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Diodes Incorporated Reports First Quarter 2013 Financial Results

  Diodes Incorporated Reports First Quarter 2013 Financial Results

                Achieves Record Revenue with Improved Margins

Business Wire

PLANO, Texas -- May 9, 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 first quarter ended March 31, 2013.

First Quarter Highlights

  *Completed acquisition of BCD Semiconductor Manufacturing Limited (“BCD”)
    on March 5 and included initial purchase accounting adjustments in first
    quarter 2013 GAAP results;
  *Revenue was $177.0 million, an increase of 8.4 percent from the $163.3
    million in the fourth quarter 2012, and an increase of 22.3 percent from
    the $144.7 million in the first quarter 2012;
  *GAAP gross profit was $46.2 million, including a $1.8 million inventory
    valuation adjustment related to the BCD purchase, and GAAP gross margin
    was 26.1 percent;
  *Non-GAAP adjusted gross profit was $48.0 million compared to GAAP gross
    profit of $43.2 million in fourth quarter 2012, and GAAP gross profit of
    $33.7 million in first quarter 2012;
  *Non-GAAP adjusted gross profit margin was 27.1 percent compared to GAAP
    gross profit margin of 26.5 percent in fourth quarter 2012, and GAAP gross
    margin of 23.3 percent in the first quarter 2012;
  *GAAP income tax expense was $6.6 million, including a $5.4 million China
    tax audit adjustment for 2009-2011;
  *GAAP net loss was $1.9 million, or ($0.04) per share, compared to fourth
    quarter 2012 GAAP net income of $4.1 million, or $0.09 per diluted share,
    and first quarter 2012 GAAP net income of $4.9 million, or $0.10 per
    diluted share;
  *Non-GAAP adjusted net income was $7.5 million, or $0.16 per diluted share,
    compared to non-GAAP adjusted net income of $6.2 million, or $0.13 per
    diluted share in fourth quarter 2012, and non-GAAP adjusted net income of
    $4.1 million, or $0.09 per diluted share, in first quarter 2012;
  *Excluding $2.1 million, net of tax, of share-based compensation expense,
    GAAP net loss per share of ($0.04) would have improved by $0.05 per share
    and non-GAAP adjusted net earnings per fully diluted share of $0.16 would
    have improved by $0.04 per diluted share; and
  *Achieved $31.3 million cash flow from operations, $43.1 million net cash
    flow, including $20.2 million of BCD cash at quarter end, and $15.4
    million of free cash flow.

As previously disclosed the Company’s updated guidance provided on March 7,
2013 did not include the impact of any BCD purchase price accounting
adjustments. Based on the subsequent initial valuation of BCD’s acquired
assets, GAAP gross profit includes an inventory valuation adjustment totaling
$1.8 million. In addition, as previously disclosed, the China government
audited the high-tech company status of the Company’s largest China subsidiary
that has utilized a preferential tax rate of 15 percent. On April 11, 2013,
the Company was notified by the China government that they had completed their
tax audit and had concluded that the Company owed additional tax related to
the 2011 tax year in the amount of $5.4 million.

Commenting on the results, Dr. Keh-Shew Lu, President and Chief Executive
Officer, stated, “I am pleased to report that Diodes achieved record quarterly
revenue despite the typical seasonal softness in the quarter and the slowdown
at certain key OEMs. Our sequential revenue growth was due to the result of
our continued design win momentum, as well as, one month of revenue
contribution from our acquisition of BCD.

“Additionally, non-GAAP adjusted gross profit margin, which excludes the BCD
inventory valuation adjustment, improved 60 basis points sequentially and was
favorable to our updated guidance due to revenue increases in the higher
margin regions of North America and Europe, a better than expected
manufacturing recovery following the Chinese New Year holiday, lower gold
prices and a more favorable product mix.

“Also during the quarter, we finalized our acquisition of BCD and the
integration to-date has gone smoothly. This transaction, excluding purchase
price accounting adjustments, was immediately accretive to earnings.

