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Diodes Incorporated Reports Fourth Quarter and Fiscal 2012 Financial Results

  Diodes Incorporated Reports Fourth Quarter and Fiscal 2012 Financial Results

Solid Fourth Quarter Performance with Improved Margins; Agrees to Acquire BCD
                                Semiconductor

Business Wire

PLANO, Texas -- February 13, 2013

Diodes Incorporated (Nasdaq: DIOD), a leading global manufacturer and supplier
of high-quality application specific standard products within the broad
discrete, logic and analog semiconductor markets, today reported its financial
results for the fourth quarter and fiscal year ended December 31, 2012.

Fourth Quarter Highlights

  *Agreed to acquire BCD Semiconductor Manufacturing Limited (“BCD”) for
    approximately $151 million in cash (BCD 2012 revenue $143 million, net
    income $8 million);
  *Revenue was $163.3 million, an increase of 14.0 percent over the $143.3
    million reported in the fourth quarter of 2011, and a decrease of 2.0
    percent from the $166.6 million in the third quarter of 2012;
  *Gross profit was $43.2 million, compared to $35.5 million in the fourth
    quarter of 2011 and $43.6 million in the third quarter of 2012;
  *Gross profit margin was 26.5 percent, compared to 24.8 percent in the
    fourth quarter 2011 and 26.2 percent in the third quarter of 2012;
  *Operating expenses were $39.7 million or 24.3 percent of revenue, which
    included approximately $1.5 million of BCD acquisition; excluding
    acquisition costs, non-GAAP adjusted operating expenses were $38.2
    million, or 23.4 percent of revenue, slightly below the midpoint of the
    Company’s guidance.
  *GAAP net income was $4.1 million, or $0.09 per diluted share, compared to
    fourth quarter 2011 of $3.1 million, or $0.07 per diluted share, and third
    quarter 2012 of $8.6 million, or $0.18 per diluted share;
  *Non-GAAP adjusted net income was $6.2 million, or $0.13 per diluted share,
    compared to fourth quarter 2011 of $4.0 million, or $0.09 per diluted
    share, and third quarter 2012 of $9.5 million, or $0.20 per diluted share;
  *Excluding $2.4 million of share-based compensation expense, both GAAP and
    non-GAAP adjusted net income would have increased by $0.05 per diluted
    share;
  *Achieved $16.4 million cash flow from operations, negative ($11.1) million
    net cash primarily due to $16 million paid to acquire Power Analog
    Microelectronics (“PAM”), and free cash flow was a $1.1 million, which
    included $15.3 million of capital expenditures. Capital expenditures
    included $2.1 million associated with the Chengdu assembly test facility
    construction;
  *Completed acquisition of PAM; and
  *Completed $300 million Revolving Credit Line.

Commenting on the results, Dr. Keh-Shew Lu, President and Chief Executive
Officer of Diodes Incorporated, stated, “Diodes once again delivered solid
financial results in 2012, a year in which the global markets remained
challenging. Fourth quarter revenue grew 14 percent over the prior year period
as we continued to gain momentum for our products used in smartphones and
tablets. Our new product initiatives and increasing customer content remained
key drivers of our market share gains throughout the year. Despite gold prices
being up approximately 4 percent and the loading down from third quarter to
fourth quarter, margins improved due mainly to additional copper wire
conversion and productivity improvements, coupled with a small mix
improvement. Also during the quarter, we began integrating Eris Technology
Corporation (“Eris”) and PAM.”

“To further capitalize on market expansion opportunities and improve leverage
through select acquisitions, we also recently announced the proposed
acquisition of BCD Semiconductor, which we expect will greatly enhance our
analog product portfolio by expanding our product offerings for standard
linear and AC/DC solutions for switch-mode power supply chargers and adaptors.
Combining manufacturing synergies and BCD’s established local market position
in China with Diodes’ global customer base and sales channels provides
enhanced profitability and growth opportunities for the Company in 2013 and
beyond.”

