9 million par value of Notes during the fourth quarter of 2008 and the first, second and third quarters of 2009.

Other expense for the three months ended September 30, 2009 was $1.1 million, compared to other expense of $0.9 million in the same period last year. Included in other expense for the three months ended September 30, 2009 was a $1.4 million foreign currency transaction losses due primarily to the strengthening of the U.S. Dollar versus the British Pound, negatively affecting foreign currency hedges entered into by Zetex prior to our acquisition.

Read the The complete ReportDIOD is in the portfolios of Richard Pzena of Pzena Investment Management LLC.

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