“Overall, we believe the first quarter sets the stage for continued growth and
margin improvement in the second quarter, which will represent our first full
quarter with BCD.”

First Quarter 2013

Revenue for the first quarter 2013 was $177.0 million, an increase of 8.4
percent over the $163.3 million in the fourth quarter 2012, and an increase of
22.3 percent from the $144.7 million in the first quarter 2012. Revenue was up
sequentially primarily due to one month of revenue contribution from BCD, as
well as, the result of our continued design win momentum.

GAAP gross profit was $46.2 million, including a $1.8 million inventory
valuation adjustment related to the BCD purchase. GAAP gross profit margin was
26.1 percent.

Non-GAAP adjusted gross profit for the first quarter 2013 was $48.0 million,
or 27.1 percent of revenue, compared to GAAP gross profit of $43.2 million, or
GAAP gross profit margin of 26.5 percent of revenue, in the fourth quarter
2012, and GAAP gross profit of $33.7 million, or GAAP gross profit margin of
23.3 percent, in the first quarter 2012. Gross profit margin improved over the
prior quarter as a result of increased revenue in higher margin regions, a
better than expected manufacturing recovery following the Chinese New Year
holiday, lower gold prices, and improved product mix.

First quarter 2013 GAAP net loss was $1.9 million, or ($0.04) per share, which
compared to fourth quarter 2012 GAAP net income of $4.1 million, or $0.09 per
diluted share, and first quarter 2012 GAAP net income of $4.9 million, or
$0.10 per diluted share.

First quarter 2013 non-GAAP adjusted net income was $7.5 million, or $0.16 per
diluted share, which excluded, net of tax, $2.5 million of items related to
the BCD acquisition, $1.5 million of non-cash acquisition-related intangible
asset amortization costs, and $5.4 million due to the China tax audit
adjustment. This compared to non-GAAP adjusted net income of $6.2 million, or
$0.13 per diluted share, in the fourth quarter 2012 and $4.1 million, or $0.09
per diluted share, in the first quarter 2012.

The following is a summary reconciliation of GAAP net loss to non-GAAP
adjusted net income and per share data, net of tax (in thousands, except per
share data):

                         Three Months Ended
                           March 31, 2013
                           Cost of     Operating     Income Tax     Net Income
                           Goods     Expenses    Provision    (Loss)
                           Sold
                                                                    
GAAP                                                               $ (1,926 )
                                                                    
Loss per share (GAAP)
Diluted                                                            $ (0.04  )
                                                                    
Adjustments to
reconcile net loss
to adjusted net
income:
                                                                    
Items related to the
BCD acquisition
(excluding intangible      1,828       925           (213    )        2,540
assets)
                                                                    
Amortization of
acquisition related        -           1,909         (443    )        1,466
intangible assets
                                                                    
Tax expense related to     -           -             5,447           5,447  
tax audit
                                                                    
Adjusted (Non-GAAP)                                                $ 7,527  
                                                                    
Diluted shares used in
computing
earnings per share                                                   47,233 
                                                                    
Adjusted earnings per
share (Non-GAAP)
Diluted                                                            $ 0.16   
                                                                    

(See the reconciliation of net loss to adjusted net income tables near the end
of the release for further details, including details of all items included in
“items related to the BCD acquisition.”)

Included in first quarter 2013 GAAP net loss and non-GAAP adjusted net income
was approximately $2.1 million, net of tax, non-cash share-based compensation
expense. Excluding share-based compensation expense, GAAP net loss per share
of ($0.04) would have improved by $0.05 per share and non-GAAP adjusted
diluted earnings per share of $0.16 would have improved by $0.04 per share.

EBITDA, which represents earnings before net interest expense, income tax,
depreciation and amortization, for the first quarter 2013 was $23.1 million,
compared to $24.1 million for the fourth quarter 2012 and $21.2 million for
the first quarter 2012. For a reconciliation of GAAP net income (loss) to
EBITDA (non-GAAP), see the table near the end of the release for further
details.