Business Outlook

Dr. Lu concluded, “As we look to the first quarter of 2013, we are expecting a
slightly better than seasonal quarter with revenue ranging between $157
million and $170 million, or flat plus or minus 4 percent sequentially. We
expect gross margin to be 25 percent, plus or minus 2 percent. Operating
expenses are expected to be 23 percent of revenue, plus or minus 1 percent. We
expect our income tax rate to range between 10 and 17 percent, and shares used
to calculate GAAP EPS for the first quarter are anticipated to be
approximately 47.0 million.”

Fourth Quarter 2012

Revenue for the fourth quarter of 2012 was $163.3 million, an increase of 14.0
percent over the $143.3 million reported in the fourth quarter of 2011, and a
decrease of 2.0 percent from the $166.6 million in the third quarter of 2012.
The sequential decline in revenue was primarily due to seasonal weakness,
partially offset by initial revenue recognized from PAM and Eris.

Gross profit for the fourth quarter of 2012 was $43.2 million, or 26.5 percent
of revenue, compared to $35.5 million, or 24.8 percent, in the fourth quarter
of 2011 and $43.6 million, or 26.2 percent of revenue, in the third quarter
2012. Gross profit margin improved during the quarter due mainly to additional
copper wire conversion, productivity improvements as well as moderate
improvements in product mix, despite gold prices being up approximately 4
percent and loading down sequentially.

Income taxes for the fourth quarter of 2012 was $2.8 million, making our
effective income tax rate 43 percent, which includes a one-time $2.7 million
non-cash tax expense associated with a correction of the Company's foreign tax
credits and deferred taxes. In addition, the China government began an audit
of our high-tech company status for our largest Chinese subsidiary that has a
reduced tax rate of 15 percent.

Fourth quarter 2012 GAAP net income was $4.1 million, or $0.09 per diluted
share, compared to GAAP net income of $3.1 million, or $0.07 per diluted
share, in the fourth quarter of 2011 and GAAP net income of $8.6 million, or
$0.18 per diluted share, in the third quarter of 2012.

Non-GAAP adjusted net income for the fourth quarter of 2012 was $6.2 million,
or $0.13 per diluted share, which excluded, net of tax, $1.1 million of
non-cash acquisition related intangible asset amortization costs and $1.0
million of acquisition costs, compared to non-GAAP adjusted net income of $4.0
million, or $0.09 per diluted share, in the fourth quarter of 2011 and
non-GAAP adjusted net income of $9.5 million, or $0.20 per diluted share, in
the third quarter of 2012. The following is a 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
                                                        December 31, 2012
                                                        unaudited
GAAP net income                                         $       4,075
                                                        
GAAP diluted earnings per share                         $       0.09
                                                        
Adjustments to reconcile GAAP net income
to Non-GAAP adjusted net income:
                                                        
Amortization of acquisition related intangible assets           1,131
                                                        
Acquisition costs                                              959
                                                        
Non-GAAP adjusted net income                            $       6,165
                                                        
Non-GAAP adjusted diluted earnings per share            $       0.13
                                                                

See the tables below for further details of the reconciliation.

Included in fourth quarter 2012 GAAP and non-GAAP adjusted net income was
approximately $2.4 million, net of tax, non-cash share-based compensation
expense. Excluding share based compensation expense, both GAAP and non-GAAP
adjusted diluted EPS would have increased by an additional $0.05 per diluted
share, the same amount per diluted share by which share-based compensation
affected GAAP and non-GAAP adjusted net income in fourth quarter 2011.

EBITDA, which represents earnings before net interest expense, income tax,
depreciation and amortization, for the fourth quarter of 2012 was $24.1
million, compared to $19.7 million for the fourth quarter of 2011 and $24.8
million for the third quarter of 2012. For a reconciliation of GAAP net income
to EBITDA (non-GAAP), see the table below.