As of March 31, 2013, the Company had approximately $200 million in cash and
cash equivalents, and working capital was approximately $453 million.

Business Outlook

Dr. Lu concluded, “For the second quarter 2013, we expect continued growth
with revenue increasing to between $206 million and $218 million, or up 16
percent to 23 percent sequentially, including the first full quarter of
revenue from BCD. GAAP gross profit margin, which will include approximately
$4.0 million relating to an inventory valuation adjustment pertaining to the
inventory acquired as part of the BCD purchase, is expected to be 27.0
percent, plus or minus 2 percent. Non-GAAP gross profit margin, excluding the
inventory valuation adjustment, is expected to be 29.0 percent, plus or minus
2 percent.

“In early second quarter 2013, we announced a restructuring of our UK
development team and the closure of our New York sales office. We expect that
these actions will be completed in the second quarter. Restructuring costs in
the second quarter 2013 are expected to be approximately $1.7 million, and
will provide cost savings going forward of approximately $3.0 million per
year.

“GAAP operating expenses are expected to be 23.6 percent of revenue, plus or
minus 1 percent. Non-GAAP operating expenses, excluding amortization of
intangible expenses, restructuring expenses, and BCD retention bonus accruals,
are expected to be 21.3 percent of revenue plus or minus 1 percent. We expect
our income tax rate to range between 14 percent and 20 percent, and shares
used to calculate GAAP earnings per share for the second quarter are
anticipated to be approximately 47.4 million.”

A summary of the guidance for GAAP and non-GAAP financial measures follows:

                                     GAAP             Non-GAAP
Revenue $ (millions)                   $206 to $218       $206 to $218
Sequential growth (%)                  16% to 23%         16% to 23%
                                                          
Gross profit margin (% of Revenue)     25.0% to 29.0%     27.0% to 31.0%
                                                          
Operating expenses (% of Revenue)      22.6% to 24.6%     20.3% to 22.3%
                                                          
Tax rate (%)                           14% to 20%         14% to 20%
                                                          
Shares (millions)                      47.4               47.4
                                                          

Conference Call

Diodes will host a conference call on Thursday, May 9, 2013 at 4:00 p.m.
Central Time (5:00 p.m. Eastern Time) to discuss its first quarter financial
results. Investors and analysts may join the conference call by dialing
1-866-515-2915 and providing the confirmation code 64110633. International
callers may join the teleconference by dialing 1-617-399-5129 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 Thursday, May 16, 2013 at midnight Central Time. The replay
number is 1-888-286-8010 with a pass code of 33988622. 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, AC-DC converters and controllers, 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 four
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; Suwon, 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:
overall, we believe the first quarter sets the stage for continued growth and
margin improvement in the second quarter, which will represent our first full
quarter with BCD; for the second quarter 2013, we expect continued growth with
revenue increasing to between $206 million and $218 million, or up 16 percent
to 23 percent sequentially, including the first full quarter of revenue from
BCD; GAAP gross profit margin, which will include approximately $4.0 million
relating to an inventory valuation adjustment pertaining to the inventory
acquired as part of the BCD purchase, is expected to be 27.0 percent, plus or
minus 2 percent; non-GAAP gross profit margin, excluding the inventory
valuation adjustment, is expected to be 29.0 percent, plus or minus 2 percent;
in early second quarter 2013, we announced a restructuring of our UK
development team and the closure of our New York sales office; we expect that
these actions will be completed in the second quarter; restructuring costs in
the second quarter 2013 are expected to be approximately $1.7 million, and
will provide cost savings going forward of approximately $3.0 million per
year; GAAP operating expenses are expected to be 23.6 percent of revenue, plus
or minus 1 percent; non-GAAP operating expenses, excluding amortization of
intangible expenses, restructuring expenses, and BCD retention bonus accruals,
are expected to be 21.3 percent of revenue plus or minus 1 percent; and we
expect our income tax rate to range between 14 percent and 20 percent, and
shares used to calculate GAAP earnings per share for the second quarter are
anticipated to be approximately 47.4 million. Potential risks and
uncertainties include, but are not limited to, such factors as: the risk that
BCD’s business will not be integrated successfully into Diodes’; the risk that
the expected benefits of the acquisition may not be realized; the risk that
BCD’s standards, procedures and controls will not be brought into conformance
within Diodes’ operations; difficulties coordinating Diodes’ and BCD’s new
product and process development, hiring additional management and other
critical personnel, and increasing the scope, geographic diversity and
complexity of Diodes’ operations; difficulties in consolidating facilities and
transferring processes and know-how; the diversion of our management’s
attention from the management of our business; 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; and other information 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
                                              March 31,
                                              2013             2012
NET SALES                                     $  176,964        $  144,663
                                                                
COST OF GOODS SOLD                              130,781         110,957  
                                                                
Gross profit                                     46,183            33,706
                                                                
OPERATING EXPENSES
Selling, general and administrative              30,376            22,146
Research and development                         10,080            7,164
Amortization of acquisition related              1,909             1,095
intangible assets
Loss (gain) on sale of assets                   42              (2,199   )
Total operating expenses                        42,407          28,206   
                                                                
Income from operations                           3,776             5,500
                                                                
OTHER INCOME (EXPENSES)
Interest income                                  80                172
Interest expense                                 (945     )        (123     )
Gain (loss) on securities carried at             366               -
fair value
Other                                           1,020           638      
Total other income (expenses)                    521               687
                                                                
Income before income taxes and                   4,297             6,187
noncontrolling interest
                                                                
INCOME TAX PROVISION                            6,574           618      
                                                                
NET INCOME (LOSS)                                (2,277   )        5,569
                                                                
Less: NET LOSS (INCOME) attributable            351             (698     )
to noncontrolling interest
                                                                
NET INCOME (LOSS) attributable to             $  (1,926   )     $  4,871    
common stockholders
                                                                
EARNINGS (LOSS) PER SHARE
attributable to common stockholders
Basic                                         $  (0.04    )     $  0.11     
Diluted                                       $  (0.04    )     $  0.10     
                                                                
Number of shares used in computation
Basic                                           46,021          45,460   
Diluted                                         46,021          46,935   
                                                                            
Note: Throughout this release, we refer to “net income attributable to common
stockholders” as “net income.”

                                                              
                                                                    
DIODES INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME
(in thousands, except per share data)
(unaudited)
                                                                    
For the three months ended
March 31, 2013:
                                 Cost of   Operating   Income Tax   Net Income
                                 Goods     Expenses    Provision   (Loss)
                                 Sold
                                                                    
GAAP                                                                $ (1,926 )
                                                                    
Loss per share (GAAP)
Diluted                                                             $ (0.04  )
                                                                    
Adjustments to reconcile net
loss
to adjusted net income:
                                                                    
Inventory valuations             1,828     -           (274    )      1,554
                                                                    
Acquisition costs                -         600         110            710
                                                                    
Retention costs                  -         325         (49     )      276
                                                                    
Amortization of acquisition      -         1,909       (443    )      1,466
related intangible assets
                                                                    
Tax expense related to tax       -         -           5,447         5,447  
audit
                                                                    
Adjusted (Non-GAAP)                                                 $ 7,527  
                                                                    
Diluted shares used in
computing
earnings per share                                                   47,233 
                                                                    
Adjusted earnings per share
(Non-GAAP)
Diluted                                                             $ 0.16   
                                                                             

Note: Included in GAAP and non-GAAP adjusted net income was approximately $2.1
million, net of tax, non-cash share-based compensation expense. Excluding
share-based compensation expense, GAAP net loss per share of ($0.04) would
have improved by $0.05 and non-GAAP adjusted diluted earnings per share of
$0.16 would have improved by $0.04.