For the fourth quarter of 2012, cash flow from operations was $16.4 million
while net cash flow was a negative ($11.1) million primarily due to $16
million paid to acquire PAM. Free cash flow was a $1.1 million, which included
$15.3 million of capital expenditures. Capital expenditures included $2.1
million of associated with the Chengdu assembly test facility construction.

As of December 31, 2012, Diodes had approximately $157 million in cash and
cash equivalents and working capital was approximately $378 million.

Fiscal 2012

For the fiscal year 2012, revenue was $633.8 million as compared to $635.3
million reported in 2011. Gross profit was $161.6 million, or 25.5 percent of
revenue, compared to $193.7 million, or 30.5 percent of revenue, in the prior
year. GAAP net income was $24.2 million, or $0.51 per diluted share, compared
to $50.7 million, or $1.09 per diluted share in 2011.

Non-GAAP adjusted net income for fiscal 2012 was $26.1 million, or $0.56 per
diluted share, which excluded, net of tax, $3.7 million of non-cash
acquisition related intangible asset amortization costs, $2.7 million gain on
the sale of assets and $1.0 million of acquisition costs, compared to non-GAAP
adjusted net income of $58.0 million, or $1.24 per diluted share, in the prior
year. The following is a 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):

                                                       Twelve Months Ended
                                                        December 31, 2012
                                                        unaudited
GAAP net income                                         $    24,152    
                                                        
GAAP diluted earnings per share                         $    0.51      
                                                        
Adjustments to reconcile GAAP net income
to Non-GAAP adjusted net income:
                                                        
Amortization of acquisition related intangible assets        3,682
                                                        
Gain on sale of assets                                       (2,717    )
                                                        
Acquisition costs                                           959       
                                                        
Non-GAAP adjusted net income                            $    26,076    
                                                        
Non-GAAP adjusted diluted earnings per share            $    0.56      
                                                        

See the tables below for further details of the reconciliation.

Included in fiscal 2012 GAAP and non-GAAP adjusted net income was
approximately $9.4 million, net of tax, non-cash share-based compensation
expense. Excluding this expense, both GAAP and non-GAAP adjusted diluted EPS
would have increased by an additional $0.20 per diluted share, a comparable
amount per diluted share by which share-based compensation affected GAAP and
non-GAAP adjusted net income in fiscal 2011.

EBITDA, which represents earnings before net interest expense, income tax
provision, depreciation and amortization, for fiscal 2012 was $93.2 million,
compared to $130.5 million for fiscal 2011. For a reconciliation of GAAP net
income to EBITDA (non-GAAP), see table below.

For the year ended December 31, 2012, net cash provided by operating
activities was $64 million. Net cash flow was $28 million. Free cash flow was
$6 million, which included $58 million of capital expenditures. Capital
expenditures included approximately $15 million of capital expenditures
associated with the Chengdu assembly test facility construction.

Conference Call

Diodes will host a conference call on Wednesday, February 13, 2013 at 4:00
p.m. Central Time (5:00 p.m. Eastern Time) to discuss its fiscal 2012 and
fourth quarter financial results. Investors and analysts may join the
conference call by dialing 1-866-202-4683 and providing the confirmation code
92396703. International callers may join the teleconference by dialing
1-617-213-8846 and enter 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 Wednesday, February 20, 2013 at midnight
Central Time. The replay number is 1-888-286-8010 with a pass code of
33061397. International callers should dial 1-617-801-6888 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 60 days.