                                                               
                                                                    
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, 2012:
                                           Operating   Income Tax   Net Income
                                           Expenses    Provision
                                                                    
GAAP                                                                $  4,075
                                                                    
Earnings per share (GAAP)
Diluted                                                             $  0.09
                                                                    
Adjustments to reconcile net income
to adjusted net income:
                                                                    
Amortization of acquisition related        1,721       (590   )        1,131
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
earnings per share would have improved by $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 March 31,
2012:
                                           Operating   Income Tax   Net Income
                                           Expenses    Provision
                                                                    
GAAP                                                                $ 4,871  
                                                                    
Earnings per share (GAAP)
Diluted                                                             $ 0.10   
                                                                    
Adjustments to reconcile net income
to adjusted net income:
                                                                    
Amortization of acquisition related        1,095       (290   )       805
intangible assets
                                                                    
Gain on sale of assets                     (2,122  )   509           (1,613 )
                                                                    
Adjusted (Non-GAAP)                                                 $ 4,063  
                                                                    
Diluted shares used in computing
earnings per share                                                   46,935 
                                                                    
Adjusted earnings per share (Non-GAAP)
Diluted                                                             $ 0.09   
                                                                             

Note: Included in GAAP and non-GAAP adjusted net income was approximately $2.3
million, net of tax, non-cash share-based compensation expense. Excluding this
expense, both GAAP and non-GAAP adjusted diluted earnings per share would have
improved by $0.05 per share.

ADJUSTED NET INCOME (Non-GAAP)

This measure consists of generally accepted accounting principles (“GAAP”) net
income (loss), which is then adjusted solely for the purpose of adjusting for
inventory valuations, acquisition costs, retention costs, amortization of
acquisition related intangible assets, tax payments related to tax audit and
gain on sale of assets, as discussed below. Excluding inventory valuations,
acquisition costs, retention costs, tax payments related to tax audit and gain
on sale of assets 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 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. For example, we do not adjust for any
amounts attributable to noncontrolling interest. 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.

Inventory valuations – The Company excluded cost incurred for inventory
valuation. The Company adjusted the inventory acquired from the BCD
acquisition to account for the reasonable profit allowance for the selling
effort on finished goods inventory and the reasonable profit allowance for the
completing and selling effort on the work-in-process inventory. This non-cash
adjustment to inventory is not recurring in nature. The Company believes the
exclusion of inventory valuations 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.

Acquisition costs – The Company excluded costs associated with acquiring BCD
Semiconductor Manufacturing Limited (“BCD”), which consisted of advisory,
legal and other professional and consulting fees. These costs were expensed in
the first quarter of 2013 as that was when the costs were incurred and
services were received of which, the corresponding tax adjustments were made
for the non-deductible portions of these expenses. 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.

Retention costs – The Company excluded costs accrued within operating expenses
in regard to the $5 million employee retention plan in connection with the BCD
acquisition. The retention payments are payable at the 12, 18 and 24 month
anniversaries of the acquisition with the majority of the cost occurring in
the first 12 months. Although these retention costs will be recurring every
quarter until the final retention payment has been made, they are not part of
the employees normal annual salaries and therefore being excluded. The Company
believes the exclusion of retention 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 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.

Tax expense related to tax audit – The Company excluded additional tax expense
in regard to a tax audit of the China tax authorities. The China government
audited the Company’s High and New Technology Enterprise (“HNTE”) status for
the years 2009 through 2011 and determined there was an underpayment for the
tax year 2011. The Company has been approved for the HNTE status for 2012
through 2014. Given that 2011 is an isolated occurrence, the additional tax
and any penalties and interest associated with the audit are being excluded.
The Company believes the exclusion of tax expense related to tax audit
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.

Gain on sale of assets – The Company excluded the gain recorded for the sale
of 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. 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.

Adjusted Earnings per Share (Non-GAAP) - This non-GAAP financial measure is
the portion of the Company’s GAAP net income (loss) assigned to each share of
stock, excluding inventory valuations, acquisition costs, retention costs,
amortization of acquisition related intangible assets, tax payments related to
tax audit and gain on sale of assets, as discussed below. Excluding inventory
valuations, acquisition costs, retention costs, tax payments related to tax
audit and gain on sale of assets 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 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 GROSS PROFIT

Adjusted gross profit (Non-GAAP) - This measure consists of GAAP gross profit,
which is then adjusted solely for the purpose of adjusting for inventory
valuations (as described above) related to the acquisition of BCD. Excluding
inventory valuations provides investors with a better depiction of the
Company’s gross profit and provides a more informed baseline for modeling
future gross profit. Presentation of the above non-GAAP measure 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 measure is useful to investors because it provides
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.