About Diodes Incorporated

Diodes Incorporated (Nasdaq: DIOD), a Standard and Poor's SmallCap 600 and
Russell 3000 Index company, is a leading global manufacturer and supplier of
high-quality application specific standard products within the broad discrete,
logic and analog semiconductor markets. Diodes serves the consumer
electronics, computing, communications, industrial, and automotive markets.
Diodes' products include diodes, rectifiers, transistors, MOSFETs, protection
devices, functional specific arrays, single gate logic, amplifiers and
comparators, Hall-effect and temperature sensors; power management devices,
including LED drivers, DC-DC switching and linear voltage regulators, and
voltage references along with special function devices, such as USB power
switches, load switches, voltage supervisors, and motor controllers. Diodes’
corporate headquarters, logistics center, and Americas' sales office are
located in Plano, Texas. Design, marketing, and engineering centers are
located in Plano; San Jose, California; Taipei, Taiwan; Manchester, England;
and Neuhaus, Germany. Diodes’ wafer fabrication facilities are located in
Kansas City, Missouri and Manchester, with two manufacturing facilities
located in Shanghai, China, and two joint venture facilities located in
Chengdu, China, as well as manufacturing facilities located in Neuhaus and
Taipei. Additional engineering, sales, warehouse, and logistics offices are
located in Fort Worth, Texas; Taipei; Hong Kong; Manchester; Shanghai;
Shenzhen, China; Seongnam-si, South Korea; Tokyo, Japan; and Munich, Germany,
with support offices throughout the world. For further information, including
SEC filings, visit Diodes’ website at http://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 regarding our expectation that:
to further capitalize on market expansion opportunities and improve leverage
through select acquisitions, we also recently announced the proposed
acquisition of BCD Semiconductor, which we expect will greatly enhance our
analog product portfolio by expanding our product offerings for standard
linear and AC/DC solutions for switch-mode power supply chargers and adaptors;
combining manufacturing synergies and BCD’s established local market position
in China with Diodes’ global customer base and sales channels provides
enhanced profitability and growth opportunities for the Company in 2013 and
beyond; as we look to the first quarter of 2013, we are expecting a slightly
better than seasonal quarter with revenue ranging between $157 million and
$170 million, or flat plus or minus 4 percent sequentially; we expect gross
margin to be 25 percent, plus or minus 2 percent; operating expenses are
expected to be 23 percent of revenue, plus or minus 1 percent; and we expect
our income tax rate to range between 10 and 17 percent, and shares used to
calculate GAAP EPS for the first quarter are anticipated to be approximately
47.0 million. Potential risks and uncertainties include, but are not limited
to, such factors as: 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; 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; and other information detailed from
time to time in the Company's 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          Twelve Months Ended
                         December 31,                December 31,
                          2012       2011        2012       2011    
NET SALES                $ 163,287     $ 143,313     $ 633,806     $ 635,251
                                                                   
COST OF GOODS SOLD        120,040     107,818     472,220     441,554 
                                                                   
Gross profit               43,247        35,495        161,586       193,697
                                                                   
OPERATING EXPENSES
Selling, general and       28,661        22,585        101,363       89,974
administrative
Research and               9,295         6,876         33,761        27,231
development
Amortization of
acquisition related        1,721         1,095         5,122         4,503
intangible assets
Gain on sale of assets    -           -           (3,556  )    -       
Total operating           39,677      30,556      136,690     121,708 
expenses
                                                                   
Income from operations     3,570         4,939         24,896        71,989
                                                                   
OTHER INCOME
(EXPENSES)
Interest income            194           175           778           1,024
Interest expense           (307    )     (116    )     (876    )     (3,139  )
Amortization of debt       -             -             -             (6,032  )
discount
Gain (loss) on
securities carried at      3,724         296           7,100         (1,039  )
fair value
Other                     (561    )    (1,236  )    (1,091  )    861     
Total other income         3,050         (881    )     5,911         (8,325  )
(expenses)
                                                                   
Income before income
taxes and                  6,620         4,058         30,807        63,664
noncontrolling
interest
                                                                   
INCOME TAX PROVISION      2,842       245         4,825       10,157  
                                                                   
NET INCOME                 3,778         3,813         25,982        53,507
                                                                   
Less: NET INCOME
attributable to           297         (698    )    (1,830  )    (2,770  )
noncontrolling
interest
                                                                   