                                            
                                               Three Months Ended
                                               March 31, 2013
                                               unaudited
GAAP gross profit                              $    46,183    
                                               
GAAP gross profit margin                            26.1      %
                                               
Adjustments to reconcile GAAP gross profit
to non-GAAP adjusted gross profit:
                                               
Inventory valuations                               1,828     
                                               
Non-GAAP adjusted gross profit                 $    48,011    
                                               
Non-GAAP gross profit margin                        27.1      %
                                               

CASH FLOW ITEMS

Free cash flow (FCF) (Non-GAAP)

FCF for the first quarter of 2013 is a non-GAAP financial measure, which is
calculated by taking cash flow from operations less capital expenditures. For
the first quarter of 2013, the amount was $15.4 million ($31.3 million less
(-) ($15.9) 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 (LOSS) TO EBITDA

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. For example, our EBITDA
takes into account all net interest expense, income tax provision,
depreciation and amortization without taking into account any attributable to
noncontrolling interest. 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 (loss) to EBITDA
(in thousands, unaudited):

                                                       
                                Three Months Ended          Three Months Ended
                                March 31,                   December 31,
                                2013        2012           2012
                                                            
Net income (loss) (GAAP)        $ (1,926 )   $ 4,871        $      4,075
Plus:
Interest expense, net             865          (49    )            113
Income tax provision              6,574        618                 2,842
Depreciation and                 17,558     15,773            17,072
amortization
EBITDA (Non-GAAP)               $ 23,071    $ 21,213      $      24,102

                                                  
                                                       
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS

ASSETS
(in thousands)
                                                       
                                       March 31,       December 31,
                                       2013            2012
                                       (Unaudited)
CURRENT ASSETS
Cash and cash equivalents              $ 200,205       $   157,121
Accounts receivable, net                 172,237           152,073
Inventories                              182,201           153,293
Deferred income taxes, current           11,566            9,995
Prepaid expenses and other              45,680           18,928
Total current assets                    611,889          491,410
                                                       
PROPERTY, PLANT AND EQUIPMENT, net       338,173           243,296
                                                       
DEFERRED INCOME TAXES, non current       31,956            36,819
                                                       
OTHER ASSETS
Goodwill                                 86,400            87,359
Intangible assets, net                   58,623            44,337
Other                                   17,597           16,842
Total assets                           $ 1,144,638     $   920,063

                                                             
                                                                  
DIODES INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS

LIABILITIES AND EQUITY
(in thousands, except share data)
                                                                  
                                                March 31,         December 31,
                                                2013              2012
                                                (Unaudited)
CURRENT LIABILITIES
Lines of credit                                 $ 3,713           $  7,629
Accounts payable                                  92,091             64,072
Accrued liabilities                               57,565             41,139
Income tax payable                               5,547            678     
Total current liabilities                        158,916          113,518 
                                                                  
LONG-TERM DEBT, net of current portion            213,787            44,131
OTHER LONG-TERM LIABILITIES                      59,472           41,974  
Total liabilities                                432,175          199,623 
                                                                  
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;
46,023,965 and 46,010,815 issued and
outstanding at March 31, 2013 and
December 31, 2012, respectively                   30,683             30,674
Additional paid-in capital                        283,876            280,571
Retained earnings                                 397,870            399,796
Accumulated other comprehensive loss             (42,870   )       (33,856 )
Total Diodes Incorporated stockholders'          669,559          677,185 
equity
Noncontrolling interest                          42,904           43,255  
Total equity                                      712,463            720,440
Total liabilities and equity                    $ 1,144,638      $  920,063 

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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