NET INCOME
attributable to common   $ 4,075      $ 3,115      $ 24,152     $ 50,737  
stockholders
                                                                   
EARNINGS PER SHARE
attributable to common
stockholders
Basic                    $ 0.09       $ 0.07       $ 0.53       $ 1.12    
Diluted                  $ 0.09       $ 0.07       $ 0.51       $ 1.09    
                                                                   
Number of shares used
in computation
Basic                     46,011      45,425      45,780      45,202  
Diluted                   46,900      46,599      46,899      46,713  
                                                                             

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

                                                               
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME
(in thousands, except per share data)
(unaudited)
                                                                    
For the fiscal year ended December 31, 2012:
                                                                    
                               Operating   Other       Income Tax
                               Expenses    Income      Provision    Net Income
                                           (Expense)
                                                                    
GAAP                                                                $ 24,152 
                                                                    
Earnings per share (GAAP)
Diluted                                                             $ 0.51   
                                                                    
Adjustments to reconcile net
income
to adjusted net income:
                                                                    
Amortization of acquisition    5,122       -           (1,440  )      3,682
related intangible assets
                                                                    
Gain on sale of assets         (3,452  )   -           735            (2,717 )
                                                                    
Acquisition costs              1,475       -           (516    )     959    
                                                                    
Adjusted (Non-GAAP)                                                 $ 26,076 
                                                                    
Diluted shares used in
computing
earnings per share                                                   46,899 
                                                                    
Adjusted earnings per share
(Non-GAAP)
Diluted                                                             $ 0.56   
                                                                             

Note: Included in GAAP and non-GAAP adjusted net income was $9.3 million, net
of tax, non-cash share-based compensation expense. Excluding this expense,
both GAAP and non-GAAP adjusted diluted EPS would have increased by an
additional $0.20 per share.

                                                               
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME
(in thousands, except per share data)
(unaudited)
                                                                    
For the fiscal year ended December 31, 2011:
                                                                    
                               Operating   Other       Income Tax
                               Expenses    Income      Provision    Net Income
                                           (Expense)
                                                                    
GAAP                                                                $  50,737
                                                                    
Earnings per share (GAAP)
Diluted                                                             $  1.09
                                                                    
Adjustments to reconcile net
income
to adjusted net income:
                                                                    
Amortization of acquisition    4,503                   (1,184  )       3,319
related intangible assets
                                                                    
Amortization of debt                       6,032       (2,111  )      3,921
discount
                                                                    
Adjusted (Non-GAAP)                                                 $  57,977
                                                                    
Diluted shares used in
computing
earnings per share                                                    46,713
                                                                    
Adjusted earnings per share
(Non-GAAP)
Diluted                                                             $  1.24
                                                                       

Note: Included in GAAP and non-GAAP adjusted net income was $8.9 million, net
of tax, non-cash share-based compensation expense. Excluding this expense,
both GAAP and non-GAAP adjusted diluted EPS would have increased by an
additional $0.19 per share.

                                                               
DIODES INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME
(in thousands, except per share data)
(unaudited)

For the three months ended December 31, 2012:
                                                                    
                               Operating   Other       Income Tax
                               Expenses    Income      Provision    Net Income
                                           (Expense)
                                                                    
GAAP                                                                $  4,075
                                                                    
Earnings per share (GAAP)
Diluted                                                             $  0.09
                                                                    
Adjustments to reconcile net
income
to adjusted net income:
                                                                    
Amortization of acquisition    1,721       -           (590   )        1,131
related intangible assets
                                                                    
Acquisition costs              1,475       -           (516   )       959
                                                                    
Adjusted (Non-GAAP)                                                 $  6,165
                                                                    
Diluted shares used in
computing
earnings per share                                                    46,900
                                                                    
Adjusted earnings per share
(Non-GAAP)
Diluted                                                             $  0.13
                                                                       

Note: Included in GAAP and non-GAAP adjusted net income was approximately $2.4
million, net of tax, non-cash share-based compensation expense. Excluding
share based compensation expense, both GAAP and non-GAAP adjusted diluted EPS
would have increased by an additional $0.05 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 December 31, 2011:
                                                                    
                               Operating   Other       Income Tax
                               Expenses    Income      Provision    Net Income
                                           (Expense)
                                                                    
GAAP                                                                $  3,115
                                                                    
Earnings per share (GAAP)
Diluted                                                             $  0.07
                                                                    
Adjustments to reconcile
net income
to adjusted net income:
                                                                    
Amortization of acquisition    1,095       -           (230   )       865
related intangible assets
                                                                    
Adjusted (Non-GAAP)                                                 $  3,980
                                                                    
Diluted shares used in
computing
earnings per share                                                    46,599
                                                                    
Adjusted earnings per
share (Non-GAAP)
Diluted                                                             $  0.09
                                                                       

Note: Included in GAAP and non-GAAP adjusted net income was approximately $2.4
million, net of tax, non-cash share-based compensation expense. Excluding
share based compensation expense, both GAAP and non-GAAP adjusted diluted EPS
would have increased by an additional $0.05 per share.

ADJUSTED NET INCOME (Non-GAAP)

This measure consists of generally accepted accounting principles (“GAAP”) net
income, which is then adjusted solely for the purpose of adjusting for
amortization of acquisition related intangible assets, gain on sale of assets,
acquisition costs and amortization of debt discount, as discussed below.
Excluding gain on sale of assets and acquisition costs provides investors with
a better depiction of the Company’s operating results and provides a more
informed baseline for modeling future earnings expectations. Excluding the
amortization of acquisition related intangible assets and amortization of debt
discount allows for comparison of the Company’s current and historic operating
performance. The Company excludes the above listed items to evaluate the
Company’s operating performance, to develop budgets, to determine incentive
compensation awards and to manage cash expenditures. Presentation of the above
non-GAAP measures allows investors to review the Company’s results of
operations from the same viewpoint as the Company’s management and Board of
Directors. The Company has historically provided similar non-GAAP financial
measures to provide investors an enhanced understanding of its operations,
facilitate investors’ analyses and comparisons of its current and past results
of operations and provide insight into the prospects of its future
performance. The Company also believes the non-GAAP measures are useful to
investors because they provide additional information that research analysts
use to evaluate semiconductor companies. These non-GAAP measures should be
considered in addition to results prepared in accordance with GAAP, but should
not be considered a substitute for or superior to GAAP results and may differ
from measures used by other companies. The Company recommends a review of net
income on both a GAAP basis and non-GAAP basis be performed to get a
comprehensive view of the Company’s results. The Company provides a
reconciliation of GAAP net income to non-GAAP adjusted net income.

Amortization of acquisition related intangible assets – The Company excluded
the amortization of its acquisition related intangible assets including
developed technologies and customer relationships. The fair value of the
acquisition related intangible assets, which was allocated to the assets
through purchase accounting, is amortized using straight-line methods which
approximate the proportion of future cash flows estimated to be generated each
period over the estimated useful lives of the applicable assets. The Company
believes the exclusion of the amortization expense of acquisition related
assets is appropriate as 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 the amortization
expense as there is significant variability and unpredictability across other
companies with respect to this expense.

Gain on sale of assets – The Company excluded the gain recorded for the sale
assets. During the first quarter 2012, the Company sold an intangible asset
located in Europe and this gain was excluded from management’s assessment of
the Company’s core operating performance as this long-lived asset was a
non-core intellectual asset. During the second quarter 2012, the Company sold
a building located in Taiwan and this gain was excluded from management’s
assessment of the Company’s core operating performance. The Company believes
the exclusion of the gain on sale of assets provides investors an enhanced
view of a gain the Company may incur from time to time and facilitates
comparisons with results of other periods that may not reflect such gains.

Acquisition costs – The Company incurred costs associated with entering into
an agreement and plan of merger with BCD Semiconductor Manufacturing Limited,
which consisted of advisory, legal and other professional and consulting fees.
These costs were expensed in the fourth quarter of 2012 as that was when the
costs were incurred and services were received. The Company believes the
exclusion of the acquisition related costs provides investors an enhanced view
of certain costs the Company may incur from time to time and facilitates
comparisons with the results of other periods that may not reflect such costs.

Amortization of debt discount – The Company excluded the amortization of debt
discount on its 2.25% Convertible Senior Notes (“Notes”). This amortization
was excluded from management’s assessment of the Company’s core operating
performance. Although the amortization of debt discount is recurring in
nature, the expected life of the Notes is five years as that is the earliest
date in which the Notes can be put back to the Company at par value. The
amortization period ended October 1, 2012, therefore the Company no longer
records an amortization of debt discount. In addition, over the past several
years, the Company has repurchased all of its Notes, which made the principal
amount outstanding and related amortization vary from period to period, and as
such the Company believes the exclusion of the amortization facilitates
comparisons with the results of other periods that may reflect different
principal amounts outstanding and related amortization.

Adjusted Earnings per Share (Non-GAAP) - This non-GAAP financial measure is
the portion of the Company’s GAAP net income assigned to each share of stock,
excluding amortization of acquisition related intangible assets, gain on sale
of assets, acquisition costs and amortization of debt discount as described
above. Excluding gain on sale of assets, and acquisition costs provides
investors with a better depiction of the Company’s operating results and
provides a more informed baseline for modeling future earnings expectations,
as described in further detail above. Excluding the amortization of
acquisition related intangible assets and amortization of debt discount allows
for comparison of the Company’s current and historic operating performance, as
described in further detail above. This non-GAAP measure should be considered
in addition to results prepared in accordance with GAAP, but should not be
considered a substitute for or superior to GAAP results and may differ from
measures used by other companies. The Company recommends a review of diluted
earnings per share on both a GAAP basis and non-GAAP basis be performed to
obtain a comprehensive view of the Company’s results. Information on how these
share calculations are made is included in the reconciliation table provided.

ADJUSTED OPERATING EXPENSES (Non-GAAP)

This measure consists of generally accepted accounting principles (“GAAP”)
operating expenses, which is then adjusted solely for the purpose of adjusting
for acquisition costs. Excluding acquisition costs provides investors with a
better depiction of the Company’s operating results and provides a more
informed baseline for modeling future earnings expectations. Presentation of
the above non-GAAP measures allows investors to review the Company’s results
of operations from the same viewpoint as the Company’s management and Board of
Directors. The Company has historically provided similar non-GAAP financial
measures to provide investors an enhanced understanding of its operations,
facilitate investors’ analyses and comparisons of its current and past results
of operations and provide insight into the prospects of its future
performance. The Company also believes the non-GAAP measures are useful to
investors because they provide additional information that research analysts
use to evaluate semiconductor companies. This non-GAAP measure should be
considered in addition to results prepared in accordance with GAAP, but should
not be considered a substitute for or superior to GAAP results and may differ
from measures used by other companies. The Company recommends a review of
operating expenses on both a GAAP basis and non-GAAP basis be performed to get
a comprehensive view of the Company’s results.

                                                 
                                                   Three Months Ended
                                                   December 31, 2012
                                                   unaudited
GAAP operating expenses                            $    39,677    
                                                   
Adjustments to reconcile GAAP operating expenses
to non-GAAP adjusted operating expenses:
                                                   
Acquisition costs                                      (1,475    )
                                                   
Non-GAAP adjusted operating expenses               $    38,202    
                                                                  

CASH FLOW ITEMS

Free cash flow (FCF) (Non-GAAP)

FCF for the fiscal and fourth quarter of 2012 is a non-GAAP financial measure,
which is calculated by taking cash flow from operations less capital
expenditures. For fiscal 2012, the amount was $6.0 million ($64.2 million less
(-) ($58.2) million). For the fourth quarter 2012, the amount was $1.1 million
($16.4 million less (-) ($15.3) million). FCF 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.

                     DIODES INCORPORATED AND SUBSIDIARIES
             CONSOLIDATED RECONCILIATION OF NET INCOME TO EBITDA

EBITDA (Non-GAAP)

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
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 used by other companies. 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
                                December 31,
                                 2012     2011    
                                           
Net income (GAAP)               $ 4,075    $ 3,115
Plus:
Interest expense, net             113        (59     )
Income tax provision              2,842      245
Depreciation and amortization    17,072    16,382  
EBITDA (Non-GAAP)               $ 24,102   $ 19,683  
                                           
                                           
                                Twelve Months Ended
                                December 31,
                                 2012      2011    
                                           
Net income (GAAP)               $ 24,152   $ 50,737
Plus:
Interest expense, net (1)         98         8,147
Income tax provision              4,825      10,157
Depreciation and amortization    64,193    61,431  
EBITDA (Non-GAAP)               $ 93,268   $ 130,472 
                                           

(1) Includes $6.0 million for the twelve months ended December 31, 2011 of
amortization of debt discount.

                                                 
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS

ASSETS
(in thousands)
                                                    
                                     December 31,   December 31,
                                        2012          2011
CURRENT ASSETS                       unaudited
Cash and cash equivalents            $   157,121    $   129,510
Accounts receivable, net                 152,073        132,408
Inventories                              153,293        140,337
Deferred income taxes, current           9,995          5,450
Prepaid expenses and other              18,928        19,093
Total current assets                    491,410       426,798
                                                    
                                                    
DEFERRED INCOME TAXES, non-current       36,819         26,863
                                                    
PROPERTY, PLANT AND EQUIPMENT, net       243,296        225,393
                                                    
OTHER ASSETS
Goodwill                                 87,359         67,818
Intangible assets, net                   44,337         24,197
Other                                   16,842        21,995
Total assets                         $   920,063    $   793,064

                                                               
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS

LIABILITIES AND EQUITY
(in thousands, except share data)
                                                                  
                                                   December 31,   December 31,
                                                     2012         2011    
CURRENT LIABILITIES                                unaudited
Lines of credit and short-term debt                $  7,629       $  8,000
Accounts payable                                      64,072         66,063
Accrued liabilities and other current                 41,139         30,793
liabilities
Income tax payable                                   678          4,855   
Total current liabilities                            113,518      109,711 
                                                                  
LONG-TERM DEBT, net of current portion
Long-term borrowings                                  44,131         2,857
                                                                  
CAPITAL LEASE OBLIGATIONS, net of current             789            1,082
portion
OTHER LONG-TERM LIABILITIES                          41,185       30,699  
Total liabilities                                    199,623      144,349 
                                                                  
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;
46,010,815 and 45,432,252 issued and outstanding
at December 31, 2012 and
December 31, 2011, respectively                       30,674         30,423
Additional paid-in capital                            280,571        263,455
Retained earnings                                     399,796        375,644
Accumulated other comprehensive loss                 (33,856 )     (35,762 )
Total Diodes Incorporated stockholders' equity       677,185      633,760 
Noncontrolling interest                              43,255       14,955  
Total equity                                         720,440      648,715 
Total liabilities and equity                       $  920,063    $  793,064 

Contact:

Company Contact:
Diodes Incorporated
Laura Mehrl
Director of Investor Relations
P: 972-987-3959
E: laura_mehrl@diodes.com
or
Investor Relations Contact:
Shelton Group
Leanne Sievers
EVP, Investor Relations
P: 949-224-3874
E: lsievers@sheltongroup.com
 
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